<PAGE> 1
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
SCHEDULE 14A
(RULE 14a)
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 sec.240.14a-11(c) or sec.240.14a-12
</TABLE>
HUFFY CORPORATION
(NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
HUFFY CORPORATION
(NAME OF PERSON(S) FILING PROXY STATEMENT, IF OTHER THAN THE REGISTRANT)
Payment of filing fee (Check the appropriate box):
/ / $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), 14a-6(i)(2) or
Item 22(a)(2) of Schedule 14A.
/ / $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3).
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction
applies:____________________________________________________________
(2) Aggregate number of securities to which transaction
applies:____________________________________________________________
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on
which the filing fee is calculated and state how it was
determined):_________________________________________________________
(4) Proposed maximum aggregate value of transaction:_____________________
(5) Total fee paid:______________________________________________________
/X/ 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:___________________________________________________________
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- --------------------------------------------------------------------------------
<PAGE> 2
HUFFY
CORPORATION
ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD APRIL 26, 1996
To our Shareholders:
You are cordially invited to attend the Annual Meeting of Shareholders of
Huffy Corporation which will be held this year on Friday, April 26, 1996, at
10:00 a.m. Eastern Daylight Time, at Huffy Service First, Inc., 8521 Gander
Creek Drive, Miamisburg, Ohio.
Enclosed are directions to the location of the Annual Meeting and an RSVP
to indicate your present intention to attend the Meeting in person.
Formal Notice of the Meeting and Proxy Statement accompany this letter.
Please sign and return the enclosed proxy card in the envelope provided as soon
as possible so that your shares will be represented at the meeting. We hope you
will be present at the meeting.
Very truly yours,
/s/ Richard L. Molen
- -------------------------------
Richard L. Molen
Chairman of the Board
<PAGE> 3
HUFFY CORPORATION
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD APRIL 26, 1996
The Annual Meeting of Shareholders of Huffy Corporation (the "Company"), an
Ohio corporation, will be held at Huffy Service First, Inc., 8521 Gander Creek
Drive, Miamisburg, Ohio, on Friday, April 26, 1996, at 10:00 a.m., Eastern
Daylight Time, for the following purposes:
1. To elect three Directors to serve for terms of three years, and one
Director to serve for a term of less than one year.
2. To approve an amendment to the Company's 1988 Stock Option Plan and
Restricted Share Plan increasing the number of shares available for the
grant of options thereunder by 650,000 shares and adding an annual
limitation to the Plan restricting the number of shares that may be
granted in any one year to an employee.
3. To ratify the appointment of KPMG Peat Marwick LLP as independent public
accountants for 1996.
4. To transact such other business as properly may be brought before the
Annual Meeting or any adjournment(s) thereof.
Shareholders of record at the close of business on March 1, 1996, are
entitled to vote at the meeting or any adjournment(s) thereof.
By Order of the Board of Directors
/s/ Nancy A. Michaud
------------------------------
Nancy A. Michaud
Secretary
Dayton, Ohio
March 7, 1996
ALL SHAREHOLDERS ARE INVITED TO ATTEND THE MEETING IN PERSON. WHETHER YOU
EXPECT TO ATTEND OR NOT, PLEASE DATE AND SIGN THE ENCLOSED PROXY CARD AND MAIL
IT PROMPTLY IN THE ENCLOSED POSTAGE PAID ENVELOPE.
<PAGE> 4
HUFFY CORPORATION
P.O. BOX 1204
DAYTON, OHIO 45401
PROXY STATEMENT
FOR ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD APRIL 26, 1996
MARCH 7, 1996
GENERAL INFORMATION
PERSONS MAKING THE SOLICITATION
This Proxy Statement is furnished in connection with the solicitation of
proxies by the Board of Directors of Huffy Corporation (the "Company") to be
used at the Annual Meeting of Shareholders to be held on April 26, 1996, and any
adjournment(s) thereof. This Proxy Statement and the accompanying proxy card
were first mailed to Shareholders on or about March 7, 1996. The Company will
bear the cost of soliciting proxies and will, upon request, reimburse banks,
brokerage houses and other institutions for their expenses in forwarding proxy
materials to their principals. Directors, Officers and employees of the Company
may solicit proxies personally from some Shareholders if proxies are not
received promptly. In addition, the Company has retained Morrow & Co., Inc. to
assist in the solicitation of proxies, for which the Company will pay fees
estimated to total $3,500.
VOTING SECURITIES
The authorized voting capital stock of the Company consists of 60,000,000
shares of Common Stock, $1.00 par value, of which there were 13,481,066 shares
issued and outstanding as of March 1, 1996, which is the record date for the
determination of the holders of Common Stock entitled to receive notice of and
to vote at the Annual Meeting. Each share of Common Stock entitles the holder
thereof to one vote.
ACTIONS TO BE TAKEN BY HOLDERS OF PROXIES
Unless otherwise directed by the person giving the proxy, all properly
executed proxies will be voted: (1) for the election of Jack D. Michaels, James
F. Robeson, Patrick W. Rooney and Joseph P. Viviano as Directors of the Company;
(2) in favor of the adoption of the amendment to the 1988 Stock Option Plan and
Restricted Share Plan, described at page 18 herein; (3) in favor of ratification
of the appointment of KPMG Peat Marwick LLP as independent public accountants
for the Company for 1996; and (4) at the discretion of the holders of the
proxies, in the transaction of such other business as may properly come before
the Annual Meeting or any adjournment(s) thereof.
The holders of the proxies may, in their discretion, vote for substitute
nominee(s) designated by the Board of Directors, or take action to reduce the
number of Directors, in the event that any nominee becomes unable to serve for
any reason presently unknown.
A proxy may be revoked at any time before exercise by written notice to the
Company bearing a later date than the proxy, by submission of a later dated
proxy, or by voting in person in open meeting (although presence at the Annual
Meeting will not in and of itself constitute revocation of the proxy). Any
written notice revoking a proxy should be sent to Huffy Corporation, P.O. Box
1204, Dayton, Ohio 45401, Attention: Nancy A. Michaud, Secretary.
1
<PAGE> 5
ELECTION OF DIRECTORS
The Company's Board of Directors is divided into three classes. The Board
of Directors of the Company recommends that three Directors be elected each for
a three year term expiring in 1999 and that one Director be elected for a term
of less than one year expiring in 1997. The Board of Directors of the Company
currently has 12 Directors: four whose terms expire in 1996, five whose terms
expire in 1997, and three whose terms expire in 1998. Jack D. Michaels, James F.
Robeson and Patrick W. Rooney, whose terms expire in 1996, have each been
recommended by the Nominating and Governance Committee of the Board of Directors
and nominated by the Board of Directors for election to the Board of Directors
for a three year term expiring in 1999. Joseph P. Viviano has also been
recommended by the Nominating and Governance Committee of the Board of Directors
and nominated by the Board of Directors for election to the Board of Directors
for a term of less than one year commencing on September 1, 1996 and expiring in
1997. Because of previous commitments, Mr. Viviano has requested that his term
commence on September 1, 1996 at which time he will possess the available time
to properly fulfill his responsibilities as a Director. Thomas D. Gleason, whose
term expires in 1996, is retiring from the Board of Directors in accordance with
the Company's Director Retirement Policy.
