sec document
SCHEDULE 14A
(RULE 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE SECURITIES EXCHANGE ACT OF 1934
(AMENDMENT NO. )
Filed by the Registrant /_/
Filed by a Party other than the Registrant /X/
Check the appropriate box:
/X/ Preliminary Proxy Statement
/_/ Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
/_/ Definitive Proxy Statement
/_/ Definitive Additional Materials
/_/ Soliciting Material Under Rule 14a-12
VESTA INSURANCE GROUP, INC.
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(Name of Registrant as Specified in Its Charter)
NEWCASTLE PARTNERS, L.P.
NEWCASTLE CAPITAL MANAGEMENT, L.P.
NEWCASTLE CAPITAL GROUP, L.L.C.
MARK E. SCHWARZ
JAMES C. EPSTEIN
MARK J. MORRISON
STEVEN J. PULLY
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(Name of Persons(s) Filing Proxy Statement, if Other Than the Registrant)
Payment of Filing Fee (Check the appropriate box):
/X/ No fee required.
/_/ Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and
0-11.
(1) Title of each class of securities to which transaction applies:
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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:
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/_/ 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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PRELIMINARY COPY SUBJECT TO COMPLETION
DATED JULY 14, 2005
NEWCASTLE PARTNERS, L.P.
July __, 2005
Fellow Stockholders:
Newcastle Partners, L.P. ("Newcastle Partners") is the beneficial owner of
an aggregate of 3,050,700 shares of Common Stock of Vesta Insurance Group, Inc.
("Vesta" or the "Company"), representing approximately 8.5% of the outstanding
Common Stock of the Company. Newcastle Partners does not believe the current
Board of Directors is acting in your best interests, and is therefore seeking
your support for the election of its nominees to the Board of Directors of the
Company at the annual meeting of stockholders scheduled to be held at
______________________________________________ on ______, ______ __, 2005, at
______ __.M.
Newcastle Partners urges you to carefully consider the information
contained in the attached Proxy Statement and then support its efforts by
signing, dating and returning the enclosed GOLD proxy card today. The attached
Proxy Statement and the enclosed GOLD proxy card are first being furnished to
the stockholders on or about _______, 2005.
If you have already voted for the incumbent management slate you have every
right to change your vote by signing, dating and returning a later dated proxy
card.
If you have any questions or require any assistance with your vote please
contact MacKenzie Partners, Inc., which is assisting us, at their address and
toll-free numbers listed on the following page.
Thank you for your support,
Mark E. Schwarz
Newcastle Partners, L.P.
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IF YOU HAVE ANY QUESTIONS, REQUIRE ASSISTANCE IN VOTING YOUR GOLD PROXY CARD,
OR NEED ADDITIONAL COPIES OF NEWCASTLE PARTNERS' PROXY MATERIALS, PLEASE CALL
MACKENZIE PARTNERS AT THE PHONE NUMBERS LISTED BELOW.
MACKENZIE PARTNERS, INC.
105 Madison Avenue
New York, NY 10016
PROXY@MACKENZIEPARTNERS.COM
(212) 929-5500 (Call Collect)
or
TOLL-FREE (800) 322-2885
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ANNUAL MEETING OF STOCKHOLDERS
OF
VESTA INSURANCE GROUP, INC.
-------------------------
PROXY STATEMENT
OF
NEWCASTLE PARTNERS, L.P.
-------------------------
PLEASE SIGN, DATE AND MAIL THE ENCLOSED GOLD PROXY CARD TODAY
Newcastle Partners, L.P., a Texas limited partnership ("Newcastle Partners"
or "we"), is one of the largest stockholders of Vesta Insurance Group, Inc., a
Delaware corporation ("Vesta" or the "Company"). Newcastle Partners is writing
to you in connection with the election of three nominees to the Board of
Directors of Vesta (the "Vesta Board") at the annual meeting of stockholders
scheduled to be held at ______________________________________________ on
______, ______ __, 2005, at ______ __.M., including any adjournments or
postponements thereof and any meeting which may be called in lieu thereof (the
"Annual Meeting"). Newcastle Partners has nominated three Class III directors
for election at the Annual Meeting in opposition to three incumbent directors
whose terms expire at the Annual Meeting.
This proxy statement (the "Proxy Statement") and the enclosed GOLD proxy
card are being furnished to stockholders of Vesta by Newcastle Partners in
connection with the solicitation of proxies from Vesta's stockholders to be used
at the Annual Meeting to elect Newcastle Partners' nominees, James C. Epstein,
Mark J. Morrison and Steven J. Pully (the "Nominees"), to the Vesta Board.
Newcastle Partners, Newcastle Capital Management, L.P. ("Newcastle Management"),
Newcastle Capital Group, L.L.C. ("Newcastle Group"), Mark E. Schwarz, James C.
Epstein, Mark J. Morrison and Steven J. Pully are members of a group (the
"Group") formed in connection with this proxy solicitation and are deemed
participants in this proxy solicitation. See "Other Participant Information."
This Proxy Statement and the GOLD proxy card are first being furnished to
Vesta's stockholders on or about _______, 2005.
Vesta [, pursuant to an order of the Delaware Court of Chancery,] has set
the record date for determining stockholders entitled to notice of and to vote
at the Annual Meeting as ________, 2005 (the "Record Date"). The principal
executive offices of Vesta are located at 3760 River Run Drive, Birmingham,
Alabama 35243. Stockholders of record at the close of business on the Record
Date will be entitled to vote at the Annual Meeting. According to Vesta, as of
the Record Date, there were _______ shares of common stock, $.01 par value per
share (the "Shares"), outstanding and entitled to vote at the Annual Meeting.
Newcastle Partners, along with all of the participants in this solicitation, are
the beneficial owners of an aggregate of 3,050,700 Shares, which represents
approximately 8.5% of the Shares outstanding (based on information publicly
disclosed by Vesta). The participants in this solicitation intend to vote such
Shares for the election of the Nominees.
THIS SOLICITATION IS BEING MADE BY NEWCASTLE PARTNERS AND NOT ON BEHALF OF THE
BOARD OF DIRECTORS OR MANAGEMENT OF VESTA. NEWCASTLE PARTNERS IS NOT AWARE OF
ANY OTHER MATTERS TO BE BROUGHT BEFORE THE ANNUAL MEETING. SHOULD OTHER MATTERS,
WHICH NEWCASTLE PARTNERS IS NOT AWARE OF A REASONABLE TIME BEFORE THIS
SOLICITATION, BE BROUGHT BEFORE THE ANNUAL MEETING, THE PERSONS NAMED AS PROXIES
IN THE ENCLOSED GOLD PROXY CARD WILL VOTE ON SUCH MATTERS IN THEIR DISCRETION.
