<PAGE>
B.B. WALKER COMPANY
414 East Dixie Drive, P.O. Drawer ll67, Asheboro, North Carolina 27204
- ------------------------------------------------------------------------------
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON MARCH l6, l998
TO THE HOLDERS OF COMMON STOCK OF B.B. WALKER COMPANY
You are cordially invited to attend the Annual Meeting of the Shareholders of
B.B. Walker Company scheduled to be held on Monday, March l6, l998 at 7:00
p.m. EST in the executive offices of the Company at 4l4 East Dixie Drive,
Asheboro, North Carolina. The purposes of the meeting are:
(l) To elect 6 Directors of the Company.
(2) To consider ratifying the appointment by the Board of
Directors of Price Waterhouse LLP, as the independent public
accountants of the Company.
(3) To transact such other business as may properly be brought
before the meeting or any adjournment thereof.
Only holders of common stock of record at the close of business on February
23, l998 will be entitled to vote at the meeting. The stock transfer books of
the Company will not be closed.
IMPORTANT - YOUR PROXY CARD IS ENCLOSED
WHETHER OR NOT YOU PLAN TO ATTEND THE MEETING, YOU ARE URGED TO COMPLETE,
SIGN, DATE AND RETURN THE ENCLOSED PROXY CARD PROMPTLY. THIS WILL INSURE THAT
YOUR VOTE IS COUNTED, WHETHER OR NOT YOU ARE ABLE TO BE PRESENT. YOUR PROXY
CARD WILL BE RETURNED TO YOU IF YOU ARE PRESENT AT THE MEETING AND SO REQUEST.
PLEASE USE THE ENCLOSED POSTAGE PAID RETURN ENVELOPE FOR MAILING YOUR PROXY
CARD.
You have been mailed a copy of the Company's Annual Report, including
financial statements for the fiscal year ended November l, l997.
By Order of the Board of Directors
DOROTHY W. CRAVEN
----------------------------
Dorothy W. Craven, Secretary
Date of Mailing:
February 23, l998
Cover
<PAGE>
B.B. WALKER COMPANY
414 East Dixie Drive, P.O. Drawer ll67, Asheboro, North Carolina 27204
- ------------------------------------------------------------------------------
PROXY STATEMENT FOR ANNUAL MEETING OF SHAREHOLDERS
March l6, l998 and Adjournments
SOLICITATION OF PROXY
The enclosed Proxy, mailed on February 23, l998, is solicited by the Board of
Directors of B.B. WALKER COMPANY, (the Company), for use at its Annual
Meeting of Shareholders to be held in the executive offices of the Company at
414 East Dixie Drive, Asheboro, North Carolina, at 7:00 p.m. EST on Monday,
March l6, l998 or any adjournments thereof.
The Company will bear the cost of solicitation of proxies, including the
charges and expenses of brokerage firms and others for forwarding solicitation
material to beneficial owners of stock. In addition to the use of the mails,
proxies may be solicited by personal interview or by telephone, telegram and
fax, etc. Proxies and correspondence should be addressed to Dorothy W.
Craven, Corporate Secretary.
REVOCATION OF PROXY
Execution and return of a Proxy given in response to this solicitation will
not affect a Shareholder's right to attend the meeting and vote in person.
Any Shareholder signing and returning a Proxy in the form enclosed with this
statement may revoke it at any time before it is exercised by giving notice
thereof to the Company in writing or in open meeting.
VOTING SECURITIES AND PRINCIPAL HOLDERS THEREOF
The Board of Directors has fixed the close of business on February 23, l998 as
the record date for Shareholders entitled to notice of and to vote at the
meeting and any adjournment. On February 23, l998, the Company had issued and
outstanding l,726,534 shares of common stock all of which were outstanding and
entitled to vote. Each share of common stock is entitled to one vote. As of
January 5, l998, all Directors and Officers of the Company as a group (l0
persons) owned or controlled 790,48l shares of the Company's common stock.
Included in the solicitation of proxies is the solicitation of discretionary
authority to transact such other business as may properly be brought before
the meeting or any adjournments. The presence, in person or by proxy, of the
holders of a majority of the outstanding shares of B.B. Walker Company
common stock entitled to vote, is necessary to constitute a quorum.
1
<PAGE>
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table shows information as to "beneficial ownership" of the
common stock of the Company as of January 5, l998 by each person, known by the
Company, (i) to be the beneficial owner of more than 5% of the outstanding
common stock of the Company; (ii) by each of the Company's directors and
nominees for director owning common stock in the Company; and (iii) by all
directors and executive officers as a group:
Name of Beneficial Number of shares Percent of
Owner beneficially Beneficially Owned
owned (l) Shares
- -------------------------- ---------------- ------------------
Kent T. Anderson (2) l82,927 10.2%
James P. McDermott (3) 395,739 22.9%
Nellie Jean Richardson (4) l94,260 11.3%
Edna A. Walker (5) ll0,697 6.4%
All Directors and Executive
Officers as a Group,
including unexercised stock
option grants (l0 persons) 790,481 42.6%
(l) Except as otherwise noted, all persons have sole voting and investment
power with respect to their shares. With the exception of 22,500 shares
held by executive officers and directors, all amounts shown in this
column include shares obtainable under currently exercisable stock
options. One-half of stock option grants may be exercised immediately
and one-half l2 months later. This restriction on these 22,500 shares
expires on March 3l, l998.
(2) Kent T. Anderson individually owns 65,202 shares directly and holds
43,675 shares jointly with Mrs. Anderson. He is deemed to own 58,750
shares by virtue of currently exercisable stock option grants. The above
total also includes l5,300 shares of common stock owned by certain family
members, some of which shares are held in a fiduciary capacity.
(3) James P. McDermott individually owns 25,420 shares directly and is
deemed to own 3,000 shares under unexercised Directors stock option
grants. In addition, as Trustee of the Employee Stock Ownership Plan of
B.B. Walker Company (the ESOP), he is authorized to vote all 367,3l9
shares held by the ESOP.
(4) Mrs. Nellie Jean Richardson, widow of the late former executive officer
and former Director of the Company, individually owns ll3,202 shares
directly and is deemed to own beneficially 8l,058 shares held by members
of her family.
(5) Edna A. Walker individually owns 88,846 shares directly and is deemed to
own 3,000 shares under exercisable Directors stock option grants. In
addition Mrs. Walker holds joint ownership with two members of her family
of l,699 shares and is deemed to own beneficially l7,l52 shares held by
members of her family.