Under Ohio law, if a Shareholder gives written notice to the President, a
Vice President or the Secretary of the Company, not less than 48 hours before
the time fixed for the Annual Meeting, that such Shareholder desires the voting
at the election of Directors to be cumulative, and if an announcement of the
giving of such notice is made upon the convening of the meeting by the chairman
or secretary of the meeting or by or on behalf of the Shareholder giving such
notice, then the Directors will be elected by cumulative voting. In such event,
each Shareholder has the right to give one candidate a number of votes equal to
the number of Directors then being elected multiplied by the number of such
Shareholder's shares, or to distribute such Shareholder's votes on the same
principle among two or more candidates. In the event that Directors are elected
by cumulative voting and cumulated votes represented by proxies solicited hereby
are insufficient to elect all the nominees, then the holders of the proxies
intend to vote such proxies cumulatively for the election of as many of such
nominees as possible and in such order as the holders may determine. Votes will
be counted by KeyCorp Shareholder Services, Inc. acting as the inspector of
elections.
Under Ohio law and the Company's Code of Regulations, the four nominees
receiving the greatest number of votes shall be elected as Directors. Shares as
to which authority to vote is withheld, abstentions and shares not voted by
brokers and other entities holding shares on behalf of beneficial owners will
not be counted and will have no effect on the outcome of the election.
2
<PAGE> 6
The following table sets forth certain information as to each nominee for
Director and each other person whose term of office as Director will continue
after this Annual Meeting:
<TABLE>
<CAPTION>
SERVED AS
NAME AND PRINCIPAL OCCUPATION DIRECTOR
FOR THE PAST FIVE YEARS(1) AGE SINCE
- --------------------------------------------------------------------------- --- ---------
<S> <C> <C>
NOMINEES FOR TERMS EXPIRING IN 1999
Jack D. Michaels, President and Chief Executive Officer of HON INDUSTRIES 58 1993
Inc. (manufacturer of metal and wood office furniture and pre-fabricated
fireplaces) since 1991(2)
James F. Robeson, Herbert E. Markley Visiting Scholar in Business at Miami 59 1994
University since 1995; prior thereto and currently consultant to various
distribution companies since 1993; prior thereto Senior Director of
Coopers & Lybrand (national accounting firm) in 1993; prior thereto Dean
of the Richard T. Farmer School of Business Administration at Miami
University(3)
Patrick W. Rooney, Chairman of the Board, President and Chief Executive 60 1995
Officer of Cooper Tire & Rubber Company (manufacturer of tires and inner
tubes for the automotive aftermarket, and engineered rubber products for
the O.E.M. automotive industry) since 1994; prior thereto President and
Chief Operating Officer of such company since 1991(4)
NOMINEE FOR TERM EXPIRING IN 1997
Joseph P. Viviano, President and Chief Operating Officer of Hershey Foods 57 -
Corporation since 1994; prior thereto President of Hershey Chocolate
U.S.A., a division of such company(5)
DIRECTORS WHOSE TERMS EXPIRE IN 1998
Linda B. Keene, Vice President - Market Development of American Express 44 1993
Financial Advisors since 1994; prior thereto Vice President - Marketing
Services of The Pillsbury Company (multi-national food company) since
1992; prior thereto Vice President and General Manager, Desserts and
Specialty Products at such company since 1991
Geoffrey W. Smith, Vice President of LTI Ventures Leasing Corporation 50 1986
(engaged in the financing of high-tech office automation equipment) since
1993; prior thereto Director of U.S. Multinational Division of The First
National Bank of Boston since 1991
Thomas C. Sullivan, Chairman and Chief Executive Officer of RPM, Inc. 58 1995
(manufacturer of specialty chemicals and coatings) since 1971(6)
</TABLE>
3
<PAGE> 7
<TABLE>
<CAPTION>
SERVED AS
NAME AND PRINCIPAL OCCUPATION DIRECTOR
FOR THE PAST FIVE YEARS(1) AGE SINCE
- --------------------------------------------------------------------------- --- ---------
<S> <C> <C>
DIRECTORS WHOSE TERMS EXPIRE IN 1997
William K. Hall, President and Chief Executive Officer of Eagle Industries, 52 1980(8)
Inc. (manufacturer of building, electrical and transportation products)
since 1990(7)
Stephen P. Huffman, Retired Vice President - Planning and Human Resources 56 1984
of Blue Diamond Growers (an agricultural cooperative) since 1995; prior
thereto Vice President - Planning and Human Resources of such company
since 1993; prior thereto Vice President - Administration of such company
Donald K. Miller, Chairman of Greylock Financial Inc. (engaged in the 64 1988
financing of management and leveraged buyouts) since 1992 and also
President and Chief Executive Officer of PIMCO Advisors Inc. (a
privately-held holding company for certain ownership of PIMCO Advisors
L.P. units) since 1994; prior thereto Vice Chairman of Thomson Advisory
Group L.P. (now PIMCO Advisors L.P.) since 1993; prior thereto Managing
Partner of Greylock Financial Partnership (now Greylock Financial Inc.)
since 1986 and Chairman and Chief Executive Officer of Thomson Advisory
Group L.P. since 1990(9)
Richard L. Molen, Chairman of the Board, President and Chief Executive 55 1985
Officer of the Company since 1994; prior thereto President and Chief
Executive Officer of the Company since 1993; prior thereto President and
Chief Operating Officer of the Company(10)
Fred G. Wall, Chairman of Madsen Wire Products, Inc. (manufacturer of 61 1978
fabricated wire products) since 1988; prior thereto and currently
consultant to various manufacturing companies
- ---------------
<FN>
(1) Except as disclosed herein, no information is included in this Proxy
Statement for any portion of a period in which a Director did not hold
office as a Director of the Company.
(2) Mr. Michaels is a Director of HON INDUSTRIES Inc.
(3) Mr. Robeson is a Director of Roberds, Inc.
(4) Mr. Rooney is a Director of Alltrista Corporation and Cooper Tire & Rubber
Company.
(5) Mr. Viviano is a Director of Chesapeake Corporation, and Hershey Foods
Corporation.
(6) Mr. Sullivan is a Director of Pioneer-Standard Electronics, Inc., and RPM,
Inc.
(7) Mr. Hall is a Director of A.M. Castle & Co., GenCorp. Inc., Falcon
Building Products, Inc., and Great American Management and Investment,
Inc.
(8) Mr. Hall has served on the Company's Board of Directors from 1980 through
1989, and since 1991.
(9) Mr. Miller is a Director of Layne, Inc., RPM, Inc., and PIMCO Advisors
L.P.
(10) Mr. Molen is a Director of Alltrista Corporation, and The Duriron Company,
Inc.
