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
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[X] Preliminary Proxy Statement [ ] Confidential, for Use of the
Commission Only (as permitted by
Rule 14a-6(e)(2))
[ ] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
REDWOOD TRUST, INC.
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(Name of Registrant as Specified In Its Charter)
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(Name of Person(s)Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
1) Title of each class of securities to which transaction applies:
2) Aggregate number of securities to which transaction applies:
3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the
filing fee is calculated and state how it was determine):
4) Proposed maximum aggregate value of transaction:
5) Total fees paid:
[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was
paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
1) Amount Previously Paid:
2) Form, Schedule or Registration Statement No.:
3) Filing Party:
4) Date Filed:
RWT
REDWOOD TRUST, INC.
591 Redwood Highway, Suite 3100
Mill Valley, California 94941
(415) 389-7373
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NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
To the Stockholders
of Redwood Trust, Inc.
You are cordially invited to attend the Annual Meeting of Stockholders
of Redwood Trust, Inc., a Maryland corporation (the "Company"), to be held on
Thursday, June 4, 1998, at 10:00 a.m., PDT, at The Mandarin Oriental Hotel, 222
Sansome Street, San Francisco, California, for the following purposes:
1. The election of three Class I Directors to serve until the Company's
Annual Meeting of Stockholders to be held in 2001 or until such
directors' successors are elected and qualified;
2. To consider and act upon a proposal to approve technical amendments to
the Company's Charter (i) to conform to the requirements of the New York
Stock Exchange and (ii) to clarify the application of the Company's 9.8%
REIT-qualifying stock ownership requirements.
3. Ratification of the selection of Coopers & Lybrand, L.L.P. as the
Company's independent public accountants for the fiscal year ending
December 31, 1998; and
4. To transact such other business as may properly come before the Annual
Meeting or at any adjournments thereof.
A proxy statement describing the matters to be considered at the Annual
Meeting is attached to this notice. The Board of Directors has fixed the close
of business on March 23, 1998, as the record date for determination of
stockholders entitled to notice of, and to vote at, the Annual Meeting and at
any adjournments thereof.
Management desires to have a maximum representation of stockholders at
the Annual Meeting. The Company may incur substantial additional proxy
solicitation costs if a sufficient number of proxies are not returned in advance
of the Annual Meeting. In order that your shares may be represented at the
Annual Meeting, management respectfully requests that you date, execute and
promptly mail the enclosed proxy in the accompanying postage-paid envelope. A
proxy may be revoked by a shareholder by notice in writing to the Secretary of
the Company at any time prior to its use, by presentation of a later-dated
proxy, or by attending the Annual Meeting and voting in person.
By Order of the Board of Directors
FREDERICK H. BORDEN
Secretary
Mill Valley, California
March 31, 1998
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YOUR VOTE IS IMPORTANT
PLEASE PROMPTLY MARK, DATE, SIGN AND RETURN
YOUR PROXY IN THE ENCLOSED ENVELOPE.
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RWT
REDWOOD TRUST, INC.
591 Redwood Highway, Suite 3100
Mill Valley, California 94941
(415) 389-7373
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PROXY STATEMENT
ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD JUNE 4, 1998
To Our Stockholders:
This Proxy Statement is furnished in connection with the solicitation of
proxies by the Board of Directors of Redwood Trust, Inc., a Maryland corporation
(the "Company"), for use at the Annual Meeting of Stockholders of the Company
(the "Annual Meeting") to be held, on Thursday, June 4, 1998 at 10:00 a.m.,
Pacific Daylight Time, at The Mandarin Oriental Hotel, 222 Sansome Street, San
Francisco, California, and any adjournments thereof. This Proxy Statement, the
accompanying proxy card and the Notice of Annual Meeting are being provided to
stockholders beginning on or about March 31, 1998.
GENERAL INFORMATION
SOLICITATION OF PROXIES
The enclosed proxy is solicited by the Board of Directors of the
Company. The costs of this solicitation will be borne by the Company. Proxy
solicitations will be made by mail, and also may be made by personal interview,
telephone, facsimile transmission and telegram on behalf of the Company by
directors and officers of the Company. Banks, brokerage houses, nominees and
other fiduciaries will be requested to forward the proxy soliciting material to
the beneficial owners and to obtain authorization for the execution of proxies.
The Company will, upon request, reimburse such parties for their reasonable
expenses in forwarding proxy materials to their beneficial owners. The Company
does not expect to engage an outside firm to solicit votes, but if such a firm
is engaged subsequent to the date of this Proxy Statement, the cost is estimated
to be less than $10,000, plus reasonable out-of-pocket expenses.
VOTING RIGHTS
Holders of shares of the Company's common stock ("Common Stock") at the
close of business on March 23, 1998, the record date, are entitled to notice of,
and to vote at, the Annual Meeting. On that date, 14,070,557 shares of Common
Stock were outstanding. Each share of Common Stock outstanding on the record
date is entitled to one vote on each matter presented at the Annual Meeting. The
presence, in person or by proxy, of stockholders representing 50% or more of the
issued and outstanding stock entitled to vote constitutes a quorum for the
transaction of business at the Annual Meeting. If a quorum is present, (i) a
plurality of the votes cast at the Meeting is required for election as a
director, (ii) the affirmative vote of the majority of the outstanding shares of
the Company is required to approve the proposed Charter amendments, and (iii)
the affirmative vote of the majority of the shares present, in person or by
proxy, at the Annual Meeting and entitled to vote is required for all other
matters. Cumulative voting in the election of directors is not permitted.
Abstentions are considered shares present and entitled to vote, and therefore
have the same legal effect as a vote against all matters presented at the Annual
Meeting other than the election of directors. Any shares held in street name for
which the broker or nominee receives no instructions from the beneficial owner,
and as to which such broker or nominee does not have discretionary voting
authority under applicable New York Stock Exchange rules, will be considered as
shares not entitled to vote and will therefore not be considered in the
tabulation of the votes. Accordingly, a broker non-vote will have no effect on
items (i) and (iii) above but will have the same effect as a vote against item
(ii) which requires the approval of the majority of outstanding shares.
