<PAGE> 1
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 14A
(RULE 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. _____ )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
<TABLE>
<S> <C>
[ ] Preliminary Proxy Statement [ ] Confidential, for Use of the
Commission Only (as permitted by
Rule 14a-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-17
</TABLE>
KEVCO, INC.
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
- --------------------------------------------------------------------------------
(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)(1) 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
KEVCO, INC.
1300 SOUTH UNIVERSITY DRIVE, SUITE 200
FORT WORTH, TEXAS 76107-5734
Dear Shareholder:
You are cordially invited to attend the annual meeting of shareholders
of Kevco, Inc. to be held at 10:00 a.m., local time, on June 16, 2000, at the
Marriott Courtyard, 3150 Riverfront Drive, Fort Worth, Texas 76107.
The matters expected to be acted upon at the meeting are described in
the accompanying notice of annual meeting of shareholders and proxy statement.
We believe that a favorable vote on each of these matters is in your
best interests and recommend a vote "FOR" each such matter.
Your vote is important, whether or not you plan to attend the meeting.
Accordingly, please take a moment now to complete, sign, date and return your
proxy in the enclosed envelope.
I look forward to seeing you at the meeting.
Very truly yours,
/s/ JOSEPH P. TOMCZAK
JOSEPH P. TOMCZAK
Executive Vice President and Chief
Financial Officer
2
<PAGE> 3
KEVCO, INC.
1300 SOUTH UNIVERSITY DRIVE, SUITE 200
FORT WORTH, TEXAS 76107-5734
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD JUNE 16, 2000
The annual meeting of shareholders of Kevco, Inc. will be held at 10:00
a.m., local time, on June 16, 2000, at the Marriott Courtyard, 3150 Riverfront
Drive, Fort Worth, Texas 76107. The items of business are:
o Election of directors
o Ratification of independent auditors
Only shareholders of record at the close of business on May 17, 2000
are entitled to notice of and to vote at the meeting and any adjournment
thereof. A list of shareholders entitled to vote at the meeting will be
available for your inspection, for any purpose relevant to the meeting, during
the meeting and during normal business hours for 10 days prior to the meeting at
our principal office. The terms "we," "our" and "company," when used throughout
this notice and the accompanying proxy statement, refer to Kevco, Inc.
We believe that a favorable vote on each of these matters is in your best
interests and recommend a vote "FOR" each matter. Your vote is very important
regardless of the number of shares you own.
WE URGE YOU TO COMPLETE, SIGN, DATE AND RETURN THE ENCLOSED PROXY IN
THE ENVELOPE PROVIDED, WHICH REQUIRES NO POSTAGE IF MAILED IN THE UNITED STATES.
IF YOU DECIDE TO ATTEND THE MEETING, YOU MAY, IF SO DESIRED, REVOKE THE PROXY
AND VOTE YOUR SHARES IN PERSON.
Very truly yours,
/s/ JOSEPH P. TOMCZAK
JOSEPH P. TOMCZAK
Executive Vice President and Chief
Financial Officer
3
<PAGE> 4
<TABLE>
<CAPTION>
TABLE OF CONTENTS
PAGE
<S> <C>
GENERAL INFORMATION.............................................................1
Location........................................................................1
Record Date; Stock Entitled to Vote.............................................1
Quorum; Abstentions.............................................................1
Voting; Required Votes..........................................................1
Voting by Proxy; Revocation of Proxies..........................................1
Other Business..................................................................2
Proxy Solicitation..............................................................2
No Dissenters' or Appraisal Rights..............................................2
ELECTION OF DIRECTORS...........................................................3
Board of Directors Meetings and Committees......................................5
Director Compensation...........................................................6
Security Ownership of Certain Beneficial Owners.................................6
EXECUTIVE OFFICERS..............................................................8
Security Ownership of Management................................................8
Report of the Compensation Committee on Executive Compensation.................10
Compensation Committee Interlocks and Insider Participation....................11
Summary Compensation Table.....................................................11
Option Grants..................................................................12
Year-End Option Values.........................................................13
Employment Agreements..........................................................13
Certain Relationships and Related Transactions.................................14
Stock Performance Chart........................................................15
Section 16(a) Beneficial Ownership Reporting Compliance........................16
RATIFICATION OF INDEPENDENT AUDITORS...........................................16
SHAREHOLDER PROPOSALS..........................................................17
ADDITIONAL INFORMATION.........................................................17
</TABLE>
i
<PAGE> 5
KEVCO, INC.
PROXY STATEMENT
------------------
ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD JUNE 16, 2000
------------------
GENERAL INFORMATION
LOCATION
We will hold the 2000 annual meeting of shareholders at 10:00 a.m.,
local time, on June 16, 2000, at the Marriott Courtyard, 3150 Riverfront Drive,
Fort Worth, Texas 76107. This proxy statement and the accompanying form of proxy
are being mailed beginning on or about May 22, 2000, to shareholders entitled to
vote.
RECORD DATE; STOCK ENTITLED TO VOTE
The record date for determining the shareholders entitled to notice of
and to vote at the meeting is the close of business on May 17, 2000. Common
stock is currently our only class of outstanding voting securities.
QUORUM; ABSTENTIONS
The presence, in person or by proxy, at the meeting of holders of at
least a majority of the issued and outstanding shares of common stock is
necessary to constitute a quorum for the transaction of business. Each share
represented at the meeting in person or by proxy will be counted toward a
quorum. Abstentions and broker "non-votes" will be counted as present for the
purposes of determining whether a quorum is present but will not be counted as
votes cast in favor of the proposals. A broker "non-vote" occurs when a nominee
holding common shares for a beneficial owner does not vote on a particular
proposal because the nominee does not have discretionary voting power with
respect to that item and has not received instructions from the beneficial
owner.
VOTING; REQUIRED VOTES
A holder of common stock on the record date will be entitled to cast
one vote for each share of common stock registered in his or her name on each
matter that is properly presented to the shareholders for a vote at the meeting.
In order to be elected a director, a nominee must receive a plurality of the
votes of the holders of common stock entitled to vote at the meeting.
"Plurality" means that the nominees who receive the largest number of votes cast
are elected as directors.