</TABLE>
MEETINGS BY, AND CERTAIN COMMITTEES OF, THE COMPANY'S BOARD OF DIRECTORS
Donald K. Miller (Chairman), Stephen P. Huffman, Linda B. Keene, James F.
Robeson and Geoffrey W. Smith comprise the Audit Committee of the Board of
Directors. The Audit Committee meets with the Company's independent public
accountants, internal auditors, and financial management executives and reviews
the scope and results of audits as well as recommendations made by the Company's
auditors and executives with respect to internal accounting controls. During the
last fiscal year, the Audit Committee met two times.
Fred G. Wall (Chairman), Jack D. Michaels, Patrick W. Rooney and Thomas C.
Sullivan comprise the Compensation Committee of the Board of Directors. The
Compensa-
4
<PAGE> 8
tion Committee sets salary and benefits policy, and determines compensation and
benefit levels for the Company's Officers and certain other key employees.
During the last fiscal year, the Compensation Committee met four times.
The Board also had an Executive Committee in 1995 comprised of William K.
Hall (Chairman), Thomas D. Gleason, Donald K. Miller, Richard L. Molen, and Fred
G. Wall. In December, 1995, the Board approved the elimination of the Executive
Committee and the redistribution of its duties to the full Board and to the
Nominating Committee, renamed the Nominating and Governance Committee. In 1995,
the Executive Committee met four times.
Thomas D. Gleason (Chairman), Jack D. Michaels and James F. Robeson
comprise the Nominating and Governance Committee. This Committee seeks out and
reviews the qualifications of possible candidates for Board membership.
Shareholders may submit nominee recommendations, complete with qualifications,
to any member of the Committee at any time. The Committee recommends to the
Board of Directors candidates for election as Directors at annual meetings,
candidates to fill vacancies on the Board, and candidates for Committees of the
Board. The Committee also conducts the annual CEO and Board evaluations. During
1995, the Committee met three times.
During the last fiscal year, the Board of Directors met nine times. No
Director attended fewer than 75 percent of the aggregate number of meetings of
the Board of Directors and meetings of Committees thereof during the time such
person was a Director and member of any such Committee.
COMPENSATION OF DIRECTORS
The Company's non-employee Directors ("Outside Directors") receive annual
base compensation of $15,000, plus additional compensation of $900 per Board
meeting attended. Effective April 1, 1996, Directors not vested in the
Directors' Retirement Plan, which has been discontinued (see page 6 herein),
will receive annual base compensation of $19,000. The Chairman of the
Compensation Committee receives additional compensation of $3,000 per year. The
Chairmen of the Audit and Nominating and Governance Committees receive
additional compensation of $1,500 per year. Each Committee member (including the
Chairman of the Committee) receives $700 for each Committee meeting attended.
Additionally, Directors receive consulting fees of $500 for each half day of
service provided outside their normal duties as Directors when such services are
provided at the request of management of the Company and $500 for Board of
Directors' visits to Company plant sites. Directors receive $2,500 for
attendance at Board of Directors' retreat meetings but such fee is in lieu of
all meeting fees for Board and Committee meetings held during such retreat. No
Director who is an employee of the Company receives any compensation for
services as a Director.
DIRECTOR PLANS
Outside Directors may elect to defer payment of their fees or take part or
all of their annual base fees in the form of stock options, pursuant to the
Company's 1987 Director Stock Option Plan (the "1987 Plan"). The 1987 Plan
provides for the automatic grant of options to purchase 5,625 shares (adjusted
for stock splits) of the Company's Common Stock every third year, commencing in
1988, on the second business day after the Annual Meeting of Shareholders.
Options are granted to Outside Directors at a purchase price equal to 100
percent of the fair market value of the Common Stock on the date of grant.
In addition to options granted automatically every three years, if an
Outside Director files an irrevocable election with the Secretary of the Company
at least six months prior to July 1 of any year and on such other date(s) as may
be designated from time to time electing not to receive all or a portion of his
or her annual base compensation to be earned in the following 12 month period
beginning July 1 and ending June 30, then the Company shall grant options
automatically on July 1 or such other dates, if applicable, to such Outside
Director. The number of shares of Common Stock for which options will be granted
will be the nearest number of whole shares of Common Stock determined in
accordance with the following formula:
<TABLE>
<C> <S>
Portion of Annual Base
Compensation Not Received = Number of Shares
- -----------------------------
Fair Market
Value minus $1.00
</TABLE>
5
<PAGE> 9
For the 12 month period beginning July 1, 1996, and ending June 30, 1997,
Outside Directors have elected not to receive, in the aggregate, $90,000 of
their annual base compensation and to have the Company grant options to them on
July 1, 1996, based on such elections in accordance with the 1987 Plan. The
option price per share of the Common Stock covered by such options will be
$1.00.
No options may be exercised before the second Annual Meeting of
Shareholders of the Company following the date they were granted, except upon a
change in control (as defined in the 1987 Plan), or due to retirement from the
Board of Directors because of total and permanent disability, expiration of a
Director's term of office, or otherwise in accordance with the current Board of
Directors' policy or upon the death of the option holder. A notice to exercise
an option must be accompanied by full payment of the purchase price for the
Common Stock being purchased. The 1987 Plan, which is effective for ten years,
is administered by a Committee consisting of three Officers and two key
employees of the Company not entitled to participate in the 1987 Plan.
In 1990, the Company adopted a Directors' Retirement Plan whereby each
Outside Director who has served as a member of the Board of Directors five years
or more and each former employee Director who has served as a member of the
Board of Directors five years or more after retirement or termination as an
employee of the Company will earn an annual retirement benefit of $5,000 plus
$1,000 for each year of service as an Outside Director (prorated for partial
years) in excess of five years service, not to exceed a maximum annual benefit
of $10,000. Retirement benefits will commence when specified by an eligible
Director after retirement from the Board of Directors, but not earlier than age
60 or later than age 70, and will continue for a period equal to the number of
full years of service as an Outside Director, not to exceed 12 years.
In February, 1996, the Board of Directors elected to discontinue the
Directors' Retirement Plan, freezing retirement benefits for those Board members
vested in such Plan through their current term, and in lieu of such benefits for
those Directors not vested in such Plan, effective April 1, 1996, increasing
such non-vested Directors' annual base compensation by $4,000. Those Directors
receiving an increase in base compensation have elected to receive the maximum
amount of such increase in $1.00 stock options as permitted under the 1987 Plan.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
SECURITY OWNERSHIP OF MANAGEMENT
The following table shows the beneficial ownership of the Company's Common
Stock reported to the Company as of February 1, 1996, for each Director and
nominee and for each of the Executive Officers named in the Summary Compensation
Table (the "Named Executive Officers"), and for all Directors, nominees and
Executive Officers as a group. For purposes of the table, a person is considered
to "beneficially own" any shares of Common Stock (i) over which the person
exercises sole or shared voting or investment power or (ii) of which the person
has the right to acquire beneficial ownership at any time within 60 days after
February 1, 1996.
