<PAGE> 1
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. )
FILED BY THE REGISTRANT [X] FILED BY A PARTY OTHER THAN THE REGISTRANT [ ]
- - --------------------------------------------------------------------------------
Check the appropriate box:
[ ] Preliminary Proxy Statement
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to sec.240.14a-11(c) or sec.240.14a-12
[ ] Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
Bacou USA, Inc.
(Name of Registrant as Specified In Its Charter)
Bacou USA, Inc.
(Name of Person(s) Filing Proxy Statement)
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 determined):
4) Proposed maximum aggregate value of transaction:
5) Total fee 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:
- - --------------------------------------------------------------------------------
<PAGE> 2
BACOU USA, INC.
10 THURBER BOULEVARD
SMITHFIELD, RHODE ISLAND 02917
NOTICE OF ANNUAL MEETING
MAY 19, 1997
To the Stockholders of
Bacou USA, Inc.
Notice is hereby given that the Annual Meeting of the Stockholders of Bacou
USA, Inc. (the "Corporation"), will be held at the Grand Hyatt Hotel, New York,
New York, on Monday, May 19, 1997 at 10:00 A.M., Eastern Daylight Time, for the
following purposes:
(1) To elect directors of the Corporation for the ensuing year, and
until their successors are elected and qualified.
(2) To ratify the adoption of the Bacou USA, Inc. 1996 Non-Employee
Directors Stock Option Plan.
(3) To ratify the selection by the Board of Directors of KPMG Peat
Marwick LLP as independent auditors to audit the Corporation's books and
accounts for the fiscal year ending December 31, 1997.
(4) To transact such other business as may properly come before the
meeting or any adjournment thereof.
By Order of the Board of Directors,
PHILIP B. BARR, JR.
Secretary
April 8, 1997
Mailed at Boston, Massachusetts
PLEASE COMPLETE, SIGN AND DATE THE ENCLOSED PROXY AND MAIL IT AS PROMPTLY
AS POSSIBLE. IF YOU ATTEND THE MEETING AND VOTE IN PERSON, THE PROXY WILL NOT BE
USED.
<PAGE> 3
BACOU USA, INC.
10 THURBER BOULEVARD
SMITHFIELD, RHODE ISLAND 02917
PROXY STATEMENT
ANNUAL MEETING OF STOCKHOLDERS
MAY 19, 1997
INTRODUCTION
This Proxy Statement is furnished in connection with the solicitation of
proxies to be used at the Annual Meeting of Stockholders of Bacou USA, Inc. (the
"Corporation") to be held on May 19, 1997 and at any adjournment thereof, for
the purposes set forth in the accompanying notice of such meeting. All
stockholders of record of the Corporation's Common Stock at the close of
business on March 31, 1997 will be entitled to vote. The stock transfer books
will not be closed.
Proxies in the form enclosed are solicited on behalf of the Board of
Directors. Any stockholder giving a proxy in such form has the power to revoke
it at any time before it is exercised by filing a later proxy with the
Corporation, by attending the meeting and voting in person, or by notifying the
Corporation of the revocation in writing to its President at 10 Thurber
Boulevard, Smithfield, Rhode Island 02917. Any such proxy, if received in time
for the voting and not revoked, will be voted at the Annual Meeting in
accordance with the directions of the stockholder. Any proxy which fails to
specify a choice with respect to any matter to be acted upon will be voted for
the election of each nominee for director and in favor of each proposal to be
acted upon.
As of March 31, 1997, the Corporation had outstanding and entitled to vote
17,312,200 shares of Common Stock. Each share of Common Stock entitles the
holder thereof to one vote on the matters to be voted upon at the Annual
Meeting. All holders of Common Stock vote together as one class. Abstentions and
broker non-votes will be counted in determining if a quorum is present. With
regard to the election of directors, votes that are withheld will be excluded
entirely from the vote and will have no effect. Abstentions may be specified on
all proposals other than the election of directors and will be counted as
present for purposes of the item on which the abstention is noted. Abstentions
on the ratification of accountants and the adoption of the non-employee
directors stock option plan will have the same legal effect as a vote against
such matter. Brokers holding shares in street name have the authority to vote on
certain matters when they have not received instructions from the beneficial
owners. Brokers that do not receive instructions are permitted to vote on the
outcome of the election of directors, the ratification of accountants and the
adoption of the non-employee directors stock option plan. As a result, broker
non-votes will have no effect on the outcome of the election of directors, the
ratification of accountants and the adoption of the non-employee directors stock
option plan.
The holders of a majority of the issued and outstanding shares of Common
Stock entitled to vote, present in person or represented by proxy, shall
constitute a quorum for the transaction of business. In the absence of a quorum,
the Annual Meeting may be postponed from time to time until stockholders holding
the requisite amount are present or represented by proxy.
The approximate date on which the Proxy Statement and accompanying proxy
card will first be mailed to the stockholders of the Corporation is April 8,
1997.
<PAGE> 4
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth, as of March 31, 1997, certain information
concerning the ownership of shares of Common Stock by (i) each person or group
who is known by the Corporation to own beneficially more than five percent of
the issued and outstanding Common Stock, (ii) each director and nominee for
director of the Corporation, (iii) each named executive officer described in
"Executive Compensation" below, and (iv) all directors and executive officers as
a group. Except as otherwise indicated, each person named has sole investment
and voting power with respect to the securities shown.
<TABLE>
<CAPTION>
NAME NUMBER OF SHARES PERCENT OF CLASS
- - ---- ---------------- ----------------
<S> <C> <C>
Bacou S.A.(1)............................................ 12,612,600 72.85%
168 Avenue des Aureats
BP 1205
26012 Valence Cedex, France
Gilbert Vandeputte(1).................................... 12,612,600 72.85%
Binensteenweg 160-172
2530 Bocchout, Belgium
J. & W. Seligman & Co. Incorporated(2)................... 913,374 5.28%
100 Park Avenue
New York, NY 10017
Walter Stepan(3)......................................... 422,800 2.44%
Philip B. Barr, Jr....................................... 50,000(4) *
Philippe Bacou(1)........................................ 12,651,400(5) 72.91%
Christophe Bacou(1)...................................... 12,633,000(5) 72.89%
Karl F. Ericson.......................................... 22,400(5) *
Herbert A. Wertheim...................................... 63,900(5)(6) *
Raymond Baker............................................ 30,000(4) *
Harry D. Neff, II........................................ 30,000(4) *
Edward E. Greene......................................... 15,000(4) *
All directors and executive officers as a group (15
persons)............................................... 13,386,500(3)(4)(5)(6) 75.84%
</TABLE>
- - ---------------
(1) According to Form 13Gs filed with the Securities and Exchange Commission
(the "Commission"), Bacou S.A. is controlled by Engineering Bacou S.A. and
Allesia S.A., entities which are ultimately controlled by the Bacou and
Vandeputte families. As a result, the members of such families may be deemed
the beneficial owners of the Common Stock held by Bacou S.A.