NEWCASTLE PARTNERS URGES YOU TO SIGN, DATE AND RETURN THE GOLD PROXY CARD IN
FAVOR OF THE ELECTION OF ITS NOMINEES DESCRIBED IN THIS PROXY STATEMENT.
IF YOU HAVE ALREADY SENT A PROXY CARD FURNISHED BY VESTA MANAGEMENT TO THE VESTA
BOARD, YOU MAY REVOKE THAT PROXY AND VOTE FOR THE ELECTION OF NEWCASTLE
PARTNERS' NOMINEES BY SIGNING, DATING AND RETURNING THE ENCLOSED GOLD PROXY
CARD. THE LATEST DATED PROXY IS THE ONLY ONE THAT COUNTS. ANY PROXY MAY BE
REVOKED AT ANY TIME PRIOR TO THE ANNUAL MEETING BY DELIVERING A WRITTEN NOTICE
OF REVOCATION OR A LATER DATED PROXY FOR THE ANNUAL MEETING TO NEWCASTLE
PARTNERS, C/O MACKENZIE PARTNERS, INC. WHICH IS ASSISTING IN THIS SOLICITATION,
OR TO THE SECRETARY OF VESTA, OR BY VOTING IN PERSON AT THE ANNUAL MEETING.
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IMPORTANT
YOUR VOTE IS IMPORTANT, NO MATTER HOW MANY OR HOW FEW SHARES YOU OWN.
NEWCASTLE PARTNERS URGES YOU TO SIGN, DATE, AND RETURN THE ENCLOSED GOLD PROXY
CARD TODAY TO VOTE FOR THE ELECTION OF NEWCASTLE PARTNERS' NOMINEES.
The Nominees are committed, subject to their fiduciary duties, to giving
all of Vesta's stockholders the opportunity to achieve the maximum value for
their Shares. A vote FOR the Nominees will enable you - as the owners of Vesta -
to send a message to the Vesta Board that you are committed to maximizing the
value of your Shares.
o If your Shares are registered in your own name, please sign and date the
enclosed GOLD proxy card and return it to Newcastle Partners, c/o MacKenzie
Partners, Inc., in the enclosed envelope today.
o If any of your Shares are held in the name of a brokerage firm, bank, bank
nominee or other institution on the Record Date, only it can vote such
Shares and only upon receipt of your specific instructions. Accordingly,
please contact the person responsible for your account and instruct that
person to execute on your behalf the GOLD proxy card. Newcastle Partners
urges you to confirm your instructions in writing to the person responsible
for your account and to provide a copy of such instructions to Newcastle
Partners, c/o MacKenzie Partners, Inc., who is assisting in this
solicitation, at the address and telephone numbers set forth below, and on
the back cover of this Proxy Statement, so that we may be aware of all
instructions and can attempt to ensure that such instructions are followed.
If you have any questions regarding your proxy,
or need assistance in voting your Shares, please call:
MACKENZIE PARTNERS, INC.
105 Madison Avenue
New York, New York 10016
(212) 929-5500 (Call Collect)
PROXY@MACKENZIEPARTNERS.COM
or
CALL TOLL FREE (800) 322-2885
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PROPOSAL NO. 1
ELECTION OF DIRECTORS
The Vesta Board is currently composed of eight directors divided into three
classes serving staggered three-year terms. It is Newcastle Partners'
understanding that the terms of three Class III directors of the Vesta Board -
Tambra L. G. Bailie, Norman W. Gayle, III and Michael J. Gough - expire at the
Annual Meeting. Newcastle Partners expects that the Vesta Board will nominate
these incumbent directors for re-election at the Annual Meeting. Newcastle
Partners is seeking your support at the Annual Meeting to elect its Nominees in
opposition to Vesta's director nominees.
REASONS WHY NEWCASTLE PARTNERS IS CHALLENGING THE INCUMBENT DIRECTORS.
Newcastle Partners believes the election of the Nominees represents the
best means for Vesta's stockholders to maximize the value of their Shares.
Newcastle Partners, one of the largest stockholders of Vesta, has a vested
interest in the maximization of the value of the Shares. Additionally, Newcastle
Partners' Nominees have extensive experience in private and public investment,
corporate governance and business management. Specifically, James Epstein and
Mark Morrison are seasoned insurance industry executives as further discussed in
their biographical extracts below. If elected to the Vesta Board, the Nominees
will use their best efforts to cause the Company to adopt and implement a
business plan with the goal of achieving consistent profitability. The Nominees
will also seek to implement corporate governance reform while exploring all
available alternatives to maximize stockholder value. There can be no assurance
that the election of our nominees will maximize or otherwise enhance stockholder
value or improve corporate governance. If elected, the Nominees will represent a
minority of the members of the Vesta Board.
WE BELIEVE VESTA HAS BEEN SLOW TO IMPLEMENT FUNDAMENTAL CORPORATE GOVERNANCE
PRACTICES.
We believe that proper corporate governance procedures and practices and
the level of management accountability that the Vesta Board imposes are highly
relevant to Vesta's Share price and financial performance. In view of sweeping
legislation enacted by Congress including the Sarbanes-Oxley Act of 2002 and the
rules being adopted by the major stock exchanges which are promoting greater
accountability to stockholders, we believe the state of Vesta's corporate
governance is inadequate. The Company has been slow to implement the most basic
corporate governance practices, as set forth below.
VESTA HAS NOT HELD AN ANNUAL MEETING OF STOCKHOLDERS IN OVER 13 MONTHS.
As of July 7, 2005, Vesta had not held an annual meeting of stockholders in
over 13 months. Accordingly, on such date, Newcastle Partners filed a complaint
with the Delaware Court of Chancery to enforce its rights as a stockholder of
Vesta, pursuant to Section 211 of the Delaware General Corporation Law ("DGCL"),
to compel Vesta to hold an annual meeting of stockholders for the purpose of
electing directors. Since each of the directors of Vesta serves a staggered
three year term, Norman Gayle, one of the incumbent directors up for election at
the Annual Meeting, was last elected by the stockholders to serve on the Vesta
Board over 37 months ago. Remarkably, Tambra Bailie and Michael Gough, the other
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two incumbent directors up for election at the Annual Meeting, have served on
the Vesta Board for over 29 and 31 months, respectively, without ever being
elected by the stockholders. Rather, Messrs. Bailie and Gough were appointed by
the Vesta Board. We believe the stockholders, the true owners of the Company,
should have the opportunity to exercise their right to democratically install
all directors on an annual basis. For this reason, we also believe the Vesta
Board should be destaggered.