VOTING BY PROXY; REVOCATION OF PROXIES
Shares of common stock that are entitled to vote and are represented by
a proxy properly signed and received at or prior to the meeting, unless
subsequently properly revoked, will be voted in accordance with the instructions
indicated on such proxy. If a proxy is signed and returned without indicating
any voting instructions, the shares of common stock represented by such proxy
will be voted "FOR" each nominee.
1
<PAGE> 6
Any proxy given pursuant to this solicitation may be revoked by the
person giving such proxy at any time before the shares represented by such proxy
are voted at the meeting by:
o attending, and voting in person at, the meeting,
o giving notice of revocation of the proxy at the meeting, or
o delivering to our Chief Financial Officer a written notice of
revocation or a duly executed proxy relating to the same shares
bearing a date later than the proxy previously executed.
All written notices of revocation and other communications concerning
revocation of proxies should be addressed as follows: Kevco, Inc., 1300 South
University Drive, Suite 200, Fort Worth, Texas 76107-5734, Attention: Joseph P.
Tomczak, Executive Vice President and Chief Financial Officer, and must be
received before the taking of votes at the meeting.
OTHER BUSINESS
We are not currently aware of any other business to be acted upon at
the meeting. If, however, other matters are properly brought before the meeting,
the persons appointed as proxies may vote or act thereon in accordance with
their best judgment, unless authority to do so is withheld in the proxy.
PROXY SOLICITATION
We will bear all proxy solicitation costs. In addition to solicitation
by mail, we may solicit proxies by telephone, facsimile transmission, personally
or otherwise through our officers and directors and a small number of our
regular employees, none of whom will be specially compensated. We may also make
arrangements with brokerage houses, banks, and other custodians, nominees and
fiduciaries for the forwarding of solicitation materials to the beneficial
owners of shares of common stock held of record by such persons, and we may
reimburse them for their related out-of-pocket expenses.
NO DISSENTERS' OR APPRAISAL RIGHTS
You will not be entitled to any right of appraisal or similar rights of
dissenters with respect to any action to be taken at the meeting.
2
<PAGE> 7
ELECTION OF DIRECTORS
Our board is divided into three classes and consists of six directors
with each class consisting of two directors, with the term of one class expiring
each year and with the directors of each class, upon election, holding a
three-year term. Each director serves until the annual meeting of shareholders
in the year in which his term expires or until his successor is elected and
qualified.
Under the terms of our securities purchase agreement with Wingate
Partners II, L.P., both the Kevco Partners Investment Trust (KPI Trust) and
Jerry E. Kimmel, our former CEO, were each entitled to designate two members to
our board. The KPI Trust is also required to use its commercially reasonable
efforts to ensure the appointment and election of at least two independent
directors to our board for a period of five years from the closing of the
transaction on July 26, 1999.
Following the closing, the following designees were appointed or, in
the case of Mr. Kimmel's designees, retained as directors:
<TABLE>
<S> <C>
The KPI Trust's designees: Frederick B. Hegi, Jr.
James A. Johnson
Mr. Kimmel's designees: Jerry E. Kimmel
Richard Nevins
Independent directors: William L. Estes
Peter B. McKee
</TABLE>
Messrs. Hegi and Kimmel, are in the class whose term of office expires
in 2000. The board has nominated Messrs. Hegi and Kimmel for reelection as
directors at the meeting, to serve for a three-year term expiring at our annual
meeting of shareholders in 2003 or until their successors are elected and
qualified.
Each nominee has indicated his willingness to serve on the board if
elected; however, in case either nominee shall become unavailable for election
to our board for any reason, you can vote your proxy for a substitute nominee or
nominees. Proxies cannot be voted for more than two nominees. The following sets
forth information, as of the date of this proxy statement, as to the nominees
and each director whose term of office will continue after the meeting,
including their ages, present principal occupations, other business experience
during the last five years, membership on committees of our board and
directorships in other publicly-held companies.
<TABLE>
<CAPTION>
YEAR TERM
AS DIRECTOR
NAME AGE POSITION EXPIRES
- ---- --- -------- -----------
<S> <C> <C> <C>
Nominees for a three-year term ending in 2003:
Frederick B. Hegi, Jr.......................... 56 President, Chief Executive 2000
Officer and Chairman of the
Board
Jerry E. Kimmel................................ 62 Vice Chairman of the Board 2000
Continuing Directors:
James A. Johnson............................... 46 Executive Vice President, 2001
Secretary and Director
Richard Nevins................................. 52 Director 2001
William L. Estes............................... 52 Director 2002
Peter B. McKee................................. 61 Director 2002
</TABLE>
3
<PAGE> 8
Frederick B. Hegi, Jr. has served as Chairman of the Board since July
26, 1999. Mr. Hegi also currently serves as Chairman of the executive committee.
Hegi also is the Chairman of United Stationers, Inc., a wholesale distributor of
paper products and office supplies; Chairman of Loomis, Fargo & Co., an armored
car service company; Chairman of Tahoka First Bancorp, Inc., a bank holding
company; Chairman of Cedar Creek Bancshares, Inc., a bank holding company; a
director of Pro Parts Xpress, Inc., a wholesale distributor of automotive parts;
a director of Lone Star Technologies, Inc., a manufacturer of tubular products;
and a director of Texas Capital Bancshares, Inc., a bank holding company. Mr.
Hegi received his B.B.A. from Southern Methodist University, his M.B.A. from
Harvard Business School and his Ph.D. from the University of Texas.
James A. Johnson has served as a director since July 26, 1999. Mr.
Johnson also currently serves on both the compensation committee and the
executive committee. Mr. Johnson currently serves as a director of Pro Parts
Xpress and of United Stationers. Mr. Johnson received his B.S. in industrial
engineering from Stanford University and his M.B.A. from the Stanford Graduate
School of Business.
Jerry E. Kimmel is our founder and has spent his entire career in this
industry. Mr. Kimmel has served as Vice Chairman of the Board since July 1999
and has served as a director since 1993. Mr. Kimmel also currently serves on the
executive committee. From 1978 to July 1999, Mr. Kimmel served as President of
Kevco. Mr. Kimmel also served as Chairman of the Board and Chief Executive
Officer of the company from 1993 until July 1999. In 1992, Mr. Kimmel was
inducted into the MH/RV Hall of Fame. Mr. Kimmel served as the Chairman of the
Board of Governors of the Manufactured Housing Institute (MHI), a leading
manufactured housing trade group, in 1983 and 1984, and has served in various
other MHI board capacities.