(2) According to its Form 13G filed with the Commission, J. & W. Seligman & Co.
Incorporated has sole voting power with respect to 765,600 shares and sole
dispositive power with respect to 913,374 shares; it has no shared voting or
dispositive power.
(3) Includes 55,440 shares of Common Stock owned of record by Mr. Stepan's wife.
Excludes 138,600 shares of Common Stock owned by each of Mr. Stepan's two
adult children. See "Certain Transactions -- Stepan Stock Purchase and Gift
Transfer."
(4) Includes the following shares of Common Stock reserved for issuance upon
exercise of stock options outstanding pursuant to the Corporation's 1996
Stock Incentive Plan: Mr. Barr, 45,000 shares; Mr. Baker, 30,000 shares; Mr.
Neff, 30,000 shares; Mr. Greene, 15,000 shares; and all directors and
executive officers as a group, 200,000 shares.
(5) Includes the following shares of Common Stock received for issuance upon
exercise of stock options outstanding pursuant to the Corporation's 1996
Non-Employee Directors Stock Option Plan: Mr. P. Bacou, 38,800 shares; Mr.
C. Bacou, 20,400 shares; Mr. Ericson, 20,400 shares; Dr. Wertheim, 20,400
shares; and all directors and executive officers as a group, 100,000 shares.
(6) Includes 22,500 shares owned by Dr. Wertheim's spouse.
* Less than 1%.
2
<PAGE> 5
ELECTION OF DIRECTORS
The persons named below have been nominated for election at the Annual
Meeting as directors of the Corporation. The directors who are elected shall
hold office until their respective successors shall have been duly elected and
qualified. In accordance with Delaware General Corporation Law, directors are
elected by a plurality of the votes of the shares present in person or
represented by proxy at the Annual Meeting.
All nominees are members of the present Board. Each of the nominees for
director has consented to being named a nominee in this Proxy Statement and has
agreed to serve as a director, if elected at the Annual Meeting. It is the
intention of the persons named in the proxy to vote for the following nominees.
<TABLE>
<CAPTION>
PRINCIPAL OCCUPATION DURING DIRECTOR
NAME AND AGE THE PAST FIVE YEARS SINCE
------------ -------------------------------------------- --------
<S> <C> <C>
Walter Stepan, 58...................... Vice Chairman of the Board, President and 7/94
Chief Executive Officer; Chairman of the
Board, President and Chief Executive Officer
of Uvex Safety, Inc.; Chairman of the Board
of Titmus Optical, Inc.; Chairman of the
Board and Chief Executive Officer of
Pro-Tech Respirators, Inc. Also a director
of Bacou S.A., Bacou Far East Ltd., Uvex
Winter Optical, Inc. and Uvex Sports, Inc.
Uvex Winter Optical, Inc. and Uvex Sports,
Inc. are affiliates of Uvex Winter Optik
GmbH, a producer of sport safety equipment
("Uvex Germany").
Philippe Bacou*, 39.................... Chairman of the Board since June 1996; 7/94
President and Chief Executive Officer of
Bacou, S.A. since July 1996; previously
Executive Vice President of Bacou, S.A.
since 1993; Chief Financial Officer and Vice
President -- Finance of Bacou, S.A. since
1985; Director of Bacou, S.A. since July
1996.
Christophe Bacou*, 33.................. Marketing Manager of two subsidiaries of 1/96
Bacou, S.A. since 1990. Employed by
affiliates of Bacou, S.A. since 1990.
Philip B. Barr, Jr., 45................ Executive Vice President since October 1996; 8/95
previously Vice President since 1995; Chief
Financial Officer, Treasurer and Secretary
since August 1995. Partner of Edwards &
Angell, the Corporation's general counsel,
from 1985 to 1995.
Karl F. Ericson, 63.................... Consultant since 1990. Partner with KPMG 7/96
Peat Marwick LLP from 1970 to 1990. Also
Director of Bank Rhode Island.
Herbert A. Wertheim, 57................ Founder, Chairman and Chief Executive 7/96
Officer of Brain Power Incorporated, a
manufacturer of optical instruments and
chemicals, since 1971. Director and member
of the Compensation Committee of FPAM
Medical Management.
</TABLE>
- - ---------------
* Philippe and Christophe Bacou are brothers.
3
<PAGE> 6
COMMITTEES OF THE BOARD OF DIRECTORS
The Board of Directors has a Compensation Committee, currently comprised of
Mr. P. Bacou, Dr. Wertheim and Mr. Stepan (Chair), which is charged with the
responsibility of reviewing, approving and recommending to the Board of
Directors all compensation arrangements for executive officers. The Compensation
Committee also administers the Corporation's 1996 Stock Incentive Plan. The
Compensation Committee met twice during the Corporation's last fiscal year.
The Board of Directors has an Audit Committee, currently comprised of
Messrs. P. Bacou and Ericson (Chair), which is charged with the responsibility
of recommending to the Board of Directors the annual engagement of the
Corporation's independent auditors and reviewing with the independent auditors
the scope and results of the audits, the internal accounting controls of the
Corporation, audit practices and professional services furnished by the
independent auditors. The Audit Committee met once during the Corporation's last
fiscal year.