VESTA'S STAGGERED, THREE-TIERED BOARD LIMITS ACCOUNTABILITY TO STOCKHOLDERS.
Vesta's Bylaws provide that the Vesta Board shall be divided into three
classes as nearly equal in number as possible, and designated as Class I, Class
II and Class III. We believe Vesta's classified board structure is not in the
best interests of the stockholders because it reduces the accountability of the
Vesta Board and, in our view, only serves to entrench current management. We
believe that all stockholders should have the opportunity to vote to elect all
directors annually, not just once every three years. We believe that such annual
accountability would serve to keep directors closely focused on the performance
of the Company's management and on maximizing stockholder value. A classified
board of directors protects the incumbency of the board of directors and current
management, which in turn limits accountability to stockholders. It is our
belief that Vesta's corporate governance procedures and practices, and the level
of management accountability they impose, have adversely impacted the Company's
stock price and financial performance. We believe sound corporate governance
practices, such as the annual election of directors, would impose the level of
management accountability necessary to help ensure that a good performance
record continues over the long term.
If elected, the Nominees will, subject to their fiduciary duties, petition
the Vesta Board to take the necessary steps to destagger the Vesta Board so that
all directors are elected on an annual basis as soon as possible.
VESTA HAS NOT RESOLVED AN ACCOUNTING ERROR OR FILED QUARTERLY AND ANNUAL REPORTS
WITH THE SEC IN THE PAST 8 MONTHS.
The last Form 10-Q filed by Vesta was for the quarter ended June 30, 2004.
Since then, the Company has failed to comply with SEC reporting requirements
since the Company has not filed its Form 10-Q for the quarter ended September
30, 2004 (the "Q3 Form 10-Q"), the Form 10-K for the year ended December 31,
2004 (the "2004 Form 10-K") and the Form 10-Q for the quarter ended March 31,
2005 (the "Q1 Form 10-Q"). Even more alarming is the fact that Vesta has failed
to resolve an accounting error that was first announced by the Company in
November 2004. The following is a chronology of public statements made by Vesta
regarding the accounting error and filing delinquencies since November 2004:
November 8, 2004 Vesta issued a press release announcing that the filing
of the Q3 Form 10-Q would be delayed until November 16,
2004 in order for the Company to estimate the potential
impact of an unfavorable jury verdict.
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November 15, 2004 Vesta issued a press release announcing that the filing
of the Q3 Form 10-Q would be delayed due to a $1.8
million error in the balance sheet that occurred prior
to 2003 and would "immediately begin the process to
pinpoint the period and the nature of the error."
November 24, 2004 Vesta filed a Form 8-K reporting that documentation and
testing to date identified internal control weaknesses
in the documentation, design and effectiveness of
internal controls over financial reporting and that the
Company also identified a material weakness in the
effectiveness in internal controls over financial
reporting as it related to the Company's consolidation
process.
March 11, 2005 Vesta issued a press release announcing that the filing
of the Q3 Form 10-Q would be further delayed. Vesta
also announced that the filing of the 2004 Form 10-K
would be delayed since the Company had not finalized
the resolution of the error it disclosed in November
2004 and had not completed the assessment of the
effectiveness of its internal controls. Vesta disclosed
that it anticipated that the Form 10-K would be filed
on or before April 1, 2005.
March 31, 2005 Vesta issued a press release announcing that the filing
of the Form 10-K would be delayed beyond April 1, 2005
in order to provide additional time to finalize the
assessment of the effectiveness of its internal
controls and to conclude the resolution of the error
disclosed in November 2004. Vesta disclosed that it now
anticipated that the Form 10-K would be filed on or
before April 30, 2005.
April 20, 2005 Vesta filed a Form 8-K announcing that Vesta's
compensation committee approved the payment of bonuses
to its 5 highest paid executives, including Norman
Gayle, consisting of an aggregate of over $500,000 in
cash and 325,000 options.
May 11, 2005 Vesta filed a notification with the SEC that the
Company is diligently working to prepare the Q3 Form
10-Q and 2004 Form 10-K and as long as such filings
were delinquent, it would also be unable to timely file
the Q1 Form 10-Q.
June 3, 2005 Vesta issued a press release announcing a revised
estimate of the accounting error. Vesta stated that in
the process of pinpointing the period and nature of the
previously disclosed error, the Company discovered
additional errors and now believed the cumulative total
impact of correcting all errors discovered to date will
reduce GAAP stockholders' equity by a total of $11.6
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million instead of the previously reported $1.8
million, but that these estimates were subject to
change. The Company also stated that the Company has
identified material weaknesses in ceded reinsurance and
financial management and may identify additional
material weaknesses as the internal control assessments
are completed.
We are extremely disappointed that Vesta has not filed quarterly or annual
reports or resolved the accounting error in the past 8 months, despite public
announcements that these issues would be resolved sooner. We are extremely
concerned that the Company keeps changing its position on the timing of its
ability to file its delinquent SEC reports and that the scope of the accounting
error has substantially increased from what was initially identified by the
Company. We are worried that final resolution of the error, rectifying material
weaknesses in the effectiveness of internal controls over financial reporting
and filing of the quarterly and annual reports are not high enough priorities of
the Company, especially after, to our surprise, the Vesta Board found the time
to award bonuses to its executives in May 2005. We are also concerned that the
NYSE could seek to delist the Shares if Vesta does not file its delinquent
reports.
VESTA'S POISON PILL ENTRENCHES THE VESTA BOARD AND MANAGEMENT.
