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 Materials Pursuant to Section 240.14a-12
THE INTERGROUP CORPORATION
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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)
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pursuant to Exchange Act Rule 0-11 (set forth the amount on which
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THE INTERGROUP CORPORATION
10940 WILSHIRE BLVD., Suite 2150
LOS ANGELES, CALIFORNIA 90024
(310) 889-2500
___________________
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON FEBRUARY 23, 2011
To the Shareholders of The InterGroup Corporation:
NOTICE IS HEREBY GIVEN that the Annual Meeting of Shareholders of The
InterGroup Corporation ("InterGroup" or the "Company") for the fiscal year
ended June 30, 2010, will be held at the Hilton San Francisco Financial
District, 750 Kearny Street, San Francisco, CA 94108 on February 23, 2011 at
2:30 P.M. for the following purposes:
(1) To elect two Class B Directors to serve until the fiscal 2013
Annual Meeting and until his or her successor shall have been duly
elected and qualified;
(2) To ratify the retention of Burr Pilger Mayer, Inc. as the Company's
independent registered public accounting firm for the fiscal year
ending June 30, 2011;
(3) To approve, in a non-binding vote, the compensation of our named
executive officers;
(4) To determine, in a non-binding vote, whether a shareholder vote to
approve the compensation of our named executive officers should occur
every one, two or three years; and
(5) To transact such other business as may properly come before the
meeting, or any postponements or adjournments thereof.
The Board of Directors has fixed the close of business on January 11, 2011
as the record date for determining the shareholders entitled to notice of, and
to vote at, the Annual Meeting or any postponements or adjournments thereof.
The Company's Annual Report for the fiscal year ended June 30, 2010
accompanies this Notice of Annual Meeting of Shareholders and Proxy Statement.
By Order of the Board of Directors,
/s/ Gary N. Jacobs
Gary N. Jacobs
Secretary
Los Angeles, California
January 21, 2011
YOUR PROXY IS IMPORTANT WHETHER YOU OWN A FEW OR MANY SHARES. PLEASE COMPLETE,
SIGN, DATE AND PROMPTLY RETURN THE ENCLOSED PROXY IN THE SELF-ADDRESSED,
POSTAGE-PAID ENVELOPE PROVIDED. RETURN THE PROXY EVEN IF YOU PLAN TO ATTEND
THE MEETING. YOU MAY ALWAYS REVOKE YOUR PROXY AND VOTE IN PERSON.
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Important Notice Regarding the Availability of Proxy Materials for the Annual
Meeting of Shareholders to be Held on February 23, 2011. The Company's Proxy
Statement and Annual Report for the fiscal year ended June 30, 2010 are also
available on the Company's website at: www.intergroupcorporation.com.
THE INTERGROUP CORPORATION
10940 WILSHIRE BLVD., SUITE 2150
LOS ANGELES, CALIFORNIA 90024
(310) 889-2500
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PROXY STATEMENT
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ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD FEBRUARY 23, 2011
The Board of Directors of The InterGroup Corporation ("InterGroup" or the
"Company") is soliciting proxies in the form enclosed with this statement in
connection with its fiscal 2010 Annual Meeting of Shareholders to be held on
February 23, 2011 or at any adjournments thereof. Only shareholders of record
at the close of business on January 11, 2011 are entitled to notice of, and to
vote at, the Annual Meeting.
Each shareholder is entitled to cast, in person or by proxy, one vote for each
share held of record at the close of business on January 11, 2011. As of
January 11, 2011, there were outstanding 2,424,164 shares of common stock, par
value $.01 per share (the "Common Stock"). Of the total 2,424,164 shares
outstanding, a majority, or 1,212,083 voting shares will constitute a quorum
for the transaction of business at the meeting. The affirmative vote of the
holders of the majority of the shares of the Common Stock present and
represented at the meeting and entitled to vote is required to elect directors,
ratify the selection of the Company's independent registered public accounting
firm, and approve the other matters submitted for a non-binding vote.
The proxies named in the accompanying Form of Proxy will vote the shares
represented thereby if the proxy appears to be valid on its face, and where
specification is indicated as provided in such proxy, the shares represented
will be voted in accordance with such specification. If no specification is
made, the shares represented by the proxies will be voted (1) FOR the election
of the Board nominees for Class B Directors for a three-year term expiring at
the fiscal 2013 Annual Meeting of Shareholders; (2) FOR ratification of the
appointment of Burr Pilger Mayer, Inc. as the Company's independent registered
public accounting firm for the fiscal year ending June 30, 2011; (3) FOR
approval of the compensation of executive officers; and (4) FOR 3 Years as the
period of time that non-binding shareholder votes should occur to approve
compensation of executive officers.
If you give us a proxy, you can revoke it at any time before it is used. To
revoke it, you may file a written notice revoking it with the Secretary of the
Company, execute a proxy with a later date or attend the meeting and vote in
person.
This Proxy Statement and the accompanying Form of Proxy are first being sent to
shareholders on or about January 26, 2011. In addition to mailing this
material to shareholders, the Company has asked banks and brokers to forward
copies to persons for whom they hold stock of the Company and to request
authority for the execution of proxies. The Company will reimburse banks and
brokers for their reasonable out-of-pocket expenses in doing so. Officers of
the Company may, without being additionally compensated, solicit proxies by
mail, telephone, telegram or personal contact. All proxy soliciting expenses
will be paid by the Company. The Company does not expect to employ anyone else
to assist in the solicitation of proxies.
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Proposal No. 1
ELECTION OF CLASS B DIRECTORS
The Company's Certificate of Incorporation provides that the Board of Directors
shall consist of not more than nine nor less than five members. The exact
number of Directors is fixed by the Board prior to each year's Annual Meeting
of Shareholders. The Board is divided into three staggered classes, each class
having not less than one or more than three members. Each Director is elected
to serve for a three-year term, and until the election and qualification of his
or her successor. When vacancies on the Board occur, due to resignation or
otherwise, the Directors then in office may continue to exercise the powers of
the Directors and a majority of such directors may select a new Director to
fill the vacancy. Any Director may resign at any time. Any Director may be
removed by the vote of, or written consent of, the holders of a majority of the
shares of Common Stock outstanding at a special meeting called for the purpose
of removal or to ratify the recommendation of a majority of the Directors that
such Director be removed.
The term of the Class B Directors expire at the fiscal 2010 Annual Meeting to
be held on February 23, 2011. The Board has proposed Gary N. Jacobs and
William J. Nance as Class B Directors to serve until the fiscal 2013 Annual
Meeting and until the election and qualification of their successors. The
Board of Directors has been informed that the nominees have consented to being
named as nominees and are willing to serve as directors if elected. However,
if the nominees should be unable, or decline to serve, it is intended that the
proxies will be voted for such other persons as the proxies shall, in their
discretion, designate. Unless otherwise directed in the accompanying Proxy,
the persons named therein will vote FOR the election of these nominees.
Election requires the affirmative vote of a majority of the shares represented
and voted at the Annual Meeting.
DIRECTORS AND EXECUTIVE OFFICERS
The following table sets forth certain information with respect to the
Directors and Executive Officers of the Company:
Position with
Name the Company Age Term to Expire
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Class A Directors:
John V. Winfield Chairman of the Board; 64 Fiscal 2012 Annual Meeting
(1)(4)(6)(7) President and Chief
Executive Officer
Josef A. Grunwald
(2)(3)(7) Director and Vice 62 Fiscal 2012 Annual Meeting
Chairman of the Board
Class B Directors:
Gary N. Jacobs
(1)(2)(6)(7) Secretary; Director 65 Fiscal 2010 Annual Meeting
William J. Nance (1)
(2)(3)(4)(6)(7) Director 66 Fiscal 2010 Annual Meeting
Class C Director:
John C. Love Director 70 Fiscal 2011 Annual Meeting
(3)(4)(5)
2
Other Executive
Officers:
David C. Gonzalez Vice President 43 N/A
Real Estate
David T. Nguyen Treasurer and 37 N/A
Controller
Michael G. Zybala Assistant Secretary 58 N/A
And Counsel
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(1) Member of the Executive Committee
(2) Member of the Administrative and Compensation Committee
(3) Member of the Audit Committee
(4) Member of the Real Estate Investment Committee
(5) Member of the Nominating Committee
(6) Member of the Securities Investment Committee
(7) Member of the Special Strategic Options Committee
Business Experience:
The principal occupation and business experience during the last five years
for each of the Directors and Executive Officers of the Company are as follows:
John V. Winfield -- Mr. Winfield was first appointed to the Board in 1982. He
currently serves as the Company's Chairman of the Board, President and Chief
Executive Officer, having first been appointed as such in 1987. Mr. Winfield
also serves as President, Chairman and Chief Executive Officer of the Company's
subsidiaries, Santa Fe Financial Corporation ("Santa Fe") and Portsmouth
Square, Inc. ("Portsmouth"), both public companies. Mr. Winfield's extensive
experience as an entrepreneur and investor, as well as his managerial and
leadership experience from serving as a chief executive officer and director of
public companies, led to the Board's conclusion that he should serve as a
director of the Company.
Josef A. Grunwald -- Mr. Grunwald is an industrial, commercial and residential
real estate developer. He serves as Chairman of PDG N.V. (Belgium), a hotel
management company, and President of I.B.E. Services S.A. (Belgium), an
international trading company. Mr. Grunwald was first elected to the Board in
1987 and named Vice Chairman on January 30, 2002. Mr. Grunwald is also a
Director of Portsmouth. Mr. Grunwald's extensive experience in business and
finance in the real estate industry, his experience in hotel management, as
well as his experience as an entrepreneur and manager of his own companies, led
to the Board's conclusion that he should serve as a director of the Company.