The Board of Directors has an Oversight Committee, currently comprised of
Mr. Ericson and Dr. Wertheim, which is charged with the responsibility for
reviewing the terms of transactions between the Corporation and Bacou S.A. and
any of its subsidiaries and affiliates (the "Bacou Group") and any possible
conflicts of interest arising in connection with corporate opportunities which
became available to each of the Company and the Bacou Group. See "Certain
Transactions -- Corporate Opportunities Agreement." The Oversight Committee met
once during the Corporation's last fiscal year.
The Board of Directors has an Executive Committee, currently comprised of
Messrs. Stepan and P. Bacou, which is authorized to handle routine matters which
arise between meetings of the Board of Directors. The Executive Committee met
once during the Corporation's last fiscal year.
The Board of Directors does not have a nominating committee as the Board as
a whole considers the qualifications and recommends to the stockholders the
election of directors of the Corporation. Stockholders may recommend nominees
for election as directors by writing to the President of the Corporation.
The Board of Directors held a total of five meetings during 1996. Each
member of the Board of Directors, other than Christophe Bacou, attended at least
75% of the aggregate number of meetings of the Board and all committees on which
he served.
COMPENSATION OF DIRECTORS AND OFFICERS
DIRECTORS COMPENSATION
The Company's non-employee directors receive cash compensation for service
on the Board of Directors in an annual amount of $15,000, payable quarterly; the
Chairman of the Board receives $25,000 annually. In addition, each non-employee
director receives $1,000 per day for attendance at any meeting of the Board of
Directors or any Committees thereof or $500 per day for attendance by conference
call. Directors are also reimbursed for certain out-of-pocket expenses in
connection with attendance at Board and committee meetings. Since August 1,
1996, non-employee directors have been granted 100,000 options in the aggregate
at exercise prices equal to the fair market value of the Common Stock on the
date of grant, subject to shareholder approval, pursuant to the 1996
Non-Employee Directors Stock Option Plan. See "Approval of Directors Stock
Option Plan." Directors who are also employees of the Corporation receive no
compensation for service on the Board of Directors.
4
<PAGE> 7
EXECUTIVE COMPENSATION
The following table summarizes certain information with respect to
compensation for services rendered to the Corporation during the years ended
December 31, 1996 and 1995 by the Corporation's chief executive officer and the
four other most highly compensated executive officers whose salary and bonus
exceeded $100,000.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG-TERM
COMPENSATION
------------
AWARDS
------------
SECURITIES
ANNUAL COMPENSATION UNDERLYING
------------------------------------ OPTIONS/
CALENDAR OTHER ANNUAL SARS ALL OTHER
NAME AND PRINCIPAL POSITION YEAR SALARY BONUS COMPENSATION (SHARES) COMPENSATION
- - ------------------------------ -------- -------- ---------- ------------ ------------ ------------
<S> <C> <C> <C> <C> <C> <C>
Walter Stepan................. 1996 $500,000 $1,206,672 $40,000(1)(3) -- $50,936(2)
President and Chief 1995 300,000 1,214,734 53,000(1)(3) -- 50,806(2)
Executive Officer; Chairman,
President and Chief
Executive Officer of Uvex
Safety, Inc.
Philip B. Barr, Jr. .......... 1996 190,000 160,000 (3) 45,000 --
Executive Vice President and 1995 71,521 55,000 (3) -- --
Chief Financial Officer
Harry D. Neff, II............. 1996 120,000 75,000 (3) 30,000 2,398(4)
Vice President-Sales of Uvex 1995 109,167 57,917 (3) -- 3,480(4)
Safety, Inc.
Raymond R. Baker.............. 1996 120,000 60,000 (3) 30,000 2,595(4)
Vice President-Manufacturing 1995 99,167 30,417 (3) -- 1,980(4)
of Uvex Safety, Inc.
Edward E. Greene(5)........... 1996 180,000 -- 4,903(3)(6) 15,000 28,442(7)
President of Titmus Optical, 1995 45,000 20,000 1,237(3)(6) -- 3,322(7)
Inc.
</TABLE>
- - ---------------
(1) Represents reimbursement by the Corporation for United States social
security taxes payable to Mr. Stepan and the applicable personal income tax
effects of such reimbursement.
(2) Represents (i) split dollar life insurance premiums paid by the Corporation
on behalf of Mr. Stepan ($36,450 in 1996), (ii) term life insurance premiums
paid by the Corporation on behalf of Mr. Stepan ($9,736 in 1996), and (iii)
contributions by the Corporation on behalf of Mr. Stepan under the Uvex
Safety, Inc. 401(k) Plan Trust ($4,750 in 1996).
(3) Perquisites and other personal benefits paid to the Named Executive Officer
were less than $50,000 or 10% of aggregate salary and bonus and accordingly
are omitted from the table as permitted by the rules of the Commission.
(4) Represents amounts paid by the Corporation under the Uvex Safety, Inc.
401(k) Plan Trust.
(5) Mr. Greene's employment with the Corporation terminated on January 22, 1997.
(6) Represents reimbursement of personal withholding taxes on fringe benefits.
(7) Represents amounts paid by the Corporation under the Titmus Optical, Inc.
Retirement Savings Plan and in 1996 includes a $10,000 contribution by the
Corporation for an insurance program.
5
<PAGE> 8
The following table sets forth certain information relating to option
grants pursuant to the Corporation's 1996 Stock Incentive Plan (the "Plan") in
the year ended December 31, 1996 to the individuals named in the Summary
Compensation Table above. No options have been granted to Mr. Stepan pursuant to
the Plan.
OPTION/SAR GRANTS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
INDIVIDUAL GRANTS
--------------------------------------------------------------- POTENTIAL REALIZABLE
% OF VALUE AT ASSUMED
NUMBER OF TOTAL ANNUAL RATES OF
SECURITIES OPTIONS/SARS EXERCISE STOCK PRICE
UNDERLYING GRANTED TO OR GRANT- APPRECIATION FOR
OPTIONS/ EMPLOYEES BASE DATE MARKET EXPIRA- OPTION TERM(3)(4)
SARS IN FISCAL PRICE PRICE TION ------------------------
NAME GRANTED(1)(2) YEAR ($/SH) PER SHARE DATE 5% 10%
---- ------------- ------------ ------ ----------- -------- -------- ----------
<S> <C> <C> <C> <C> <C> <C> <C>
Philip B. Barr, Jr. ............... 45,000 11.3% $15.00 $15.00 3/27/06 $424,504 $1,075,776
Harry D. Neff, II.................. 30,000 7.6 $15.00 $15.00 3/27/06 $283,003 $ 717,184
Raymond R. Baker................... 30,000 7.6 $15.00 $15.00 3/27/06 $283,003 $ 717,184
Edward E. Greene................... 15,000 3.8 $15.00 $15.00 3/27/06 $141,501 $ 358,592
</TABLE>
- - ---------------
(1) None of the options granted were options with tandem SARs and no
free-standing SARs were granted.