In June 2000, the Vesta Board adopted, without stockholder approval, a
rights agreement or "poison pill" purportedly to encourage persons who may seek
to acquire control of the Company to initiate such an acquisition through
negotiations with the Board of Directors. We believe the poison pill has the
effect of entrenching the Vesta Board and management. In our opinion, this lack
of management accountability to stockholders adversely affects stockholder
value. If the Nominees are elected, they will use their best efforts to cause
the Vesta Board to terminate Vesta's poison pill by redeeming all of the
outstanding rights. Historically, proponents of poison pills have asserted that
they enable a board of directors to respond in an orderly fashion to unsolicited
takeover bids by providing sufficient time to carefully evaluate the fairness of
such a bid. We oppose Vesta's poison pill because we believe that it places such
an effective obstacle to a takeover bid that it serves to entrench the Vesta
Board and management. We believe that Vesta's poison pill forces a would-be
acquirer to negotiate its bid for Vesta with management, instead of making its
offer directly to the stockholders of Vesta. In our opinion, the power of the
Vesta Board and management to block any bid that does not leave them in control
adversely affects stockholder value. We further believe that the effect of their
poison pill is to insulate management from the most fundamental accountability
to stockholders by providing management and the Vesta Board with a veto over
takeover bids, even when stockholders might favorably view such bids.
If elected, the Nominees will, subject to their fiduciary duties, press the
Vesta Board to repeal the poison pill.
VESTA'S CERTIFICATE OF INCORPORATION AND BYLAWS CONTAIN NUMEROUS ANTI-TAKEOVER
PROVISIONS.
Vesta's Certificate of Incorporation ("Charter") and Bylaws contain
numerous anti-takeover provisions that we believe infringe on the stockholders'
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rights to determine what is best for the Company and serve to entrench current
management. These anti-takeover provisions include, but are not limited to, the
following:
o Charter and Bylaw provisions allowing stockholders to remove
directors, but only for cause and only by the affirmative vote of at
least 80% of the voting power of the outstanding voting stock.
o Charter provision prohibiting stockholders from taking action by
written consent in lieu of a meeting.
o Charter provision authorizing Vesta Board to create and issue rights
entitling stockholders to purchase from Vesta securities of the
Company "recognizing that, under certain circumstances, the creation
and issuance of such rights could have the effect of discouraging
third parties from seeking, or impairing their ability to seek, to
acquire a significant portion of the outstanding securities of the
Corporation, to engage in any transaction which might result in a
change of control of the Corporation or to enter into any agreement,
arrangement or understanding with another party to accomplish the
foregoing . . ."
o Bylaws do not permit stockholders to call special meetings of
stockholders.
o The anti-takeover provisions above, as well as all other Bylaw
provisions, may be amended or repealed by the stockholders, but only
by the affirmative vote of 80% of the voting power of the outstanding
voting stock.
We believe the foregoing anti-takeover provisions are intended to
disenfranchise stockholders and strip away any semblance of management
accountability which Vesta's stockholders deserve. If elected, the Nominees
will, subject to their fiduciary duties, lobby the Vesta Board to eliminate the
Company's remaining anti-takeover provisions.
WE BELIEVE VESTA'S DISMAL FINANCIAL PERFORMANCE DEMONSTRATES THE VESTA BOARD'S
FAILURE TO CREATE VALUE FOR ITS STOCKHOLDERS.
Vesta's financial results over the past several years have been a
disappointment to Newcastle Partners, and it believes, to many other Vesta
stockholders. Vesta has sustained net losses during fiscal 2001, 2002 and 2003
which losses have increased from year to year. The financial results for fiscal
2004 are unknown as the Company has not yet filed its Form 10-K for that period.
o In fiscal 2001, Vesta sustained a net loss of $29,330,000.
o In fiscal 2002, Vesta's net loss increased by approximately 10% from
the prior year to $32,211,000.
o In fiscal 2003, Vesta's net loss ballooned by approximately 272% from
the prior year to $119,985,000.
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o During this three year period, expenses have increased by
approximately 82%, from $361,870,000 in fiscal 2001 to $657,361,000 in
fiscal 2003.
We believe the Vesta Board should be held accountable for these sustained
losses and inability to control expenses.
WE BELIEVE VESTA'S SHARE PRICE HAS SUFFERED AS A RESULT OF CONTINUED LOSSES.
We believe the net losses sustained by Vesta from 2001 to 2003 and Vesta's
failure to report its financial results for 2004 has had a significant negative
impact on the Company's Share price performance during this period.
o According to information contained in management's proxy statement for
the 2004 annual meeting of stockholders (the "Management Proxy
Statement"), during the period from December 31, 1998 through December
31, 2003, Vesta's Share price performance trailed the S&P Property &
Casualty Index by a significant margin.
o According to the Management Proxy Statement, during this period an
investment in Vesta would have lost over 35% of its value compared to
a loss of just over 11% had the same investment been made in the S&P
Property & Casualty Index and a loss of just over 3% had the
investment been made in the S&P 500 Index.
o Since the Management Proxy Statement, Vesta has not mailed proxy
materials reporting comparisons of its Share price with its peer group
indexes due to Vesta's failure to hold an annual meeting of
stockholders in over 13 months.
o On December 31, 2003, the date on which Vesta last compared its Share
price to its peer group indexes as described above, the Share price
closed at $3.79 per Share. On July 13, 2005, the Share price closed at
$2.69 per Share, representing a substantial 29% decrease since the
beginning of 2004.
THE NOMINEES
The following information sets forth the name, business address, present
principal occupation, and employment and material occupations, positions,
offices, or employments for the past five years of each of the Nominees. This
information has been furnished to Newcastle Partners by the Nominees. The
Nominees are citizens of the United States of America.
JAMES C. EPSTEIN (Age 46) has served as Chief Risk Officer of Contran
Corporation, a diversified holding company with controlling interests in public
and private companies, since January 2005. He has served as Chairman of the
Board and Chief Executive Officer of EWI RE, Inc., an insurance and reinsurance
brokerage and consulting firm and Contran Corporation affiliate, since November
2004, and as its President from 1995 to December 2000. He has served as Chairman
of the Board of Tall Pines Insurance Company, a Vermont captive insurer and
Contran Corporation affiliate, since November 2004. Mr. Epstein has been a
director of Hallmark Financial Services, Inc., a property and casualty insurance
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holding company, since May 2003. Certain relatives of Mr. Epstein are investors
in Newcastle Partners. The business address of Mr. Epstein is 5400 LBJ Freeway,
Suite 1060, Dallas, Texas 75240. As of the date hereof, Mr. Epstein did not
beneficially own any securities of Vesta. Mr. Epstein has not purchased or sold
any securities of Vesta during the past two years.