William J. Nance -- Mr. Nance is a Certified Public Accountant and private
consultant to the real estate and banking industries. He is also President of
Century Plaza Printers, Inc. Mr. Nance was first elected to the Board in 1984.
He served as the Company's Chief Financial Officer from 1987 to 1990 and as
Treasurer from 1987 to June 2002. Mr. Nance is also a Director of Santa Fe and
Portsmouth. Mr. Nance also serves as a director and Chairman of the Board of
Comstock Mining, Inc. (formerly Goldspring, Inc.), a public company. Mr.
Nance's extensive experience as a CPA and in numerous phases of the real estate
industry, his business and management experience gained in running his own
businesses, his service as a director and audit committee member for other
public companies and his knowledge and understanding of finance and financial
reporting, led to the Board's conclusion that he should serve as a director of
the Company.
Gary N. Jacobs -- Mr. Jacobs is an attorney at law and a partner in the law
firm of Glaser, Weil, Fink, Jacobs Howard & Shapiro, LLP. He was appointed to
the Board and as Secretary of the Company in 1998. Mr. Jacobs also served as a
Director and General Counsel of MGM MIRAGE (NYSE: MGM) from 2000, as Secretary
of MGM MIRAGE from 2002 and as Executive Vice President from 2000 to August
2009, when he became President Corporate Strategy. Mr. Jacobs retired from all
of his positions with MGM MIRAGE effective, December 15, 2009. Mr. Jacob's
extensive experience as an attorney and as an executive officer and director of
a large public company, and his knowledge and understanding of business
transactions, finance, public company reporting and corporate governance, led
to the Board's conclusion that he should serve as a director of the Company.
3
John C. Love -- Mr. Love was appointed to the Board in 1998. Mr. Love is an
international hospitality and tourism consultant. He is a retired partner in
the national CPA and consulting firm of Pannell Kerr Forster and, for the last
30 years, a lecturer in hospitality industry management control systems and
competition & strategy at Golden Gate University and San Francisco State
University. He is Chairman Emeritus of the Board of Trustees of Golden Gate
University and the Executive Secretary of the Hotel and Restaurant Foundation.
Mr. Love is also a Director of Santa Fe and Portsmouth. Mr. Love's extensive
experience as a CPA and in the hospitality industry, including teaching at the
university level for the last 30 years in management control systems, and his
knowledge and understanding of finance and financial reporting, led to the
Board's conclusion that he should serve as a director of the Company.
David C. Gonzalez -- Mr. Gonzalez was appointed Vice President Real Estate of
the Company on January 31, 2001. Over the past 22 years, Mr. Gonzalez has
served in numerous capacities with the Company, including Controller and
Director of Real Estate.
David T. Nguyen -- Mr. Nguyen was appointed as Treasurer of the Company on
February 26, 2003. Mr. Nguyen also serves as Treasurer of Santa Fe and
Portsmouth, having been appointed to those positions on February 27, 2003. Mr.
Nguyen is a Certified Public Accountant and, from 1995 to 1999, was employed by
PricewaterhouseCoopers LLP where he was a Senior Accountant specializing in
real estate. Mr. Nguyen served as the Company's Controller from 1999 to 2001
and from 2003 to the present.
Michael G. Zybala -- Mr. Zybala is an attorney at law and has served as
Assistant Secretary and legal counsel of the Company since January 1999. Mr.
Zybala is also the Vice President and Secretary of Santa Fe and Portsmouth and
has served as their General Counsel since 1995. Mr. Zybala has provided legal
services to Santa Fe and Portsmouth since 1978.
Family Relationships: There are no family relationships among directors,
executive officers, or persons nominated or chosen by the Company to become
directors or executive officers.
Involvement in Certain Legal Proceedings: No director or executive officer, or
person nominated or chosen to become a director or executive officer, was
involved in any legal proceeding requiring disclosure.
BOARD AND COMMITTEE INFORMATION
InterGroup is a Smaller Reporting Company under the rules and regulations of
the Securities and Exchange Commission ("SEC"). The Company's common stock is
listed on the Capital Market tier of the NASDAQ Stock Market LLC ("NASDAQ").
The Board of Directors of InterGroup currently consists of five members. With
the exception of the Company's President and CEO, John V. Winfield, all of
InterGroup's Board of Directors consists of "independent" directors as
independence is defined by the applicable rules of the SEC and NASDAQ. The
Board of Directors held four meetings during the 2010 Fiscal Year (in person,
telephonically or by written consent). No Director attended (whether in
person, telephonically, or by written consent) less than 75% of all meetings
held during the period of time he served as Director during the 2010 Fiscal
Year. The independent directors also meet in executive session at least two
times per year.
The Board of Directors has not established a formal process for security
holders to send communications to the Board of Directors and the Board has not
deemed it necessary to establish such a procedure at this time. Historically,
almost all communications that the Company receives from security holders are
administrative in nature and are not directed to the Board of Directors. If
the Company should receive a security holder communication directed to the
Board of Directors, or to an individual director, said communication will be
relayed to the Board of Directors or the individual director as the case may
be.
The Company does not have any formal policy with regard to board members
attendance at annual meetings of shareholders but encourages each director to
attend said meetings. All of the Company's directors, with the exception of
Director Jacobs, attended the fiscal 2009 annual meeting of shareholders.
4
Committees:
The Company has an Executive Committee that meets in lieu of the Board upon the
request of the Chairman of the Committee. Mr. Winfield is Chairman of the
Executive Committee. The Committee held two meetings (in person,
telephonically or by written consent) during the 2010 Fiscal Year.
The Company's Administrative and Compensation Committee (the "Compensation
Committee") is comprised of three "independent" members of the Board of
Directors as independence is defined by the applicable rules of the SEC and
NASDAQ. Mr. Nance serves as Chairman of the Compensation Committee. The
Company has not established a charter for the Compensation Committee. The
Compensation Committee reviews and recommends to the Board of Directors the
compensation for the Company's Chief Executive Officer and other executive
officers, including equity or performance based compensation and plans. The
Compensation Committee seeks to design and set compensation to attract and
retain highly qualified executive officers and to align their interests with
those of long-term owners of the Company. The Compensation Committee may also
make recommendations to the Board of Directors as to the amount and form of
director compensation. The Compensation Committee has not engaged any
compensation consultants in determining the amount or form of executive or
director compensation, but does review and monitor published compensation
surveys and studies. The Compensation Committee may delegate to the Company's
Chief Executive Officer the authority determine the compensation of certain
executive officers. The Compensation Committee held two meetings (in person,
telephonically or by written consent) during the 2010 Fiscal Year. The
Compensation Committee also oversees the Company's 2007 Stock Compensation Plan
for Non-Employee Directors (the "2007 Stock Plan"), the Company's 2008
Restricted Stock Unit Plan (the "2008 RSU Plan") and the Company's 2010 Omnibus
Employee Incentive Plan (the "2010 Incentive Plan").
The Company has a Real Estate Investment Committee, which is chaired by Mr.
Nance. This Committee held four meetings (in person, telephonically or by
written consent) during the 2010 Fiscal Year. The Real Estate Investment
Committee reviews and considers potential acquisitions, dispositions, and
financings of properties.
The Company's Nominating Committee is comprised of two "independent" directors
as independence is defined by the applicable rules of the SEC and NASDAQ. The
Company has not established a charter for the Nominating Committee and the
Committee has no policy with regard to consideration of any director candidates
recommended by security holders. As a Smaller Reporting Company whose
directors own in excess of sixty eight percent of the voting shares of the
Company, InterGroup has not deemed it appropriate to institute such a policy.
There have not been any material changes to the procedures by which security
holders may recommend nominees to the Company's board of directors during the
last fiscal year. Mr. Love is the Chairman of the Nominating Committee. The
Committee held one meeting during the 2010 Fiscal Year.
The Company's Securities Investment Committee oversees and establishes certain
investment procedures and reports to the Board of Directors. The Committee's
Chairman is Mr. Winfield. This committee held three meetings (in person,
telephonically or by written consent) during the 2010 Fiscal Year.
The Company's Special Strategic Options Committee is chaired by Mr. Winfield.
This committee held no formal meetings during the 2010 Fiscal Year, but its
members consult with each other frequently on an informal basis. The Special
Strategic Options Committee reviews and considers the Company's strategic
options and provides guidance to accomplish its goals considering both current
and prospective investment opportunities.
The Company is a Smaller Reporting Company under SEC rules. The Company's
Audit Committee is currently comprised of three members: Directors Nance
(Chairperson), Grunwald and Love, each of who meet the independence
requirements of the SEC and NASDAQ as modified or supplemented from time to
time. Directors Nance and Love also meet the Audit Committee Financial Expert
requirement as defined by the SEC and NASDAQ. The primary function of the
Audit Committee is to assist the Board of Directors in fulfilling its
responsibility of overseeing management's conduct of the financial reporting
process, the annual independent audit of the Company's financial statements,
reviewing the financial reports provided by the Company to any governmental
body or the public; the Company's system of internal controls regarding
finance, accounting, legal compliance and ethics that management and the Board
have established; and the Company's auditing, accounting and financial
processes generally. The Audit Committee is also responsible for the selection
and retention of the Company's independent registered public accounting firm.
The Audit Committee held five meetings during the 2010 Fiscal Year.