William L. Estes has served as a director of the company since
September 21, 1999. Mr. Estes is currently a member of the audit committee and
Chairman of the compensation committee. Mr. Estes is also currently President
and Chief Executive Officer of Consolidated Container Holdings (CCC), a $700
million manufacturer and marketer of rigid plastic containers to the dairy,
beverage, food, household chemical, automotive and industrial chemical sectors.
Prior to joining CCC, Mr. Estes served as President and Chief Executive Officer
of Suiza Packaging, a predecessor company to CCC. From November 1996 to February
1998, Mr. Estes served as President and Chief Operating Officer of McKesson
Corporation's McKesson-Carrollton operations. From January 1994 to November
1996, Mr. Estes served in various capacities with FoxMeyer Corporation, a
pharmaceutical distributor, most recently as President and Chief Operating
Officer. FoxMeyer filed for protection under Chapter 11 of the U.S. Bankruptcy
Code on August 27, 1996. Earlier Mr. Estes spent eight years with Pepsico,
primarily in key operating positions within its Frito-Lay subsidiary. Mr. Estes
received his B.A. in mechanical engineering from the University of Illinois and
his M.B.A. from the Wharton School of Business.
Peter B. McKee has served as a director of the company since September
21, 1999. Mr. McKee is currently a member of the compensation committee and
Chairman of the audit committee. From May 1996 to June 1999, Mr. McKee served as
the Senior Vice President and Chief Financial Officer of Allegiance Corporation,
a $4.5 billion health care products supplier. From January 1994 to May 1996, Mr.
McKee served as the Senior Vice President and Chief Financial Officer of
FoxMeyer Corporation and was previously Chief Financial Officer of Swift
Independent, a $4 billion meat processing and distribution company. FoxMeyer
filed for protection under Chapter 11 of the U.S. Bankruptcy Code on August 27,
1996. Mr. McKee currently serves as a director of CurranCare, a healthcare
consulting company. Mr. McKee received his B.S. in business administration from
Northwestern University. Mr. McKee also attended the New York University
Graduate School of Business.
Richard Nevins has served as a director of the company since November
1996. Mr. Nevins also currently serves on both the audit committee and the
compensation committee. Since July 1998, Mr. Nevins has served as Managing
Director of Jefferies & Company, Inc., an investment banking firm. From 1992 to
July 1998, Mr. Nevins served as President of Richard Nevins & Associates, a
financial advisory firm. Mr. Nevins served as a director of Fruehauf Trailer
Corporation from 1995 until October 1996. On October 7, 1996, Fruehauf filed for
relief under
4
<PAGE> 9
Chapter 11. During 1996, Mr. Nevins served as acting Chief Operating Officer and
Chief Restructuring Officer for Sun World International, a California
agricultural firm. From 1995 to 1996, Mr. Nevins served as a director of Ampex
Corporation and from 1993 to 1995 he served as a director of The Actava Group
(now Metromedia International Group). Mr. Nevins received his B.A. in Economics
from the University of California, Riverside and his M.B.A. from Stanford
Graduate School of Business.
BOARD OF DIRECTORS MEETINGS AND COMMITTEES
<TABLE>
<CAPTION>
AUDIT COMPENSATION EXECUTIVE
NAME BOARD COMMITTEE COMMITTEE COMMITTEE
- ---- ----- --------- ------------ ---------
<S> <C> <C> <C> <C>
Frederick B. Hegi, Jr...................... X* X*
James A. Johnson........................... X X X
Jerry E. Kimmel............................ X X
William L. Estes........................... X X X*
Peter B. McKee............................. X X* X
Richard Nevins............................. X X X
</TABLE>
- ------------
*Chairman
Our business is managed under the direction of our board. Our board
meets on a regularly scheduled basis to review significant developments
affecting us and to act on matters requiring its approval. It also holds special
meetings when an important matter requires action by the board between scheduled
meetings. During 1999, our board met 10 times and acted by unanimous written
consent 12 times. During 1999, each member of our board participated in all
board and applicable meetings held during the period for which he was a
director.
Our board has three standing committees: the audit committee, the
compensation committee and the executive committee. The functions of these
committees, their current members, and the number of meetings held during 1999
are described below.
Audit Committee. The audit committee was established to review the
professional services and independence of our independent auditors and our
accounts, procedures and internal controls. The audit committee recommends to
the board the appointment of the firm selected to be our independent public
accountants and monitors the performance of such firm; reviews and approves the
scope of the annual audit; reviews and evaluates with the independent public
accountants our annual audit and annual consolidated financial statements;
reviews with management the status of internal accounting controls; evaluates
problem areas having a potential financial impact on us that may be brought to
its attention by management, the independent public accountants or our board;
and evaluates all our public financial reporting documents. No member of the
audit committee is also one of our officers or employees nor does any such
member have any relationship with us which would interfere with the exercise of
such member's independent judgment in carrying out such member's
responsibilities as a member of the audit committee. The audit committee met
twice and acted by written consent twice in 1999.
Compensation Committee. The function of the compensation committee is
to set the annual salaries, bonuses, option awards, and the overall compensation
program for our officers and key employees. The compensation committee met once
in 1999.
Executive Committee. The executive committee meets as necessary when
the board is not in session to exercise general control and supervision in all
matters pertaining to the interests of the company, subject at all times to the
direction of our board. The executive committee also serves as the nominating
committee for the purpose of identifying, evaluating and recommending potential
candidates for election to our board. The executive committee was formed on
October 1, 1999 and has not yet convened a meeting.
5
<PAGE> 10
DIRECTOR COMPENSATION
During 1999, directors who were also our employees did not receive
additional compensation for serving as directors. Each director who was not an
employee received a fee of $1,000 for attendance at each board meeting and $500
for attendance at each board committee meeting (unless held on the same day as a
board meeting). All directors were reimbursed for out-of-pocket expenses
incurred in attending board and committee meetings, and for other out-of-pocket
expenses incurred in their capacity as directors. In addition to these amounts,
each director (excluding Messrs. Hegi, Johnson and Kimmel, the last of whom is
compensated under the terms of his consulting agreement described below under
the caption "Employment Agreements") receives $20,000 annually for service on
the board, prorated for length of service.