VOTING OF PROXIES
Shares of the Common Stock represented by all properly executed proxies
received in time for the Annual Meeting will be voted in accordance with the
choices specified in the proxies. Unless contrary instructions are indicated on
the proxy, the shares will be voted FOR the election of the nominees named in
this proxy statement as directors, FOR the approval of the proposed Charter
amendments, and FOR the appointment of Coopers & Lybrand, L.L.P. as the
Company's auditors.
The management and the Board of Directors of the Company know of no
matters to be brought before the Annual Meeting other than as set forth herein.
To date, no stockholders' proposals have been received by the Company. However,
if any other matters of which the management and Board of Directors of the
Company are not now aware are presented properly to the stockholders for action,
it is the intention of the proxy holders named in the enclosed proxy to vote in
their discretion on all matters on which the shares represented by such proxy
are entitled to vote.
REVOCABILITY OF PROXY
The giving of the enclosed proxy does not preclude the right to vote in
person should the stockholder giving the proxy so desire. A proxy may be revoked
at any time prior to its exercise by delivering a written statement to the
Secretary of the Company that the proxy is revoked, by presenting to the Company
a later-dated proxy, or by attending the Annual Meeting and voting in person.
ANNUAL REPORT
The 1997 Annual Report including financial statements for the year ended
December 31, 1997, which is being mailed to stockholders together with the Proxy
Statement, contains financial and other information about the activities of the
Company, but is not incorporated into this Proxy Statement and is not to be
considered a part of these proxy soliciting materials.
The 1997 Annual Report includes the annual report on From 10-K for the
year ended December 31, 1997 as filed with the SEC. Any exhibits listed in the
Form 10-K will be furnished upon request at the actual expense incurred by the
Company in furnishing such exhibit. Any such requests should be directed to the
Company's Secretary at the Company's executive offices set forth in this Proxy
Statement.
ITEM 1 -- ELECTION OF DIRECTORS
The Company's Articles of Incorporation and Bylaws provide for a
classified Board of Directors comprised of Classes I, II and III. Class I
Directors are scheduled to be elected at the 1998 Annual Meeting to serve for a
three-year term and until their successors are elected and duly qualified. The
Company's Bylaws further provide that, except in the case of a vacancy, a
majority of the members of the Board of Directors and of any committee of the
Board of Directors will be at all times Independent Directors. The nominees for
Class I directors of the Board of Directors are set forth below. Unless
authorization is withheld, the persons named as proxies will vote FOR the
nominees for directors listed below unless otherwise specified by the
stockholder. In the event any nominee is unable or declines to serve as a
director at the time of the Annual Meeting, the proxies will be voted for any
nominee who shall be designated by the present Board of Directors to fill the
vacancy. In the event that additional persons are nominated for election as
directors, the proxy holders intend to vote all proxies received by them for the
nominees listed below and against any other nominees. As of the date of this
Proxy Statement, the Board of Directors is not aware of any nominee who is
unable or will decline to serve as director. All of the nominees listed below
already are serving as directors of the Company.
2
The election to the Board of Directors of each of the three nominees
identified in this Proxy Statement will require a plurality of the votes cast,
in person or by proxy, at the Annual Meeting. THE BOARD OF DIRECTORS UNANIMOUSLY
RECOMMENDS THAT STOCKHOLDERS VOTE FOR THE THREE NOMINEES IDENTIFIED BELOW.
NOMINEES TO BOARD OF DIRECTORS
NAME POSITION WITH THE COMPANY
Frederick H. Borden Vice Chairman, Secretary and Director
Nello Gonfiantini Director
Mariann Byerwalter Director
Certain biographical information regarding each nominee is set forth
below along with biographical information for each continuing director.
CLASS I NOMINEES
FREDERICK H. BORDEN, age 52, has served as Vice Chairman of the Board
and Secretary of the Company since 1994 and as Secretary and a Director of
Sequoia Mortgage Funding Corporation, a subsidiary of the Company, since
February, 1997. From 1992 through March of 1997 Mr. Borden was a Principal with
GB Capital. Prior to joining GB Capital, Mr. Borden was Senior Vice President of
Douglas, Emmett & Company, where he organized an institutional capital raising
effort to fund debt and equity investments in West Los Angeles commercial real
estate properties. From 1985 to 1990, Mr. Borden worked as a specialist in
raising capital for financial institutions and as a high yield bond salesman for
Drexel Burnham Lambert. In 1984, Mr. Borden was the sales manager for the
mortgage loan trading department of Farmer's Savings Bank. Mr. Borden was one of
the founding members of Salomon Brothers' mortgage securities department in 1978
and was manager of the West Coast mortgage sales department until 1984.
MARIANN BYERWALTER, age 37, was elected to the Board of Directors in
March 1998. Ms. Byerwalter is the Chief Financial Officer and Vice President for
Business Affairs of Stanford University. From 1987 to 1996 Ms. Byerwalter was a
partner and co-founder of America First Financial Corporation. Ms. Byerwalter
was also the Chief Operating Officer, Chief Financial Officer and Director of
America First Eureka Holdings, the holding company for EurekaBank, a publicly
traded institution. She was the Chief Financial Officer of Eureka Bank from 1993
to 1996 and has been a member of its Board of Directors since 1988. From 1984 to
1987 Ms. Byerwalter was a Vice President for Strategic Planning and Corporate
Development at BankAmerica Corporation. From 1984 to 1987 she was a Vice
President of the BankAmerica Venture Capital Corporation.
NELLO GONFIANTINI, age 43, has been a Director of the Company since
1994. Mr. Gonfiantini manages a private mortgage finance and real estate
development business in Reno, Nevada. Mr. Gonfiantini has been chairman of the
Board, President and Chief Executive Officer of Specialty Mortgage Trust, Inc.,
a Maryland corporation organized as a real estate investment trust, since its
formation in October 1997. From 1986 until 1994, Mr. Gonfiantini was the
Chairman, CEO, and President of Home Federal Savings Bank of Nevada.