<TABLE>
<CAPTION>
AMOUNT AND
NATURE OF
NAME OF BENEFICIAL BENEFICIAL
OWNER(1) OWNERSHIP(2)
- ---------------------------- ------------
<S> <C>
Thomas A. Frederick......... 6,778(3)
Thomas D. Gleason........... 16,225(4)
William K. Hall............. 8,212(5)
Timothy G. Howard........... 29,590(6)
Stephen P. Huffman.......... 81,883(7)
Linda B. Keene.............. 700(8)
Jack D. Michaels............ 1,000
Nancy A. Michaud............ 4,925(9)
Donald K. Miller............ 54,177(10)
Richard L. Molen............ 183,309(11)
James F. Robeson............ 1,000(12)
Patrick W. Rooney........... 200
Geoffrey W. Smith........... 43,676(13)
Thomas C. Sullivan.......... 2,250
</TABLE>
6
<PAGE> 10
<TABLE>
<CAPTION>
AMOUNT AND
NATURE OF
NAME OF BENEFICIAL BENEFICIAL
OWNER(1) OWNERSHIP(2)
- ---------------------------- ------------
<S> <C>
Joseph P. Viviano........... 500(14)
Fred G. Wall................ 16,592(15)
Pamela J. Whipps............ 3,718(16)
All Directors, Nominees and
Executive Officers as a
Group (17 persons)........ 454,535(17)
Gary E. Morin............... 18,973(18)
</TABLE>
- ---------------
(1) All shares are held with sole voting and sole investment power unless
otherwise indicated in the footnotes below.
(2) Except for Richard L. Molen whose Common Stock ownership is 1.35 percent,
no such beneficial owner owns more than one percent of the issued and
outstanding shares of Common Stock of the Company. All Directors, Nominees
and Executive Officers as a group own 3.3 percent of the issued and
outstanding shares of Common Stock of the Company as of February 1, 1996.
(3) Mr. Frederick has shared voting and shared investment power with respect to
491 shares held jointly with his wife. The total amount also includes 2,753
shares as to which Mr. Frederick holds options exercisable within 60 days.
(4) The total amount also includes 13,377 shares as to which Mr. Gleason holds
options exercisable within 60 days.
(5) Mr. Hall has shared voting and shared investment power with respect to 450
shares held jointly with his wife. The total amount also includes 6,609
shares as to which Mr. Hall holds options exercisable within 60 days.
(6) Mr. Howard has shared voting and shared investment power with respect to
5,545 shares held jointly with his wife. The total amount also includes
20,937 shares as to which Mr. Howard holds options exercisable within 60
days.
(7) Mr. Huffman has sole voting and sole investment power with respect to
63,918 shares held in trust for the benefit of himself and his family. Mr.
Huffman has shared voting and shared investment power with respect to 2,706
shares held jointly with his wife and with respect to 3,300 shares held by
his children. The total amount also includes 11,959 shares as to which Mr.
Huffman holds options exercisable within 60 days.
(8) Ms. Keene has shared voting power and shared investment power with respect
to 700 shares held jointly with her husband.
(9) Ms. Michaud has shared investment power with respect to 390 shares held by
her husband. The total amount also includes 2,437 shares as to which Ms.
Michaud holds options exercisable within 60 days.
(10) Mr. Miller has sole voting and sole investment power with respect to 46,425
shares, of which 16,000 are held by him as custodian for his children. Mr.
Miller has shared investment power with respect to 975 shares held by his
wife. The total amount also includes 7,752 shares as to which Mr. Miller
holds options exercisable within 60 days.
(11) Mr. Molen has shared investment power with respect to 33,781 shares held by
his wife and 2,338 shares held by his children. The total amount also
includes 113,409 shares as to which Mr. Molen holds options exercisable
within 60 days.
(12) Mr. Robeson has shared investment power with respect to 1,000 shares held
by his wife.
(13) Mr. Smith has sole voting and sole investment power with respect to 32,045
shares, of which 4,865 shares are held in trust for the benefit of his
children and 1,827 shares are held by him as custodian for his children.
The total amount also includes 11,631 shares as to which Mr. Smith holds
options exercisable within 60 days.
(14) Mr. Viviano has shared voting and shared investment power with respect to
500 shares held jointly with his wife.
(15) Mr. Wall has sole voting and sole investment power with respect to 2,598
shares, of which 2,000 shares are held in trust for his benefit. The total
amount also includes 13,994 shares as to which Mr. Wall holds options
exercisable within 60 days.
(16) The total amount also includes 3,063 shares as to which Ms. Whipps holds
options exercisable within 60 days.
7
<PAGE> 11
(17) The total amount includes 207,921 shares which are subject to options
exercisable within 60 days.
(18) Mr. Morin has shared voting and shared investment power with respect to 31
shares held jointly with his wife. The total amount also includes 18,942
shares as to which Mr. Morin holds options exercisable within 60 days.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
The following table sets forth information with respect to Shareholders
known to the Company to be beneficial owners of more than five percent of the
Company's Common Stock.
<TABLE>
<CAPTION>
AMOUNT
AND
NATURE OF PERCENT
NAME AND ADDRESS OF BENEFICIAL OF
BENEFICIAL OWNER OWNERSHIP CLASS(4)
- -------------------------- ---------- ---------
<S> <C> <C>
David L. Babson & Co.,
Inc.(1)
One Memorial Drive
Cambridge, MA
02142-1300 1,383,350 10.30%
Sanford C. Bernstein &
Co., Inc.(2)
One State Street Plaza
New York, NY 10004 874,400 6.50%
The Parnassus Fund(3)
One Market
Steuart Tower -
Suite #1600
San Francisco, CA 94105 698,700 5.20%
</TABLE>
(1) This information is taken from the Schedule 13G, dated February 12, 1996,
filed by David L. Babson & Co., Inc. with the Securities and Exchange
Commission, which disclosed David L. Babson & Co., Inc. has sole voting
power with respect to 968,200 shares, shared voting power with respect to
415,150 shares, and sole investment power with respect to 1,383,350 shares.
(2) This information is taken from the Schedule 13G, dated February 7, 1996,
filed by Sanford C. Bernstein & Co., Inc. with the Securities and Exchange
Commission, which disclosed Sanford C. Bernstein & Co., Inc. has sole voting
power with respect to 680,500 shares, shared voting power with respect to
12,400 shares, and sole investment power with respect to 874,400 shares.
(3) This information is taken from the Schedule 13G, dated February 9, 1996,
filed by The Parnassus Fund with the Securities and Exchange Commission,
which disclosed The Parnassus Fund has sole voting power with respect to
698,700 shares.
(4) Percentages listed are those disclosed in the referenced Schedules 13G and
are not verified by the Company.
- ---------------
REPORT OF COMPENSATION COMMITTEE
Decisions on compensation and stock options of the Company's Executive
Officers are made by the Compensation Committee of the Board of Directors (the
"Committee") which is comprised of non-employee Directors.