2
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l. ELECTION OF DIRECTORS
---------------------
Six Directors are to be elected at the forthcoming Annual Meeting. The
recommendation of the Nominating Committee of the Board of Directors was that
the existing six member Board be reelected. This was accepted and the Board
directed that the six persons be presented as its director nominees for
consideration by the shareholders. It is intended that the two persons named
in the accompanying Proxy will vote FOR all six director nominees named on the
following pages unless authority to vote is directed otherwise. Directors
shall be elected by a plurality of the votes cast at the meeting.
A Director is elected to serve until the next Annual Meeting of the
Shareholders or until a successor shall be elected and shall qualify. Each
nominee for Director has agreed to serve and, so far as the Board is aware,
will serve if elected. If any nominee is unable to serve, the proxies will be
voted by those named therein for the election of a substitute nominee selected
by the Board of Directors.
Of the six nominees for director, one is presently an employee and three are
retired employees. The Company provides Directors and Officers Liability
Insurance coverages. There are no family relationships between any of the
nominees and the executive officers of the Company or its subsidiary.
BOARD MEETINGS AND DIRECTORS' ATTENDANCE
The Board of Directors meets on a quarterly basis. The Annual Meeting of the
Board of Directors is held immediately following the Annual Meeting of the
Shareholders. Special meetings of the Board may be called at any time when
necessary as provided in the By-Laws. There were 5 Board meetings held in
l997. All Directors attended all meetings of the Board and of the Committees
on which he or she served during fiscal l997.
BOARD COMMITTEES
The Board has 3 committees: an Audit Committee; a Compensation Committee; and
a Nominating Committee.
(l) The Audit Committee, which held l meeting in l997, meets with the
independent public accountants and reviews the scope and results of the audit
by the independent auditing firm. The Committee makes recommendations to the
Board as to the selection of the independent public accountants and as to
services provided. In addition it reviews the system of internal control and
accounting policies. The Audit Committee is composed entirely of Directors
who are not employees of the Company or of its subsidiary. The five Members
of the Audit Committee are: James P. McDermott, Chairman; George M. Ball;
Robert L. Donnell, Jr.; Michael C. Miller and Edna A. Walker. The Committee
met with the independent public accountants on January l4, l998 and reviewed
the financial statements presented. The Committee subsequently recommended to
the Board of Directors that the formal audit report be accepted as presented.
3
<PAGE>
(2) The Compensation Committee met once during the year when the fiscal
l997 financial results were available for its review. The Committee is
directly responsible for determining the compensation of the Chairman and
Chief Executive Officer of the Company, relating his compensation to an
evaluation of his performance during the fiscal year. The Committee presents
its recommendations to the Board of Directors for its consideration. The
Committee is composed of the 5 outside non-employee directors. The Committee
is responsible for the establishment and oversight of executive compensation,
benefit and retirement plans of the Company. The Compensation Committee is
composed of George M. Ball, Chairman; Robert L. Donnell, Jr.; James P.
McDermott; Michael C. Miller and Edna A. Walker.
The Compensation Committee also reviews the recommendations of management for
the issuance of Stock Option Grants under the l995 Incentive Stock Option Plan
of the Company. After review the Committee makes recommendations to the Board
regarding the issuance of the grants, the price at which the shares of stock
are issued, and the conditions of the grant.
(3) The Nominating Committee, composed of three non-employee directors who
are not officers of the Company or its subsidiary, held l meeting in l997.
The Committee reviews information for the selection of qualified candidates
for director nominee and recommends to the Board of Directors for its
consideration the names of qualified director nominees who are willing to
serve if nominated and elected. This Committee has no current plans to
consider nominees recommended by security holders. The 3 Members of the
Nominating Committee are: Michael C. Miller, Chairman; Edna A. Walker and
George M. Ball. The Committee met on January l4, l998 and unanimously
recommended to the Board of Directors the re-election of the existing Board of
Directors.
NOMINEES FOR ELECTION TO THE BOARD OF DIRECTORS
THE BOARD RECOMMENDS A VOTE "FOR" ALL OF THE BELOW LISTED NOMINEES FOR
ELECTION AS DIRECTORS.
Name, Age & Year Equity Securities of
First Elected Principal Occupation Company, beneficially
a Director For Last Five Years owned on January 5,l998(l)
- ---------------- -------------------- --------------------------
Common Preferred
Shares(6) Shares
--------- ---------
Kent T. Anderson Chairman of the Board (1992) l82,927 -
(55)(l985) President (1984) & Chief (10.2%)
Executive Officer(l986)(2)
George M. Ball Chairman, Philpott, 3,000 -
(63)(l993) Ball & Co., Investment (.17%)
Bankers, Charlotte, N. C.(5)
Robert L. Donnell, Jr. Retired. Formerly Executive 5,l46 -
(66) (l968) Vice President - Operations (.30%)
l968-l99l (6)
4
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James P. McDermott Retired. Formerly Vice 395,739 -
(77)(l986) President & General (22.9%)
Counsel l974-l992.
Formerly Corporate
Secretary l984-l993.(3)
Michael C. Miller President & Chief Executive 3,000 -
(46) (l993) Officer, First National (.17%)
Bank & Trust Co.,
Asheboro, N.C.(4)
Edna A. Walker President l10,697 35
(73)(l952) B. B. Walker Foundation (6.4%) (4.2%)
(l) The By-Laws and the Corporate Charter do not require Directors
to be Shareholders. The number of shares of common stock
shown includes shares held in the names of spouses, minor
children or certain relatives, as to which beneficial
ownership is disclaimed. The totals shown in the table
include shares subject to currently exercisable options
granted by the Company.
(2) Kent T. Anderson, currently holds exercisable stock option
grants for 58,750 shares. Under the l987 Incentive Stock
Option Plan of the Company, Mr. Anderson holds unexercised
stock option grants for 38,750 shares. He also holds 20,000
shares granted on March 3l, l997 under the l995 Incentive
Stock Option Plan of the Company. Reference is made to
subparagraph (2) on page 2 of this Proxy Statement under
the heading, "SECURITY OWNERSHIP OF CERTAIN BENEFICIAL
OWNERS AND MANAGEMENT".