3
CLASS II AND CLASS III DIRECTORS -- TERMS EXPIRING AFTER 1998
GEORGE E. BULL, age 49, has served as Chairman of the Board and Chief
Executive Officer of the Company since 1994 and as Chairman of the Board of
Sequoia Mortgage Funding Corporation, a subsidiary of the Company, since
February, 1997. From 1983 through March 1997 Mr. Bull was the President of
George E. Bull, III Capital Management, Inc. ("GB Capital"). GB Capital
discontinued operating as a business on March 31, 1997. GB Capital assisted
banks, insurance companies, and savings and loans in managing portfolios of
securitized and unsecuritized mortgage loans, in arranging collateralized
borrowings, in hedging balance sheet risks, and with other types of capital
markets transactions. In 1991 and 1992, Mr. Bull served as Acting Chief
Investment Officer of First Capital Life Insurance Company, managing its $4
billion securities portfolio and over $200 million in commercial real estate
loans. He also worked during this period in various aspects of fixed income
portfolio management with Wood Island Associates, Inc. From 1991 though 1993,
Mr. Bull and GB Capital oversaw the management of the $350 million portfolio of
commercial real estate investments and the $8 billion securities portfolio of
Executive Life Insurance Company (in Rehabilitation) on behalf of the California
Department of Insurance. Mr. Bull is a Class III director whose term expires in
2000.
DAN A. EMMETT, age 58, has been a Director of the Company since 1994.
Mr. Emmett is the co-founder and President of Douglas Emmett Realty Advisors, a
leading real estate investment advisor in Los Angeles, and of Douglas, Emmett
and Company, a leading commercial and multifamily real estate development and
management company established in 1971. Mr. Emmett is a Class III director whose
term expires in 2000.
THOMAS F. FARB, age 41, has been a Director of the Company since 1994.
Mr. Farb is the Executive Vice President of Finance, Chief Financial Officer and
Treasurer of Interneuron Pharmaceuticals, Inc., a publicly-held pharmaceutical
company. From 1992 to 1994, Mr. Farb was the Vice President of Finance and
Corporate Development, Chief Financial Officer and Controller of Cytyc
Corporation, a medical device/diagnostics company. From 1989 to 1992, Mr. Farb
was Senior Vice President, Chief Financial Officer and Director of AIRFUND
Corporation, where he closed numerous international aircraft financing
transactions involving various interest rate hedges and multiple layers of debt
and equity. Mr. Farb is currently a director of HNC Software, Inc., a public
company. Mr. Farb is a Class II director whose term expires in 1999.
DOUGLAS B. HANSEN, age 40, has served as President, Chief Financial
Officer and a Director of the Company since 1994 and as President and a Director
of Sequoia Mortgage Funding Corporation, a subsidiary of the Company, since
February, 1997. From 1990 through March 1997 Mr. Hansen was a Principal with GB
Capital. From 1991 to 1993, Mr. Hansen also served as a Special Deputy Insurance
Commissioner of the State of California and as the Acting Chief Investment
Officer of Executive Life Insurance Company (in Rehabilitation), managing its $8
billion portfolio of securities and its Investment Department. In 1991 and 1992,
Mr. Hansen worked in various aspects of fixed income portfolio management with
Wood Island Associates, Inc. From 1992 to 1994, Mr. Hansen served as the Acting
Chief Investment Officer of Old Colony Life Insurance Company, a failed
insurance company conserved by the State of Georgia. Prior to joining GB
Capital, Mr. Hansen worked from 1987 through 1990 at Merrill Lynch as a
specialist in mortgage loans and securities and hedging instruments. Mr. Hansen
is a Class II director whose term expires in 1999.
4
CHARLES J. TOENISKOETTER, age 53, has been a Director of the Company
since 1994. Mr. Toeniskoetter is the President of Toeniskoetter & Breeding, Inc.
Development, a company which has developed, and owns and manages over $100
million of commercial and industrial real estate properties, and is the
President of Toeniskoetter & Breeding, Inc. Construction, a commercial and
industrial construction company that has completed over $250 million of
construction contracts since its founding. Mr. Toeniskoetter co-founded both of
these companies in 1983. Mr. Toeniskoetter serves on the Board of the San Jose
Water Company and a number of non-profit foundations and other community
entities. Mr. Toeniskoetter is a Class II director whose term expires in 1999.
INFORMATION CONCERNING THE BOARD OF DIRECTORS
The Audit Committee of the Board of Directors consists of Mr. Emmett and
Mr. Toeniskoetter. The Audit Committee reviews and approves the scope of the
annual audit undertaken by the Company's independent certified public
accountants. The Audit Committee met one time in 1997. The Board of Directors
also has a Compensation Committee consisting of Mr. Farb and Mr. Gonfiantini.
The Compensation Committee met seven times in 1997. The Company has no other
standing committees of the Board of Directors.
The Board of Directors held twelve regular meetings in 1997. None of the
Directors attended fewer than 75% of the meetings of the Board of Directors and
the committees on which he served.
The Directors who are not employed by the Company (the "Independent
Directors") receive an annual fee of $6,000 per year, plus a fee of $500 for
each meeting of the Board of Directors attended in person and $250 for each
meeting attended telephonically. They also are granted options to purchase 2,500
shares of the Company's Common Stock, together with DERs, at the fair market
value on the date of grant each year on the day after the Annual Meeting of
Stockholders. Independent Directors are reimbursed for expenses related to their
attendance at Board of Directors meetings.
MANAGEMENT OF THE COMPANY
The executive officers of the Company and their positions are as
follows:
NAME POSITION WITH THE COMPANY AGE
- ---- ------------------------- ---
George E. Bull Chairman of the Board and Chief Executive Officer 49
Douglas B. Hansen President, Chief Financial Officer and Director 40
Frederick H. Borden Vice Chairman of the Board and Secretary 52
Vickie L. Rath Vice President, Treasurer and Controller 38
The executive officers serve at the discretion of the Company's Board of
Directors. Biographical information regarding Mr. Bull, Mr. Hansen and Mr.
Borden is provided above. Biographical information regarding Ms. Rath is set
forth below.
VICKIE L. RATH, age 38, has served as Vice President, Treasurer and
Controller of the Company since 1994 and as Treasurer and Assistant Secretary of
Sequoia Mortgage Funding Corporation, a subsidiary of the Company, since
February, 1997. Ms. Rath acted as an independent consultant to GB Capital from
February 1994 to August 1994 and served as a Vice President of GB Capital from
August 1994 to December 1995. From 1993 to 1994, Ms. Rath served as Principal
and Controller of Wells Fargo Nikko Investment Advisors. From 1988 to 1993, Ms.