5
The Company's Board of Directors has adopted a written charter for the Audit
Committee, which is reviewed on an annual basis. A copy of that written
charter, as amended, is attached as Appendix A to this proxy statement.
EXECUTIVE COMPENSATION
Executive Officers Compensation
The following table provides certain summary information concerning
compensation awarded to, earned by, or paid to the Company's principal
executive officer and other named executive officers of the Company whose total
compensation exceeded $100,000 for all services rendered to the Company and its
subsidiaries for each of the Company's last two completed fiscal years ended
June 30, 2010 and June 30, 2009. There was no non-equity incentive plan
compensation or nonqualified deferred compensation earnings. There are
currently no employment contracts with the executive officers.
SUMMARY COMPENSATION TABLE
Name and Principal Fiscal Stock Option All Other
Position Year Salary Bonus Awards Awards Compensation Total
----------------------- ---- ---------- ----- --------- ---------- ------------ ----------
John V. Winfield 2010 $522,000(1) $ - $450,681(2) $294,292(3) $172,000(4) $1,438,973
Chairman, President and 2009 $522,000(1) $ - $ - - $166,000(4) $ 688,000
Chief Executive Officer
David C. Gonzalez 2010 $180,000 $ - $ - $ 14,708(5) $ - $ 194,708
Vice President 2009 $180,000 $ - $ - $ - $ - $ 180,000
Real Estate
David T. Nguyen 2010 $180,000(6) $ - $ - $ - $ - $ 180,000
Treasurer and 2009 $180,000(6) $ - $ - $ - $ - $ 180,000
Controller
Michael G. Zybala 2010 $155,000(7) $ - $ - $ - $ - $ 155,000
Asst. Secretary 2009 $138,000(7) $ - $ - $ - $ - $ 138,000
and Counsel
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(1) Mr. Winfield also serves as President and Chairman of the Board of the
Company's subsidiary, Santa Fe, and Santa Fe's subsidiary, Portsmouth. Mr.
Winfield received a salary from Santa Fe and Portsmouth in the aggregate amount
of $255,000 from those entities for each of fiscal years 2010 and 2009, as well
as director's fees totaling $12,000 for each year. Those amounts are included
in this item.
(2) Dollar amount reflects the fair market value of 54,628 shares of common
stock issued to Mr. Winfield upon the vesting of 54,628 Restricted Stock Units
("RSUs") on September 10, 2009 as determined by reference to the closing price
of the Company's common stock as reported on the NASDAQ Capital Market on the
vesting date. The RSUs were issued pursuant to the Company's 2008 RSU Plan. On
December 21, 2008, Mr. Winfield surrendered to the Company 225,000 fully vested
stock options in exchange for 84,628 RSUs pursuant to an exchange offer made by
the Compensation Committee as authorized by 2008 RSU Plan. Each RSU represents
a promise to deliver, in the future, one share of Common Stock, subject to
certain vesting requirements and other restrictions. The number of RSUs to be
issued under the exchange offer was determined by multiplying the number of
options that were surrendered by the difference between the exercise price of
the options surrendered ($7.917) and the closing price of the Company's common
stock on December 19, 2008 of $12.69, with that product divided by the closing
price of the common stock on December 19, 2008. Since the value of the RSUs
issued equaled the value of the options surrendered, no dollar compensation
amount was recognized for fiscal 2009. The RSUs are taxable as ordinary income
to Mr. Winfield upon vesting and issuance of the shares of Common Stock. Mr.
Winfield's remaining RSUs vest, and the shares of common stock are issuable, as
follow: September 10, 2010 - 15,000; and September 10, 2011 - 15,000 shares.
6
(3) Dollar amount reflects aggregate grant date fair value, computed in
accordance with FASB ASC Topic 718, of 100,000 stock options granted to Mr.
Winfield on March 16, 2010 pursuant to the Company's 2010 Incentive Plan. The
options expire 10 years from the date of grant and have an exercise price of
$10.30 per share, which was 100% of the fair market value of the Company's
common stock as determined by reference to the closing price as reported on the
NASDAQ Capital Market on March 16, 2010, the date of grant. The options are
subject to both time and performance based vesting requirements, each of which
must be satisfied before the options are fully vested and eligible to be
exercised. Pursuant to the time vesting requirements, the options vest over a
period of five years, with 20,000 options vesting upon each one year
anniversary of the date of grant. Pursuant to the performance vesting
requirements, the options vest in increments of 20,000 shares upon each
increase of $2.00 or more in the market price of the Company's common stock
above the exercise price ($10.30) of the options. To satisfy this requirement,
the common stock must trade at that increased level for a period of at least
ten trading days during any one quarter.
(4) Amounts include an auto allowance and compensation for a portion of the
salary of an assistant. The auto allowance was $30,000 and $29,000 during
fiscal years 2010 and 2009, respectively. The amount of compensation related
to the assistant was approximately $57,000 and $52,000 for fiscal years 2010
and 2009, respectively. During fiscal 2010 and 2009, the Company and its
subsidiaries also paid annual premiums in the total amount of $85,000 for split
dollar whole life insurance policies owned by, and the beneficiary of which
are, a trust for the benefit of Mr. Winfield's family. Of the $85,000 in
premiums paid each year, Santa Fe and Portsmouth paid $43,000 of that amount.
The Company has a secured right to receive, from any proceeds of the policies,
reimbursement of all premiums paid prior to any payment to the beneficiary.
(5) Dollar amount reflects aggregate grant date fair value computed in
accordance with FASB ASC Topic 718 of 5,000 stock options granted to Mr.
Gonzalez on March 16, 2010 pursuant to the Company's 2010 Incentive Plan. The
options expire 10 years from the date of grant and have an exercise price of
$10.30 per share. The options vest as follow: 2,500 options vest on March 16,
2011; and 2,500 options vest on March 16, 2012.
(6) Mr. Nguyen's salary is allocated approximately 50% to the Company and 50%
to Santa Fe and Portsmouth.
(7) For fiscal 2010 and 2009, respectively, these amounts include $105,000 and
$94,800 in salary allocated to and paid by Portsmouth and $18,750 and $16,200
in salary allocated to Santa Fe.
Compensation Committee and Executive Compensation
The Company's Administrative and Compensation Committee (the "Compensation
Committee") is comprised of three "independent" members of the Board of
Directors as independence is defined by the applicable rules of the SEC and
NASDAQ. Mr. Nance serves as Chairman of the Compensation Committee. The
Company has not established a charter for the Compensation Committee. The
Compensation Committee reviews and recommends to the Board of Directors the
compensation for the Company's Chief Executive Officer and other executive
officers, including equity or performance based compensation and plans. The
Compensation Committee seeks to design and set compensation to attract and
retain highly qualified executive officers and to align their interests with
those of long-term owners of the Company. The Compensation Committee may also
make recommendations to the Board of Directors as to the amount and form of
director compensation. The Compensation Committee has not engaged any
compensation consultants in determining the amount or form of executive of
director compensation, but does review and monitor published compensation
surveys and studies. The Compensation Committee may delegate to the Company's
Chief Executive Officer the authority to determine the compensation of certain
executive officers. The Compensation Committee also oversees the Company's
2007 Stock Plan, the 2008 RSU Plan and the 2010 Incentive Plan.
On July 18, 2003, the disinterested members of the respective Boards of
Directors of the Company's subsidiary, Santa Fe and Santa Fe's subsidiary,
Portsmouth, established a performance based compensation program for the
Company's CEO, John V. Winfield, to keep and retain his services as a direct
and active manager of the securities portfolios of those companies. On January
12, 2004, the disinterested members of the Securities Investment Committee of
InterGroup also established a performance based compensation program for Mr.
Winfield, which was ratified by the Board of Directors. The Company's previous
experience and results with outside money managers was not acceptable.
Pursuant to the criteria established the Board of Directors, Mr. Winfield is
7
entitled to performance compensation for his management of the securities
portfolios of the Company and its subsidiaries equal to 20% of all net
investment gains generated in excess of an annual return equal to the Prime
Rate of Interest (as published by the Wall Street Journal) plus 2%.
Compensation amounts are earned, calculated and paid quarterly based on the
results of the Company's investment portfolio for that quarter. Should the
companies have a net investment loss during any quarter, Mr. Winfield would not
be entitled to any further performance-based compensation until any such
investment losses are recouped by the Company. This performance based
compensation program may be modified or terminated at the discretion of the
respective Boards of Directors. No performance based compensation was earned or
paid for fiscal years ended June 30, 2010 or 2009.
Outstanding Equity Awards as of Fiscal Year Ended June 30, 2010
The following table sets forth information concerning option awards and stock
awards for each named executive officer that were outstanding as of the end of
the Company's last competed fiscal year ended June 30, 2010. There were no
other equity incentive plan awards that were outstanding.
OPTION AWARDS STOCK AWARDS
-------------------------------------------------- ------------------------
Number of Number of Number of Market value
securities securities shares or of shares or
underlying underlying units of units of
unexercised unexercised Option Option stock that stock that
options(#) options(#) exercise expiration have not have not
Name exercisable unexercisable price($) date vested vested(3)
-------- ----------- ------------- -------- ---------- ---------- ----------
John V. Winfield - 100,000(1) $10.30 3/15/2020 30,000(2) $ 457,800
David C. Gonzalez 15,000 - $13.17 1/30/2011 - -
David C. Gonzalez 5,000(4) $10.30 3/15/2020 - -
-----------------
(1) Stock options issued to Mr. Winfield pursuant to the Company's 2010
Incentive Plan are subject to both time and performance based vesting
requirements, each of which must be satisfied before the options are fully
vested and eligible to be exercised. Pursuant to the time vesting requirements,
the options vest over a period of five years, with 20,000 options vesting upon
each one year anniversary of the date of grant Pursuant to the performance
vesting requirements, the options vest in increments of 20,000 shares upon each
increase of $2.00 or more in the market price of the Company's common stock
above the exercise price ($10.30) of the options. To satisfy this requirement,
the common stock must trade at that increased level for a period of at least
ten trading days during any one quarter.