MARK J. MORRISON (Age 45) has served as Executive Vice President and Chief
Financial Officer of Hallmark Financial Services, Inc., a property and casualty
insurance holding company, since March 2004. From January 2001 to March 2004, he
served as President of Associates Insurance Group, a subsidiary of St. Paul
Travelers, a national provider of property casualty insurance and asset
management services. From 1996 to 2000, he served as Senior Vice President and
Chief Financial Officer of Associates Insurance Group, the insurance division of
Associates First Capital Corporation, an international provider of finance and
insurance products. The business address of Mr. Morrison is 777 Main Street,
Suite 100, Fort Worth, Texas 76102. As of the date hereof, Mr. Morrison did not
beneficially own any securities of Vesta. Mr. Morrison has not purchased or sold
any securities of Vesta during the past two years.
STEVEN J. PULLY (Age 45) has served as the President of Newcastle
Management, the general partner of Newcastle Partners, a private investment
partnership, since January 2003 and has been with Newcastle Partners since
December 2001. Mr. Pully has served as a director of Whitehall Jewellers, Inc.,
a specialty retailer of fine jewelry, since June 22, 2005 and as Chairman of the
Board since July 5, 2005. He has served as Chief Executive Officer and a
director of New Century Equity Holdings Corp., a company formerly engaged in
investing in high-growth companies, since June 2004. He has served as a director
of Pizza Inn, Inc., a franchisor and operator of pizza restaurants, since
December 2002. From January 2003 to June 2004, he served as Chief Executive
Officer of privately-held Pinnacle Frames and Accents, Inc., a domestic picture
frame manufacturer. Prior to joining Newcastle Management, from May 2000 to
December 2001, he served as a managing director in the mergers and acquisitions
department of Banc of America Securities, Inc. and from January 1997 to May 2000
he was a member of the investment banking department of Bear Stearns where he
became a senior managing director in 1999. Mr. Pully is a CPA, a CFA, and a
member of the Texas Bar. The business address of Mr. Pully is c/o Newcastle
Capital Management, L.P., 300 Crescent Court, Suite 1110, Dallas, Texas 75201.
As of the date hereof, Mr. Pully did not beneficially own any securities of
Vesta. Mr. Pully has not purchased or sold any securities of Vesta during the
past two years.
There can be no assurance that the actions our Nominees intend to take as
described above will be implemented if they are elected or that the election of
our Nominees will improve the Company's business or otherwise enhance
stockholder value. Your vote to elect the Nominees does not constitute a vote in
favor of our value enhancing plans for Vesta. Your vote to elect the Nominees
will have the legal effect of replacing three incumbent directors of Vesta with
our Nominees. Neither we (nor to our knowledge, any other person on our behalf)
has made or undertaken any analysis or reports as to whether stockholder value
will be maximized as a result of this solicitation or obtained reports from
consultants or other outside parties as to whether the proposals presented
herein would have an effect on stockholder value. There can be no assurance that
stockholder value will be maximized as a result of this solicitation or the
election of the Nominees. If elected to the Vesta Board, the Nominees will use
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their best efforts to cause the Company to take all necessary action to improve
the Company's operating results and to otherwise enhance stockholder value.
The Nominees will not receive any compensation from Newcastle Partners for
their services as directors of Vesta other than the normal compensation Steven
J. Pully receives for his services as President of Newcastle Management. Other
than as stated herein, there are no arrangements or understandings between
Newcastle Partners and any of the Nominees or any other person or persons
pursuant to which the nomination described herein is to be made, other than the
consent by each of the nominees to be named in this Proxy Statement and to serve
as a director of Vesta if elected as such at the Annual Meeting. Except as
provided under the Section entitled "Legal Proceedings" herein, none of the
Nominees is a party adverse to Vesta or any of its subsidiaries or has a
material interest adverse to Vesta or any of its subsidiaries in any material
pending legal proceedings.
Newcastle Partners does not expect that the Nominees will be unable to
stand for election, but, in the event that such persons are unable to serve or
for good cause will not serve, the Shares represented by the enclosed GOLD proxy
card will be voted for substitute nominees. In addition, Newcastle Partners
reserves the right to nominate substitute persons if Vesta makes or announces
any changes to its Bylaws or takes or announces any other action that has, or if
consummated would have, the effect of disqualifying the Nominees. In any such
case, Shares represented by the enclosed GOLD proxy card will be voted for such
substitute nominees. Newcastle Partners reserves the right to nominate
additional persons if Vesta increases the size of the Vesta Board above its
existing size or increases the number of directors serving as Class III
directors above three. Additional nominations made pursuant to the preceding
sentence are without prejudice to the position of Newcastle Partners that any
attempt to increase the size of the current Vesta Board or to increase the
number of directors serving as Class III directors constitutes an unlawful
manipulation of Vesta's corporate machinery.
YOU ARE URGED TO VOTE FOR THE ELECTION OF THE NOMINEES ON THE ENCLOSED GOLD
PROXY CARD.
-11-
VOTING AND PROXY PROCEDURES
Only stockholders of record on the Record Date will be entitled to notice
of and to vote at the Annual Meeting. Each Share is entitled to one vote.
Stockholders who sell Shares before the Record Date (or acquire them without
voting rights after the Record Date) may not vote such Shares. Stockholders of
record on the Record Date will retain their voting rights in connection with the
Annual Meeting even if they sell such Shares after the Record Date. Based on
publicly available information, Newcastle Partners believes that the only
outstanding class of securities of Vesta entitled to vote at the Annual Meeting
is the Shares.
Shares represented by properly executed GOLD proxy cards will be voted at
the Annual Meeting as marked and, in the absence of specific instructions, will
be voted FOR the election of the Nominees to the Vesta Board and, in the
discretion of the persons named as proxies, on all other matters as may properly
come before the Annual Meeting.
We are asking you to elect our Nominees. The enclosed GOLD proxy card may
only be voted for our Nominees and does not confer voting power with respect to
the Company's nominees. Accordingly, you will not have the opportunity to vote
for any of Vesta's nominees. You can only vote for Vesta's nominees by signing
and returning a proxy card provided by Vesta. Stockholders should refer to the
Company's proxy statement for the names, backgrounds, qualifications and other
information concerning Vesta's nominees. The participants in this solicitation
intend to vote all of their Shares in favor of the Nominees and will not vote
their Shares in favor of any of Vesta's nominees.