COMPENSATION POLICIES TOWARD EXECUTIVE OFFICERS
The Company's executive compensation program is designed to tie a
significant portion of executive compensation to the Company's success in
meeting specified performance goals and to appreciation in the price of the
Company's Common Stock. This strategy is designed to attract and retain the best
possible executive talent, to motivate these executives to achieve the Company's
goals, to link executive and Shareholder interests, and to provide a
compensation package that recognizes individual contributions as well as overall
business results. In reviewing the individual performance of the named Executive
Officers whose compensation is detailed in this Proxy Statement, other than Mr.
Richard L. Molen, the Chief Executive Officer, the Committee takes into account
the views of Mr. Molen.
The Committee compares the Company's executive compensation structure
against those of other industrial manufacturers whose size is adjusted to that
of the Company. The Committee believes that industrial manufacturers generally
represent the Company's most direct competitors for executive talent. A majority
of those industrial companies are not included in the Performance Graph on page
14
8
<PAGE> 12
herein, as the Company uses the Standard & Poor's Composite Leisure Time Index,
which is more representative of the Company's lines of business. The Committee's
policy is to establish midpoints of base salary ranges and total compensation at
the 50th percentile level of industrial midpoints for comparable positions and
to adjust such midpoints annually to maintain that level. The Company's overall
executive compensation levels are below such 50th percentile midpoints.
The key elements of the Company's 1995 executive compensation program
consist of Base Salary, the Profit Sharing Bonus Plan, the Long-Term Incentive
Plan and Stock Options, as well as the 1993 CEO Long-Term Performance Plan (the
"CEO Plan") for Mr. Molen. In addition, while the elements of compensation
described below are considered separately, the Committee takes into account the
full compensation package afforded by the Company to the individual, including
pension benefits, supplemental retirement benefits, severance plans, insurance
and other benefits, as well as the programs described below. The Committee has
reviewed Section 162(m) of the Internal Revenue Code of 1986, as amended, which
limits the deduction for certain executive compensation and, based on present
levels of compensation, does not anticipate the loss of deductibility for any
compensation paid over the next year.
BASE SALARY
Base salary ranges for Executive Officers are determined by periodic
recommendations by an independent compensation consultant who evaluates the
responsibilities of each such position, and compares the Company's salary level
for the position to comparable positions at other industrial companies
nationwide. The Company's policy is to establish midpoints of such base salary
ranges at the 50th percentile level of industrial midpoints for comparable
positions, and to adjust such midpoints annually to maintain that level. Annual
salary adjustments within such base salary ranges are determined by evaluating
both the performance of the Executive Officer and the Executive Officer's
current base salary as a percentage of his or her target base salary range
midpoint, using a matrix which reflects the Company's overall annual salary
increase budget. Generally speaking, the higher the performance level and the
lower the percentage that current base salary represents of the base salary
range midpoint, the higher the percentage of base salary increase. Performance
of an Executive Officer is evaluated based upon the employee's accomplishment of
his or her duties, objectives established by his or her supervisor (in the case
of Mr. Molen by the Board of Directors), and general management abilities.
PROFIT SHARING BONUS PLAN
Executive Officers may receive bonuses based upon corporate and individual
performance objectives established at the beginning of each year. The corporate
performance measure for bonus payments in 1995 established by the Committee was
based equally on return on average net assets ("RONA") and on earnings per share
("EPS"). For 1995, threshold level bonus would have been achieved when RONA was
8.0 percent and EPS reached $1.22. Individual performance is based on
performance of personal goals. Personal goals are both qualitative, such as
certain business strategy development and/or implementation, improved customer
satisfaction, management effectiveness and personal development, and
quantitative, such as achieving cost reduction, production and sales goals. In
1995, the Company reported a RONA of 0 percent and a net loss per share of
$0.78. Based on these results, none of the Executive Officers, including Mr.
Molen, was awarded a bonus, other than Mr. Frederick who received a bonus for
past services as President of Huffy Service First, Inc.
LONG-TERM INCENTIVE PLAN
The Executive Officers participate in the Company's Long-Term Incentive
Plan which is based on the average return on equity ("ROE") achieved by the
Company over a three-year period. Under this plan, in 1995 Executive Officers
were each eligible to earn maximum awards ranging from 35 percent to 68 percent
(100 percent for Mr. Molen) of their average three-year salary midpoint over the
three-year award cycle, depending on position. In 1995, for the three-year award
cycle ended December 31, 1994, the ROE targets were 13.7 percent for the award
of 50 percent (excluding the impact of the implementation of Statement of
Financial Accounting Standards ("SFAS")
9
<PAGE> 13
No. 112, employers' accounting for post-employment benefits, and the effect of
the restructure at True Temper Hardware Company), and 13.4 percent for the other
50 percent, which represents the average ROE of the Standard & Poor's 400
Industrials over the same period. During this three-year award cycle, the
Company's average ROE was 11.4 percent (excluding the impact of the
implementation of SFAS No. 112, employers' accounting for post-employment
benefits, and the effect of the restructure at True Temper Hardware Company) and
7.3 percent, including SFAS No. 112 and such restructure. As a result, in 1995,
none of the Executive Officers, including Mr. Molen, received a payment.
STOCK OPTIONS
Under the Company's 1988 Stock Option Plan and Restricted Share Plan, stock
options may be granted by the Committee to the Company's Executive Officers and
other key managers. The Committee sets guidelines for the size and frequency of
awards of stock option grants which are based upon the employee's position and
base salary. Mr. Molen and all other Executive Officers are eligible to receive
an annual grant equal to approximately 85 percent of their base salary (subject
to eligibility for additional options as described below) divided by the closing
price of the Common Stock on the New York Stock Exchange on the date of grant.
Stock options are granted to Executive Officers with an exercise price equal to
the closing market price of the Common Stock on the date of grant and currently
become exercisable in three equal, annual installments commencing three years
from the date of grant. This approach is designed to motivate the creation of
Shareholder value over the long term since the full benefit of the compensation
package cannot be realized unless Common Stock price appreciation occurs over a
number of years. In 1995, Mr. Molen received options to purchase 41,286 shares
of the Common Stock with an exercise price of $11.125 per share. The options
become exercisable ratably over a three-year period beginning in December, 1998.
As of February 1, 1996, Mr. Molen beneficially owned 183,309 shares of Common
Stock.
In order to align the interests of Shareholders and management, the Board
of Directors approved an Executive Stock Ownership program in 1994, commencing
in 1995, which sets guidelines for stock ownership for Executive Officers and
other key personnel. Under the guidelines, in order to be awarded additional
stock options, equal to approximately 17 percent of their base salary, the Chief
Executive Officer and all other Executive Officers are required to own Common
Stock equal to 1.5 times and 1 to 0.5 times their salaries, respectively, with
measured interim ownership goals to be attained over a ten year period.