(2) On December 21, 2008, Mr. Winfield surrendered to the Company 225,000 fully
vested stock options in exchange for 84,628 Restricted Stock Units ("RSUs")
pursuant to an exchange offer made by the Compensation Committee as authorized
by the Company's 2008 RSU Plan. On September 10, 2009, 54,628 of those RSUs
vested and Mr. Winfield was issued 54,628 shares of common stock. The balance
of the RSUs vest, and the shares of Common Stock are issuable as follow:
September 10, 2010 - 15,000 shares; and September 10, 2011 - 15,000 shares.
(3) Market value was calculated based on the closing price of the Company's
Common Stock on June 30, 2010 of $15.26 per share as reported on the NASDAQ
Capital Market.
(4) Mr. Gonzalez's options vest as follow: 2,500 options vest on March 16,
2011; and 2,500 options vest on March 16, 2012.
8
Internal Revenue Code Limitations
Section 162(m) of the Internal Revenue Code of 1986, as amended (the "Code"),
provides that, in the case of a publicly held corporation, the corporation is
not generally allowed to deduct remuneration paid to its chief executive
officer and certain other highly compensated officers to the extent that such
remuneration exceeds $1,000,000 for the taxable year. Certain remuneration,
however, is not subject to disallowance, including compensation paid on a
commission basis and, if certain requirements prescribed by the Code are
satisfied, other performance based compensation. Since InterGroup, Santa Fe
and Portsmouth are each public companies, the $1,000,000 limitation applies
separately to the compensation paid by each entity. Stock option expenses are
also amortized over a several years. For fiscal years 2010 and 2009, no
compensation paid by the Company to its CEO or other executive officers was
subject the deduction disallowance prescribed by Section 162(m) of the Code.
EQUITY COMPENSATION PLANS
The Company currently has three equity compensation plans, each of which has
been approved by the Company's stockholders. The Company's 1998 Stock Option
Plan for Selected Key Officers, Employees and Consultants (the "Key Employee
Plan") expired on December 8, 2008 and no options under the Key Employee Plan
were granted in fiscal 2009. The Key Employee Plan was replaced by The
InterGroup Corporation 2008 Restricted Stock Unit Plan (the "2008 RSU Plan"),
described below. The Company's 1998 Stock Option Plan for Non-Employee
Directors (the "Non-Employee Director Plan") was terminated upon shareholder
approval, and Board adoption, of The InterGroup Corporation 2007 Stock
Compensation Plan for Non-Employee Directors (the "2007 Stock Plan"), described
below, since all options authorized to be issued under the Non-Employee
Director Plan were exhausted in fiscal 2006. Any outstanding options issued
under the Key Employee Plan or the Non-Employee Director Plan remain effective
in accordance with their terms.
The purpose of the Company's equity compensation plans is to provide a means
whereby officers, directors and key employees of the Company develop a sense of
proprietorship and personal involvement in the development and financial
success of the Company, and to encourage them to devote their best efforts to
the business of the Company, thereby advancing the interests of the Company and
its shareholders. A further purpose of these plans is to provide a means
through which the Company may attract able individuals to become employees or
serve as directors of the Company and to provide a means for such individuals
to acquire and maintain stock ownership in the Company, thereby strengthening
their concern for the welfare of the Company.
The InterGroup Corporation 2007 Stock Compensation Plan for Non-Employee
Directors
The InterGroup Corporation 2007 Stock Compensation Plan for Non-Employee
Directors (the "2007 Stock Plan") was approved by the shareholders of the
Company on February 21, 2007, and was thereafter adopted by the Board of
Directors. The 2007 Plan will terminate upon the earlier of the date all shares
reserved for issuance have been awarded or February 21, 2017, if not sooner
terminated by the Board upon recommendation by the Compensation Committee. The
stock to be available for issuance under the 2007 Stock Plan shall be
unrestricted shares of the Company's Common Stock, par value $.01 per share,
which may be unissued shares or treasury shares. Subject to certain
adjustments upon changes in capitalization, a maximum of 60,000 shares of the
Common Stock will be available for issuance to participants under the 2007
Stock Plan.
All non-employee directors are eligible to participate in the 2007 Stock Plan.
Each non-employee director as of the adoption date of the 2007 Stock Plan was
granted an award of 600 unrestricted shares of the Company's Common Stock. On
each July 1 following the adoption date of the 2007 Stock Plan, each non-
employee director shall receive an automatic grant of a number of shares of
Company's Common Stock equal in value to $18,000 based on 100% of the fair
market value (as defined) of the Common Stock on the date of grant, provided he
or she holds such position on that date and the number of shares of Common
Stock available for grant under the 2007 Stock Plan is sufficient to permit
such automatic grant. Any fractional shares resulting from such grant will be
rounded up to next highest whole share. All stock awards to non-employee
directors will be fully vested on the date of grant. The dollar amount of the
annual grant is subject to further adjustment by the Board of Directors upon
recommendation by the Compensation Committee.
9
The stock awards granted under the 2007 Stock Plan are shares of unrestricted
Common Stock and are fully vested on the date of grant. The right of the non-
employee director to receive his or her annual grant of Common is personal to
the director and is not transferable. Once received, shares of Common Stock
awarded to the non-employee director are freely transferable subject to any
requirements of Section 16(b) of the Securities Exchange Act of 1934, as
amended (the "Exchange Act"). On June 28, 2007, Company filed a registration
statement on Form S-8 to register the shares subject to the 2007 Stock Plan and
the Company's two prior stock option plans under the Securities Act of 1933, as
amended (the "Securities Act").
Upon recommendation of the Compensation Committee, the Board may, at any time
and from time to time and in any respect, amend or modify the 2007 Stock Plan.
The Board must obtain stockholder approval of any material amendment to the
2007 Stock Plan if required by any applicable law, regulation or stock exchange
rule. The Board of Directors may amend the 2007 Stock Plan or any award
agreement, which amendment may be retroactive, in order to conform it to any
present or future law, regulation or ruling relating to plans of this or
similar nature. No amendment or modification of the 2007 Stock Plan or any
award agreement may adversely affect any outstanding award without the written
consent of the participant holding the award.
For the fiscal year ended June 30, 2010, the four non-employee directors of the
Company, Josef A. Grunwald, Gary N. Jacobs, John C. Love and William J. Nance,
each received a grant of 1,501 shares of Common Stock pursuant to the 2007
Stock Plan.
The InterGroup Corporation 2008 Restricted Stock Unit Plan
On December 3, 2008, the Board of Directors adopted, subject to shareholder
approval, a new equity compensation plan for its officers, directors and key
employees entitled, The InterGroup Corporation 2008 Restricted Stock Unit Plan
(the "2008 RSU Plan"). The 2008 RSU Plan was approved and ratified by the
shareholders on February 18, 2009.
The 2008 RSU Plan authorizes the Company to issue restricted stock units
("RSUs") as equity compensation to officers, directors and key employees of the
Company on such terms and conditions established by the Compensation Committee
of the Company. RSUs are not actual shares of the Company's common stock, but
rather promises to deliver common stock in the future, subject to certain
vesting requirements and other restrictions as may be determined by the
Committee. Holders of RSUs have no voting rights with respect to the underlying
shares of common stock and holders are not entitled to receive any dividends
until the RSUs vest and the shares are delivered. No awards of RSUs shall vest
until at least six months after shareholder approval of the Plan. Subject to
certain adjustments upon changes in capitalization, a maximum of 200,000 shares
of the common stock are available for issuance to participants under the 2008
RSU Plan. The 2008 RSU Plan will terminate ten (10) years from December 3,
2008, unless terminated sooner by the Board of Directors. After the 2008 RSU
Plan is terminated, no awards may be granted but awards previously granted
shall remain outstanding in accordance with the Plan and their applicable terms
and conditions.
The shares of common stock to be delivered upon the vesting of an award of RSUs
have been registered under the Securities Act, pursuant to a registration
statement filed on Form S-8 by the Company on June 16, 2010. The grant of RSUs
is personal to the recipient and is not transferable. Once received, shares of
common stock issuable upon the vesting of the RSUs are freely transferable
subject to any requirements of Section 16(b) of the Exchange Act. Under the
2008 RSU Plan, the Compensation Committee also has the power and authority to
establish and implement an exchange program that would permit the Company to
offer holders of awards issued under prior shareholder approved compensation
plans to exchange certain options for new RSUs on terms and conditions to be
set by the Committee. The exchange program is designed to increase the
retention and motivational value of awards granted under prior plans. In
addition, by exchanging options for RSUs, the Company will reduce the number of
shares of common stock subject to equity awards, thereby reducing potential
dilution to stockholders in the event of significant increases in the value of
its common stock.