(3) The above set forth total of shares of common stock
beneficially owned by James P. McDermott includes the 367,3l9
shares of common stock or (2l.27%) of the total shares issued
and outstanding, held by him as Trustee of the Employee Stock
Ownership Plan and Trust of B. B. Walker Company for the
benefit of all Plan participants. Under the Plan,
participants exercise no voting control over shares of stock
allocated to their accounts so long as they are participants
in the Plan, unless required by North Carolina law. Shares
cannot be distributed to nor disposed of by participants while
employed. Equitable ownership by participants of shares
allocated to their accounts depends upon their being vested in
their accounts, which vesting is based upon their length of
service. Reference is made to subparagraph (3) on page 2 of
this Proxy Statement under the heading, "SECURITY OWNERSHIP OF
CERTAIN BENEFICIAL OWNERS AND MANAGEMENT".
5
<PAGE>
James P. McDermott, subsequent to his retirement in February
l992 as Vice President, General Counsel & Secretary of the
Company, was retained by the Company as a Consultant to render
services in two specialized areas. (l) James P. McDermott
oversees the administration and prepares the annual report
filings with the IRS of the Company's three ERISA qualified
employee benefit plans. Under the Consulting Agreement he
serves as Trustee and Plan Administrator for the three
qualified Plans. (2) In addition under the Consulting
Agreement he is responsible for the preparation and filing of
the Annual Report to the Securities and Exchange Commission,
Washington, D. C., (the Form No. l0-K) and the preparation
of the Proxy Statement for filing with the SEC, which Proxy
Statement is sent to Shareholders for the Annual Meeting of
the Shareholders. James P. McDermott was paid $30,87l during
fiscal l997 for services rendered.
(4) Michael C. Miller, elected to the Board on July 6, l993 has
been President since l99l of First National Bank & Trust
Company, Asheboro, N.C. He was elected Chief Executive
Officer of the bank in January l994. In January l994 he was
elected President and Chief Executive Officer of FNB Corp.,
the parent company of the bank. He has been associated with
First National Bank since l985 serving as Executive Vice
President until l99l when he was elected President. He is a
Director of the bank's parent holding company. Prior to
joining the First National Bank, he was an attorney engaged in
the private practice of law in Asheboro, N.C. Mr. Miller is
a graduate of the University of North Carolina at Chapel Hill,
N.C. He holds a Masters of Business Administration Degree in
Management from Wake Forest University and a Juris Doctor
Degree from the Wake Forest University School of Law. First
National Bank has entered into a Mortgage Loan transaction
with the Company and holds a first lien on the Company's
facility in Somerset, Pennsylvania. First National Bank is
also a major participant with Mellon Bank, Philadelphia,
Pennsylvania, in a Term Loan to the Company secured by
a lien on the Company's manufacturing facilities in Asheboro,
North Carolina.
6
<PAGE>
(5) George M. Ball, elected to the Board on September 7, l993, has
been Chairman of Philpott, Ball & Co., an investment banking
firm in Charlotte, N.C. since l99l. Prior to the founding of
Philpott, Ball & Co., he was Senior Vice President in charge
of the Mergers & Acquisitions Department at Interstate/Johnson
Lane Securities, a regional securities firm in Charlotte, N.C.
George Ball has been involved on an executive level in
corporate finance and management and with securities firms
since l968. He presently serves on the Board of Directors of
Juno Lighting, Inc., a publicly held lighting equipment
manufacturing company located in Des Plaines, Illinois. Mr.
Ball is a graduate of Yale University following which he
served for a number of years as a pilot in the United States
Marine Corps. George M. Ball, on behalf of his employer
Philpott, Ball & Company, has served the B.B. Walker
Company as a management consultant for a number of years
advising management on various matters of corporate finance
and restructuring. Philpott, Ball & Company was paid $46,438
for its services rendered during fiscal l997.
(6) Robert L. Donnell, Jr., until his disability retirement in
l99l was Executive Vice President-Operations of the Company.
DIRECTOR AND OFFICER SECURITIES REPORTS
Federal securities laws require the Company's directors and executive officers
to file with the Securities and Exchange Commission, Washington, D.C.
initial reports of ownership and reports of changes in ownership of B.B.
Walker Company common stock. The Company is required to identify any officer,
director or owner of more than l0% of the Company's common stock who failed to
timely file with the Securities and Exchange Commission a required report
relating to beneficial ownership of common stock under Section l6(a) of the
Securities Exchange Act of l934. To the Company's knowledge and based on
Company records and other information, all parties subject to these reporting
requirements with respect to B.B. Walker Company's common stock, filed the
required reports on a timely basis during fiscal l997.
7
<PAGE>
EXECUTIVE COMPENSATION AND RELATED INFORMATION
The following table sets forth information concerning the annual compensation
for services in all capacities to the Corporation for the fiscal years ended
in November l997 and l996 and October l995, of those persons who were, at
November l, l997 (i) the chief executive officer and (ii) the other four most
highly compensated executive officers of the Corporation, ("The Named
Officers") who were paid compensation of $l00,000 or more per year:
<TABLE>
<CAPTION>
SUMMARY COMPENSATION TABLE
--------------------------
ANNUAL COMPENSATION
-------------------
(a) (b) (c) (d) (e) (g) (i)
Long Term
Other Compensation
Name and Annual Awards All Other
Principal Compen- Options/ Compensation
Position Year Salary(1) Bonus sation SAR(#) (1)(2)(3)(4)
- -------- ---- --------- ------- ------ ------------ ------------------
<S> <C> <C> <C> <C> <C> <C>
Kent T. Anderson l997 $198,489 $ - $ - (5) 20,000 Sh $ 5,631
Chief Executive l996 215,000 - - - Sh $ 2,493
Officer l995 215,000 - - 20,000 Sh. $ 2,126
</TABLE>
"NO EXECUTIVE OFFICER OTHER THAN THE CHIEF EXECUTIVE OFFICER EARNED $l00,000
OR MORE IN BASE SALARY AND COMPENSATION DURING FISCAL l997."
(1) Salary data shown for the Named Officer is prior to any deduction
or offset for participation in the Company's Thrift Plan, a
Section 40l(k) Plan. Since January l, l989, the Company has
sponsored for the benefit of all employees, including the Named
Officer, Kent T. Anderson, the Retirement Savings Plan of B.B.