1993 CEO LONG-TERM PERFORMANCE PLAN
Under the CEO Plan, Mr. Molen may earn a cash performance award if, and
only if, the Company achieves the requisite Total Shareholder Return (as defined
in the CEO Plan to include the annual rate of growth of the Common Stock and
dividends paid on such stock) on a Beginning Share Price (as defined in the CEO
Plan) during the applicable performance period. For the performance period
beginning January 1, 1993, and ended December 31, 1995, the Beginning Share
Price was $16.25 and a Total Shareholder Return of 15 percent or greater was
required on December 31, 1995 for the receipt of a performance award by Mr.
Molen. A Total Shareholder Return of 15 percent was not achieved for this period
and, thus, no award was made.
Through the programs described above, a significant portion of the
Company's executive compensation is linked directly to individual and corporate
performance and returns to Shareholders, a policy the Committee intends to
continue.
SUBMITTED BY THE COMPENSATION COMMITTEE OF THE BOARD OF DIRECTORS(1)
Jack D. Michaels, Patrick W. Rooney, Thomas C. Sullivan and Fred G. Wall
- ---------------
(1) Notwithstanding anything to the contrary set forth in any of the Company's
previous filings under the Securities Act of 1933, as amended, or the
Securities Exchange Act of 1934, as amended, that might incorporate future
filings, including this Proxy Statement, in whole or in part, this report
and the graph set forth on page 14 shall not be incorporated by reference
into any such filings.
10
<PAGE> 14
CERTAIN RELATIONSHIPS AND OTHER RELATED TRANSACTIONS
The Company, in the ordinary course of business, selected Columbus Circle
Investors in 1991 as one of its four investment advisors for Company pension
funds. Mr. Donald K. Miller, a Director of the Company, is a Director of PIMCO
Advisors L.P., of which Columbus Circle Investors is a sub-partnership. Fees
paid to Columbus Circle for services rendered in 1995 aggregated $99,498, which
fees were generally competitive with those offered by other investment advisors
providing similar services.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The members of the Compensation Committee for 1995 were Fred G. Wall
(Chairman), Jack D. Michaels, Patrick W. Rooney and Thomas C. Sullivan, none of
whom is or was a current or former officer or employee of the Company or any of
its subsidiaries. No Executive Officer of the Company serves as a Director or as
a member of a Committee of any company of which any of the Company's Directors
are executive officers.
EXECUTIVE COMPENSATION
SUMMARY OF CASH AND CERTAIN OTHER INFORMATION
The following table shows, for the fiscal years ended December 31, 1993,
1994 and 1995, the cash compensation paid by the Company as well as certain
other compensation paid or accrued for those years, to each of the five most
highly compensated Executive Officers, including Richard L. Molen, the current
Chairman, President and Chief Executive Officer of the Company, and a former
Officer of the Company, in all capacities in which they served:
<TABLE>
SUMMARY COMPENSATION TABLE
<CAPTION>
LONG TERM COMPENSATION
--------------------------------------
ANNUAL COMPENSATION AWARDS PAYOUTS
--------------------------------------- ----------------------- ----------
OTHER NUMBER
ANNUAL RESTRICTED OF ALL OTHER
NAME AND COMPENSA- STOCK OPTIONS/ LTIP COMPENSA-
PRINCIPAL POSITION YEAR SALARY(1) BONUS(1) TION(2) AWARD(S) SARS(3) PAYOUTS(4) TION(5)
- ---------------------------- ---- --------- -------- ----------- ---------- ---------- -------- ---------
<S> <C> <C> <C> <C>
Richard L. Molen 1995 $424,996 $ 0 $ 2,184 $0 41,286 $ 0 $93,914
Chairman of the Board, 1994 387,762 171,800 1,550 0 25,351 0 94,507
President and Chief 1993 341,076 99,275 2,486 0 16,767 85,192 90,516
Executive Officer
Thomas A. Frederick(6) 1995 145,000 25,325 1,974 0 14,086 0 14,397
Vice President - 1994 131,117 60,000 3,286 0 10,379 0 14,145
Finance and Chief 1993 118,374 49,450 2,375 0 2,831 0 3,425
Financial Officer
Timothy G. Howard 1995 142,000 0 2,597 0 13,794 0 19,042
Vice President - 1994 133,236 36,650 913 0 8,471 0 19,297
Controller 1993 123,819 23,250 929 0 3,090 11,666 19,989
Nancy A. Michaud 1995 140,000 0 1,826 0 13,600 0 14,533
Vice President - General 1994 129,577 33,625 1,180 0 8,351 0 13,372
Counsel and Secretary 1993 102,815 19,925 1,837 0 2,589 0 5,313
Pamela J. Whipps 1995 105,000 0 511 0 10,200 0 4,252
Vice President - 1994 90,430 22,575 330 0 6,246 0 3,102
Treasurer 1993 -- -- -- -- -- -- --
Gary E. Morin 1995 225,629 0 710 0 0 0 3,079
Former Executive Vice 1994 238,862 86,200 1,314 0 14,376 0 9,236
President and Chief 1993 222,547 69,000 3,334 0 8,088 17,588 8,941
Operating Officer
</TABLE>
11
<PAGE> 15
- ---------------
(1) "Salary" and "Bonus" include amounts that would have been payable currently,
but were deferred at an election of an Executive Officer, such as through
the Company's 401(k) Savings Plan.
(2) The compensation listed represents the amounts reimbursed to the Named
Executive Officers for the payment of taxes. No perquisites were provided or
other personal benefits paid to a Named Executive Officer in 1995 which
exceeded the lesser of $50,000 or ten percent of the total annual salary and
bonus reported for such Named Executive Officer.
(3) These numbers represent options for shares of the Company's Common Stock
granted pursuant to the Company's 1988 Stock Option Plan and Restricted
Share Plan. See the next table labeled "Option Grants in Last Fiscal Year"
for more detailed information on such options.
(4) Long Term Incentive Pay consists of amounts paid to each of the Named
Executive Officers under the Company's Long-Term Incentive Plan discussed
later in this Proxy Statement under the table labeled "Long Term Incentive
Plans." There were no awards for the three-year award cycle ended December
31, 1994, and the Company anticipates there will be no awards for the
three-year award cycle ended December 31, 1995.
(5) "All Other Compensation" includes (i) Company contributions to the Company's
401(k) Savings Plan in the amount of $3,079 each for Richard L. Molen, Nancy
A. Michaud, and Gary E. Morin; $2,900 for Thomas A. Frederick; $2,855 for
Timothy G. Howard; and $1,700 for Pamela J. Whipps to match 1995 pre-tax
elective deferral contributions (included under "Salary" and "Bonus") made
by each Named Executive Officer to such plan; (ii) amounts distributed of
$65,000, $6,000, $11,000, and $6,300 under the Company's Capital
Accumulation Plan to Richard L. Molen, Thomas A. Frederick, Timothy G.