Pursuant to an exchange offer authorized by the Compensation Committee, a total
of 2,564 RSUs were issued to four holders of Non-Employee Director stock
options in exchange for a total of 12,000 stock options which were surrendered
to the Company on June 30, 2010. The number of RSUs issued was determined by
10
multiplying the number of options that were surrendered by the difference
between the exercise price of the options surrendered ($12.00) and the closing
price of the Company's common stock on June 30, 2010 of $15.26, with that
product divided by the closing price of the common stock on June 30, 2010. The
2,564 RSUs issued pursuant to that exchange offer vest on October 1, 2010.
The InterGroup Corporation 2010 Omnibus Employee Incentive Plan
On February 24, 2010, the shareholders of the Company approved The InterGroup
Corporation 2010 Omnibus Employee Incentive Plan (the "2010 Incentive Plan"),
which was formally adopted by the Board of Directors following the annual
meeting of shareholders. The 2010 Incentive Plan authorizes a total of up to
200,000 shares of common stock to be issued as equity compensation to officers
and employees of the Company in an amount and in a manner to be determined by
the Compensation Committee in accordance with the terms of the Plan. The 2010
Incentive Plan authorizes the awards of several types of equity compensation
including stock options, stock appreciation rights, performance awards and
other stock based compensation. The 2010 Incentive Plan will expire on February
23, 2020, if not terminated sooner by the Board of Directors upon
recommendation of the Compensation Committee. Any awards issued under the Plan
will expire under the terms of the grant agreement.
The shares of common stock to be issued under the 2010 Incentive Plan have been
registered under the Securities Act, pursuant to a registration statement filed
on Form S-8 by the Company on June 16, 2010. Once received, shares of common
stock issued under the Plan will be freely transferable subject to any
requirements of Section 16(b) of the Exchange Act.
On March 16, 2010, the Compensation Committee authorized the grant of 100,000
stock options to the Company's Chairman, President and Chief Executive, John V.
Winfield to purchase up to 100,000 shares of the Company's common stock
pursuant to the 2010 Incentive Plan. The exercise price of the options is
$10.30, which equals 100% of the fair market value of the Company's Common
Stock as determined by reference to the closing price of the Company's Common
Stock as reported on the NASDAQ Capital Market on March 16, 2010, the date of
grant. The options expire ten years from the date of grant, unless earlier
terminated in accordance with the terms of the 2010 Plan. The options shall be
subject to both time and performance based vesting requirements, each of which
must be satisfied before options are fully vested and eligible to be exercised.
Pursuant to the time vesting requirements, the options vest over a period of
five years, with 20,000 options vesting upon each one year anniversary of the
date of grant. Pursuant to the performance vesting requirements, the options
vest in increments of 20,000 shares upon each increase of $2.00 or more in the
market price of the Company's common stock above the exercise price ($10.30) of
the options. To satisfy this requirement, the common stock must trade at that
increased level for a period of at least ten trading days during any one
quarter.
On March 16, 2010, the Compensation Committee also authorized a grant of 5,000
stock options to the Company's Vice President Real Estate, David C. Gonzalez,
to purchase up to 5,000 shares of the Company's common stock pursuant to the
2010 Incentive Plan. The exercise price of the options is $10.30 and the
options expire ten years from the date of grant, unless earlier terminated in
accordance with the terms of the 2010 Plan. The options vest as follows: March
16, 2011 - 2,500 shares; and March 16, 2012 - 2,500 shares.
Change in Controls Provisions in Equity Compensation Plans.
Under the Company's 2008 RSU Plan and its 2010 Incentive Plan, RSUs, stock
options and other incentive awards may vest upon a change in control of the
Company in accordance with their respective grant agreements. Outstanding
unvested RSUs issued to the Company's CEO and to its Directors will immediately
vest upon a change in control. Outstanding stock options issued to the
Company's CEO and to its Vice President of Real Estate will also immediately
vest and become exercisable upon a change in control. Except for the foregoing,
there are no employment contracts between the Company and its Officers or
Directors or any change in control arrangements.
11
Compensation of Directors
Each non-employee director receives an annual cash retainer in the amount of
$16,000, to be paid in equal quarterly payments. With the exception of members
of the Audit Committee, non-employee directors will not receive any additional
fees for attending Board or Committee meetings, but will be entitled to
reimbursement of their reasonable expenses to attend such meetings. Members of
the Audit Committee are paid a fee of $1,000 per quarter, with the Chair of
that Committee to receive $1,500 per quarter. As an executive officer, the
Company's Chairman has elected to forego his annual board fees.
Non-employee directors are also eligible for grants of equity compensation
under the Company's 2007 Stock Plan and 2008 RSU Plan. Pursuant to the 2007
Stock Plan, each non-employee director is entitled to an annual grant of a
number of shares of Common Stock of the Company equal in value to $18,000 based
on the fair market value of the Common Stock on the date of grant. Non-employee
directors may also be eligible to participate in exchange offers as may be
authorized by the Compensation Committee under the 2008 RSU Plan to exchange
previously issued stock options for RSUs.
The following table sets forth the compensation paid to directors for the
fiscal year ended June 30, 2010:
DIRECTOR COMPENSATION
Fees
Earned
or Paid Stock All Other
Name in Cash(1) Awards Compensation Total
----------------- --------- ---------- ------------ -------
Josef A. Grunwald $22,000(2) $37,335(6) - $ 59,335
Gary N. Jacobs $16,000 $36,053(7) - $ 52,053
John C. Love $66,000(3) $36,053(8) - $102,053
William J. Nance $68,000(4) $44,542(9) - $112,542
John V. Winfield(5) - - - -
--------------
(1) Amounts shown include board retainer fees, committee fees and meeting fees.
(2) Mr. Grunwald also serves as a director of the Company's subsidiary,
Portsmouth. This amount includes $6,000 in regular board fees paid to Mr.
Grunwald by Portsmouth.
(3) Mr. Love also serves as a director of the Company's subsidiaries, Santa Fe
and Portsmouth. Amounts shown include $8,000 in regular board and audit
committee fees paid by Santa Fe and $8,000 in regular board and audit committee
fees paid by Portsmouth. These amounts also include $30,000 in special hotel
committee fees paid by Portsmouth related to the oversight its Hotel asset.
(4) Mr. Nance also serves as a director of the Company's subsidiaries, Santa Fe
and Portsmouth. Amounts shown include $8,000 in regular board and audit
committee fees paid by Santa Fe and $8,000 in regular board and audit committee
fees paid by Portsmouth. These amounts also include $30,000 in special hotel
committee fees paid by Portsmouth related to the oversight its Hotel asset.
(5) As Chief Executive Officer, the Company's Chairman, John V. Winfield, was
not paid any board, committee or meetings fees. Mr. Winfield did receive a
total of $12,000 in regular board fees from the Company's subsidiaries, which
is reported on the Summary Compensation Table.
(6) Dollar amounts shown reflect the following: fair market value of $18,000
for 1,501 shares of common stock issued on July 1, 2009 pursuant to the
Company's 2007 Stock Plan; fair market value of $9,555 for 955 shares of common
stock issued on January 7, 2010 upon the vesting of 955 RSUs issued pursuant to
12
the 2008 RSU Plan; and $9,780 equaling the dollar amount realized upon the
exercise of 3,000 stock options on June 30, 2010, based on difference between
the exercise price ($12.00) and the market price of the Company's stock on that
date of $15.26. As of June 30, 2010, Mr. Grunwald also had an aggregate of
14,400 vested stock options outstanding.
(7) Dollar amounts shown reflect the following: fair market value of $18,000
for 1,501 shares of common stock issued on July 1, 2009 pursuant to the
Company's 2007 Stock Plan; fair market value of $8,498 for 969 shares of common
stock issued on August 19, 2009 upon the vesting of 969 RSUs issued pursuant to
the 2008 RSU Plan; and fair market value of $9,555 for 955 shares of common
stock issued on January 7, 2010 upon the vesting of 955 RSUs issued pursuant to
the 2008 RSU Plan. As of June 30, 2010, Mr. Jacobs also had an aggregate of
14,400 vested stock options outstanding and 641 RSUs that did not vest until
October 1, 2010.
(8) Dollar amounts shown reflect the following: fair market value of $18,000
for 1,501 shares of common stock issued on July 1, 2009 pursuant to the
Company's 2007 Stock Plan; fair market value of $8,498 for 969 shares of common
stock issued on August 19, 2009 upon the vesting of 969 RSUs issued pursuant to
the 2008 RSU Plan; and fair market value of $9,555 for 955 shares of common
stock issued on January 7, 2010 upon the vesting of 955 RSUs issued pursuant to
the 2008 RSU Plan. As of June 30, 2010, Mr. Love also had an aggregate of
14,400 vested stock options outstanding and 641 RSUs that did not vest until
October 1, 2010.
(9) Dollar amounts shown reflect the following: fair market value of $18,000
for 1,501 shares of common stock issued on July 1, 2009 pursuant to the
Company's 2007 Stock Plan; fair market value of $16,987 for 1,937 shares of
common stock issued on August 19, 2009 upon the vesting of 1,937 RSUs issued
pursuant to the 2008 RSU Plan; and fair market value of $9,555 for 955 shares
of common stock issued on January 7, 2010 upon the vesting of 955 RSUs issued
pursuant to the 2008 RSU Plan. As of June 30, 2010, Mr. Nance also had an
aggregate of 14,400 vested stock options outstanding and 641 RSUs that did not
vest until October 1, 2010.
Change in Control or Other Arrangements
Except for the foregoing, there are no other arrangements for compensation of
Directors and there are no employment contracts between the Company and its
Directors or any change in control arrangements.