Rath was Vice President and Controller of TIS Mortgage Investment Company, a
NYSE-listed REIT and served as its Treasurer from 1989 to 1993. In addition, Ms.
Rath served as the Principal Financial Officer of TIS Financial Services, Inc.
from 1988 to 1993, as Vice President, Secretary and Treasurer of TIS Asset
Management from 1991 to 1993 and as Assistant Treasurer of INVG Mortgage
Securities Corp., a REIT traded on NASDAQ from 1992 to 1993. Ms. Rath is a
Certified Public Accountant.
5
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth the beneficial ownership of Common Stock
of the Company as of February 1, 1998, by each person who is known to the
Company to own beneficially more than 5% of the Company's Common Stock, by each
director, by each of the executive officers named in the Summary Compensation
Table, and by all directors and executive officers as a group:
NUMBER OF SHARES
BENEFICIALLY APPROXIMATE
NAME OWNED % OWNED
- ---- ---------------- -----------
Wallace R. Weitz & Company (1) 1,951,199 13.82%
FMR Corp. (2) 922,035 6.53%
Ryback Management Corporation (3) 800,000 5.67%
George E. Bull (4) 146,383 1.04%
Douglas B. Hansen (5) 128,926 *
Frederick H. Borden (6) 103,917 *
Mariann Byerwalter 0 *
Dan A. Emmett 13,138 *
Thomas F. Farb (7) 5,250 *
Nello Gonfiantini (8) 41,165 *
Charles J. Toeniskoetter (9) 7,996 *
Vickie L. Rath (10) 24,175 *
All Directors and Executive Officers 473,947 3.3%
as a group (9 persons) (11)
- ------------------
* LESS THAN ONE PERCENT
(1) ADDRESS: 1125 SOUTH 103RD STREET, SUITE 600, OMAHA, NEBRASKA 68124.
(2) ADDRESS: 82 DEVONSHIRE STREET, BOSTON, MASSACHUSETTS 02109.
(3) ADDRESS: 7711 CARONDELET AVE., BOX 16900, ST. LOUIS, MISSOURI 63105.
(4) INCLUDES 124,947 SHARES CURRENTLY OUTSTANDING HELD OF RECORD BY THE BULL
TRUST, 18,436 SHARES ISSUABLE UPON THE EXERCISE OF STOCK OPTIONS
EXERCISABLE WITHIN 60 DAYS AND 3,000 SHARES CURRENTLY OUTSTANDING HELD OF
RECORD BY MR. BULL'S CHILDREN.
(5) INCLUDES 18,436 SHARES ISSUABLE UPON THE EXERCISE OF STOCK OPTIONS
EXERCISABLE WITHIN 60 DAYS.
(6) INCLUDES 13,390 SHARES ISSUABLE UPON THE EXERCISE OF STOCK OPTIONS
EXERCISABLE WITHIN 60 DAYS, AND 260 SHARES CURRENTLY OUTSTANDING HELD OF
RECORD BY MR. BORDEN'S CHILDREN.
(7) INCLUDES 2,137 SHARES ISSUABLE UPON THE EXERCISE OF STOCK OPTIONS
EXERCISABLE WITHIN 60 DAYS.
(8) INCLUDES 36,165 SHARES CURRENTLY OUTSTANDING HELD OF RECORD BY THE
GONFIANTINI III 1981 TRUST, 2,500 SHARES ON WHICH MR. GONFIANTINI HAS
VOTING AND INVESTMENT POWER IN HELD OF RECORD BY THE GONZO FINANCIAL PROFIT
SHARING TRUST AND 2,500 SHARES ON WHICH MR. GONFIANTINI HAS VOTING AND
INVESTMENT POWER IN HELD OF RECORD BY GONZO FINANCIAL.
(9) INCLUDES 5,026 SHARES ISSUABLE UPON THE EXERCISE OF STOCK OPTIONS
EXERCISABLE WITHIN 60 DAYS. ALSO INCLUDES 400 SHARES ON WHICH MR.
TOENISKOETTER HAS VOTING AND INVESTMENT POWER IN THE TBI CONSTRUCTION
PROFIT SHARING TRUST.
(10) INCLUDES 8,175 SHARES ISSUABLE UPON THE EXERCISE OF STOCK OPTIONS
EXERCISABLE WITHIN 60 DAYS.
(11) INCLUDES 65,600 SHARES ISSUABLE UPON THE EXERCISE OF STOCK OPTIONS
EXERCISABLE WITHIN 60 DAYS.
6
EXECUTIVE COMPENSATION
The following Summary Compensation Table sets forth information
concerning compensation earned in the years ended December 31, 1997, 1996 and
1995 by the Company's Chief Executive Officer and its three other executive
officers.
SUMMARY COMPENSATION TABLE
- ---------------------------------------------------------------------------------------------------------
LONG-TERM
ANNUAL COMPENSATION COMPENSATION AWARDS
------------------------------- ------------------------
DIVIDEND SECURITIES
EQUIVALENT UNDERLYING
NAME AND PRINCIPAL YEAR SALARY BONUS DERS RIGHTS OPTIONS OTHER
POSITION ($) ($) ($)(1) ($)(2) (#)(3) (#) COMPENSATION($)(4)
- ------------------ ---- ------ ----- -------- ---------- ---------- ------------------
George E. Bull 1997 $190,104 -- $178,265 3,335 140,736 $21,392
Chairman of the Board 1996 169,646 -- 11,111 2,839 27,100 19,975
Chief Executive 1995 75,408 -- -- 590 46,528 7,688
Douglas B. Hansen 1997 $190,104 -- $178,265 3,335 140,736 $21,392
President and Chief 1996 169,646 -- 11,111 2,839 27,100 19,975
Financial Officer 1995 75,408 -- -- 590 46,528 7,688
Frederick H. Borden 1997 $190,104 -- $135,765 2,072 80,903 $21,392
Vice Chairman of 1996 169,646 -- 11,111 1,764 27,100 19,975
the Board and 1995 75,408 -- -- 367 28,905 7,688
Secretary
Vickie L. Rath 1997 $126,736 -- $31,175 1,075 12,441 $21,392
Vice President, 1996 113,097 22,619 5,945 915 14,500 19,380
Treasurer and Controller 1995 66,217 33,108 -- 190 15,000 6,327
- ------------------
(1) AMOUNTS STATED INCLUDE BONUS AMOUNTS ACCRUED DURING THE FISCAL YEAR AND
PAID IN THE FOLLOWING JANUARY.