On July 26, 1999, we entered into a four-year consulting agreement with
Jerry E. Kimmel providing for the payment of $210,000 annually for general
consulting services. As of the same date we entered into monitoring and
oversight and financial advisory agreements with Wingate Management Limited,
L.L.C. (Wingate LLC). Under the monitoring and oversight agreement, we are
required to pay Wingate LLC $41,667.00 per month for the first 24 months and
thereafter an annual fee of $200,000 plus 2.4% of our pre-tax income for its
management services. The financial advisory agreement requires us to pay Wingate
LLC a cash fee ranging from 1% to 1.5% of the value of any "extraordinary
transaction" we enter into. As defined by the financial advisory agreement,
"extraordinary transactions" include any proposals for a tender offer,
acquisition, sale, merger, exchange offer, recapitalization, restructuring or
other similar transaction involving the company. Messrs. Hegi and Johnson are
principals of Wingate LLC.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
The following table sets forth certain information regarding the
beneficial ownership of the common stock by each person known by us to be the
beneficial owner of more than five percent of the common stock as of the date of
this proxy statement, calculated in accordance with rule 13d-3 under the
Securities Exchange Act of 1933, as amended. Unless otherwise indicated, all
persons listed in the table below have sole voting and investment power in
respect of all shares shown as beneficially owned by them. However, as indicated
by the notes following the table, certain shares are deemed to be beneficially
owned by more than one person or entity as a result of the attribution of
ownership among affiliated persons and entities. This table does not include
shares of common stock that may be purchased pursuant to options not exercisable
within 60 days of the date of this proxy statement.
<TABLE>
<CAPTION>
AMOUNT AND NATURE
NAME AND ADDRESS OF BENEFICIAL OWNER OF BENEFICIAL OWNERSHIP PERCENT OF CLASS
------------------------------------ ----------------------- ----------------
<S> <C> <C>
The Kevco Partners Investment Trust ....................... 5,790,909(1) 45.8%
c/o First Union Trust Company, N.A.
One Rodney Square, Suite 102
920 King Street
Wilmington, Delaware 19801
Attention: Edward L. Truitt, Jr.
Frederick B. Hegi, Jr. .................................... 5,790,909(2) 45.8%
750 North St. Paul Street, Suite 1200
Dallas, Texas 75201
Jerry E. Kimmel............................................ 3,744,760(3) 29.6%
1300 South University Drive, Suite 200
Fort Worth, Texas 76107
</TABLE>
6
<PAGE> 11
<TABLE>
<CAPTION>
AMOUNT AND NATURE
NAME AND ADDRESS OF BENEFICIAL OWNER OF BENEFICIAL OWNERSHIP PERCENT OF CLASS
------------------------------------ ----------------------- ----------------
<S> <C> <C>
Dimensional Fund Advisors, Inc............................. 587,900(4) 6.2%
1299 Ocean Avenue, 77th Floor
Santa Monica, California 90401
</TABLE>
- ----------------
(1) Consists of 2,700,000 shares of common stock and 3,090,909 shares of
common stock issuable upon exchange of the Tranche A Senior
Subordinated Exchangeable Note in the principal amount of $17 million
(Tranche A Note). Based on a statement on Schedule 13D filed with the
Securities and Exchange Commission (SEC) on August 4, 1999, the KPI
Trust has shared voting power and investment power in respect of all
shares of common stock listed.
(2) Consists of 2,700,000 shares of common stock owned beneficially and of
record by the KPI Trust and 3,090,909 shares of common stock issuable
upon exchange of the Tranche A note. The KPI Trust is the beneficial
and record owner of the Tranche A note. Based on a statement on
Schedule 13D filed with the SEC on August 4, 1999, Mr. Hegi has shared
voting power and investment power in respect of all shares of common
stock listed. Mr. Hegi is the sole manager of the KPI Trust.
Accordingly, Mr. Hegi may be deemed to own beneficially all of the
shares of common stock owned beneficially and of record by the KPI
Trust. Mr. Hegi has stated in certain filings with the SEC that he
disclaims beneficial ownership of the shares listed.
(3) Excludes 626,386 shares of outstanding common stock and 15,299 shares
of common stock issuable upon exercise of options beneficially owned by
Mr. Kimmel's adult children and his brother. Mr. Kimmel disclaims
beneficial ownership of such shares.
(4) Based on a Schedule 13G filed with the SEC on February 3, 2000,
Dimensional Fund Advisors Inc. (DMA) has sole voting and dispositive
power with respect to 587,900 shares. DMA is an investment advisor
registered under the Investment Advisors Act of 1940. All of these
shares are owned by several funds to which DMA serves as investment
manager. DMA disclaims beneficial ownership of such shares.
7
<PAGE> 12
EXECUTIVE OFFICERS
Our executive officers serve at the discretion of the board and are
chosen annually by the board. Set forth below are the names, ages and positions
of our executive officers.
<TABLE>
<CAPTION>
NAME AGE POSITION
---- --- --------
<S> <C> <C>
Frederick B. Hegi, Jr............. 56 President, Chief Executive Officer and Chairman of the
Board
James A. Johnson.................. 46 Executive Vice President, Secretary and Director
Joseph P. Tomczak................. 44 Executive Vice President and Chief Financial Officer
Dan Russell Hardin................ 41 President - Distribution Group
C. Lee Denham..................... 51 President - Sunbelt Wood Components Group
</TABLE>
Information concerning the business experience of Messrs. Hegi and
Johnson is provided under "Election of Directors" above.
Joseph P. Tomczak joined Kevco on January 17, 2000 as Executive Vice
President and Chief Financial Officer. Before coming to Kevco, Mr. Tomczak was
Vice President and Corporate Controller at Outboard Marine Corporation and prior
to that held the same title at Alliant Foodservice, Inc., the second largest
foodservice distribution company in America. He received his Masters of
Management Degree from Northwestern University's Kellogg Graduate School of
Management and his B.A. in Accounting and Business Administration from Augustana
College. Mr. Tomczak is a C.P.A.