(2) Granted to the named executive officers on March 27, 1996 pursuant to the
Plan. The options become exercisable in 20% increments on July 31, 1996 and
March 27, 1997, 1998, 1999 and 2000, respectively. If a Change of Control
(as defined in the Plan) occurs, these options would become immediately
exercisable.
(3) Potential Realizable Value is based on the assumed growth rates for the
ten-year option term. 5% annual growth results in a stock price per share
of $24.43 and 10% results in a stock price per share of $38.91.
(4) The actual value, if any, an executive may realize will depend on the
excess of the stock price over the exercise price on the date the option is
exercised, so that there is no assurance the value realized by an executive
will be at or near the amounts reflected in this table.
6
<PAGE> 9
The following table sets forth certain information with respect to
unexercised options to purchase the Corporation's Common Stock granted under the
Plan to the individuals named in the Summary Compensation Table above. No
options were exercised in 1996 by such individuals.
FY-END OPTION/SAR VALUES
<TABLE>
<CAPTION>
NUMBER OF SECURITIES VALUE OF UNEXERCISED
UNDERLYING UNEXERCISED IN-THE-MONEY OPTIONS/
OPTIONS/SARS AT FY-END SARS AT FY-END(1)
----------------------------- -----------------------------
NAME EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
---- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C>
Philip B. Barr, Jr......................... 9,000 36,000 $14,625 $58,500
Harry D. Neff, II.......................... 6,000 24,000 9,750 39,000
Raymond R. Baker........................... 6,000 24,000 9,750 39,000
Edward E. Greene........................... 3,000 12,000 4,875 19,500
</TABLE>
- - ---------------
(1) Based on the closing price on the Nasdaq National Market of the
Corporation's Common Stock on December 31, 1996 ($16 5/8).
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
Mr. Stepan, the Chair of the Corporation's Compensation Committee, and Vice
Chairman, President and Chief Executive Officer of the Corporation, serves on
the Board of Directors of Bacou S.A. Mr. P. Bacou is the Chairman, President and
Chief Executive Officer of Bacou S.A. and is a member of the Corporation's
Compensation Committee.
COMPENSATION COMMITTEE REPORT
The membership of the Compensation Committee of the Board of Directors of
the Corporation (the "Committee") consists of Philippe Bacou, Walter Stepan
(Chair) and Dr. Herbert A. Wertheim. Mr. Bacou and Dr. Wertheim are not
employees of the Corporation. Mr. Stepan is Vice Chairman, President and Chief
Executive Officer of the Corporation, as well as Chairman, President and Chief
Executive Officer of Uvex Safety, Inc. and Chairman of the Corporation's other
operating subsidiaries. The role of the Committee is advisory and administrative
in nature, with responsibility for matters such as making recommendations to the
Board of Directors concerning certain compensation matters and administering
compensation plans adopted by the Board of Directors, including the
Corporation's 1996 Stock Incentive Plan and the Corporation's Bonus Plan for
Executives of Titmus Optical, Inc. and Uvex Safety, Inc. for 1996 and 1997 (the
"Bonus Plan").
COMPENSATION POLICIES
The Corporation's executive compensation program consists of three main
components: (1) base salary; (2) cash bonuses; and (3) stock options. Base
salaries are designed to attract and retain well-qualified executives who are
likely to manage the Corporation and its operating subsidiaries in a manner that
will produce successful operating strategies and results. Cash bonuses are
designed to provide short-term incentives which are determined in direct
relation to corporate financial performance and also take into account
individualized objectives and achievements. Stock options are designed to align
the interests of shareholders and executives by providing long-term incentives
based on growth in market value of the Corporation's Common Stock.
DIRECT RELATIONSHIP OF COMPENSATION TO CORPORATE FINANCIAL PERFORMANCE
For 1996, Mr. Stepan and Mr. Barr received bonuses which were determined in
direct relation to corporate financial performance, as measured by operating
income, pursuant to their employment agreements.
7
<PAGE> 10
A portion of Mr. Barr's bonus equal to $47,500 or 25% of base salary was
determined in direct relation to the achievement of a certain operating margin
by the Corporation on a consolidated basis.
With respect to the executive officers of the Corporation's operating
subsidiaries, executive compensation was related to corporate performance
through the Bonus Plan, which provides increased bonus levels as subsidiary
operating margins, net sales and operating profit increase. On this basis, the
portion of executive bonuses that were determined in direct relation to
corporate financial performance ranged from 7% to 45% of base salary for
executive officers at operating subsidiaries.
CEO COMPENSATION
Mr. Stepan's salary and benefits for 1996 were fixed by the terms of his
employment contract which was in place prior to both the establishment of the
Compensation Committee and the Corporation's initial public offering in March
1996. Approximately two-thirds of his 1996 compensation was represented by a
cash bonus, of which approximately 92% was fixed by the terms of his employment
contract and determined pursuant to an incentive formula which directly related
the Corporation's financial performance, as measured by consolidated operating
income, to the amount of his bonus. The balance of Mr. Stepan's bonus was
determined by the Committee in its discretion, taking into account the success
of the Corporation's financial results in its first year as a public company and
the expansion of his management responsibilities in 1996, including those
relating to the Corporation's initial public offering, its acquisition strategy,
and the development of its administrative capabilities.
IRS MATTERS
Section 162(m) of the Internal Revenue Code disallows deductions by
publicly-held companies for employee remuneration in excess of $1 million which
is not performance-based (the "Regulations"). Although the compensation paid by
the Corporation to Mr. Stepan during 1996 was in excess of $1 million, the
amounts paid pursuant to his employment contract are deductible within the
meaning of the Regulations since (i) the contract was in effect prior to the
Corporation's initial public offering, (ii) the contract was disclosed in the
Corporation's Registration Statement on Form S-1 filed with the Commission on
March 27, 1996, and (iii) there have been no subsequent modifications to the
contract.