Walker Company, (the Section 40l(k) Plan). Participants may
contribute through payroll deduction each month on a pre-tax
basis. The Board of Directors authorized a matching contribu-
tion to the Plan for fiscal l997 of ten (l0%) percent of actual
payroll deductions made during the year by active participants in
the Plan who were employed as of December 3l, l997. The Named
Officer received a matching contribution of $8l6 to his Section
40l(k) Plan account for fiscal l997. Such amount is included in
column (i) All Other Compensation above. In addition, all
executive officers, including the Named Officer, are provided
with nominal allowances for use of their personal vehicles on
Company business. Such amount is not included in column (i) All
Other Compensation above.
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(2) The Named Officer is a participant in the Employee Stock
Ownership Plan of B.B. Walker Company (the ESOP).
This Plan, which has been in effect since l96l, is a defined
contribution Plan under the Employee Retirement Income
Security Act of l974, (ERISA), and has accumulated for the
exclusive benefit of employee participants just under 2l.27% of
the issued and outstanding common stock of the Company. The
employees do not contribute to the ESOP and participation is
mandatory. The contribution is allocated to individual
participant accounts by a formula under which all participants
receive the same percentage of their fiscal year compensation
contributed to their accounts. The "Named Officer" was allocated
$2,099 from the $65,000 contribution for fiscal l997 as
authorized by the Board of Directors which amount is included in
column (i) All Other Compensation above.
(3) The Named Officer has borrowed funds from the Company under the
l989 Plan for the lending of Company funds to officers, directors
and key employees for the purchase of B.B. Walker Company stock.
Full data on the Named Officer's participation in the Company's
Loan Program to Officers and Directors for the purchase of the
B.B. Walker Company common stock, is set forth in sub-paragraph
(2) under the "CERTAIN TRANSACTIONS" section hereinafter. During
Fiscal l997, the Named Officer is deemed to have benefited in the
amount of $l,732 in having a contract rate provided under the
Plan that was 2% below the prime rate in effect at two regional
banks. Such amount is included in the above table under column
(i) All Other Compensation.
(4) The Company provides a special life insurance program of various
amounts for Officers, Directors, truck drivers, salesmen and
other key employees of the Company and its subsidiary, with the
Company and the employees sharing the premium cost. A total of
7l employees are insured of which 8 are Officers and Directors of
the Company and its subsidiary and 63 are truck drivers,
salesmen, supervisors and other key employees. In fiscal l997
the Company and its subsidiary's share of the premium cost
amounted to $20,487. The Company share during fiscal l997 of the
total cost of the special life insurance coverage for all 8
executive officers and directors as a group was $6,08l or 29.7%
of the total Company cost. The portion of such cost applying to
the director nominees amounted to $2,637 or l2.9% of the total
Company cost. The cost for the Named Officer for l997 was $984
which amount is included in column (i) All Other Compensation
above.
(5) See Option/SAR Grants Section below.
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OPTION/SAR GRANTS IN LAST FISCAL YEAR
-------------------------------------
No SAR's were granted by the Board of Directors to any key employee during the
fiscal l997 year. Employee Stock Option Grants were made during the l997
fiscal year under Part I, the Incentive Plan, of the "l995 Incentive Stock
Option Plan for Key Employees and Non-Employee Directors" which Plan was
approved by the shareholders at the Annual Meeting on March 20, l995. The
Board of Directors issued stock option grants in fiscal l997 totaling 76,000
shares of common stock to l5 key employees, including four officers at the
fair market value price of $.75 per share on March 3l, l997.
Under Part II of the Plan - the Automatic Option Grant Program, applying only
to non-employee Directors, automatic grants for l,000 shares each were made to
all five non-employee Directors following the close of the Annual Shareholders
Meeting on March l7, l997. No options granted to Non-Employee Directors were
exercised in fiscal l997.
AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL YEAR
AND FY-END OPTION/SAR VALUES
---------------------------------------------------
The following table shows stock options exercised by Named Officers during
fiscal l997, including the aggregate value of gains on the date of exercise.
In addition, this table includes the number of shares covered by both
exercisable and non-exercisable stock options as of November l, l997. Also
reported are the values for "in-the-money" options which represent the
positive spread between the exercise price of any such existing stock options
and the year-end price of Common Stock.
<TABLE>
<CAPTION>
(a) (b) (c) (d) (e)
Value of
Number of Unexercised
Unexercised In-the-Money
Shares Options/SARs at Options/SARs at
Acquired on Value FY-End(#)(2) FY-End($)(3)
Name Exercise(#)(l) Realized($)(3) Exercisable Unexercisable Exercisable Unexercisable
- ---------------- ----------------- -------------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Kent T. Anderson -0- -0- 48,750 10,000 ($72,344)* $ 1,250
</TABLE>
* Fair Market Value at Fiscal Year End ll/l/97 was $.875 per share
based on the Bid Price of $.50 per share and the Ask Price of
$l.25 per share as published in the Over the Counter Section of
the financial pages of local and regional newspapers.
10
<PAGE>
(l) Upon exercise of an option grant, the optionee must pay the exercise
price in cash.
(2) Options shown in column (d) were made under the l987 & l995 Incentive
Stock Option Plans. All grants provide that only one-half of the number
of shares granted may be exercised at time of grant and the other half
after l2 months. Shares purchased at exercise of grant may not be sold
without penalty for a period of two years. Under the IPSO Plans any
profit or gain realized is not taxable to the grantee at time of exercise
of the grant, but is taxable to the grantee at time of sale of the stock.
(3) Represents the difference between the fair market value of the common
stock underlying option and the exercise price at exercise or fiscal year
end respectively.
EMPLOYMENT CONTRACT AND TERMINATION OF EMPLOYMENT
AND CHANGE IN CONTROL ARRANGEMENTS
-------------------------------------------------
Kent T. Anderson, as President and Chief Executive Officer, and the Company
entered into an Employment Agreement on October 2, l989, five years after the
Chief Executive Officer was employed. The initial term was for three years
starting November l, l989 with an automatic annual extension provision
providing for the Agreement to be for no less than three years at all times.
The Agreement provided for the Chief Executive Officer's employment at a
minimum base salary of $l25,000 per year and for an annual increase on January
l of each year thereafter, of at least five (5%) percent of his current base
salary. The Agreement provides that the Board of Directors may, in its
discretion, grant merit increases to the Chief Executive Officer from time to
time. The Chief Executive Officer's salary for fiscal year l997 was reduced
from $2l5,000 to $l98,489 effective November l, l996. Based on l997 operating
results, the Compensation Committee decided to recommend the Board restore the
previous salary reduction and increase the Chief Executive Officer's base
salary to $2l5,000 per year effective November l, l997. This recommendation
was accepted by the Board.