Dan Russell Hardin has served as the President of the company's
Distribution Group since July 1999. From 1998 to July 1999, Mr. Hardin served as
Executive Vice President of the company. Mr. Hardin also served as the company's
Vice President of Sales from 1995 to 1998. Prior to joining the company, Mr.
Hardin served as the National Sales Manager of Service Supply Systems, a
distribution company which we acquired in 1995. Mr. Hardin received his B.B.A.
in business from the University of Georgia.
C. Lee Denham currently serves as President of the Sunbelt Wood
Components Group of the company. Mr. Denham founded Sunbelt Wood Components,
Inc., a fabricated structural products company which we acquired in 1996. Mr.
Denham received his B.B.A. in marketing from the University of Georgia.
SECURITY OWNERSHIP OF MANAGEMENT
The following table sets forth certain information regarding the
beneficial ownership of the common stock as of the date of this proxy statement
by: (1) each director; (2) our chief executive officer and the other four most
highly compensated executive officers who were officers on December 31, 1999;
and (3) all directors and such executive officers as a group. Unless otherwise
indicated, all persons listed in the table below have sole voting and investment
power in respect of all shares shown as beneficially owned by them. The
inclusion of any shares for any shareholder in the table below is not an
admission that such shareholder is, for any purpose, the beneficial owner of
such shares. This table does not include shares of common stock that may be
purchased pursuant to options not exercisable within 60 days of the date of this
proxy statement. An asterisk denotes beneficial ownership of less than one
percent of the shares of common stock deemed outstanding.
<TABLE>
<CAPTION>
AMOUNT AND NATURE PERCENT
NAME OF BENEFICIAL OWNER OF BENEFICIAL OWNERSHIP OF CLASS
- ------------------------ ----------------------- --------
<S> <C> <C>
Frederick B. Hegi, Jr.......................................... 5,790,909(1) 45.8%
Jerry E. Kimmel................................................ 3,744,760(2) 29.6%
James A. Johnson............................................... 0 *
</TABLE>
8
<PAGE> 13
<TABLE>
<CAPTION>
AMOUNT AND NATURE PERCENT
NAME OF BENEFICIAL OWNER OF BENEFICIAL OWNERSHIP OF CLASS
- ------------------------ ----------------------- --------
<S> <C> <C>
Richard Nevins................................................. 39,405(3) *
William L. Estes............................................... 30,000(4) *
Peter B. McKee................................................. 30,000(4) *
Clyde A. Reed, Jr.............................................. 30,015(5) *
Dan Russell Hardin............................................. 19,400(6) *
C. Lee Denham.................................................. 9,400(6) *
All directors and executive officers as a group (9 persons).... 9,693,889(7) 76.0%
</TABLE>
- ----------------
(1) See Note 1 under "-- Security Ownership of Certain Beneficial Owners."
(2) See Note 3 under "-- Security Ownership of Certain Beneficial Owners."
(3) Includes 32,500 shares of common stock subject to presently exercisable
options.
(4) Includes 30,000 shares of common stock subject to presently exercisable
options.
(5) Includes 18,847 shares of common stock subject to presently exercisable
options.
(6) Includes 9,400 shares of common stock subject to presently exercisable
options.
(7) Includes 120,747 shares of common stock subject to presently exercisable
options.
9
<PAGE> 14
REPORT OF THE COMPENSATION COMMITTEE ON EXECUTIVE COMPENSATION
The compensation committee of the board is responsible for reviewing
our compensation arrangements with our senior executive officers. The current
members of the compensation committee are Messrs. Johnson, McKee, Estes and
Nevins. The principal elements of our 1999 executive compensation program
consisted of base salaries, the opportunity for annual cash bonuses based on our
financial performance, equity-based compensation in the form of stock options
and other customary fringe benefits.
Philosophy
The compensation committee believes that all of our executive officers
should be compensated on a competitive basis with other distribution and
manufacturing companies of comparable size in sales and earnings. The
compensation committee's primary objectives with respect to executive
compensation are to establish a total compensation program that provides base
salaries in a competitive range, bonus opportunities that reward above-average
performance with above-average pay, and equity-based incentives designed to
enhance our profitable growth and the value of our common stock and to align
management and shareholder interests.
Base Salaries
For 1999, our executive officers received base salaries in accordance
with recommendations of the compensation committee.
Stock Option Programs
We intend to attract, retain and motivate our executive officers and
other employees through the grant of stock options under our 1995 stock option
plan, our 1996 stock option plan and our 1999 stock option plan. During 1999,
the compensation committee awarded options to purchase 35,000 and 60,000 shares
of our common stock to Messrs. Denham and Hardin, respectively, at an exercise
price of $2.313 per share under our 1999 stock option plan.
CEO Compensation
Although we have not entered into an employment agreement with Mr.
Hegi, our current Chairman, President and CEO, Mr. Hegi may receive indirect
financial benefits under the monitoring and oversight and financial advisory
agreements discussed above under the caption "Compensation of Directors."
Tax Considerations
In formulating its compensation policies, the compensation committee
considers the relevant provisions, including section 162(m) of the Internal
Revenue Code of 1986, as amended (Code), that limit the deductibility of certain
executive compensation and the consequences to us if the compensation paid to
our executive officers is not deductible.
COMPENSATION COMMITTEE
Peter B. McKee, Chairman
James A. Johnson
William L. Estes
Richard Nevins
10
<PAGE> 15
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
During fiscal 1999, James A. Johnson served as both Executive Vice
President and Secretary of the company and as a member of the compensation
committee. None of our executive officers served either as a director or on the
compensation committee of any other entity whose executive officers served
either as a member of our board or of our compensation committee.
SUMMARY COMPENSATION TABLE
The following table sets forth certain information regarding
compensation paid during each of the last three fiscal years to our CEO and
other most highly compensated executive officers, based on salary and bonus
earned during 1999, whose total compensation exceeded $100,000.