COMPLIANCE WITH SECTION 16(a) OF THE SECURITIES EXCHANGE ACT
Section 16(a) of the Securities Exchange Act of 1934 requires the Company's
executive officers and directors, and each beneficial owner of more than ten
percent of the Common Stock of the Company, to file reports of ownership and
changes in ownership with the Securities and Exchange Commission. Executive
officers, directors and greater than ten-percent shareholders are required by
SEC regulations to furnish the Company with copies of all Section 16(a) forms
they file. Based upon a review of the copies of such reports received by it,
or written representations from certain reporting persons that no Form 5's were
required for those persons, the Company believes that during fiscal 2010 all
filing requirements applicable to its officers, directors, and greater than
ten-percent beneficial owners were complied with.
13
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth, as of January 11, 2011, certain information
with respect to the beneficial ownership of Common Stock of the Company by (i)
those persons or groups known by the Company to own more than five percent of
the outstanding shares of Common Stock, (ii) each Director and Executive
Officer, and (iii) all Directors and Executive Officers as a group.
Name and Address of Amount and Nature
Beneficial Owner (1) of Beneficial Owner(2) Percentage(3)
-------------------- ---------------------- -------------
John V. Winfield 1,458,581 60.2%
Josef A. Grunwald 120,223(4) 5.3%
William J. Nance 57,737(5) 2.4%
Gary N. Jacobs 25,747(6) 1.1%
John C. Love 22,372(7) 0.9%
David C. Gonzalez 30,750(5) 1.3%
Michael G. Zybala 0 *
David T. Nguyen 120 *
All Directors and
Executive Officers as a
Group (8 persons) 1,725,530 69.2%
------------------
* Ownership does not exceed 1%.
(1) Unless otherwise indicated the address for the persons listed is: 10940
Wilshire Blvd., Suite 2150, Los Angeles, California 90024.
(2) Unless otherwise indicated and subject to applicable community property
laws, each person has sole voting and investment power with respect to the
shares beneficially owned.
(3) Percentages are calculated on the basis of 2,424,164 shares of Common Stock
outstanding at January 11, 2011, plus any securities that person has the right
to acquire within 60 days pursuant to options, warrants, conversion privileges
or other rights.
(4) Includes 14,400 shares that Mr. Grunwald has a right to acquire pursuant to
vested stock options.
(5) Includes 14,400 shares that Mr. Nance has a right to acquire pursuant to
vested stock options.
(6) Includes 14,400 shares that Mr. Jacobs has a right to acquire pursuant to
vested stock options. Other than his options, and any unvested RSUs, all shares
of Mr. Jacobs are held by the Gary and Robin Jacobs Family Trust.
(7) Includes 14,400 shares that Mr. Love has a right to acquire pursuant to
vested stock options.
(8) Includes 15,000 shares which Mr. Gonzalez has the right to acquire pursuant
to vested stock options.
14
As of January 11, 2011 the number of holders of record of the Company's Common
Stock was approximately 535. Such number of owners was determined from the
Company's shareholders records and does not include beneficial owners of the
Company's Common Stock whose shares are held in names of various brokers,
clearing agencies or other nominees. Including beneficial holders, there are
approximately 950 shareholders of the Company's Common Stock.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
On December 4, 1998, the Administrative and Compensation Committee authorized
the Company to obtain whole life and split dollar insurance policies covering
the Company's President and Chief Executive Officer, Mr. Winfield. During
fiscal 2010 and 2009, the Company paid annual premiums in the amount of
approximately $85,000 for the split dollar insurance policy owned by, and the
beneficiary of which is, a trust for the benefit of Mr. Winfield's family. The
Company has a secured right to receive, from any proceeds of the policy,
reimbursement of all premiums paid prior to any payments to the beneficiary.
On June 30, 1998, the Company's Chairman and President entered into a voting
trust agreement with the Company giving the Company the power to vote his 4.0%
interest in the outstanding shares of the Santa Fe common stock.
As Chairman of the Securities Investment Committee, the Company's President and
Chief Executive officer, John V. Winfield, oversees the investment activity of
the Company in public and private markets pursuant to authority granted by the
Board of Directors. Mr. Winfield also serves as Chief Executive Officer and
Chairman of Santa Fe and Portsmouth and oversees the investment activity of
those companies. Depending on certain market conditions and various risk
factors, the Chief Executive Officer, his family, Santa Fe and Portsmouth may,
at times, invest in the same companies in which the Company invests. The
Company encourages such investments because it places personal resources of the
Chief Executive Officer and his family members, and the resources of Santa Fe
and Portsmouth, at risk in connection with investment decisions made on behalf
of the Company. Under the direction of the Securities Investment Committee,
the Company has instituted certain modifications to its procedures to reduce
the potential for conflicts of interest.
The Company, its subsidiary Santa Fe and Santa Fe's subsidiary, Portsmouth,
have established performance based compensation programs for Mr. Winfield's
management of the securities portfolios of those companies. The performance
based compensation program was approved by the disinterested members of the
respective Boards of Directors of the Company and its subsidiaries. No
performance bonus compensation was paid to Mr. Winfield for the fiscal years
ended June 30, 2010 and 2009.
Director Independence
InterGroup's common stock is listed on the NASDAQ Capital Market tier of the
NASDAQ Stock Market LLC ("NASDAQ"). InterGroup is a Smaller Reporting Company
under the rules and regulations of the SEC. The Board of Directors of
InterGroup currently consists of five members. With the exception of the
Company's President and CEO, John V. Winfield, all of InterGroup's Board of
Directors consists of "independent" directors as independence is defined by the
applicable rules of the SEC and NASDAQ. There are no members of the Company's
compensation, nominating or audit committees that do not meet those
independence standards.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE ELECTION OF
GARY N. JACOBS AND WILLIAM J. NANCE AS CLASS B DIRECTORS OF THE COMPANY.
15
PROPOSAL NO. 2
RATIFICATION OF THE APPOINTMENT OF
INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
The Audit Committee of the Board of Directors has appointed the firm of Burr
Pilger Mayer, Inc. ("BPM", formerly Burr, Pilger & Mayer LLP) as the Company's
independent registered public accounting firm for the fiscal year ending June
30, 2011. BPM has served as the Company's independent registered public
accounting firm since October 23, 2007. Although the action of shareholders in
this matter is not required, the Audit Committee believes it is appropriate to
seek shareholder ratification of this appointment. Ratification requires the
affirmative vote of a majority of the shares represented and voted at the
Annual Meeting.
We expect that a representative of Burr Pilger Mayer, Inc. will be present at
the Annual Meeting to respond to appropriate questions from Shareholders, and
we will provide this representative with an opportunity to make a statement if
he or she desires to do so.
THE FOLLOWING REPORT OF THE AUDIT COMMITTEE SHALL NOT BE DEEMED TO BE
SOLICITING MATERIAL OR TO BE FILED WITH THE SEC UNDER THE SECURITIES ACT OF
1933 OR THE SECURITIES EXCHANGE ACT OF 1934 OR INCORPORATED BY REFERENCE IN ANY
DOCUMENT SO FILED.
AUDIT COMMITTEE REPORT
The Audit Committee's responsibilities are described in a written charter
adopted by the Board of Directors, which is attached as Appendix A to this
Proxy Statement. The Audit Committee primary duties and responsibilities are
to: serve as an independent and objective party to monitor the Company's
financial reporting process and internal control system; appoint and approve
the compensation of the Company's independent registered public accounting
firm; review and appraise the audit efforts of the Company's independent
registered public accounting firm; and provide an open avenue of communications
among the independent registered public accounting firm, financial and senior
management, and the Board of Directors. During fiscal year ended June 30,
2010, the Company retained Burr Pilger Mayer, Inc. ("BPM") as its independent
registered public accounting firm to provide audit and audit related services.
All fees and expenses paid to BPM were approved by the Audit Committee.
The Audit Committee reviewed and discussed the audited financial statements
with management and BPM, and management represented to the Audit Committee that
the consolidated financial statements were prepared in accordance with
accounting principles generally accepted in the United States. The discussions
with BPM also included the matters required by Statement on Auditing Standards
No. 114 (AICPA, Professional Standards, Vol. 1, AU Section 380), as adopted by
the Public Company Accounting Oversight Board (United States) in Rule 3200T
regarding "Communication with Audit Committees."
The Audit Committee has also received the written disclosures and the letter
from BPM required by applicable requirements of the Public Company Accounting
Oversight Board regarding the independent accountant's communications with the
Audit Committee concerning independence, which was also discussed with BPM.
Based on the Audit Committee's review of the audited financial statements, and
the review and discussions with management and BPM referred to above, the Audit
Committee recommended to the Company's Board of Directors that the audited
financial statements be included in the Company's Annual Report on Form 10-K
for the fiscal year ended June 30, 2010 for filing with the Securities and
Exchange Commission.
THE AUDIT COMMITTEE:
WILLIAM J. NANCE, CHAIRPERSON
JOHN C. LOVE
JOSEF A. GRUNWALD
16
Audit Fees
The aggregate fees billed for each of the last two fiscal years ended June 30,
2010 and 2009 for professional services rendered by Burr Pilger Mayer, Inc.,
the independent registered public accounting firm for the audit of the
Company's (including its consolidated subsidiaries) annual financial statements
and review of financial statements included in the Company's Form 10-Q reports
or services normally provided by the independent registered public accounting
firm in connection with statutory and regulatory filings or engagements for
those fiscal years, were as follows:
Fiscal Year
-------------------------
2010 2009
-------- --------
Audit Fees(1) $329,000 $303,000
Audit Related Fees(2) 3,000 20,000
Tax Fees - -
All Other Fees - -
-------- --------
TOTAL: $332,000 $323,000
======== ========
(1) Includes approved out-of-pocket costs.