QUORUM
[In order to conduct any business at the Annual Meeting, a quorum must be
present in person or represented by valid proxies. A quorum consists of a
majority of the Shares issued and outstanding on the Record Date. All Shares
that are voted "FOR", "AGAINST" or "ABSTAIN" (or "WITHHOLD" in the case of
election of directors) on any matter will count for purposes of establishing a
quorum and will be treated as Shares entitled to vote at the Annual Meeting (the
"Votes Present").]
VOTES REQUIRED FOR APPROVAL
A plurality of the total votes cast ("Votes Cast") by holders of the Shares
for the Nominees is required for the election of directors and the three
nominees who receive the most votes will be elected [(assuming a quorum is
present)]. A vote to "WITHHOLD" for any nominee for director will be counted for
purposes of determining the Votes Present, but will have no other effect on the
outcome of the vote on the election of directors. A Stockholder may cast such
votes for the Nominees either by so marking the ballot at the meeting or by
specific voting instructions sent with a signed proxy to either Newcastle
Partners in care of MacKenzie Partners, Inc. at the address set forth on the
back cover of this Proxy Statement or to Vesta at 3760 River Run Drive,
Birmingham, Alabama 35243 or any other address provided by Vesta.
-12-
ABSTENTIONS
[Abstentions will count as Votes Present for the purpose of determining
whether a quorum is present.] Abstentions will not be counted as Votes Cast in
the election of directors.
BROKER NON-VOTES
[Shares held in street name that are present by proxy will be considered as
Votes Present for purposes of determining whether a quorum is present.] With
regard to certain proposals, the holder of record of Shares held in street name
is permitted to vote as it determines, in its discretion, in the absence of
direction from the beneficial holder of the Shares.
The term "broker non-vote" refers to shares held in street name that are
not voted with respect to a particular matter, generally because the beneficial
owner did not give any instructions to the broker as to how to vote such shares
on that matter and the broker is not permitted under applicable rules to vote
such shares in its discretion because of the subject matter of the proposal, but
whose shares are present on at least one matter. [Such shares shall be counted
as Votes Present for the purpose of determining whether a quorum is present, if
voting instructions are given by the beneficial owner as to at least one of the
matters to be voted on.] Broker non-votes will not be counted as Votes Present
with respect to matters as to which the record holder has expressly not voted.
Accordingly, Newcastle Partners believes that broker non-votes will have no
effect upon the outcome of voting on the election of directors.
REVOCATION OF PROXIES
Stockholders of Vesta may revoke their proxies at any time prior to
exercise by attending the Annual Meeting and voting in person (although
attendance at the Annual Meeting will not in and of itself constitute revocation
of a proxy) or by delivering a written notice of revocation. The delivery of a
subsequently dated proxy which is properly completed will constitute a
revocation of any earlier proxy. The revocation may be delivered either to
Newcastle Partners in care of MacKenzie Partners, Inc. at the address set forth
on the back cover of this Proxy Statement or to Vesta at 3760 River Run Drive,
Birmingham, Alabama 35243 or any other address provided by Vesta. Although a
revocation is effective if delivered to Vesta, Newcastle Partners requests that
either the original or photostatic copies of all revocations be mailed to
Newcastle Partners in care of MacKenzie Partners, Inc. at the address set forth
on the back cover of this Proxy Statement so that Newcastle Partners will be
aware of all revocations and can more accurately determine if and when proxies
have been received from the holders of record on the Record Date of a majority
of the outstanding Shares. Additionally, MacKenzie Partners, Inc. may use this
information to contact stockholders who have revoked their proxies in order to
solicit later dated proxies for the election of the Nominees.
IF YOU WISH TO VOTE FOR THE ELECTION OF THE NOMINEES TO THE VESTA BOARD, PLEASE
SIGN, DATE AND RETURN PROMPTLY THE ENCLOSED GOLD PROXY CARD IN THE POSTAGE-PAID
ENVELOPE PROVIDED.
-13-
SOLICITATION OF PROXIES
The solicitation of proxies pursuant to this Proxy Statement is being made
by Newcastle Partners. Proxies may be solicited by mail, facsimile, telephone,
telegraph, in person and by advertisements. Newcastle Partners will not solicit
proxies via the Internet.
Newcastle Partners has entered into an agreement with MacKenzie Partners,
Inc. for solicitation and advisory services in connection with this
solicitation, for which MacKenzie Partners, Inc. will receive a fee not to
exceed $___,000.00, together with reimbursement for its reasonable out-of-pocket
expenses, and will be indemnified against certain liabilities and expenses,
including certain liabilities under the federal securities laws. MacKenzie
Partners, Inc. will solicit proxies from individuals, brokers, banks, bank
nominees and other institutional holders. Newcastle Partners has requested
banks, brokerage houses and other custodians, nominees and fiduciaries to
forward all solicitation materials to the beneficial owners of the Shares they
hold of record. Newcastle Partners will reimburse these record holders for their
reasonable out-of-pocket expenses in so doing. It is anticipated that MacKenzie
Partners, Inc. will employ approximately ___ persons to solicit Vesta's
stockholders for the Annual Meeting.
The entire expense of soliciting proxies is being borne by Newcastle
Partners pursuant to the terms of the Joint Filing and Solicitation Agreement
(as defined below). Costs of this solicitation of proxies are currently
estimated to be approximately $___,000.00. Newcastle Partners estimates that
through the date hereof, its expenses in connection with this solicitation are
approximately $___,000.00.
OTHER PARTICIPANT INFORMATION
Each member of the Group is a participant in this solicitation. Mark E.
Schwarz is the managing member of Newcastle Group, a Texas limited liability
company, which is the general partner of Newcastle Management, a Texas limited
partnership, which in turn is the general partner of Newcastle Partners, a Texas
limited partnership. The principal occupation of Mr. Schwarz is serving as the
managing member of Newcastle Group. The principal business of Newcastle Group is
acting as the general partner of Newcastle Management. The principal business of
Newcastle Management is acting as the general partner of Newcastle Partners. The
principal business of Newcastle Partners is investing in securities. The
principal business address of Mr. Schwarz, Newcastle Partners, Newcastle
Management and Newcastle Group is 300 Crescent Court, Suite 1110, Dallas, Texas
75201. As of the date hereof, Newcastle Partners is the beneficial owner of
3,050,700 Shares. Mark Schwarz, Newcastle Management and Newcastle Group may be
deemed to beneficially own the Shares held by Newcastle Partners by virtue of
their affiliation with Newcastle Partners and each disclaims beneficial
ownership of such Shares except to the extent of their pecuniary interest
therein. For information regarding purchases and sales of securities of Vesta
during the past two years by Newcastle Partners, see Schedule I.