COMPENSATION COMMITTEE
Walter Stepan (Chair)
Philippe Bacou
Dr. Herbert A. Wertheim
8
<PAGE> 11
CORPORATE PERFORMANCE
Set forth below is a line graph comparing the cumulative total stockholder
return for the year ended December 31, 1996 of the Corporation's Common Stock
against the cumulative total return of the Nasdaq Index and a peer group of
companies in the security and safety products market consisting of ADT Ltd.;
Borg-Warner Security Corp.; Checkpoint Systems; Cintas Corporation; Figgie
International; Indentix, Inc.; Mine Safety Appliances Company; Pittston Brinks
Group; Pittway Corporation; Safeskin Corporation; Sensormatic Electronics;
Symbol Technologies; Thermedics, Inc.; and Vivid Technologies (the "Peer
Group"). The graph and table assumes that $100 was invested on March 27, 1996
(the effective date of the Corporation's initial public offering) in each of the
Corporation's Common Stock, the Nasdaq Index and the Peer Group, and that all
dividends were reinvested.
- - --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
MEASUREMENT PERIOD
(FISCAL YEAR COVERED) BACOU USA NASDAQ INDEX PEER GROUP
<S> <C> <C> <C>
3/27/96 100.00 100.00 100.00
12/31/96 110.83 117.52 118.50
</TABLE>
- - --------------------------------------------------------------------------------
EMPLOYMENT CONTRACTS
Employment Agreements
In January 1996, the Corporation entered into an employment agreement with
Mr. Stepan, replacing an existing agreement with Uvex Safety, Inc. which
originated in 1992. The initial term of the agreement expires in July 1999 and,
unless either party elects not to renew, the agreement will be automatically
extended for an additional one year term. The agreement provides for an annual
base salary of $500,000, which will be reviewed annually by the Board of
Directors. The agreement also provides for an annual incentive cash bonus based
on a declining percentage ranging from four to one percent of the earnings
before interest and taxes of the Corporation, as well as reimbursement of United
States social security taxes and the applicable personal income tax effect of
such reimbursement, and certain other benefits. Mr. Stepan is restricted from
competing with the Corporation and prohibited from disclosing confidential
information regarding the Corporation during the term of the agreement and
thereafter for periods of one year and three years, respectively. The agreement
further provides that if either the Corporation terminates the agreement without
good cause prior to July 31,
9
<PAGE> 12
2000 or Mr. Stepan terminates the agreement during any term period, the
terminating party is required to pay to the other an amount equal to one year of
the annual base salary in effect at the time of the non-renewal or termination.
In May 1995, the Corporation entered into a five year employment agreement
with Mr. Barr, having an initial term expiring in 2000 which, unless either
party elects not to renew, will be automatically extended for successive three
year terms. During the initial three month transition period, the agreement
provided for compensation computed pro-rata on the basis of the services
actually rendered at a rate of $22,500 per month, offset by any legal fees
payable to Edwards & Angell for Mr. Barr's services during the transition
period. As a result, Mr. Barr received compensation in the amount of
approximately $19,000 for the transition period. The initial annual base salary
of $180,000 has been adjusted to $190,000. On January 1, 1997, Mr. Barr's annual
base salary was increased to $210,000 and such amount is subject to annual
cost-of-living increases. The agreement also provides for an annual bonus having
the following components: an amount based on the profitability of the
Corporation as measured by the Corporation's earnings before interest and taxes
at a rate ranging from 5% to 25% of the annual base salary; a bonus up to 25% of
the annual base salary based upon the achievement of individual performance
goals; and additional bonus compensation to be awarded in connection with
special projects, as identified by the Corporation. Mr. Barr is restricted from
competing with the Corporation and prohibited from disclosing any confidential
information regarding the Corporation's business during the term of the
agreement and thereafter for periods of one year and three years, respectively.
The agreement further provides that if the Corporation fails to renew the
contract prior to Mr. Barr reaching the age of 65 or Mr. Barr terminates the
agreement during any term period, the terminating party is required to pay to
the other an amount equal to six months of the annual base salary in effect at
the time of the non-renewal or termination.
The Corporation, through its respective operating subsidiaries, entered
into employment agreements (the "Subsidiary Employee Agreements") with Messrs.
Baker, Neff and Greene. The Subsidiary Employee Agreements contain the following
terms and conditions: (i) initial terms of five years commencing January 1, 1996
in the case of Messrs. Baker and Neff and 27 months commencing October 1, 1995
in the case of Mr. Greene, subject to automatic extensions for successive
additional five-year terms in the case of Messrs. Baker and Neff and additional
two-year terms in the case of Mr. Greene; (ii) annual salary which will be
subject to discretionary increases on an annual basis; (iii) annual incentive
compensation determined pursuant to the Corporation's 1996 Incentive
Compensation Plan, the criteria for which shall be established prior to the
commencement of the year to which such annual incentive compensation relates,
except in the case of 1996 which was determined before July 1, 1996; (iv)
eligibility for participation in the Stock Incentive Plan and any other stock
option plan which the Corporation may adopt; (v) participation in all
compensation and employee benefit arrangements available to other senior
executives of the Corporation; and (vi) noncompetition and confidentiality
covenants. The initial base salaries of Messrs. Baker, Neff and Greene were
$120,000, $120,000 and $180,000, respectively. The base salaries for each of
Messrs. Baker and Neff were increased to $125,000 as of January 1, 1997. Mr.
Greene's employment with the Corporation terminated on January 22, 1997.