<TABLE>
<CAPTION>
LONG TERM
COMPENSATION AWARDS
ANNUAL COMPENSATION ---------------------
FISCAL -------------------- SECURITIES UNDERLYING ALL OTHER
NAME AND PRINCIPAL POSITION YEAR SALARY ($) BONUS ($) OPTIONS/SARS (#) COMPENSATION ($)
- --------------------------- ---- ---------- --------- --------------------- ----------------
<S> <C> <C> <C> <C> <C>
Frederick B. Hegi, Jr............... 1999 -- -- -- --
President, Chief Executive 1998 -- -- -- --
Officer and Chairman of the 1997 -- -- -- --
Board
Jerry Kimmel........................ 1999 $153,846 -- -- 7,319(1)
Vice Chairman and 1998 250,000 238,299 -- 34,821(2)
former Chief Executive Officer 1997 250,000 244,960 -- 13,593(3)
Clyde A. Reed, Jr................... 1999 225,000 47,605 -- 25,124(4)
Executive Vice President 1998 224,477 59,842 -- 14,470(5)
1997 204,540 81,438 -- 12,655(6)
C. Lee Denham....................... 1999 150,020 93,318 -- 480(1)
President, Sun Belt 1998 145,220 125,572 -- 590(1)
Wood Components Group 1997 114,095 98,178 -- 1,594(7)
Dan Russell Hardin.................. 1999 175,000 61,932 -- 8,100(1)
President, Distribution Group 1998 148,923 90,101 -- 8,100(1)
1997 114,037 41,299 -- 8,100(1)
</TABLE>
- -------------------
(1) Represents personal use of a company supplied car.
(2) Consists of $11,501 representing personal use of a company supplied car
and $23,320 representing personal use of a company supplied aircraft.
(3) Consists of $12,546 representing personal use of a company supplied car
and $1,047 representing the company's contribution to such individual's
401(k) plan account.
(4) Consists of $4,172 representing personal use of a company supplied car
and $20,952 representing expense recognized by the company in 1999
relating to future payments to be made under a deferred compensation
arrangement.
(5) Consists of $2,470 representing personal use of a company supplied car
and $12,000 representing expense recognized by the company in 1998
relating to future payments to be made under a deferred compensation
agreement. Mr. Reed resigned as a director of the company on January
25, 1999 and Chief Operating Officer of the company on July 26, 1999.
11
<PAGE> 16
(6) Consists of $3,851 representing personal use of a company supplied car,
$7,757 representing expense recognized by us in 1997 relating to future
payments to be made under a deferred compensation agreement and $1,047
representing our contribution to such individual's 401(k) plan account.
(7) Consists of $547 representing personal use of a company supplied car
and $1,047 representing our contribution to such individual's 401(k)
plan account.
OPTION GRANTS
The following table presents certain information regarding the options
to purchase common stock we granted in 1999 under our 1999 stock option plan to
our executive officers.
<TABLE>
<CAPTION>
POTENTIAL REALIZABLE
VALUE AT
INDIVIDUAL GRANTS ASSUMED ANNUAL
------------------------------------------------- RATES OF
NUMBER OF % OF TOTAL STOCK PRICE
SECURITIES OPTIONS APPRECIATION
UNDERLYING GRANTED TO EXERCISE FOR OPTION TERM
OPTIONS ALL PRICE EXPIRATION ---------------------
GRANTED EMPLOYEES PER SHARE DATE 5% 10%
---------- ---------- --------- ---------- -------- -------
<S> <C> <C> <C> <C> <C> <C>
Frederick B. Hegi, Jr........ -- -- -- -- -- --
Jerry E. Kimmel.............. -- -- -- -- -- --
Clyde A. Reed, Jr............ -- -- -- -- -- --
C. Lee Denham................ 35,000 3.17% $2.313 12/10/09 $50,925 $129,010
Dan Russell Hardin........... 60,000 5.43% $2.313 12/10/09 $87,300 $221,160
</TABLE>
12
<PAGE> 17
Year-End Option Values
The following table presents the value of stock options outstanding at
December 31, 1999 held by each of our executive officers. No stock options were
exercised by these executive officers in 1999.
<TABLE>
<CAPTION>
NUMBER OF SECURITIES VALUE OF UNEXERCISED
UNDERLYING UNEXERCISED IN-THE-MONEY OPTIONS/SARS
OPTIONS/SARS AT FY-END (#) AT FY-END ($) (1)
---------------------------- ----------------------------
NAME EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
---- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C>
Frederick B. Hegi, Jr.......... -- -- -- --
Jerry E. Kimmel................ -- -- -- --
Clyde A. Reed, Jr.............. 18,847(2) -- -- --
C. Lee Denham.................. 9,400(3) 35,000(4) -- --
Dan Russell Hardin............. 9,400(3) 60,000(5) -- --
</TABLE>
- ---------------
(1) The closing price for our common stock as reported through The Nasdaq
Stock Market on December 31, 1999, was $2.00. Value is calculated on
the basis of the difference between the option exercise price and
$2.00 multiplied by the number of shares of common stock underlying
the option.
(2) Consists of options to acquire 7,097 shares of common stock at $5.64
per share and options to acquire 11,750 shares of common stock at
$11.17 per share.
(3) Consists of options to acquire 9,400 shares of common stock at $11.17
per share.
(4) Consists of options to acquire 35,000 shares of common stock at $2.313
per share.
(5) Consists of options to acquire shares of common stock at $2.313 per
share.
EMPLOYMENT AGREEMENTS
Effective October 1, 1996, Jerry E. Kimmel entered into a five year
employment agreement with us which provided for an annual base salary of
$250,000. In addition to base salary, Mr. Kimmel, through his employment
agreement, was eligible for an annual bonus equal to 2.4% of our income before
income taxes for the year provided that income before income taxes was at least
$5.0 million. Under the agreement, Mr. Kimmel performed services on our behalf
in Fort Worth, Texas as he reasonably determined was necessary to carry out his
duties under the agreement. Mr. Kimmel, his spouse and dependents participated
at our expense in health programs offered to our employees generally. Upon the
termination of this agreement effective July 26, 1999, we entered into a
four-year consulting agreement with Mr. Kimmel providing for the payment of
$210,000 annually for general consulting services from time to time if and when
required by the company. This agreement also requires us to include Mr. Kimmel
and his immediate family in all group health and dental benefits offered to our
employees generally.