Howard, and Nancy A. Michaud, respectively, and accrued interest of $13,899,
$1,397, $1,614, and $1,681 (being interest earned in excess of 120 percent
of the applicable federal long term rate provided under Section 1274(d) of
the Internal Revenue Code of 1986, as amended), by Richard L. Molen, Thomas
A. Frederick, Timothy G. Howard, and Nancy A. Michaud, respectively, on the
Company's Capital Accumulation Plan (Richard L. Molen and Timothy G. Howard
deferred salary in 1985 and 1986, and Thomas A. Frederick and Nancy A.
Michaud deferred salary in 1987 pursuant to such plan); and (iii) the
principal amounts of $11,936, $4,100, $3,573, $3,473, and $2,552 credited by
the Company for Richard L. Molen, Thomas A. Frederick, Timothy G. Howard,
Nancy A. Michaud, and Pamela J. Whipps, respectively, pursuant to the
Company's Special Deferred Compensation Agreements. Refer to "Employment
Contracts and Termination of Employment and Change-in-Control Arrangements"
later in this Proxy Statement for descriptions of such special deferred
compensation agreements.
(6) Mr. Frederick was elected Vice President - Finance and Chief Financial
Officer in December, 1994. Prior thereto, Mr. Frederick was President and
General Manager of Huffy Service First, Inc., a wholly owned subsidiary of
the Company, and received a 1995 bonus as a result of his past services at
such company.
STOCK OPTIONS
The following table contains information concerning the grant of stock
options under the Company's 1988 Stock Option Plan and Restricted Share Plan
("1988 Plan") to the Named Executive Officers for the year ended December 31,
1995, all of which are reflected in the Company's Summary Compensation Table:
OPTION GRANTS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
INDIVIDUAL GRANTS
---------------------------------------------------------- POTENTIAL
% OF REALIZABLE VALUE
NUMBER TOTAL AT ASSUMED ANNUAL
OF OPTIONS RATES OF STOCK
SECURITIES GRANTED TO EXERCISE PRICE APPRECIATION
UNDERLYING EMPLOYEES OR BASE FOR OPTION TERM(3)
OPTIONS IN FISCAL PRICE PER EXPIRATION --------------------------
NAME GRANTED(1) YEAR SHARE(2) DATE 5% 10%
- ----------------------- ---------- ---------- --------- ----------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C>
Richard L. Molen....... 41,286 12.06% $11.125 12/11/05 $ 288,856 $ 732,017
Thomas A. Frederick.... 14,086 4.11% 11.125 12/11/05 98,552 249,750
Timothy G. Howard...... 13,794 4.03% 11.125 12/11/05 96,509 244,573
Nancy A. Michaud....... 13,600 3.97% 11.125 12/11/05 95,152 241,133
Pamela J. Whipps....... 10,200 2.98% 11.125 12/11/05 71,364 180,850
Gary E. Morin.......... 0 -- -- -- -- --
</TABLE>
- ---------------
(1) The options were granted pursuant to the Company's 1988 Plan which was
approved by the Shareholders. All options granted under the 1988 Plan in
1995 are non-qualified stock options. No stock appreciation rights were
granted and no restricted shares were awarded under the 1988 Plan in 1995.
(2) The Common Stock closing market price on date of grant, December 11, 1995,
was $11.125. The exercise price may be paid in cash or in shares of Common
Stock valued at fair market value on the date of delivery or by a
combination of cash and Common Stock. The options become exercisable ratably
over a three-year period beginning in 1998. Upon a change in control (as
defined in the 1988 Plan), all options then outstanding become fully and
immediately exercisable and the then outstanding option of an employee
12
<PAGE> 16
whose employment is terminated, except for cause, within three months of
such change in control shall remain exercisable for three months from the
date of such termination, but not after the expiration of the exercise
period. Those employees who terminate employment due to disability or
retirement may exercise non-qualified stock options after such termination
of employment until the latter of (a) one year after the first exercise
date for the last shares to become exercisable under the terms of the
option grant, or (b) three years after the date of the employee's
termination of employment. Under the 1988 Plan, upon the death of an
employee or a retired or disabled former employee, all options under the
1988 Plan shall remain exercisable for six months following the date of
death. Except as set forth above, upon termination of employment, all
options terminate.
(3) Calculated on option terms of ten years beginning December 11, 1995, through
December 11, 2005, with annual compounding. The dollar amounts under these
columns are the result of calculations at the five percent and ten percent
rates set by the Securities and Exchange Commission and therefore are not
intended to forecast possible future appreciation of the Company's Common
Stock. The Company did not use an alternative formula for a grant date
valuation, as the Company is not aware of any formula which will determine
with reasonable accuracy a present value based on future unknown or volatile
factors.
OPTION EXERCISES AND HOLDINGS
The following table sets forth information with respect to the Named
Executive Officers concerning the exercise of options during the year ended
December 31, 1995, and unexercised options held as of December 31, 1995:
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR
AND FISCAL YEAR-END OPTION VALUES
<TABLE>
<CAPTION>
NUMBER OF SECURITIES
UNDERLYING UNEXERCISED VALUE OF UNEXERCISED
NUMBER OF VALUE REALIZED OPTIONS AT FISCAL IN-THE-MONEY OPTIONS
SHARES (MARKET PRICE AT YEAR-END(1) AT FISCAL YEAR-END(1)(2)
ACQUIRED EXERCISE LESS ---------------------------- ----------------------------
NAME ON EXERCISE EXERCISE PRICE) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- --------------------------- ----------- ---------------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Richard L. Molen........... 0 $ 0 113,407 99,466 $ 161,969 $ 0
Thomas A. Frederick........ 0 0 4,722 29,990 9,216 0
Timothy G. Howard.......... 0 0 20,937 28,704 18,204 0
Nancy A. Michaud........... 563 1,432 2,437 25,728 0 0
Pamela J. Whipps........... 0 0 3,063 18,196 0 0
Gary E. Morin.............. 0 0 18,942 0 0 0
- ---------------
<FN>
(1) The number of unexercised options includes options granted under the
Company's 1984 Stock Option Plan ("1984 Plan") (after December, 1987, no
further options or stock appreciation rights ("SARs") were granted under the
1984 Plan); and the 1988 Plan. No SARs were issued or outstanding as of
December 31, 1995 under the 1984 Plan or 1988 Plan.
(2) The value of "in the money" options is calculated on a per share basis as
the amount by which the fair market value of a share of the underlying
Common Stock represented by an option exceeds, as of December 31, 1995, the
per share exercise price of the option.
</TABLE>
13
<PAGE> 17
LONG-TERM INCENTIVE PLANS
The following table provides information concerning awards made to the
Named Executive Officers during the last fiscal year under the Company's
Long-Term Incentive Plan ("LTIP"). No payments were made under the LTIP in the
year ended December 31, 1995.