Additionally, Mr. Neff is party to an agreement providing additional
incentive compensation based on certain criteria established by the Compensation
Committee with respect to his service as an officer and director of Pro-Tech
Respirators, Inc.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934 requires the
Corporation's officers and directors, and persons who own more than 10% of a
registered class of the Corporation's equity securities ("insiders"), to file
reports of ownership and changes in ownership with the SEC. Insiders are
required by SEC regulation to furnish the Corporation with copies of all Section
16(a) forms they file. Based solely on review of the copies of such forms
furnished to the Corporation, the Corporation believes that during 1996 all
Section 16(a) filing
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requirements applicable to its insiders were complied with except for the
inadvertent late filings of Form 3s by (i) Jacqueline Maggi Bacou, Veronique
Mirabel (daughter of Henri Bacou), Gilbert Vandeputte and Engineering Bacou S.A.
as a result of their changes in ownership interests in Bacou S.A. upon the death
of Henri Bacou, and (ii) Allesia S.A. as a result of the changes in its
ownership interests in Bacou S.A. upon the death on Henri Bacou.
CERTAIN TRANSACTIONS
STEPAN STOCK PURCHASE AND GIFT TRANSFER
By agreement dated July 31, 1994, the Corporation issued an aggregate of
693,000 shares of Common Stock to Mr. Stepan. The purchase price of $1,200,000
was paid by Mr. Stepan on September 20, 1994. Subsequent to such purchase, Mr.
Stepan made gift transfers of 138,600 shares of Common Stock to each of his two
adult children and 55,440 shares to his wife.
REGISTRATION RIGHTS
Pursuant to an agreement, Bacou S.A. (the "Principal Stockholder") has
certain rights to cause the Corporation to register its shares of Common Stock
under the Securities Act of 1933, as amended (the "Securities Act"). In
addition, subject to certain limitations, if the Corporation proposes to
register any of its securities under the Securities Act, either for its own
account or for the account of other security holders, each of the Principal
Stockholder, the Stepan family and Figa, S.A. are entitled to written notice of
the registration and are entitled to, at the Corporation's expense, include
therein shares of Common Stock held by such holder, provided, among other
conditions, that the underwriters of any offering have the right to limit the
number of such shares included in the registration. The Corporation generally is
required to bear all the fees, costs and expenses of such registrations other
than underwriting discounts and commissions. The Corporation also is obligated
to indemnify each of the Principal Stockholder, the Stepan family, Figa, S.A.
and any other party which exercises its registration rights against certain
liabilities, including liabilities under the Securities Act.
CORPORATE OPPORTUNITIES AGREEMENT
The Corporation and the Principal Stockholder have entered into an
agreement which addresses potential conflicts of interest with respect to future
business opportunities. In general, the agreement covers the following: the
extent to which the Bacou Group may export its products to the United States;
the extent to which the Corporation may export its products to France; the
manner in which acquisition opportunities will be allocated between the
Corporation and the Bacou Group; the basis for cooperation between the
Corporation and the Bacou Group with respect to product development,
intellectual property rights, research and development and manufacturing
processes; and the terms and conditions for sale of products by one party to the
other. The agreement expires on December 31, 2016, subject to a ten year renewal
option exercisable by either party.
Except for products supplied by the Corporation as an original equipment
manufacturer, the Corporation may not offer for sale in France personal
protective equipment of a type offered by the Bacou Group to its customers in
France unless it shall have first offered to supply the products to the Bacou
Group and such offer shall have been declined. At any time after the Bacou Group
declines such an offer, it may change its decision, prevent the Corporation from
making future sales of such products in France and undertake sales of such
products on its own behalf. The rights of the Bacou Group to reconsider an offer
would be subject to any agreement entered into by the Corporation with third
parties subsequent to the Bacou Group's having declined the initial offer.
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Except for products supplied by the Bacou Group as an original equipment
manufacturer, the Bacou Group may not offer for sale in the United States
personal protective equipment of a type offered by the Corporation to its
customers in the United States unless it shall have first offered to supply the
products to the Corporation and such offer shall have been declined. At any time
after the Corporation declines such an offer, it may change its decision,
prevent the Bacou Group from making further sales of such products in the United
States and undertake sales of such products on its own behalf. The rights of the
Corporation to reconsider an offer would be subject to any agreement entered
into by the Bacou Group with third parties subsequent to the Corporation's
having declined the initial offer.
The geographic restrictions applicable generally to sales by the
Corporation in France and the Bacou Group in the United States do not apply to
products sold by either party as an original equipment manufacturer, except that
either party may determine in its reasonable discretion that such sales by the
other party would materially and adversely affect the marketability of its
competing products, in which case the other party would be required to curtail
such export sales of products supplied as an original equipment manufacturer.
Opportunities for future acquisitions generally will be allocated by
geographic location, with the Corporation making acquisitions of businesses in
North, Central and South America and the Bacou Group making acquisitions
elsewhere in the world. Recognizing the Corporation's expertise in eyewear
products, the Corporation has the right of first refusal for any acquisitions of
eyewear businesses wherever located.
The agreement requires both parties and their affiliates to regularly
exchange information about activities relating to product development,
intellectual property rights, research and development and manufacturing
processes. In the event the Corporation selects a new product of the Bacou Group
for sale within the United States, the Corporation may utilize the intellectual
property, products, processes and know-how associated with the selected products
without payment of any royalty or consulting fee. The Corporation is subject to
the same requirement for new products of the Corporation which are selected by
the Bacou Group for sale in France. The Corporation's obligations are subject to
the restrictions placed on Uvex Safety, Inc. pursuant to its agreement with Uvex
Germany. The obligations of both parties are subject to any restrictions
applicable under other third party agreements, such as secrecy agreements, in
force at January 1, 1996.
The supply of products by either party to the other generally is required
to occur upon the most favorable terms and conditions applicable to transactions
with unrelated customers involving similar quantities and purchase order
conditions.
INDEBTEDNESS TO PRINCIPAL STOCKHOLDER AND GUARANTEE BY PRINCIPAL STOCKHOLDER
As of October 31, 1995, the Corporation had outstanding indebtedness of
$13.4 million to the Principal Stockholder. In December 1995, the Corporation
repaid all outstanding indebtedness to the Principal Stockholder by using
additional proceeds under bank loans in the amount of $13.0 million. All of the
Corporation's obligations under such loans were guaranteed by the Principal
Stockholder. The indebtedness to the Principal Stockholder bore interest at a
rate equal to the lower of LIBOR or PIBOR, in either case plus 0.7%. Principal
amounts were payable in aggregate annual installments ranging from $3.0 million
to $4.2 million with a final maturity date of October 1999. The bank loans were
repaid in full in April 1996 with the proceeds of the Corporation's initial
public offering.