Under the terms of the retirement agreement we entered into with Mr.
Reed effective May 24, 1977, we began paying Mr. Reed a retirement benefit of
$55,000 per year for 10 years on April 6, 2000, the effective date of Mr.
Reed's retirement.
13
<PAGE> 18
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
We lease three of our warehouse locations from an affiliated
partnership (K&E Land & Leasing, a Texas general partnership) of which Mr.
Kimmel is a managing partner. We also lease computer equipment from K&E Land &
Leasing. These leases (1) expire in November 2003, April 2005, October 2007 and
October 2003, respectively, (2) provide for total future (i.e., post March 2000)
base rent payments of approximately $ 470,000, $ 462,000, $ 1.7 million and $ .8
million, respectively, and (3) require payments to be made in equal monthly
amounts. As of March 31, 2000, Mr. Kimmel's indirect interest in such leases was
38.0% and Gregory G. Kimmel's (Mr. Kimmel's son and former director of the
company) aggregate beneficial interest in such leases was 4.0%. Mr. Kimmel's
immediate family members (including Gregory G. Kimmel's beneficial interest)
owned indirect interests in such leases of 12.0%. Aggregate expenditures by the
company under such leases during 1999 were approximately $ 672,000, of which
approximately $ 255,000 was indirectly attributable to Jerry Kimmel's interests
in such partnership (excluding immediate family members' interests) and of which
approximately $ 27,000 was indirectly attributable to Gregory G. Kimmel's
beneficial interest. We anticipate that our aggregate expenditures under such
leases for the remainder of their terms will be approximately $ 3.5 million, of
which approximately $ 1.3 million will be indirectly payable (less partnership
expenses) to Jerry Kimmel (excluding immediate family members' interests) and of
which approximately $140,000 will be indirectly payable (less partnership
expenses) to Gregory G. Kimmel. We believe that the amounts we have paid under
such leases have not been less favorable to us than had the leases been
negotiated on an arms-length basis. Two of the leased warehouses were financed
through economic development and industrial revenue bonds; one series of which
was issued by Newton, Kansas in the original principal amount of $575,000, and
with respect to which we are the sub-lessee of the premises and a co-guarantor,
and one series of which was issued by Elkhart, Indiana in the original principal
amount of $400,000, and with respect to which we are the lessee of the premises
and have agreed to perform the obligation of the lessor contained in the
mortgage.
Gregory G. Kimmel and James Kimmel, Jerry Kimmel's brother, earned, in
the aggregate, approximately $166,731 in compensation in 1999.
We engaged Mr. Nevins to provide financial advisory services from
August 1998 through January 1999. In consideration of these services, we
compensated Mr. Nevins $5,000 for each month during this period and granted him
3,905 shares of our common stock.
On July 26, 1999, the KPI Trust acquired:
o 2,700,000 newly-issued shares of common stock for a purchase
price of $5.00 per share;
o three warrants to purchase 675,000 shares, 772,727 shares, and
295,455 shares, respectively, of nonvoting common stock;
o a Tranche A Senior Subordinated Exchangeable Note in the
principal amount of $17 million; and
o a Tranche B Senior Subordinated Exchangeable Note in the
principal amount of $6.5 million.
The aggregate purchase price for the shares, the warrants, and the
notes was $37 million.
The warrants are exercisable for 675,000 shares, 772,727 shares, and
295,455 shares of nonvoting common stock, respectively, subject to customary
adjustment to protect against dilution. Each warrant has a term of five years
and has an initial exercise price of $5.50 per share (subject to adjustment as
provided therein).
The Tranche A note is exchangeable at any time at the holder's option
for (1) 3,090,909 shares of voting preferred stock, or (2) directly into
3,090,909 shares of common stock, in each case at an initial exchange ratio of
14
<PAGE> 19
$5.50 per share, subject to customary adjustment to protect against dilution.
The Tranche B note is exchangeable at any time at the holder's option for (1)
1,181,818 shares of nonvoting preferred stock, or (2) directly into 1,181,818
shares of nonvoting common stock, in each case at an initial exchange ratio of
$5.50 per share, subject to customary adjustment to protect against dilution.
When issued, the voting preferred stock will be convertible on a share-for-share
basis into common stock and the nonvoting preferred stock will be convertible on
a share-for-share basis into nonvoting common stock.
Interest on the notes may be paid in cash or, at our option, continue
to accrue unpaid, in which case a noteholder may elect to have all accrued
interest paid in the equivalent value of shares of nonvoting preferred stock.
Dividends on the nonvoting preferred stock and the voting preferred stock may,
at our option, be paid in cash or in additional shares of nonvoting preferred
stock. We can redeem the notes and any preferred stock issued in exchange for
notes beginning on July 26, 2002 (i.e., the third anniversary of the closing of
the transaction).
On November 22, 1999, our shareholders approved an amendment to our
charter to provide for the creation of the nonvoting common stock, the voting
preferred stock and the nonvoting preferred stock. The charter amendment was
subsequently filed with the Secretary of State of the State of Delaware on
December 3, 1999.
Frederick B. Hegi, Jr., President, Chief Executive Officer and Chairman
of the Board, is also the sole manager of the KPI Trust. Each of Mr. Hegi and
James A. Johnson, a director and our Executive Vice President, is (1) a
principal of Wingate Management Limited, L.L.C., which serves as the general
partner of Wingate Management Company II, L.P., which in turn serves as the
general partner of Wingate Partners II, L.P., and (2) a general partner of
Wingate Affiliates II, L.P. Each of Wingate and Wingate Affiliates II, L.P. have
ownership interests in the KPI Trust. Consequently, each of Mr. Hegi and Mr.
Johnson has an indirect beneficial interest in the KPI Trust.
The charter amendment was approved by our board prior to Mr. Hegi and
Mr. Johnson becoming directors.
STOCK PERFORMANCE CHART
The following chart compares the percentage change in the cumulative
total shareholder return on our common stock from November 1, 1996, the date of
our initial public offering, through December 31, 1999, with the
15
<PAGE> 20
cumulative total return on the S&P Small Cap 600 and the Nasdaq Stock Market.