This Agreement with the Chief Executive Officer may not be terminated by the
Company for any reason whatsoever without penalty, other than for cause. It
may be terminated with three years prior written notice of termination.
However, the Board may exercise its statutory authority to remove the Chief
Executive Officer from his present elected office and function at any time.
This would require immediate payment of the three year compensation amount
provided for in the Agreement. By Amendment No. l dated July 6, l990, the
Employment Agreement was modified to comply with certain tax provisions of the
Internal Revenue Code. The Chief Executive Officer may, at his option, elect
to reduce the total amount due him under the Agreement so that no portion of
the amounts received by him will be subject to the excise tax imposed by the
Internal Revenue Code on some severance payments.
11
<PAGE>
The Chief Executive Officer may terminate his employment under the Agreement
in the event: (i) The Company merges or consolidates with another person or
group or undertakes any other reorganization where the Company is not the
Surviving Entity; or (ii) the Company sells or transfers substantially all of
its business or assets to another person; or (iii) 50% or more of the capital
stock of the Company presently outstanding is acquired by a person or group at
any time after the date of this Agreement. In the event of such termination,
the Chief Executive Officer is entitled to receive immediately the full amount
of his current base salary for three years. Subject to the above mentioned
Amendment, unless the Chief Executive Officer elects to reduce the total
amount to be paid to him, the three years pay following the end of fiscal l997
would be $645,000. Such payment,if made, is to be made in full in cash and
without limitation. The Board of Directors, with the exception of Kent T.
Anderson who was not present, was unanimous in authorizing the execution of
this Employment Agreement.
COMPENSATION OF OUTSIDE DIRECTORS
---------------------------------
Five of the six Directors are non-employees of the Company. The Company
provides Directors and Officers Liability Insurance coverage. Non-employee
outside Directors receive a meeting fee of $l,200 for each Board or Board
Committee Meeting, unless the Board and Committee meetings are held on the
same day. Directors who are full time employees of the Company or of its
subsidiary, namely Kent T. Anderson, do not receive any additional
compensation by reason of membership on or attendance at meetings of the Board
of Directors or Board Committees. Four quarterly Board Meetings are scheduled
each fiscal year in addition to the Annual Meeting of the Board of Directors
held immediately following the Annual Meeting of the Shareholders.
All five Non-Employee Directors benefit from Part II of the "l995 Incentive
Stock Option Plan for Key Employees (Part I) and (Part II) Non-Employee
Directors". Part II is a Non-Qualified Plan. This Plan was approved by the
Shareholders at the Annual Meeting on March 20, l995. Under Part II, Non-
Employee Directors who are elected at the Shareholders Meeting receive an
automatic grant of l,000 shares each of B.B. Walker Company common stock
under the Plan, with the Board of Directors establishing the option price.
Presently each Non-Employee Director holds unexercised options under Part II
of the l995 Plan of 3,000 shares. No such stock options have been exercised
to date.
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BOARD COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
The Compensation & Stock Option Committee of the Board of Directors, ("the
Committee"), is composed of the five outside non-employee directors and is
responsible for the establishment and oversight of the Company's policies for
executive compensation as well as benefit and retirement plans of the Company.
The Committee is responsible for the initiation and operation of the Company's
incentive stock option plans. The Committee recommends to the Board, on an
annual basis, the compensation of the Chief Executive Officer relating his
compensation to performance. The Board,(other than the Chief Executive
Officer), must approve all compensation actions affecting the Chief Executive
Officer. The Company does not utilize outside compensation consultants, but
does have available to it independent compensation data of other companies.
The Committee has prepared the following report for inclusion in this Proxy
Statement.
COMPENSATION PHILOSOPHY
From the Company's inception its corporate philosophy concerning employee
compensation as established by the Board of Directors has been for the Board
to delegate to the Chief Executive Officer, subject to review by the Board,
the responsibility for establishing rates of pay and bonus allocations for all
employees, with the exception of his own compensation (salary and bonus). The
Chief Executive Officer, in his determinations, follows the philosophy of
compensation as determined by the Committee and approved by the Board, as well
as the requirements set forth in the l995 Incentive Stock Option Plan and the
l992 Incentive Compensation (Bonus) Plan.
The Company's executive compensation policies have two primary goals: (l) to
attract and retain the highest quality executive officers and (2) to reward
those officers for superior corporate performance measured by the Company's
financial results and strategic achievements.
The Compensation Committee, in the interests of employee morale and
motivation, plans to continue supporting and recommending to the Board of
Directors and to the Chief Executive Officer, improvements in and to, simple
and plain incentive compensation plans for management personnel in the areas
of:
(1) Merit salary increases based on the individual's level of
responsibility and on above average individual work
performance and goal achievement.
(2) The l995 Incentive Stock Option Plan for key management
employees and executive officers, which is based on merit,
above average performance and goal achievement. This ISO Plan
is intended to motivate a key management employee, who holds a
stock option grant, to work for long term Company growth and
profitability. Such will benefit key employee shareholders, as
well as benefit all other shareholders.
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(3) The 1992 Incentive Compensation (Bonus) Plan was established
to provide a fair and equitable formula for the sharing of
Company profits with those management employees who help
make profits possible. If there is a loss or if profits
are minimal no bonus awards will be made. When the Company is
adequately profitable, graduated awards are made based on the
individual's level of responsibility and his/her performance
thereunder. The more responsible a key management employee's
function is, the greater the reward when pre-established goals
are met or exceeded.
Cash awards under the two-part Bonus Plan are based on the
Company meeting or exceeding during the fiscal year specified
income levels for each part. This two part Plan is designed
to share the Company profit on a merit and performance basis,
first with all management personnel and second with key
executive management. Payments under both parts being geared
to individuals achieving budgets and/or meeting specific
performance goals. In certain instances sharing is among
several individuals where group effort is to be rewarded.
CHIEF EXECUTIVE OFFICER COMPENSATION PROGRAM
The Chief Executive Officer's compensation program is comprised of base
salary, annual cash performance plan compensation and long-term incentive
compensation in the form of stock options. In addition the Committee believes
that basic management compensation should be adequate, but not excessive and
should be coupled with incentive compensation awards based on the individual's
performance and his/her contribution to the overall Company effort and
results.