INVENTORY PURCHASES FROM PRINCIPAL STOCKHOLDER
The Corporation purchases certain inventory items from wholly-owned
subsidiaries of the Principal Stockholder. Total purchases for the year ended
December 31, 1996 were approximately $625,000.
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PENDING ACQUISITION OF SURVIVAIR, INC.
In connection with the pending acquisition of Survivair, Inc., a
manufacturer and distributor of respiratory protective equipment, the
Corporation and the Principal Stockholder are cooperating in structuring the
transaction. As a result, Pro Tech Respirators, Inc., has advanced $28.0 million
to the Principal Stockholder in anticipation of the consummation of the
acquisition.
GUARANTEE BY TITMUS OF CERTAIN INDEBTEDNESS OF CERTAIN EXECUTIVE OFFICERS OF
TITMUS
Since 1992, Titmus Optical, Inc. has guaranteed certain personal lines of
credit of Edward E. Greene, Thomas J. Goeltz and Rickey B. Barnhill, in the
respective amounts of $140,000, $100,000 and $100,000. The guarantees were
terminated on December 20, 1995 without the incurrence of any liability to the
Corporation.
APPROVAL OF DIRECTORS STOCK OPTION PLAN
BACKGROUND
The 1996 Non-Employee Directors Stock Option Plan (the "Directors Plan") is
intended to promote the Corporation's interests by providing an inducement to
obtain and retain the services of qualified persons who are not employees or
officers of the Corporation to serve as members of its Board of Directors.
The Directors Plan was adopted by the Board of Directors on May 23, 1996.
On that date, four directors were eligible to participate in the Directors Plan.
Pursuant to the terms of the Directors Plan, 100,000 shares of the Corporation's
Common Stock are reserved for grant to non-employee directors. As of February
24, 1997, options to purchase 100,000 shares of the Corporation's Common Stock
had been granted to the eligible directors, subject to shareholder approval.
Approval of the Directors Plan requires the affirmative vote of a majority
of the shares entitled to vote thereon present in person or represented by proxy
at the Annual Meeting when a quorum is present. The Board of Directors
recommends that you vote FOR the approval of the Directors Plan.
THE DIRECTORS PLAN
The principal features of the Directors Plan are summarized below, but such
summary is qualified in its entirety by reference to the terms of the Directors
Plan, copies of which are available without charge upon written request from the
Corporation.
Participation. Directors of the Corporation who are not employees or
officers of the Corporation are eligible to receive options under the Directors
Plan.
Administration. The Directors Plan is administered by the Board of
Directors of the Corporation or a committee appointed by the Board, which
interprets and construes the terms of the Directors Plan. After being granted an
option, each optionee must enter into an option agreement with the Corporation
setting forth the terms of the option. Upon exercise of options, optionees are
required to pay the option price in full prior to receipt of certificates
representing shares of Common Stock.
Terms of Options. Initially, the Directors Plan provided that on July 1 of
each year during the term of the Directors Plan, each eligible director would
automatically be granted an option to purchase 2,000 shares of the Corporation's
Common Stock. As a result, options to purchase 8,000 shares were granted on July
1, 1996. On February 24, 1997, the Directors Plan was amended by the Board of
Directors to permit the Board of Directors to grant options at their discretion.
On that date, the Board of Directors granted options to purchase the remaining
92,000 shares under the Directors Plan. See "Security Ownership of Certain
Beneficial Owners and Management." The option exercise price is the fair market
value of the Common Stock on the date of
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grant. The market value of 100,000 shares of the Corporation's Common Stock at
March 7, 1997 was $1,562,500 (based on a closing price of $15 5/8 per share on
such date).
The options granted pursuant to the Directors Plan are non-qualified stock
options. See "Federal Income Tax Consequences" below.
Options granted under the Directors Plan are immediately vested and
exercisable on the date of grant (except the options granted July 1, 1996 which
vested August 1, 1996). The options may be exercised for a period of 10 years
from the date of grant of the option, provided, however, that (i) if the
optionee ceases to be a member of the Board for any reason other than death,
permanent disability or serious breach of conduct, the option shall terminate 90
days after the date the optionee ceased to be a Board member; (ii) if the
optionee ceased to be a member of the Board by reason of death or permanent
disability, the option shall terminate 12 months after the date of death or
permanent disability; or (iii) if the Board determines that an optionee has
engaged in a serious breach of conduct or anti-competitive activity (as defined
in the Directors Plan), the option will be cancelled. In the event of a change
of control (as defined in the Directors Plan), the options shall be
nonforfeitable and exercisable in full.
Stock Dividends or Splits. Appropriate adjustments will be made in the
number of shares covered by each option and to the option exercise price in the
event of any change in the Common Stock of the Corporation by reason of any
reorganization, recapitalization, reclassification, split or reverse stock
split, or of any similar change affecting the Corporation's voting stock.
Duration and Amendment of Directors Plan. The Directors Plan shall remain
in effect until all shares subject to or which may become subject to the
Directors Plan have been issued pursuant to the Directors Plan; provided that no
grants may be made under the Directors Plan after May 23, 2006 and the Board may
terminate the Directors Plan prior to that date. Amendments may be made by the
Board of Directors, provided, however, that the Board may not, without the
approval of the holders of a majority of the shares of Common Stock present and
voting at a meeting, increase the maximum number of shares for which options may
be granted under the Directors Plan, materially modify the eligibility
requirements, materially increase the benefits accruing to option holders or
amend the Directors Plan in any manner which would cause Rule 16b-3 under the
Securities Exchange Act of 1934 to become inapplicable. In addition, any
provisions of the Directors Plan specified in such Rule 16b-3 may not be amended
more than once every six months other than to comport with changes in the
Internal Revenue Code, ERISA or any rules thereunder.
Federal Income Tax Consequences. Options issued under the Directors Plan
are intended to be treated as non-qualified stock options under the Internal
Revenue Code of 1986, as amended. The grant of a non-qualified option does not
result in recognition of income to the optionee. Upon the exercise of a
non-qualified option, the amount by which the fair market value of the
Corporation's Common Stock on the date of exercise exceeds the option exercise
price is taxed to the optionee as ordinary income. The Corporation is entitled
to a deduction in the amount of the ordinary income realized by the optionee. At
such time as the optionee sells shares issued to him upon exercise of his
non-qualified option, he will realize gain or loss in an amount equal to the
difference between the selling price and the fair market value of the shares on
the date the option was exercised.