-14-
On March 21, 2005, Newcastle Partners, Newcastle Management, Newcastle
Group, Mark E. Schwarz and each of the Nominees (collectively, the "Group")
entered into a Joint Filing and Solicitation Agreement in which, among other
things, (a) the parties agreed to the joint filing on behalf of each of them of
statements on Schedule 13D with respect to the securities of Vesta to the extent
required under applicable securities laws, (b) the parties agreed to solicit
proxies or written consents for the election of the Nominees, or any other
person(s) nominated by Newcastle Partners, to the Vesta Board at the Annual
Meeting (the "Solicitation"), and (c) Newcastle Partners agreed to bear all
expenses incurred in connection with the Group's activities, including approved
expenses incurred by any of the parties in connection with the Solicitation,
subject to certain limitations. Newcastle Partners intends to seek reimbursement
from Vesta of all expenses it incurs in connection with the Solicitation.
Newcastle Partners does not intend to submit the question of such reimbursement
to a vote of security holders of the Company. Pursuant to letter agreements
dated March 21, 2005, Newcastle Partners agreed to indemnify each of Messrs.
Epstein, Morrison and Pully against any and all claims of any nature arising
from the solicitation of proxies from Vesta's stockholders at the Annual Meeting
and any related transactions.
Except as set forth in this Proxy Statement (including the Schedules
hereto), (i) during the past 10 years, no participant in this solicitation has
been convicted in a criminal proceeding (excluding traffic violations or similar
misdemeanors); (ii) no participant in this solicitation directly or indirectly
beneficially owns any securities of Vesta; (iii) no participant in this
solicitation owns any securities of Vesta which are owned of record but not
beneficially; (iv) no participant in this solicitation has purchased or sold any
securities of Vesta during the past two years; (v) no part of the purchase price
or market value of the securities of Vesta owned by any participant in this
solicitation is represented by funds borrowed or otherwise obtained for the
purpose of acquiring or holding such securities; (vi) no participant in this
solicitation is, or within the past year was, a party to any contract,
arrangements or understandings with any person with respect to any securities of
Vesta, including, but not limited to, joint ventures, loan or option
arrangements, puts or calls, guarantees against loss or guarantees of profit,
division of losses or profits, or the giving or withholding of proxies; (vii) no
associate of any participant in this solicitation owns beneficially, directly or
indirectly, any securities of Vesta; (viii) no participant in this solicitation
owns beneficially, directly or indirectly, any securities of any parent or
subsidiary of Vesta; (ix) no participant in this solicitation or any of his/its
associates was a party to any transaction, or series of similar transactions,
since the beginning of Vesta's last fiscal year, or is a party to any currently
proposed transaction, or series of similar transactions, to which Vesta or any
of its subsidiaries was or is to be a party, in which the amount involved
exceeds $60,000; (x) no participant in this solicitation or any of his/its
associates has any arrangement or understanding with any person with respect to
any future employment by Vesta or its affiliates, or with respect to any future
transactions to which Vesta or any of its affiliates will or may be a party; and
(xi) no person, including the participants in this solicitation, who is a party
to an arrangement or understanding pursuant to which the Nominees are proposed
to be elected has a substantial interest, direct or indirect, by security
holdings or otherwise in any matter to be acted on at the Annual Meeting.
-15-
LEGAL PROCEEDINGS
On July 7, 2005, Newcastle Partners filed a complaint with the Delaware
Court of Chancery, New Castle County, to enforce its rights as a stockholder of
Vesta, pursuant to Section 211 of the DGCL, to compel Vesta to hold an annual
meeting of stockholders for the purpose of electing directors. Section 211 of
the DGCL permits the Court of Chancery to compel an annual meeting of
stockholders upon application of any stockholder if there is a failure to hold
an annual meeting of stockholders for a period of 13 months after the
corporation's last annual meeting. Newcastle Partners believes that Vesta has
not held or scheduled an annual meeting of stockholders since June 1, 2004, more
than 13 months ago, and believes that no action has been taken within the last
13 months to elect directors by written consent of the stockholders of Vesta in
lieu of an annual meeting.
OTHER MATTERS AND ADDITIONAL INFORMATION
Newcastle Partners is unaware of any other matters to be considered at the
Annual Meeting. However, should other matters, which Newcastle Partners is not
aware of a reasonable time before this solicitation, be brought before the
Annual Meeting, the persons named as proxies on the enclosed GOLD proxy card
will vote on such matters in their discretion.
Newcastle Partners has omitted from this Proxy Statement certain disclosure
required by applicable law that is already included in the Company's proxy
statement. This disclosure includes, among other things, biographical
information on Vesta's directors and executive officers, information concerning
executive compensation, an analysis of cumulative total returns on an investment
in Shares during the past five years and procedures for submitting proposals for
inclusion in Vesta's proxy statement at the next annual meeting. Stockholders
should refer to the Company's proxy statement in order to review this
disclosure.
See Schedule II for information regarding persons who beneficially own more
than 5% of the Shares and the ownership of the Shares by the management of
Vesta.
The information concerning Vesta contained in this Proxy Statement and the
Schedules attached hereto has been taken from, or is based upon, publicly
available information.
NEWCASTLE PARTNERS, L.P.
_____, 2005
-16-
SCHEDULE I
----------
TRANSACTIONS IN THE SECURITIES OF VESTA INSURANCE GROUP, INC.
BY NEWCASTLE PARTNERS, L.P. DURING THE PAST TWO YEARS
Class Quantity Price Per Date of
of Security Purchased Unit ($) Purchase
------------- --------------------- --------------- -------------------------
NEWCASTLE PARTNERS, L.P.