(2) REPRESENTS TO CASH DIVIDEND EQUIVALENT RIGHTS ("DERS") PAID TO EXECUTIVE
OFFICERS AND INCLUDES CASH DERS AMOUNTS ACCRUED DURING THE FISCAL YEAR
AND PAID IN THE FOLLOWING JANUARY. THE EXECUTIVE OFFICERS WILL CONTINUE
TO RECEIVE CASH DER PAYMENTS ON CERTAIN OPTIONS UNTIL THE RELATED
OPTIONS ARE EXERCISED OR TERMINATED.
(3) REPRESENTS THE NUMBER OF SHARES OF STOCK WHICH ARE ACCRUED STOCK DERS
AND ARE ISSUABLE TO HOLDERS UPON THE EXERCISE OF THE RELATED STOCK
OPTIONS.
(4) ANNUAL COMPANY CONTRIBUTIONS TO THE COMPANY'S PROFIT SHARING PLAN.
The following table sets forth, for each of the executive officers named
in the Summary Compensation Table above, certain information concerning stock
options granted during the 1997 fiscal year:
OPTION GRANTS IN LAST FISCAL YEAR
- -------------------------------------------------------------------------------------------------------------
INDIVIDUAL GRANTS
------------------------------------------------------
NUMBER POTENTIAL REALIZABLE VALUE
OF % OF TOTAL AT ASSUMED ANNUAL RATES OF
SECURITIES OPTIONS EXERCISE STOCK PRICE APPRECIATION
UNDERLYING GRANTED TO OR FOR OPTION TERM
OPTIONS EMPLOYEES IN BASE PRICE EXPIRATION --------------------------
NAME GRANTED(#) FISCAL YEAR ($/Sh) DATE 5% ($) 10% ($)
---- ---------- ----------- ---------- ---------- --------- ----------
George E. Bull 100,000 22.21% $37.750 1/17/07 $2,374,077 $6,016,378
40,736 9.05% $45.000 7/25/07 1,152,839 2,921,521
Douglas B. Hansen 100,000 22.21% $37.750 1/17/07 2,374,077 6,016,378
40,736 9.05% $45.000 7/25/07 1,152,839 2,921,521
Frederick H. Borden 50,000 11.10% $37.750 1/18/07 1,187,039 3,008,189
6,499 1.44% $29.250 10/17/07 119,550 302,964
24,404 5.42% $20.250 12/23/07 310,787 787,597
Vickie L. Rath 3,791 0.84% $29.250 10/17/07 69,736 176,724
8,650 1.92% $20.250 12/23/07 110,158 279,163
7
The following table sets forth, for the executive officers named in the
Summary Compensation Table above, certain information regarding the exercise of
stock options during the 1997 fiscal year and the value of options held at
fiscal year end:
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR AND
FISCAL YEAR-END OPTION VALUES
NUMBER OF SECURITIES
UNDERLYING VALUE OF UNEXERCISED
SHARES VALUE UNEXERCISED OPTIONS AT IN-THE-MONEY OPTIONS
ACQUIRED ON REALIZED FISCAL YEAR-END (#) AT FISCAL YEAR-END ($)(2)
NAME EXERCISE (#) ($)(1) EXERCISABLE/UNEXERCISABLE EXERCISABLE/UNEXERSIZABLE
---- ------------ -------- ------------------------- -------------------------
George E. Bull 12,361 $343,265 18,436/215,054 $59,175/$428,041
Douglas B. Hansen 12,361 $343,265 18,436/215,053 $59,175/$428,021
Frederick H. Borden 12,361 $343,265 13,390/140,082 $36,762/$363,832
Vickie L. Rath 4,000 $111,120 8,175/39,947 $19,077/$139,413
- ------------------
(1) THE VALUE REALIZED IS BASED ON THE MARKET VALUE OF UNDERLYING SECURITIES
AT EXERCISE DATE, MINUS THE EXERCISE PRICE.
(2) THE VALUE OF UNEXERCISED OPTIONS IS BASED ON THE MARKET VALUE OF THE
UNDERLYING SECURITIES AT FISCAL YEAR END, MINUS THE EXERCISE PRICE.
EMPLOYMENT AGREEMENTS
The Company has entered into employment agreements with Messrs. Bull,
Hansen and Borden. Each agreement provides for a term through December 31, 2001
and is automatically extended for an additional year at the end of each year of
the agreement, unless either party provides a prescribed prior written notice to
the contrary. Each agreement provides for an annual base salary and for
participation in any bonus incentive compensation plan. Each agreement provides
for the officer to receive his base salary and bonus compensation to the date of
the termination of employment by reason of death, disability or resignation and
to receive base compensation to the date of the termination of employment by
reason of a termination of employment for cause as defined in the agreement.
Each agreement also provides for the officer to receive, in the event that the
Company terminates the subject officer's employment without cause, or if the
officer resigns for "good reason" (as defined in the agreement, including the
occurrence of a "Change of Control" of the Company as defined in the agreement),
an amount, 50% payable immediately and 50% payable in monthly installments over
the succeeding twelve months, equal to three times the greater of such officer's
combined maximum base salary and actual bonus compensation, subject in each case
to a maximum amount of 1% of the Company's book equity value (exclusive of
valuation adjustments) and a minimum amount of $250,000. Each agreement also
contains a "non-compete" provision prohibiting the officer from competing with
the Company for a period of one year following termination of employment
following the Company's termination of the officer without cause or resignation
of the officer for "good reason" (including a "Change of Control"). In addition,
all outstanding options and Awards granted to the officer under the Stock Option
Plan shall immediately vest upon his termination without cause or termination
for "good reason" (including upon a "Change of Control"). "Change of Control"
for purposes of the agreements would include a merger or consolidation of the
Company, a sale of all or substantially all of the assets of the Company,
changes in the identity of a majority of the members of the Board of Directors
of the Company (other than due to the death, disability or age of a director) or
acquisitions of more than 9.8% of the combined voting power of the Company's
capital stock, subject to certain limitations. Mr. Bull's agreement also
restricts the Company from entering into a separate management agreement or
arrangement, without Mr. Bull's consent, pursuant to which another entity would
perform all or a substantial portion of Mr. Bull's duties.