The preceding discussion is based upon federal tax laws and regulations in
effect on the date of this proxy statement, which are subject to change, and
does not purport to be a complete description of the federal income tax aspects
of the Directors Plan. Optionees may also be subject to state and local taxes in
connection with the grant or exercise of options granted under the Directors
Plan and the sale or other disposition of shares acquired upon exercise of
options.
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RATIFICATION OF SELECTION OF AUDITORS
The selection, by a majority of the members of the Board who are not
officers or employees of the Corporation, of KPMG Peat Marwick LLP as
independent auditors to audit the books and accounts of the Corporation for the
fiscal year ending December 31, 1997 shall be submitted to the Annual Meeting
for ratification. Such ratification requires the affirmative vote of a majority
of the shares entitled to vote thereon present in person or represented by proxy
at the Annual Meeting when a quorum is present. Representatives of KPMG Peat
Marwick LLP will be present at the Annual Meeting and will be given an
opportunity to make a statement if they desire to do so and will respond to
appropriate questions of stockholders.
The firm of KPMG Peat Marwick LLP has advised the Corporation that neither
it nor any of its members has any direct financial interest in the Corporation
as a promoter, underwriter, voting trustee, director, officer or employee.
All professional services rendered by KPMG Peat Marwick LLP during the year
ended December 31, 1996 were furnished at customary rates.
The Board recommends a vote FOR ratification of KPMG Peat Marwick LLP as
independent auditors for the fiscal year ending December 31, 1997.
OTHER MATTERS
Management does not know of any matters which will be brought before the
Annual Meeting other than those specified in the notice thereof. However, if any
other matters properly come before the Annual Meeting, it is intended that the
persons named in the form of proxy, or their substitutes acting thereunder, will
vote therein in accordance with their best judgment.
FINANCIAL STATEMENTS
The financial statements of the Corporation are contained in the 1996
Annual Report to Stockholders, which has been provided to the stockholders
concurrently herewith. Such report and the financial statements contained
therein are not to be considered as a part of this soliciting material.
STOCKHOLDER PROPOSALS FOR 1998 ANNUAL MEETING
Under the regulations of the Commission, a record or beneficial owner of
shares of the Corporation's Common Stock may submit proposals on proper subjects
for action at the 1998 Annual Meeting of Stockholders of the Corporation. All
such proposals must be mailed to the Corporation at 10 Thurber Boulevard,
Smithfield, Rhode Island 02917 and must be received at that address on or before
December 9, 1997, in order to be included in the Corporation's proxy relating to
the 1998 Annual Meeting.
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EXPENSE OF SOLICITATION OF PROXIES
All the expenses of preparing, assembling, printing and mailing the
material used in the solicitation of proxies by the Board will be paid by the
Corporation. In addition to the solicitation of proxies by use of the mails,
officers and regular employees of the Corporation may solicit proxies on behalf
of the Board by telephone, telegram or personal interview, the expenses of which
will be borne by the Corporation. Arrangements may also be made with brokerage
houses and other custodians, nominees and fiduciaries to forward soliciting
materials to the beneficial owners of stock held of record by such persons at
the expense of the Corporation.
By order of the Board of Directors,
PHILIP B. BARR, JR.
Secretary
Smithfield, Rhode Island
April 8, 1997
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BACOU USA, INC.
10 Thurber Boulevard
Smithfield, Rhode Island 02917
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
FOR THE ANNUAL MEETING OF SHAREHOLDERS, MAY 19, 1997
The undersigned hereby appoints Walter Stepan and Philip B. Barr, Jr., or
either one of them, as Proxies, each with the power to appoint his substitute,
and hereby authorizes each of them to represent and vote, as designated on the
reverse, all shares of Common Stock of Bacou USA, Inc. (the "Corporation") of
the undersigned, at the Annual Meeting to be held at the Grand Hyatt Hotel, New
York, New York, on Monday May 19, 1997 at 10:00 A.M., Eastern Daylight Time, or
at any adjournment thereof, for the following purposes:
CONTINUED AND TO BE SIGNED ON REVERSE SIDE
A[X] Please mark your
votes as in this
example.
(1) To elect directors The Board of Directors recommends that you
of the Corporation instruct the Proxies to vote FOR proposals
for the ensuing 1, 2, and 3.
year,
WITHHOLD Nominees: Philippe Bacou
FOR AUTHORITY Walter Stepan
all nominees to vote for all Christophe Bacou
listed at nominees listed Philip B. Barr, Jr.
right at right Karl F. Ericson
[ ] [ ] Dr. Herbert A. Wertheim
(2) To ratify the adoption of the Bacou USA, Inc. FOR AGAINST ABSTAIN
1996 Non-Employee Directors Stock Option Plan. [ ] [ ] [ ]
(3) To ratify the selection by the Board of Directors
of KPMG Peat Marwidk LLP as independent auditors
to audit the Corporation's books and accounts for
the fiscal year ending December 31, 1997. [ ] [ ] [ ]
(4) To transact such other business as may properly come before the meeting or
any adjournment thereof.
You are encouraged to specify your choices by marking the appropriate
boxes, but you need not mark any boxes if you wish to vote in accordance with
the Board of Directors' recommendations. The proxies cannot vote your shares
unless you sign and return this card. Please complete, sign and date this
proxy and mail it as promptly as possible. If you attend the meeting and vote
in person, the proxy will not be used.
THIS PROXY, WHEN PROPERLY EXECUTED, WILL BE VOTED IN THE MANNER DIRECTED
HEREIN BY THE UNDERSIGNED STOCKHOLDER. IF NO DIRECTION IS MADE, THIS PROXY WILL
BE VOTED FOR PROPOSALS 1, 2, AND 3.
Signature Dated
--------------------------------- ---------------------
NOTE: Please sign exactly as name appears hereon. Joint owners each should
sign. When signing as a fiduciary or for an estate, trust, corporation or
partnership, your title or capacity should be stated.