(2) For fiscal 2010, fees were for review of S-8 Registration Statement and
procedures for issuance of related consent. For fiscal 2009, fees were for
review of SEC comment letters, restatements of financial statements and related
Form 8-K reports.
Audit Committee Pre-Approval Policies
The Audit Committee shall pre-approve all auditing services and permitted non-
audit services (including the fees and terms thereof) to be performed for the
Company by its independent registered public accounting firm, subject to any de
minimus exceptions that may be set for non-audit services described in Section
10A(i)(1)(B) of the Exchange Act which are approved by the Committee prior to
the completion of the audit. The Committee may form and delegate authority to
subcommittees consisting of one or more members when appropriate, including the
authority to grant pre-approvals of audit and permitted non-audit services,
provided that decisions of such subcommittee to grant pre-approvals shall be
presented to the full Committee at its next scheduled meeting.
All of the services described herein were approved by the Audit Committee
pursuant to its pre-approval policies.
None of the hours expended on the principal auditor's engagement to audit the
Company's financial statements for the most recent fiscal year were attributed
to work performed by persons other than the principal auditor's full-time
permanent employees.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR"
THE RATIFICATION OF THE APPOINTMENT OF BURR PILGER MAYER, INC.
AS THE COMPANY'S INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM.
17
PROPOSAL NO. 3
NON-BINDING VOTE ON EXECUTIVE COMPENSATION
In accordance with the requirements of Section 14A of the Securities Exchange
Act of 1934, as amended (the "Exchange Act"), which was added by the Dodd-Frank
Wall Street and Consumer Protection Act (the "Dodd Frank Act") and the related
rules of the SEC, we are including in these proxy materials a separate
resolution subject to shareholder vote to approve, in a non-binding vote, the
compensation of our named executive officers as disclosed on pages 6 to 11. The
text of the resolution in respect of Proposal No. 3 is as follows:
"Resolved, that the shareholders approve, in a non-binding vote,
the compensation of the Company's named executive officers as
disclosed on Pages 6 to 11 in the Proxy Statement relating to the
Company's Fiscal 2010 Annual Meeting to be held on February 23,
2011."
THE BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE "FOR"
THE APPROVAL OF THE COMPENSATION OF OUR NAMED EXECUTIVE OFFICERS.
18
PROPOSAL NO. 4
NON-BINDING VOTE ON THE FREQUENCY OF SHAREHOLDER
VOTES ON EXECUTIVE COMPENSATION
In accordance with the requirements of Section 14A of the Securities Exchange
Act of 1934, as amended (the "Exchange Act"), which was added by the Dodd-Frank
Wall Street and Consumer Protection Act (the "Dodd Frank Act") and the related
rules of the SEC, we are including in these proxy materials a separate
resolution subject to shareholder vote to recommend, in a non-binding vote,
whether a non-binding shareholder vote to approve the compensation of our named
executive officers (that is similar to the non-binding vote in Proposal 3)
should occur every one, two or three years. The text of the resolution with
respect of Proposal 4 is as follows:
"Resolved, that the shareholders recommend, in a non-binding vote,
whether a non-binding shareholder vote to approve the
compensation of the Company's named executive officers should
occur every one, two or three years"
In considering their vote, shareholders may wish to review the information
presented in connection with Proposal 3 and the information on the Company's
compensation policies and decisions regarding named executive officers as
disclosed on pages 6 to 11. In addition, shareholders should note the
following:
* A triennial policy would permit shareholders and directors to evaluate
the effects of our compensation program on long-term performance and
would help align "say on pay" with the goal of avoiding short-term focus
in corporate governance and executive pay arrangements.
* In addition, the triennial approach would allow shareholders to engage
in a more thoughtful analysis and voting by providing more time between
votes to gage executive officer performance.
For these reasons, we believe that a three-year time horizon is appropriate in
order to provide shareholders with a more comprehensive view of whether or
named executive officer compensation programs are achieving their objectives.
THE BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE "THREE YEARS"
WITH RESPECT TO HOW FREQUENTLY A NON-BINDING SHAREHOLDER VOTE TO
APPROVE THE COMPENSATION OF OUR EXECUTIVE OFFICERS SHOULD OCCUR.
19
OTHER BUSINESS
As of the date of this statement, management knows of no business to be
presented at the meeting that is not referred to in the accompanying notice. As
to other business that may properly come before the meeting, it is intended
that the proxies properly executed and returned will be voted in respect
thereof at the discretion of the person voting the proxies in accordance with
the best judgment of that person.
SHAREHOLDER PROPOSALS
It is presently anticipated that the fiscal 2011 Annual Meeting of Shareholders
will be held on or around February 22, 2012. Any shareholder proposals
intended to be considered for inclusion in the proxy statement for presentation
at the fiscal 2011 Annual Meeting must be received by the Company no later than
October 22, 2011. The proposal must be in accordance with the provisions of
Rule 14a-8 promulgated by the Securities and Exchange Commission under the
Securities Act of 1934. It is suggested that the proposal be submitted by
certified mail - return receipt requested.
ANNUAL REPORT ON FORM 10-K
The Company's Annual Report for the fiscal year ended June 30, 2010 accompanies
this proxy statement, but is not deemed a part of the proxy solicitation
material. A copy of the Company's Form 10-K for the fiscal year ended June 30,
2010, as required to be filed with the Securities and Exchange Commission,
excluding exhibits, will be mailed to shareholders without charge upon written
request to: John V. Winfield, President, The InterGroup Corporation, 10940
Wilshire Blvd., Suite 2150, Los Angeles, CA 90024. Such requests must set
forth a good-faith representation that the requesting party was either a holder
of record or beneficial owner of the common stock of the Company on January 11,
2011. The Company's Form 10-K and other public filings are also available
through the Securities and Exchange Commission's world-wide-web site
(http://www.sec.gov).
By Resolution of the Board of Directors
THE INTERGROUP CORPORATION
Gary N. Jacobs
Secretary
Dated: Los Angeles, California
January 21, 2011
24
APPENDIX A
THE INTERGROUP CORPORATION
AUDIT COMMITTEE CHARTER
(As Amended on January 13, 2011)
Purpose:
-------
The primary purpose of the Audit Committee is to assist the Board of Directors
in fulfilling its responsibility of overseeing management's conduct of the
Company's financial reporting process, the Company's systems of internal
accounting and financial controls, and the annual independent audit of the
Company's financial statements.
In discharging its oversight role, the Committee is empowered to investigate
any matter brought to its attention and shall have full access to all books,
records, facilities and personnel of the Company and the power to retain
outside counsel, auditors or other experts for this purpose. The Board and the
Committee are in place to represent the Company's shareholders, and the
Company's independent registered public accounting firm is ultimately
accountable to the Board and the Committee as such representatives of
shareholders. It is the responsibility of the Committee to maintain free and
open means of communication between the Board, the independent registered
public accounting firm and the financial management and internal auditors of
the Company.
The Committee shall review the adequacy of this Charter on an annual basis.
Membership:
----------
The Committee shall be comprised of at least three (3) "independent" directors
that meet the composition requirements as defined by the rules of the
Securities and Exchange Commission ("SEC") and The NASDAQ Stock Market LLC
("NASDAQ") as may be modified and supplemented from time to time. Accordingly,
all of the members of the Committee will be directors:
1. Who have no relationship to the Company that may interfere with the
exercise of their independence from management and the Company;
2. Are not affiliates of the Company;
3. Do not receive any compensation from the Company other than in the capacity
as director; and
4. Who are financially literate or who become financially literate within a
reasonable period of time after appointment to the Committee.
In addition, at least one member of the Committee will qualify as an audit
committee financial expert as defined by the Securities and Exchange
Commission.
The members of the Committee shall be elected by the Board at the annual
meeting of the Board and shall serve until their successors shall be duly
elected and qualified. Unless a Chairman of the Committee is elected by the
full Board, the members of the Committee may designate a Chairman of the
Committee by majority vote of the full Committee Membership.
Meetings:
--------
The Committee shall meet at least four times annually, or more frequently as
circumstances dictate. A majority of the members of the Committee shall
constitute a quorum for the transaction of business. Minutes of each meeting of
the Committee should be recorded by the Secretary to the Committee. Approval by
a majority of the members present at a meeting at which a quorum is present
shall constitute approval by the Committee. The Committee may also act by
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unanimous written consent without a meeting. As part of its job to foster open
communication, the Committee should meet at least annually with management and
the Company's independent registered public accounting firm in separate
executive sessions to discuss any matters that the Committee or each of these
groups believe should be discussed privately. In addition, the Committee or at
least its Chairman should meet with the Company's independent registered public
accounting firm and management quarterly to review the Company's financials
consistent with #2 below. The Committee may request any officer or employee of
the Company or the Company's outside counsel or the Company's independent
registered public accounting firm to attend a meeting of the Committee or to
meet with any members of, or consultants to, the Committee.
Key Responsibilities:
--------------------
The Committee's job is one of oversight, and it recognizes that the Company's
management is responsible for preparing the Company's financial statements and
that the Company's independent registered public accounting firm is responsible
for auditing those financial statements pursuant to professional standards.
Additionally, the Committee recognizes that financial management has more time,
knowledge and detailed information about the Company than do Committee members.