The Company has entered into an employment agreement with Ms. Rath on
substantially the same terms as for the executive officers set forth in the
immediately preceding paragraph with the following exceptions: Ms. Rath's
agreement provides for a term through December 31, 1999 and is automatically
extended for an additional year at the end of each year of the agreement unless
either party provides a prescribed prior written notice to the contrary; and the
payment to Ms. Rath in the event the Company terminates her employment without
cause is six months of compensation (based on base salary and bonus compensation
for the last fiscal year), calculated and payable as set forth above.
8
COMPLIANCE WITH SECTION 16(a) OF THE SECURITIES EXCHANGE ACT OF 1934
Section 16(a) of the Securities Exchange Act of 1934 requires the
Company's directors and executive officers, and holders of more than 10% of the
Company's Common Stock, to file with the Securities and Exchange Commission (the
"SEC") initial reports of ownership and reports of changes in ownership of
Common Stock and other equity securities of the Company. Such officers,
directors and 10% stockholders are required by SEC regulation to furnish the
Company with copies of all Section 16(a) forms they file.
Based solely on its review of such forms that it received, and written
representations from reporting persons that no additional Form 5s were required
for such persons, the Company believes that, during fiscal 1997, all Section
16(a) filing requirements were satisfied on a timely basis.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The Company's compensation committee is comprised of Thomas F. Farb and
Nello Gonfiantini. The compensation committee establishes the compensation of
the officers of the Company and also administers the Company Stock Option Plan.
George E. Bull is a director of Specialty Mortgage Trust, Inc., a Maryland
corporation of which Nello Gonfiantini is Chairman of the Board, President and
Chief Executive Officer. There were no transactions between the Company and
Specialty Mortgage Trust, Inc. during fiscal 1997. Neither the other
compensation committee member nor the other named executive officers have any
relationships which must be disclosed under this caption.
-----------------------
Notwithstanding anything to the contrary set forth in any of the
Company's previous or future filings under the Securities Act of 1933, as
amended, or the Securities Exchange Act of 1934, as amended, that might
incorporate future filings, including this Proxy Statement, in whole or in part,
the following report and the Performance Graph shall not be incorporated by
reference into any such filings.
COMPENSATION COMMITTEE REPORT
The Compensation Committee of the Company's Board of Directors, which is
comprised exclusively of Independent Directors, administers the Company's
executive compensation program. All issues pertaining to executive compensation
are reviewed and approved by the Compensation Committee.
The Compensation Committee believes that executive compensation should
reward sustained earnings and long-term value created for shareholders and
reflect the business strategies and long-range plans of the Company. The guiding
principles in regards to compensation are (i) to attract key high caliber
executives; (ii) to provide levels of compensation competitive with those
offered by the Company's competitors; (iii) to motivate executives to enhance
earnings and long-term stockholder value by linking stock performance (on a
total return basis) with long-term incentive compensation; and (iv) to design a
long-term compensation program that leads to management retention.
Executive officer compensation is based on three principal components:
base salary, annual bonus and stock options granted under the Company's Stock
Option Plan. Base salary is reviewed at least annually by the Compensation
Committee and may be raised at the discretion of the Compensation Committee. In
addition, the Board of Directors has established a bonus incentive compensation
plan for executive officers. This program permits the Board of Directors, in
their discretion, to award cash bonuses annually to executive officers. Stock
option grants are governed by the overall limitations of the Stock Option Plan.
Overall compensation is intended to be set at a level competitive with the
amounts paid to the management of companies with similar business structure,
size and marketplace orientation, with additional emphasis on professional
experience.
9
During 1997, the Compensation Committee conducted a detailed review of
the executive compensation of a variety of financial institutions, finance
companies, REITs and mortgage-related companies. Based on this information, the
Compensation Committee concluded that the base salary, annual bonus and stock
options awarded, taken together as a whole, were at a reasonable level. This
information was one of the factors considered in establishing the 1998
compensation level for executive officers.
The Compensation Committee believes that the total compensation package
of executive officers should be linked to such factors as return on equity and
to the total return of the Company's stock, both on an absolute basis and
relative to similar companies, and to the attainment of planned objectives
established at the beginning of the year. The Company uses stock options, and in
some cases related DERs, to align the long-range interest of its executive
officers with the interests of shareholders. The amount of stock options and
DERs that are granted to executive officers is determined by the Compensation
Committee taking into consideration the officer's position with the Company,
overall individual performance, the Company's performance and an estimate of the
long-term value of the award considering current base salary and any cash bonus
awarded.
The Compensation Committee applies the foregoing principles and policies
in determining the compensation of Mr. George E. Bull, the Company's Chief
Executive Officer. During fiscal 1997 Mr. Bull received a salary of $190,104 and
cash DERs of $178,265. Of the cash DERs, $120,000 was attributable to DERs on
stock options granted in 1997 and $58,265 was attributable to DERs on stock
options granted in prior years. The Committee believes that Mr. Bull, as Chief
Executive Officer, significantly and directly influences the Company's overall
performance. Accordingly, based of the performance of the Company in fiscal
1997, the Committee granted to Mr. Bull stock options for 100,000 shares of the
Company's Common Stock in January 1997 and stock options for 40,736 shares of
the Company's Common Stock in July 1997.
The Compensation Committee will monitor the effects of its compensation
programs with regard to Internal Revenue Code Section 162(m). A substantial
portion of the compensation program will be exempt from the $1,000,000 deduction
limitation. The Company will continue to evaluate alternatives to ensure
executive compensation is reasonable, performance-based and consistent with the
Company's overall compensation objectives. The Compensation Committee reserves
the right to design programs that recognize a full range of performance criteria
important to the Company's success, even where compensation payable under such
programs may not be deductible.