The comparison assumes $100 was invested immediately prior to such period in
common stock and in each of the foregoing indices and assumes reinvestment of
dividends. Dates on the following chart represent the last day of the indicated
fiscal year. We paid no dividends during such period, except that immediately
prior to the consummation of our initial public offering, we declared and made
distributions to our shareholders of record on such declaration date.
[PERFORMANCE GRAPH]
<TABLE>
<CAPTION>
11/1/96 12/31/96 12/31/97 12/31/98 12/31/99
------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C>
Kevco, Inc. $100 $117 $138 $ 60 $ 15
S&P SmallCap 600 $100 $105 $132 $130 $145
The Nasdaq Stock Market $100 $106 $130 $183 $340
</TABLE>
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934, as amended,
requires our officers, directors, and persons who own more than 10% of a
registered class of our equity securities, to file ownership reports with the
SEC. Such persons are required by SEC regulation to furnish us with copies of
these reports.
Based solely on our review of the copies of such reports received by us
with respect to fiscal 1999, or written representations from these reporting
persons, we believe that Messrs. Estes, McKee and Hardin did not file their
respective Initial Statements of Beneficial Ownership of Securities on a timely
basis, as required by Section 16(a) of the Exchange Act of 1934, as amended.
RATIFICATION OF INDEPENDENT AUDITORS
Based upon the recommendation of our audit committee, we urge you to
ratify the appointment of Ernst & Young LLP as our independent auditors for the
fiscal year ending December 31, 2000. Ernst & Young LLP has served as our
independent auditors since August 3, 1999, the date we dismissed
PricewaterhouseCoopers LLP.
o There have been no adverse opinions, disclaimers of opinion, or
qualifications or modifications as to uncertainty, audit scope,
or accounting principles regarding the reports of
PricewaterhouseCoopers LLP on our financial statements for each
of the fiscal years ended December 31, 1999 and 1998.
o The audit committee approved the change of accountants and that
action was ratified by the board.
o During the fiscal years ended December 31, 1999 and 1998, there
were no disagreements with PricewaterhouseCoopers LLP on any
matter of accounting principles or practices, financial statement
disclosure, or auditing scope or procedure, which disagreements,
if not resolved to the satisfaction of PricewaterhouseCoopers
LLP, would have caused PricewaterhouseCoopers LLP to make
reference to the subject matter of the disagreements in
connection with its report.
The board expects representatives of Ernst & Young LLP to be present at
the meeting, to be available to respond to appropriate questions of shareholders
and to have an opportunity to make a statement if they desire.
16
<PAGE> 21
SHAREHOLDER PROPOSALS
We must receive shareholder proposals to be included in the proxy
statement relating to the 2001 annual meeting of shareholders within a
reasonable time before we begin to print and mail proxy materials. All such
proposals should be mailed to our principal executive offices, 1300 South
University Drive, Suite 200, Fort Worth, Texas 76107-5734, Attention: Joseph P.
Tomczak, Executive Vice President and Chief Financial Officer. Shareholders who
intend to nominate candidates for election as a director or to bring business
before the meeting must also comply with the applicable procedures set forth in
our bylaws. We will furnish copies of such bylaw provisions upon written request
to our Secretary at the above address. In the case of other shareholder
proposals not included in our proxy materials, we may generally exercise
discretionary voting authority, conferred by proxies, at our 2001 annual meeting
with respect to any such proposal that is not timely submitted.
ADDITIONAL INFORMATION
A COPY OF THE COMPANY'S ANNUAL REPORT ON FORM 10-K FOR THE FISCAL YEAR
ENDED DECEMBER 31, 1999 ACCOMPANIES THIS PROXY STATEMENT. ADDITIONAL COPIES ARE
AVAILABLE WITHOUT CHARGE TO SHAREHOLDERS UPON REQUEST. Written requests should
be directed to Kevco, Inc., 1300 South University Drive, Suite 200, Fort Worth,
Texas 76107-5734, Attention: Joseph P. Tomczak, Executive Vice President and
Chief Financial Officer. Alternatively, you may request such materials by
contacting Mr. Tomczak directly at (817) 885-0048.
/s/ JOSEPH P. TOMCZAK
JOSEPH P. TOMCZAK
Executive Vice President and
Chief Financial Officer
May 22, 2000
17
<PAGE> 22
PROXY CARD
PLEASE SIGN, DATE AND RETURN YOUR
PROXY CARD AS SOON AS POSSIBLE
ANNUAL MEETING OF SHAREHOLDERS
KEVCO, INC.
June 16, 2000
PLEASE DETACH AND MAIL IN THE ENVELOPE PROVIDED
[X] PLEASE MARK YOUR VOTES
AS IN THIS EXAMPLE
NOMINEE FOR WITHHELD
-------
ELECTION OF DIRECTORS Frederick B. Hegi, Jr. [ ] [ ]
Jerry E. Kimmel [ ] [ ]
I PLAN TO ATTEND MEETING [ ]
The undersigned acknowledges receipt of (a) notice of annual meeting of
shareholders, and (b) the accompanying proxy statement.
THIS PROXY IS SOLICITED ON BEHALF OF OUR BOARD AND WILL BE VOTED IN ACCORDANCE
WITH THE ABOVE SPECIFICATIONS. YOU ARE URGED TO COMPLETE, SIGN, DATE AND RETURN
THIS PROXY IN THE ENVELOPE PROVIDED, WHICH REQUIRES NO POSTAGE IF MAILED IN THE
UNITED STATES. IF YOU DECIDE TO ATTEND THE MEETING, YOU MAY, IF SO DESIRED,
REVOKE THE PROXY AND VOTE YOUR SHARES IN PERSON.
SIGNATURE DATE , 2000
---------------- -------------
SIGNATURE DATE , 2000 (Signature if held jointly)
---------------- -------------
PROXY INSTRUCTIONS:
1. Please sign exactly as the name or names appear on your stock certificate
(as indicated hereon).
2. If the shares are issued in the name of two or more persons, all of them
must sign the proxy.
3. A proxy executed by a corporation must be signed in its name by an
authorized officer. Executors, administrators, trustees and partners should
indicate their capacity when signing.
18