--------------------------------------------------------------------------------
Common Stock 31,300 3.45 3/08/05
Common Stock 62,900 3.46 3/09/05
Common Stock 10,500 3.49 3/10/05
Common Stock 52,700 3.56 3/11/05
Common Stock 49,400 3.59 3/14/05
Common Stock 1,600 3.51 3/16/05
Common Stock 13,100 3.50 3/17/05
Common Stock 2,900 3.51 3/18/05
Common Stock 31,800 3.47 3/21/05
Common Stock 24,300 3.49 3/22/05
Common Stock 15,900 3.55 3/28/05
Common Stock 38,400 3.51 3/29/05
Common Stock 13,400 3.52 3/30/05
Common Stock 86,800 3.50 3/31/05
Common Stock 28,200 3.50 4/01/05
Common Stock 15,100 3.54 4/04/05
Common Stock 2,900 3.56 4/07/05
Common Stock 18,800 3.53 4/08/05
Common Stock 34,200 3.49 4/11/05
Common Stock 90,600 3.51 4/12/05
Common Stock 78,600 3.48 4/13/05
Common Stock 62,300 3.53 4/14/05
Common Stock 53,200 3.44 4/15/05
Common Stock 395,400 3.40 4/18/05
Common Stock 397,200 3.37 4/19/05
Common Stock 52,900 3.32 4/20/05
Common Stock 136,600 3.36 4/21/05
Common Stock 10,000 2.70 4/26/05
Common Stock 74,100 2.60 4/27/05
Common Stock 129,000 2.43 4/28/05
Common Stock 53,100 2.50 4/29/05
Common Stock 17,900 2.38 5/02/05
Common Stock 25,600 2.23 5/03/05
Common Stock 65,700 2.24 5/04/05
Common Stock 24,400 2.19 5/05/05
Common Stock 200,500 2.28 5/06/05
-17-
Class Quantity Price Per Date of
of Security Purchased Unit ($) Purchase
------------- --------------------- --------------- -------------------------
Common Stock 76,600 2.22 5/10/05
Common Stock 42,300 2.22 5/11/05
Common Stock 83,600 2.25 5/12/05
Common Stock 42,200 2.19 5/13/05
Common Stock 29,400 2.29 5/16/05
Common Stock 22,200 2.29 5/17/05
Common Stock 10,300 2.38 5/18/05
Common Stock 22,000 2.48 5/19/05
Common Stock 400 2.54 5/20/05
Common Stock 15,000 2.50 5/23/05
Common Stock 18,200 2.47 5/24/05
Common Stock 10,900 2.46 5/25/05
Common Stock 17,000 2.50 5/26/05
Common Stock 12,500 2.50 5/27/05
Common Stock 19,100 2.51 6/01/05
Common Stock 220,800 2.52 6/02/05
Common Stock 6,600 2.55 6/03/05
Common Stock 300 2.60 6/08/05
-18-
SCHEDULE II
-----------
SECURITY OWNERSHIP OF PRINCIPAL STOCKHOLDERS AND MANAGEMENT
-19-
IMPORTANT
Tell your Board what you think! Your vote is important. No matter how many
Shares you own, please give Newcastle Partners your proxy FOR the election of
the Nominees by taking three steps:
o SIGNING the enclosed GOLD proxy card,
o DATING the enclosed GOLD proxy card, and
0 MAILING the enclosed GOLD proxy card TODAY in the envelope provided
(no postage is required if mailed in the United States).
If any of your Shares are held in the name of a brokerage firm, bank, bank
nominee or other institution, only it can vote such Shares and only upon receipt
of your specific instructions. Accordingly, please contact the person
responsible for your account and instruct that person to execute the GOLD proxy
card representing your Shares. Newcastle Partners urges you to confirm in
writing your instructions to Newcastle Partners in care of MacKenzie Partners,
Inc. at the address provided below so that Newcastle Partners will be aware of
all instructions given and can attempt to ensure that such instructions are
followed.
If you have any questions or require any additional information concerning
this Proxy Statement, please contact MacKenzie Partners, Inc. at the address set
forth below.
MACKENZIE PARTNERS, INC.
105 Madison Avenue
New York, New York 10016
(212) 929-5500 (Call Collect)
PROXY@MACKENZIEPARTNERS.COM
or
CALL TOLL FREE (800) 322-2885
-20-
PRELIMINARY COPY SUBJECT TO COMPLETION
DATED JULY 14, 2005
VESTA INSURANCE GROUP, INC.
2005 ANNUAL MEETING OF STOCKHOLDERS
THIS PROXY IS SOLICITED ON BEHALF OF NEWCASTLE PARTNERS, L.P.
THE BOARD OF DIRECTORS OF VESTA INSURANCE GROUP, INC.
IS NOT SOLICITING THIS PROXY
P R O X Y
The undersigned appoints Mark E. Schwarz and Steven J. Pully, and each of them,
attorneys and agents with full power of substitution to vote all shares of
common stock of Vesta Insurance Group, Inc. (the "Company") which the
undersigned would be entitled to vote if personally present at the Annual
Meeting of Stockholders of the Company, and including at any adjournments or
postponements thereof and at any meeting called in lieu thereof.
The undersigned hereby revokes any other proxy or proxies heretofore given to
vote or act with respect to the shares of common stock of the Company held by
the undersigned, and hereby ratifies and confirms all action the herein named
attorneys and proxies, their substitutes, or any of them may lawfully take by
virtue hereof. If properly executed, this Proxy will be voted as directed on the
reverse and in their discretion with respect to any other matters as may
properly come before the Annual Meeting that are unknown to Newcastle Partners,
L.P. a reasonable time before this solicitation.
IF NO DIRECTION IS INDICATED WITH RESPECT TO THE PROPOSAL ON THE REVERSE, THIS
PROXY WILL BE VOTED FOR PROPOSAL 1.
This Proxy will be valid until the sooner of one year from the date indicated on
the reverse side and the completion of the Annual Meeting.
IMPORTANT: PLEASE SIGN, DATE AND MAIL THIS PROXY CARD PROMPTLY!
CONTINUED AND TO BE SIGNED ON REVERSE SIDE
[X] PLEASE MARK VOTE AS IN THIS EXAMPLE
1. ELECTION OF DIRECTORS:
FOR ALL
WITHHOLD EXCEPT
AUTHORITY TO NOMINEE(S)
FOR ALL VOTE FOR ALL WRITTEN
NOMINEES NOMINEES BELOW
Nominees: James C. Epstein [ ] [ ] [ ]
Mark J. Morrison
Steven J. Pully
______________
DATED: ____________________________
____________________________________
(Signature)
____________________________________
(Signature, if held jointly)
____________________________________
(Title)
WHEN SHARES ARE HELD JOINTLY, JOINT OWNERS SHOULD EACH SIGN. EXECUTORS,
ADMINISTRATORS, TRUSTEES, ETC., SHOULD INDICATE THE CAPACITY IN WHICH SIGNING.
PLEASE SIGN EXACTLY AS NAME APPEARS ON THIS PROXY.