Compensation Committee
Thomas F. Farb
Nello Gonfiantini
10
PERFORMANCE GRAPH
The following graph presents a total return comparison of the Company's
Common Stock, since the Company's initial public offering on August 4, 1995
through December 31, 1997, to the S&P Composite-500 Stock Index and the National
Association of Real Estate Investment Trusts, Inc. ("NAREIT") Mortgage REIT
Index. The total returns reflect stock price appreciation and the value of
dividends for the Company's Common Stock and for each of the comparative
indices. The information has been obtained from sources believed to be reliable,
but neither its accuracy nor its completeness is guaranteed. The total return
performance shown on the graph is not necessarily indicative of future total
return performance of the Company's Common Stock.
TOTAL RETURN COMPARISON SINCE THE COMPANY'S INITIAL PUBLIC OFFERING
THROUGH DECEMBER 31, 1997
8/4/95 12/31/95 12/31/96 12/31/97
------- -------- -------- --------
Redwood Trust, Inc. $100.00 $120.58 $261.77 $152.08
S&P Composite-500 Index $100.00 $110.65 $136.06 $181.47
NAREIT Mortgage REIT Index $100.00 $118.80 $179.23 $186.07
11
ITEM 2 -- PROPOSAL TO APPROVE TECHNICAL AMENDMENTS TO THE COMPANY'S CHARTER
(I) TO CONFORM TO THE REQUIREMENTS OF THE NEW YORK STOCK EXCHANGE
AND (II) TO CLARIFY THE APPLICATION OF THE COMPANY'S
9.8% REIT-QUALIFYING STOCK OWNERSHIP RESTRICTION
The Board of Directors has unanimously approved and deemed advisable
proposed amendments to Section 1 and 3 of Article XI of the Company's Articles
of Amendment and Restatement (the "Charter") and recommends the stockholders
approve the adoption of the amendments.
Article XI, Section 3 would be amended to read as follows:
"Section 3. Prevention of Transfer. If the Board of Directors or its
designee shall at any time determine in good faith that a purported Transfer has
taken place in violation of Section 2 of this Article XI or that a Person
intends to acquire or Transfer or has attempted to acquire or Transfer
Beneficial Ownership of Capital Stock of the Corporation in violation of Section
2, the Board of Directors or its designee shall take such action as it deems
advisable to refuse to give effect to or to prevent such Transfer, including,
but not limited to, refusing to give effect to such Transfer on the books of the
Corporation or instituting proceedings to enjoin such Transfer; provided
however, that any purported Transfers in violation of this Article XI shall
automatically result in the designation and treatment described in this Article
XI, irrespective of any actions (or non-action) by the Board of Directors."
This change in the above-referenced Section will conform the language of
the Section to the requirements of the New York Stock Exchange. It will not
affect in any way the validity or transferability of stock certificates
currently outstanding, nor will the change affect in any way the capital
structure of the Company.
The definition of "Beneficial Ownership" contained in Article XI,
Section 1 would be amended to read as follows:
"Beneficial Ownership" shall mean beneficial ownership as determined
under Rule 13d-3, as amended from time to time, adopted pursuant to the
Securities Exchange Act of 1934, of Capital Stock by a Person, either directly
or constructively, including through the application of Section 544 of the Code,
as modified by sections 856(h)1)(B) and 856(H)(3)(A) of the Code and determined
without respect to whether such ownership has the effect of meeting the stock
ownership requirement of section 542(a)(2) of the Code. The terms "Beneficial
Owner," "Beneficially Owning," "Beneficially Own" and "Beneficially Owned" shall
have the correlative meanings.
This change in the above-referenced Section will clarify the definition
of "Beneficial Ownership" in order to remove any ambiguity in the application of
the 9.8% REIT qualifying stock ownership restriction. At present, the definition
is ambiguous and requires the Board of Directors to interpret its application.
The change will provide an objective reference for determining beneficial
ownership that investors may rely upon in advance in making their purchase
decisions. In addition, the reference adopted, Rule 13d-3, is already being
applied by all investors with significant holdings that might be in danger of
exceeding the Charter stock ownership limitation. The definition when read with
the REIT-qualifying provisions in the Charter restricting the ownership of
capital stock, may limit opportunities for stockholders to receive a premium for
their securities that might otherwise exist if any person were to attempt to
assemble a block of shares in excess of the number of shares permitted under the
Charter. The amendment will not affect in any way the validity or
transferability of stock certificates currently outstanding, nor will the change
affect in any way the capital structure of the Company.
12
The approval of the proposal to change the language in the
above-referenced Sections requires the affirmative vote of the majority of the
outstanding shares of Common Stock of the Company. If the amendments are adopted
by the stockholders, they will become effective upon the filing of a certificate
of the amendment of the Charter with the Maryland State Department of
Assessments and Taxation. Such filing is expected to be accomplished immediately
after the Annual Meeting of stockholders.
THE BOARD OF DIRECTORS RECOMMENDS THAT THE SHAREHOLDERS VOTE "FOR" THE
PROPOSAL TO AMEND THESE SECTIONS OF THE CHARTER.
ITEM 3 -- RATIFICATION OF INDEPENDENT PUBLIC ACCOUNTANTS
The Board of Directors has selected the accounting firm of Coopers &
Lybrand, L.L.P. to audit the Company's financial statements for, and otherwise
act as the Company's independent certified public accountants with respect to,
the year ended December 31, 1998. The Board of Directors' selection of Coopers &
Lybrand, L.L.P. for the current fiscal year is being presented to shareholders
for ratification at the Annual Meeting. To the Company's knowledge, neither
Coopers & Lybrand, L.L.P. nor any of its partners has any direct financial
interest or any material indirect financial interest in the Company, or has had
any connection since the inception of the Company in the capacity of promoter,
underwriter, voting trustee, director, officer or employee. A representative of
Coopers & Lybrand, L.L.P. will be present at the Annual Meeting.
OTHER BUSINESS
The Board of Directors knows of no other matters which may be presented
for stockholder action at the meeting. However, if other matters do properly
come before the meeting, it is intended that the persons named in the proxies
will vote upon them in accordance with their best judgment.