The Chief Executive Officer is a Certified Public Accountant who had worked
for a number of years in the management services division of a world renowned
public accounting firm. He is a hands on executive and knowledgeable about
all aspects of footwear manufacturing, marketing and distribution activities,
including compensation and affordable employee benefits in those areas. The
Chief Executive Officer has a broad general knowledge of compensation levels
in other footwear manufacturing concerns and in communities wherein such are
located. To the Committee's knowledge no management employee has left
employment with the Company permanently for greater pay and/or fringe benefits
during tenure, which confirms the soundness of this delegation of Board
function.
The Committee believes the Chief Executive Officer is best qualified to judge
the merits of employee compensation requests and recommendations for
compensation levels for individual management employees. Due to the size of
the Company, the Chief Executive Officer, who is also the Chief Operating
Officer, is familiar with and works with all such management personnel on a
day to day basis. Delegation of authority on a report back basis is widely
used by him.
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The Company, with its flexible internal communications relationship in
management and its open door policy for questions, suggestions and complaints,
etc., is not staffed as and does not operate as a bureaucracy. Salary
increases and bonus allocation amounts are based on merit and are generally
made by the Chief Executive Officer in conjunction with input from the
Department Heads subject to review by the Compensation Committee.
The Compensation Committee reviews the base salary and the annual incentive
compensation of the Chief Executive Officer following the close of each fiscal
year. This review is made in light of his handling of his responsibilities,
his performance during the year and the financial results for the fiscal year.
Base Salary
The Chief Executive Officer's base salary through fiscal l997 was $l98,489.
Effective November l, l997, his base salary was increased to $2l5,000 for
fiscal l998. This merit increase or restoration of salary is commensurate
with the Company's operating results for fiscal l997.
The Chief Executive Officer's 3 year continuing Employment Contract provides
for an automatic increase of 5% of base salary on January l following the
close of each fiscal year. The base salary by contract thus provides a floor
from which merit increases based on performance may be made. The Compensation
Committee independently determines merit increases in the base salary for the
Chief Executive Officer by evaluating the Company's performance against its
pre-set goals; examining the Company's performance within the industry and
evaluating the overall performance of the Chief Executive Officer in operating
the Company during the fiscal year.
The Company was only marginally profitable in fiscal l997 having a net income
of $24,000 compared with the loss of $4 million in fiscal l996. The Committee
believes the footwear market and other factors faced by the Company in fiscal
l997 were extremely difficult. Continuing major factors were: the continuing
decline in shipments due to overproduction by suppliers which has caused
overstocked inventory conditions of dealers and retailers affecting the
Company's profit margins; severe price competition from work shoe imports in
the marketplace and marketing restructuring activities. The Committee
believes the Chief Executive Officer handled his responsibilities well during
fiscal l997 resulting in a breakeven status for the year. The Chief Executive
Officer has in place substantial changes to improve the financial results for
l998.
Annual Incentive Compensation
Since fiscal l997 generated a marginal net income for the year, no provision
was made for the payment of any bonuses under the l992 Incentive Compensation
(Bonus) Plan.
15
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Stock Option Grants
The Committee is responsible for reviewing and granting employee incentive
stock options under Part I of the l995 Incentive Stock Option Plan For Key
Employees and Non-Employee Directors. The Committee on March 3l, l997 saw fit
to approve and recommend to the Board for approval Stock Option Grants to l5
Key Employees, including 4 officers, totaling 76,000 shares of the Company's
common stock under the l995 Incentive Stock Plan at a fair market value price
of $.75 per share. The Chief Executive Officer was awarded 20,000 shares at
this time. These grants were unanimously approved by the Board.
Fourteen grants had been recommended to the Committee by the Chief Executive
Officer as an incentive to these Key Employees to exert extra effort and
thought to help turn around the disastrous financial results of fiscal l996.
The Committee saw fit to include the Chief Executive Officer in the group of
stock option grants. The Company has a set of general guidelines that is used
to determine the size of the stock option awards. In addition to common
sense, these general guidelines take into account the duties and
responsibilities of the individual, his/her individual performance, years of
service to the Company, the number of outstanding options and the size of
prior option awards. These general guidelines were used by the Committee in
making all the l997 stock option grants for the Chief Executive Officer and
other Key Employees.
DIRECTORS AND MEMBERS OF THE
COMPENSATION & STOCK OPTION COMMITTEE
George M. Ball, Chairman
R.L. Donnell, Jr.
James P. McDermott
Michael C. Miller
Edna A. Walker
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COMPENSATION AWARDS TO KEY EMPLOYEES BY THE CHIEF EXECUTIVE OFFICER
The Board of Directors has delegated to the Chief Executive Officer, (the
"CEO"), the establishing of rates of pay and bonus allocations for all key
employees and officers, with the exception of benefits for himself. This is
on the basis of his experience in the footwear industry and a belief that his
regular contacts with employees would result in his establishing compensation
levels that would be more accurate and fair. The exercise of this authority
by the CEO is subject to review by the Compensation Committee and by the Board
of Directors.
Due to the relatively small size of the Company and since the CEO is also the
Chief Operating Officer, he is in contact with sales, manufacturing and
administrative management personnel on a regular basis. His contacts are
basically observing and checking without interfering with the natural line of
authority in the various levels of supervision. Accordingly, the various
managers and key employees are personally known to him and such exposure forms
the basis for his evaluation of key employee and officer performance.
Evaluation is also obtained from time to time by attendance at various sales,
manufacturing and administrative meetings both as an observer and as a
participant.
It is his practice when it is time for the annual compensation review for key
employees and officers to confer with individual higher level managers
regarding each key employee's goals, performance, attitude, effort, relations
with and motivation of those supervised, as well as relations with fellow
supervisors and higher level supervisors. The acceptance of responsibility
and performance toward and achievement of goals set thereunder are given
considerable weight in decisions made by the CEO.
At times the CEO will prepare a list of key employees and officers
recommending the granting of stock options under the l995 Stock Option Plan
for Key Employees and Officers. The CEO follows the set of general guidelines
in determining his recommendations of stock option grants. He generally takes
into account the duties and responsibilities of the individual, his/her
individual performance, years of service to the Company, the number of
outstanding options and the size of prior option awards. In general, more
emphasis is placed on employee performance and the achievement of goals. Such
list is submitted by him to the Compensation Committee for its consideration
and recommendation to the Board of Directors. Similar factors used by the CEO
in base pay and incentive compensation considerations go into preparing the
proposed list of stock option grants.