Consequently, in carrying out its oversight responsibilities, the Committee is
not providing any expert or special assurance as to the Company's financial
statements or any professional certification as to the outside auditor's work.
The following functions shall be the common recurring activities of the
Committee in carrying out its oversight function. These functions are set forth
as a guide with the understanding that the Committee may diverge from this
guide as appropriate given the circumstances.
1. The Committee shall review with management and the Company's
independent registered public accounting firm the audited financial statements
to be included in the Company's Annual Report on Form 10-K (or the Annual
Report to Shareholders if distributed prior to the filing of the Form 10-K)
prior to the filing of the Form 10-K or, if deemed appropriate, prior to any
year-end earnings release. The Committee shall review and consider with the
Company's independent registered public accounting firm all matters required to
be discussed by Statement on Auditing Standards ("SAS") No. 114 (AICPA,
Professional Standards, Vol. 1, AU Section 380), as adopted by the Public
Company Accounting Oversight Board (United States) in Rule 3200T regarding
"Communication with Audit Committees."
2. As a whole, or through the Committee chair, the Committee shall review
with the Company's independent registered public accounting firm the Company's
interim financial results to be included in the Company's quarterly reports to
be filed with Securities and Exchange Commission and the matters required to be
discussed by SAS No. 114 with respect to quarterly financial statements. Such
review will occur prior to the Company's filing of the Form 10-Q or, if deemed
appropriate, prior to any quarterly earnings releases.
3. Review disclosures made to the Committee by the Company's CEO and CFO
during their certification process for the Form 10-K and Form 10-Q about any
significant deficiencies in the design or operation of internal controls or
material weaknesses therein and any fraud involving management or other
employees who have a significant role in the Company's internal controls.
4. The Committee shall:
(a) request from the Company's independent registered public
accounting firm annually written disclosures and a letter
required by applicable requirements of the Public Company
Accounting Oversight Board regarding the independent accountant's
communications with the Audit Committee concerning independence.
(b) discuss with the Company's independent registered public
accounting firm any disclosed relationships or services which
may impact that firm's objectivity or independence; and
(c) recommend that the Board take appropriate action in response
to the Company's independent registered public accounting firm's
report to satisfy itself of that firm's independence.
A-2
5. The Committee shall have the sole authority to appoint or replace the
Company's independent registered public accounting firm (subject, if
applicable, to shareholder ratification). The Committee shall be directly
responsible for the compensation and oversight of the work of the Company's
independent registered public accounting firm (including resolution of
disagreements between management and the Company's independent registered
public accounting firm regarding financial reporting) for the purpose of
preparing or issuing an audit report or related work. The Company's
independent registered public accounting firm shall report directly to the
Committee.
6. The Committee shall preapprove all auditing services and permitted
non-audit services (including the fees and terms thereof) to be performed for
the company by its independent registered public accounting firm, subject to
the de minimus exceptions for non-audit services described in Section 10A
(i)(1)(B) of the Exchange Act which are approved by the Committee prior to the
completion of the audit. The Committee may form and delegate authority to
subcommittees consisting of one or more members when appropriate, including the
authority to grant preapprovals of audit and permitted nonaudit services,
provided that decisions of such subcommittee to grant preapprovals shall be
presented to the full Committee at its next scheduled meeting.
7. Review and discuss quarterly reports from the Company's independent
registered public accounting firm:
(a) All critical accounting policies and practices to be
used.
(b) All alternative treatments of financial information
within generally accepted accounting principles that have
been discussed with management, ramifications of the use of
such alternative disclosures and treatments, and the
treatment preferred by the independent registered public
accounting.
(c) Other material written communications between the
independent registered public accounting firm and management,
such as any management letter or schedule of unadjusted
differences.
8. Periodically consult with the Company's independent registered public
accounting firm, out of the presence of management, about internal controls and
the fullness and accuracy of the organization's financial statements.
9. Recommend to the Board policies for the Company's hiring of employees
or former employees of the independent registered public accounting firm who
participated in any capacity in the audit of the Company.
10. Discuss with management the Company's use of "pro forma" or
"adjusted" non-GAAP information, as well as financial information and earnings
guidance provided to analysts and rating agencies. Such discussion may be done
generally (consisting of discussing the types of information to be disclosed
and the types of presentations to be made).
11. Establish regular and separate systems of reporting to the Committee
by each of management, the independent registered public accounting firm, and
the internal accountants regarding any significant judgments made in
management's preparation of the financial statements, and the view of each as
to appropriateness of such judgments.
12. Following completion of the annual audit, review separately with each
of management and the independent registered public accounting firm any
significant difficulties encountered during the course of the audit, including
any restrictions on the scope of work or access to required information.
13. Review any significant disagreement among management and the
independent registered public accounting firm in connection with the
preparation of the financial statements.
A-3
14. Establish procedures for the receipt, retention and treatment of
complaints received by the Company regarding accounting, internal accounting
controls or auditing matters, and the confidential, anonymous submission by
employees of concerns regarding questionable accounting or auditing matters.
15. Establish, review, and update periodically a Code of Ethical Conduct,
and ensure that management has established a system to enforce this Code.
16. Review and approve any transactions between the Company and its
officers, directors or 5% shareholders.
17. The Committee shall have the authority, to the extent it deems
necessary or appropriate, to retain independent legal, accounting or other
advisors. The Company shall provide for appropriate funding, as determined by
the Committee, for payment of compensation to the Company's independent
registered public accounting firm for the purpose of rendering or issuing an
audit report and to any advisors employed by the Committee.
Reporting Responsibilities:
--------------------------
The Committee shall prepare the report required by the rules of the Securities
and Exchange Commission to be included in the Company's annual proxy statement.
The Committee shall prepare such other reports for the full Board of Directors
and others as it shall deem necessary to discharge its responsibilities under
this Charter.
A-4
FORM OF PROXY
THE INTERGROUP CORPORATION
This Proxy is Solicited on Behalf of the Board of Directors
The undersigned hereby (a) acknowledges receipt of the Notice of Annual
Meeting of Shareholders of The InterGroup Corporation to be held on February
23, 2011 at 2:30 P.M. at the Hilton San Francisco Financial District, 750
Kearny Street, San Francisco, CA 94108 and the Proxy Statement in connection
therewith each dated January 21, 2011; (b) appoints John V. Winfield and Gary
N. Jacobs, as proxies, each with the power to appoint his or her substitute,
and hereby authorizes them to represent and to vote, as designated on the
reverse side of this Form of Proxy, all of the shares of Common Stock of The
InterGroup Corporation held of record by the undersigned on January 11, 2011 at
the Annual Meeting of Shareholders to be held on February 23, 2011 or at any
adjournment thereof.
(Continued and to be signed on reverse side)
Annual Meeting of Shareholders Of
THE INTERGROUP CORPORATION
FEBRUARY 23, 2011
NOTICE OF INTERNET AVAILABILITY OF PROXY MATERIAL:
The Notice of Meeting, Proxy Statement and Proxy Card
are available at www.intergroupcorporation.com
Please date, sign and mail
your proxy card in the
envelope provided as soon
as possible.
Please detach along perforated line and mail in the envelope provided.
----------------------------------------------------------------------------
Please sign, date and return promptly in the enclosed envelope. Please mark
your vote in blue or black ink as shown here [x]
1. Election of Class B Directors
[ ] FOR THE NOMINEES Nominees:
( ) Gary N. Jacobs
( ) William J. Nance
[ ] WITHHOLD AUTHORITY
FOR ALL NOMINEES
[ ] FOR ALL EXCEPT
(See instructions below)
INSTRUCTION: To withhold authority to vote for any individual nominee(s) mark
"FOR ALL EXCEPT" and fill in the circle next to each nominee you wish to
withhold as shown here (x).
2. PROPOSAL TO APPROVE THE RETENTION FOR AGAINST ABSTAIN
OF BURR PILGER MAYER, INC. AS [ ] [ ] [ ]
AS THE COMPANY'S INDEPENDENT REGISTERED
PUBLIC ACCOUNTANT.
3. PROPOSAL TO APPROVE BY NON-BINDING VOTE, FOR AGAINST ABSTAIN
THE COMPENSATION OF THE NAMED EXECUTIVE [ ] [ ] [ ]
OFFICERS.
The Board of Directors recommends you vote "3 Years" on the following proposal.
4. PROPOSAL TO RECOMMEND, BY NON-BINDING 1 year 2 years 3 years ABSTAIN
VOTE, THE FREQUENCY OF SHAREHOLDER VOTES [ ] [ ] [ ] [ ]
ON NAMED EXECUTIVE OFFICER COMPENSATION.
4. In their discretion, the Proxies are authorized to vote upon such other
business as may properly come before the meeting.
This proxy is solicited on behalf of the Board of Directors. This proxy, when
properly executed, will be voted in the manner directed herein by the
undersigned shareholder. If no direction is made, this Proxy will be voted FOR
Proposals 1, 2 and 3 and "3 Years" with respect to proposal 4.
To change the address on your account, please check the box at the right
and indicate your new address in the address space above. Please note [ ]
that changes to the registered name(s) on the account may not be
submitted via this method.
Signature of Shareholder _____________________ Date: ____________
Signature of Shareholder _____________________ Date: ____________
NOTE: Please sign exactly as your name or names appear on this Proxy. When
shares are held by jointly, each holder should sign. When signing as
executor, administrator, attorney, trustee or guardian, please give
full title as such. If the signer is a corporation, please sign full
corporate name by duly authorized officer, giving full title as such. If
signer is a partnership, please sign in partnership name by authorized
person.