STOCKHOLDER PROPOSALS -- 1999 ANNUAL MEETING
Stockholders are entitled to present proposals for action at a
forthcoming stockholders' meeting if they comply with the requirements of the
proxy rules and the Company's Bylaws. Any proposals intended to be presented at
the 1999 Annual Meeting of Stockholders of the Company must be received at a
Company's offices on or before December 1, 1998 in order to be considered for
inclusion in the Company's proxy statement and form of proxy relating to such
meeting.
BY ORDER OF THE BOARD OF DIRECTORS
Frederick H. Borden
Secretary
Mill Valley, California
March 31, 1998
13
THE BOARD OF DIRECTORS OF REDWOOD TRUST, INC. RECOMMENDS A VOTE FOR EACH OF THE
PROPOSALS.
Please mark
your votes as
indicated in
this example
X
1 ELECTION OF DIRECTORS. INSTRUCTIONS: To withhold authority to vote for any individual nominee
FOR WITHHOLD AUTHORITY check the "FOR all nominees" box to the left, and strike a line through
all nominees to vote for all that nominee's name below.
below to the right nominees listed to
the right FREDERICK H. BORDEN, MARIANN BYERWALTER, NELLO GONFIANTINI
2 AMENDMENT TO CORPORATE CHARTER 3 RATIFICATION OF COOPERS & LYBRAND AS INDEPENDENT
AUDITORS OF REDWOOD TRUST, INC.
FOR AGAINST ABSTAIN FOR AGAINST ABSTAIN
[ ] [ ] [ ] [ ] [ ] [ ]
4 IN THEIR DISCRETION, THE PROXYHOLDERS ARE AUTHORIZED TO VOTE ON SUCH OTHER
MATTERS THAT MAY PROPERLY COME BEFORE THIS ANNUAL MEETING OR ANY ADJOURNMENT
OR POSTPONEMENT THEREFOR.
IMPORTANT: PLEASE SIGN EXACTLY AS YOUR NAME APPEARS ON THIS PROXY. IF ACTING AS
EXECUTOR, ADMINISTRATOR, TRUSTEE, GUARDIAN, ETC., YOU SHOULD INDICATE WHEN
SIGNING. IF THE SIGNER IS A CORPORATION PLEASE SIGN IN FULL CORPORATE NAME BY A
DULY AUTHORIZED OFFICER. IF A PARTNERSHIP, PLEASE SIGN IN THE PARTNERSHIP NAME
BY AN AUTHORIZED PERSON. IF SHARES ARE HELD JOINTLY, EACH STOCKHOLDER SHOULD
SIGN.
UNLESS OTHERWISE SPECIFIED, THIS PROXY WILL BE VOTED FOR EACH OF THE LISTED
ITEMS, AND IN THE DISCRETION OF THE PROXYHOLDERS ON SUCH OTHER MATTERS AS MAY
PROPERLY COME BEFORE THE MEETING.
THE UNDERSIGNED HEREBY ACKNOWLEDGES RECEIPT OF NOTICE OF THE ANNUAL MEETING OF
THE STOCKHOLDERS OF REDWOOD TRUST, INC. AND A PROXY STATEMENT FOR THE ANNUAL
MEETING PRIOR TO THE SIGNING OF THIS PROXY.
DATED: __________________________ , 1998
(BE SURE TO DATE PROXY)
SIGNATURE_______________________________
PLEASE VOTE, SIGN AND RETURN THIS PROXY
AS PROMPTLY AS POSSIBLE IN THE ENVELOPE
PROVIDED.
(SEE OTHER SIDE FOR IMPORTANT INFORMATION)
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FOLD AND DETACH HERE
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REDWOOD TRUST, INC.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS.
THE UNDERSIGNED HEREBY APPOINTS DOUGLAS B. HANSEN AND GEORGE E. BULL, AND EACH
OF THEM, AS PROXIES WITH FULL POWER OF SUBSTITUTION, AND HEREBY AUTHORIZES EACH
OF THEM TO REPRESENT AND TO VOTE, AS DESIGNATED ON THE REVERSE SIDE HEREOF, ALL
SHARES OF COMMON STOCK OF REDWOOD TRUST, INC. WHICH THE UNDERSIGNED IS ENTITLED
TO VOTE AT THE ANNUAL MEETING OF STOCKHOLDERS TO BE HELD AT THE MANDARIN
ORIENTAL HOTEL, 222 SANSOME STREET, SAN FRANCISCO, CALIFORNIA ON JUNE 4, 1998,
AT 10:00 A.M. LOCAL TIME, OR ANY ADJOURNMENTS OR POSTPONEMENTS THEREOF.
BY SIGNING AND DATING THE REVERSE OF THIS CARD, YOU AUTHORIZE THE PROXIES TO
VOTE EACH PROPOSAL, AS MARKED, OR IF NOT MARKED TO VOTE "FOR" EACH PROPOSAL, AND
TO USE THEIR DISCRETION TO VOTE ANY OTHER MATTER AS MAY PROPERLY COME BEFORE THE
MEETING. PLEASE COMPLETE AND MAIL THIS CARD AT ONCE IN THE ENVELOPE PROVIDED. AT
THE PRESENT TIME, THE BOARD OF DIRECTORS KNOWS OF NO OTHER BUSINESS TO BE
PRESENTED AT THE MEETING.
THIS PROXY IS REVOCABLE AND THE UNDERSIGNED MAY REVOKE IT AT ANY TIME PRIOR TO
ITS EXERCISE. ATTENDANCE OF THE UNDERSIGNED AT SAID MEETING OR ANY ADJOURNED OR
POSTPONED SESSION THEREOF WILL NOT BE DEEMED TO REVOKE THIS PROXY UNLESS THE
UNDERSIGNED SHALL INDICATE AFFIRMATIVELY THEREAT THE INTENTION OF THE
UNDERSIGNED TO VOTE SAID SHARES IN PERSON. IF THE UNDERSIGNED HOLD(S) ANY SHARES
OF REDWOOD TRUST, INC. IN A FIDUCIARY, CUSTODIAL OR JOINT CAPACITY OR
CAPACITIES, THIS PROXY IS SIGNED BY THE UNDERSIGNED IN EVERY SUCH CAPACITY AS
WELL AS INDIVIDUALLY.
(CONTINUED AND TO BE SIGNED ON THE REVERSE HEREOF)
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FOLD AND DETACH HERE