It is the CEO's belief that the linking of key management and officer
compensation to performance and achievement of goals on an all around basis is
the best way to serve the Company and the Shareholders.
17
<PAGE>
CERTAIN TRANSACTIONS
(l) MAE, Inc. ("MAE" hereinafter), of Asheboro, North Carolina, is an
advertising agency and public relations firm owned by Maggie Anderson and her
husband Kent T. Anderson, Chairman and Chief Executive Officer of B.B. Walker
Company, ("Walker" hereinafter). During fiscal l997, Maggie Anderson, as the
only active principal and owner, rendered technical and creative services to
Walker in the areas of design, layout, color separation, photography and other
services, including the placement of Walker advertisements and ad copy in
trade publications, footwear magazines and other related media means. Other
services rendered include assistance in producing printed material,
coordinating public relations events and press conferences for the Company;
arranging interviews with print and electronic media and developing
promotional projects.
In August l997, the Company created an in-house advertising agency to provide
more focus to its advertising programs. The in-house agency is staffed by
three employees who were formerly employed by the external advertising agency.
Maggie Anderson, the wife of Kent T. Anderson, is managing the operations for
the in-house agency and is providing consultation regarding the implementation
of advertising programs. Maggie Anderson, who still manages the external
advertising agency, is on a monthly retainer to the Company and is supervised
by management of the Company. The in-house agency will provide comparable
technical and creative services, as well as fulfilling other functions related
to the Company's advertising programs, that the external agency formerly
provided.
During fiscal l997, Walker paid MAE a total of $373,000 for services rendered.
As advertising agent for Walker, MAE received certain funds included in the
above total, for the placing of Company advertising in various trade
publications, which funds were then transferred in payment therefore, net of
her standard commission. A substantial portion of the payments are for
creative work in design, layout, writing copy, etc.
This relationship was disclosed to and approved by the Board of Directors at
inception. The Chief Executive Officer updated the Board again in October
l997. The Board believes the services rendered to Walker by MAE and paid for
are competitive as to price and equal to or superior in quality to others
available in this area.
(2) Key employees and Directors, including the Named Officer, Kent T.
Anderson, have borrowed Company funds for the purchase of B.B. Walker Company
stock through the exercise of stock options. Such loans were made under the
"l989 Plan For The Lending of Company Funds To Officers and Directors For The
Purchase of B.B. Walker Company Stock", (the Loan Program). The lending of
B.B. Walker Company funds to officers, directors and other key employees in
management, as authorized under North Carolina law, was instituted initially
by shareholder approval granted in l966. In l989 the loan program was updated
and was approved by the Shareholders at the Annual Meeting held on March l3,
l989. The Loan Program is in accord with a long standing Company policy of
encouraging officers and directors and other key employees in management to
become shareholders.
18
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All loans are made in the sole and absolute discretion of the Board of
Directors. All borrowings are made solely to enable the employee to purchase
B.B. Walker Company stock from various sources, including the exercise of all
or part of any outstanding stock option grant. Loans are made for a period of
up to l0 years and are repayable through payroll deduction. Interest is
charged at 2% below the lower of the prime rate charged by the First National
Bank and Trust Company, Asheboro, N.C. or by NationsBank of Charlotte, N.C. as
determined by the Board of Directors. Each loan is made under a negotiable
promissory note and is secured or collateralized by the pledge of all shares
purchased with the loan proceeds. All four loans presently outstanding, as of
ll/l/97 totaling $l05,9l6, are at 4% per annum, which rate is charged monthly
on the outstanding unpaid balance. No executive officer owes $60,000 or more
to the Company under the Loan Program. All loans in the aggregate cannot and
have not exceeded $350,000 at any time.
(3) Michael C. Miller, a Director of the Company since l993, is President and
Chief Executive Officer of First National Bank and Trust Company, Asheboro,
N.C. ("the Bank"). Until l995 the Bank held a First Deed of Trust on the
Company's main manufacturing facility in Asheboro. For many years the Company
has operated a western boot manufacturing facility in Somerset, Pa. In l994
the Company purchased a larger manufacturing facility in Somerset, Pa.
borrowing funds from three sources, one of which was the Bank. The Bank holds
a 25% interest in this mortgage loan package, all of which is secured by a
first lien on the Somerset, Pa. manufacturing facility.
In l995 the Company entered into a major refinancing agreement with Mellon
Bank of Philadelphia, Pa. As part of its refinancing, the Company received a
separate term loan from Mellon of $3 Million. Proceeds from this loan were
used to pay off the First Deed of Trust held by First National Bank on the
Company's Asheboro manufacturing facility and Mellon thus secured a First Deed
of Trust in its favor on the Company's main manufacturing facility as security
for the $3 Million term loan. First National Bank dealing directly with
Mellon is a secured participant with Mellon in the term loan to the Walker
Company. There is no direct relationship in this transaction between First
National Bank and the Walker Company.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
No member of the Compensation Committee is an officer or an employee of the
Company. As reported elsewhere under Nominees for Election to the Board of
Directors on page 4, James P. McDermott, until February l992 a former
executive officer of the Company and a Director Nominee, renders services to
the Company as a Consultant for which he is compensated. Similarly, George M.
Ball, a Director Nominee, renders services to the Company as Chairman of
Philpott, Ball & Company, for which his Company is compensated. Also Michael
C. Miller, a Director Nominee, is President of First National Bank and Trust
Company. The bank as reported elsewhere herein, under Certain Transactions,
is a participant with other lenders and holds a security interest in the two
parcels of real estate owned by the Company in Asheboro, NC and Somerset, PA.
19
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SHAREHOLDER RETURN PERFORMANCE PRESENTATION
-------------------------------------------
Set forth below is a table comparing the annual percentage change in the
Company's common stock with the percentage change in the NASDAQ Composite
Index and an index of peer companies ("Peer Group") selected by the Company.
COMPARISON OF FIVE YEAR CUMULATIVE TOTAL RETURN
(B.B. Walker Company, NASDAQ Composite Index, Peer Group)
NASDAQ
Measurement Period B.B. Walker Composite Peer
(Fiscal Year) Company Index Group
------------------ ----------- --------- -----
Measurement Point -
October 31, 1992 $ 100 $ 100 $ 100
October 30, 1993 $ 275 $ 129 $ 185
October 29, 1994 $ 163 $ 128 $ 139
October 28, 1995 $ 38 $ 172 $ 120
November 2, 1996 $ 41 $ 202 $ 153
November 1, 1997 $ 41 $ 263 $ 203
This graph depicts the total cumulative appreciation of a $l00
investment made on October 31, l992 through November 1, 1997
in B.B. Walker Company, the NASDAQ Composite Index and the
Peer Group.
The Peer Group is comprised of the following public companies:
Brown Group, Genesco, Justin Industries, McRae Industries,
Rocky Shoes & Boots, Timberland, Wellco Enterprises, Weyco
Group and Wolverine World Wide. These companies operate in
the same or similar markets and produce same or similar
products. The Peer Group appreciation is the average total
appreciation of the companies within the group.
20
<PAGE>
2. APPOINTMENT OF INDEPENDENT PUBLIC ACCOUNTANTS
---------------------------------------------
The Board of Directors of the Company at its January l4, l998 meeting, on the
recommendation of the Audit Committee, again selected the firm of Price
Waterhouse LLP, Winston-Salem, North Carolina, to continue as independent
public accountants of B.B. Walker Company and its subsidiary for the fiscal
year ending October 3l, l998, subject to ratification by the Shareholders.
Unless otherwise specified by the Shareholders, votes will be cast pursuant to
the proxies hereby solicited in favor of the approval of the selection by the
Board of Price Waterhouse LLP, as independent public accountants, to audit the
books and accounts of the Company for the l998 fiscal year and until their
successors are selected. Price Waterhouse LLP has acted in such capacity
since April l973.
The Board of Directors and the Audit Committee are satisfied as to the
professional competence and standing of Price Waterhouse LLP. The Audit
Committee meets with representatives of Price Waterhouse LLP to review the
audit scope and estimated fees for the coming year and to review the results
of the audit of the prior fiscal year.
Price Waterhouse LLP plans to have one or more representatives present at the
Annual Meeting who will have the opportunity to make a statement if desired
and to respond to appropriate questions which any Shareholders might have.
Management knows of no direct or indirect material financial interests or
relationships that any members of such firm have with B. B. Walker Company.
The vote of a majority of shares present is necessary to ratify the Board of
Directors' selection of Price Waterhouse LLP.
The submission of Price Waterhouse LLP for shareholder approval at the
forthcoming meeting is not mandatory under North Carolina law or the rules and
regulations of the Securities and Exchange Commission. In the event the
Shareholders do not approve of the action of the Board of Directors, the Board
will take prompt action to select another competent independent public
accounting firm of equal ability and standing to perform the services
presently being rendered by Price Waterhouse LLP. Shareholder action is
simply a confirmation of prior Board action. The Board of Directors
anticipates dropping this shareholder voting confirmation in future years.
3. SHAREHOLDER PROPOSALS
---------------------
Proposals from Shareholders for inclusion in the Proxy Statement of B.B. Walker
Company relating to the l999 Annual Meeting of the Shareholders, must be
directed to the Secretary of the Company at the principal office of B.B.
Walker Company for consideration no later than October 23, l998. All such
proposals must meet the requirements set forth in the rules and regulations
of the Securities and Exchange Commission, in order to be eligible for
inclusion in the Company's l999 Proxy Statement.
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4. OTHER MATTERS
-------------
The management of the Company knows of no other matters which may come before
this meeting. However, if any matters other than those referred to above
should come before the meeting, it is the intention of the persons named in
the enclosed Proxy to vote such proxy in accordance with their best judgment.
BY ORDER OF THE BOARD OF DIRECTORS, THIS 23RD DAY OF FEBRUARY, l998.
DOROTHY W. CRAVEN
----------------------------
Dorothy W. Craven, Secretary
YOUR VOTE IS IMPORTANT. PLEASE COMPLETE AND SIGN THE
ENCLOSED PROXY CARD. RETURN THE CARD PROMPTLY IN THE
ACCOMPANYING POSTPAID PRE-ADDRESSED ENVELOPE. THANK YOU.
22
<PAGE>
B.B. WALKER COMPANY THIS PROXY IS SOLICITED ON BEHALF OF THE
4l4 East Dixie Drive BOARD OF DIRECTORS
P.O. Drawer ll67
Asheboro, N.C. 27204
P The undersigned hereby appoints Dorothy W.
R Craven and Rebecca S. Rich or either of
O them, as Proxies, each with the power to
X appoint a substitute and hereby authorizes
Y them to represent and to vote as designated
below, all of the shares of common stock of
B.B. Walker Company held of record by the
undersigned on February 23, l998 at the
Annual Meeting of Shareholders to be held
at 7:00 p.m. EST on March l6, l998 or any
adjournment thereof.
l. ELECTION OF [ ] FOR all nominees listed below [ ] WITHHOLD AUTHORITY
DIRECTORS (Except as marked to the to vote for all
contrary) nominees
K.T. Anderson; G.M. Ball, R.L. Donnell, Jr., J.P. McDermott
M.C. Miller and E.A. Walker
INSTRUCTION: To withhold authority to vote for one or more
individual nominees, write the name(s) of such
nominees(s) in the space provided below.
-------------------------------------------------------------
2. TO CONSIDER RATIFYING THE APPOINTMENT OF PRICE WATERHOUSE LLP AS THE
INDEPENDENT PUBLIC ACCOUNTANTS OF THE COMPANY
[ ] FOR [ ] AGAINST [ ] ABSTAIN
3. WITH DISCRETIONARY AUTHORITY UPON SUCH OTHER MATTERS AS MAY PROPERLY COME
BEFORE THE MEETING OR ANY ADJOURNMENTS THEREOF.
YOUR PROXY MAY BE RESCINDED AT ANY TIME BEFORE IT IS EXERCISED AND WILL BE
RETURNED TO YOU ON REQUEST. THIS PROXY WILL BE VOTED AS SPECIFIED AND IF NO
SPECIFICATION IS MADE, SHALL BE VOTED IN FAVOR OF THE AFOREMENTIONED
PROPOSALS. PLEASE SIGN AND DATE THIS PROXY AND RETURN AT ONCE IN THE ENCLOSED
BUSINESS REPLY ENVELOPE. MANAGEMENT RECOMMENDS A VOTE FOR EACH OF THE ABOVE
PROPOSITIONS.
DATED
--------------------------------------
(SEAL)
--------------------------------------
Signature
(SEAL)
--------------------------------------
Signature
IMPORTANT: Please sign this Proxy exactly as your name appears hereon. If
shares are held jointly, both owners must sign. Others signing
in a representative capacity should give their full titles.