LONG TERM INCENTIVE PLANS -- AWARDS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
ESTIMATED FUTURE PAYOUTS UNDER
NUMBER OF SHARES, PERFORMANCE OR NON-STOCK PRICE BASED PLAN(2)
UNITS OTHER PERIOD UNTIL ----------------------------------
NAME OR OTHER RIGHTS MATURATION OR PAYOUT THRESHOLD TARGET MAXIMUM
- ----------------------- ----------------- ------------------------ --------- --------- --------
<S> <C> <C> <C> <C> <C>
Richard L. Molen....... (1) 3 years ending 12/31/98 $114,978 $ 229,954 $459,908
Thomas A. Frederick.... (1) 3 years ending 12/31/98 13,808 27,460 54,918
Timothy G. Howard...... (1) 3 years ending 12/31/98 13,522 26,892 53,782
Nancy A. Michaud....... (1) 3 years ending 12/31/98 13,332 26,512 53,026
Pamela J. Whipps....... (1) 3 years ending 12/31/98 10,000 19,884 39,768
</TABLE>
- ---------------
(1) Effective in 1995, LTIP awards were made to Executive Officers based on the
Company's actual earnings to be achieved during the period as compared to
the earnings' target established by the Company's Compensation Committee
prior to the commencement of the award period. The earnings' targets set are
designed to return the Corporation's earnings level over the three-year
period to a positive Economic Value Added (defined as earnings before
interest and taxes minus an asset usage charge using the Company's weighted
average cost of capital). Any award earned for 1996 is payable one-third in
1997; one-third in 1998; and the balance in 1999. The 1998 and 1999 payments
may be reduced to zero if the Company's actual earnings for the immediately
preceding year fall short of the then established targets.
(2) The amounts calculated assume eight percent annual base salary increases.
PERFORMANCE GRAPH
Set forth below is a line graph comparing the yearly percentage change in
the Company's cumulative total Shareholder return on its Common Stock with the
Standard & Poor's 500 Composite Stock Index ("S&P 500") and the Standard &
Poor's Composite Leisure Time Index ("Leisure Index") for the five-year period
ended December 31, 1995:
COMPARISON OF FIVE-YEAR CUMULATIVE TOTAL RETURN
HUFFY CORPORATION, S&P 500 AND LEISURE INDEX*
<TABLE>
<CAPTION>
MEASUREMENT PERIOD LEISURE IN-
(FISCAL YEAR COVERED) HUFFY S&P 500 DEX
<S> <C> <C> <C>
1990 100 100 100
1991 226 134 132
1992 169 144 176
1993 196 158 193
1994 164 160 186
1995 115 218 225
</TABLE>
* Assumes $100 invested on December 31, 1990 in Company Common Stock, the S&P
500 and the Leisure Index and the reinvestment of dividends.
14
<PAGE> 18
PENSION PLAN TABLE
The Company's Salaried Employees' Retirement Plan (the "Retirement Plan")
is a defined benefit pension plan which provides benefits to salaried employees
not otherwise covered under another pension plan of the Company. The following
table shows the estimated annual benefits (assuming payments made on the normal
life annuity with 12 months certain) payable upon retirement at age 65 to an
employee in specified compensation and years of service classifications.(1)
<TABLE>
<CAPTION>
YEARS OF SERVICE
-----------------------------------------------------------------
COMPENSATION 15 20 25 30 35
- ----------- --------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C>
$ 100,000 $ 21,256 $ 27,508 $ 33,760 $ 40,012 $ 40,012
250,000 55,006 72,508 90,010 107,512 107,512
400,000 88,756 117,508 146,260 175,012 175,012
550,000 122,506 162,508 202,510 242,512 242,512
700,000 156,256 207,508 258,760 310,012 310,012
850,000 190,006 252,508 315,010 377,512 377,512
</TABLE>
- ---------------
(1) The Internal Revenue Code of 1986, as amended (the "Code"), places certain
limitations on the annual pension benefits which can be paid from the
Retirement Plan. Such limitations are not reflected in the table. This table
reflects the total aggregate benefits payable annually upon retirement under
both the Retirement Plan and the Company's Supplemental/Excess Benefit Plan
("Benefit Plan"), which is discussed below. The Benefit Plan requires an
offset of one-half of the Social Security primary insurance amount ("PIA"),
and such amount has been deducted from the figures in the table. The PIA
amount used in developing the above figures is $14,976. Thus, the offset is
$7,488 for a person with 30 or more years of service.
Monthly benefits upon normal retirement (age 65) are the sum of (i) 0.9
percent of final average monthly compensation (as defined under the Retirement
Plan to include salary, incentive compensation, commissions and overtime pay and
based upon the highest three consecutive years in the last ten) up to the
monthly Social Security Covered Compensation Amount, plus 1.3 percent of the
amount by which final average monthly compensation exceeds the monthly Social
Security Covered Compensation Amount, times years of service (to a maximum of 30
years) and (ii) .075 percent of final average monthly compensation (to a maximum
of $4,166.67) times years of service (to a maximum of 20 years). Additional
provisions for early retirement are included. Mr. Molen has 27 years of credited
service, Mr. Frederick has 9 years of credited service, Mr. Howard has 22 years
of credited service, Ms. Michaud has 9 years of credited service, and Ms. Whipps
has 5 years of credited service. The 1995 compensation covered under the
Retirement Plan and Benefit Plan for each of the Named Executive Officers was as
follows: $596,796 for Mr. Molen; $205,000 for Mr. Frederick; $178,650 for Mr.
Howard; $173,625 for Ms. Michaud; and $127,575 for Ms. Whipps.
The Company has established the Benefit Plan which provides additional
benefits to participants in the Retirement Plan whose benefits are reduced by
limitations imposed under Sections 415 and 401(a)(17) of the Code and Section
2004 of the Employee Retirement Income Security Act of 1974, as amended
("ERISA"). Under the Benefit Plan, Executive Officers and certain key employees
will receive at the same time and in the same form as benefits paid under the
Retirement Plan, additional benefits in a monthly amount which, when added to
the benefits paid to the participant under the Retirement Plan, will equal the
benefit amount such participant would have earned but for the limitations
imposed by the Code and ERISA to the extent such limitations apply, and the
amount by which the sum of 45 percent of final average monthly compensation (as
defined under the Benefit Plan to include salary and bonus and based upon the
highest three years in the last ten) less 50 percent of the monthly PIA payable
under Social Security, with the difference prorated for less than 30 years of
service, plus $2,500 per year, exceeds benefits payable only under the
Retirement Plan. The Benefit Plan also provides that Executive Officers and
certain key employees will be provided benefits beginning at age 58, in an
amount equal to such participants' then ac-
15
<PAGE> 19
crued benefits without actuarial reduction for early commencement in the event
of (i) a "change-in-control" of the Company, as defined in the Benefit Plan, and
(ii) subsequent termination of employment. Except as noted in the preceding
sentence, benefits under the Benefit Plan will be reduced to an actuarial
equivalent to reflect early distribution in the same manner as benefits under
the Retirement Plan.
EMPLOYMENT CONTRACTS AND TERMINATION OF EMPLOYMENT AND CHANGE-IN-CONTROL
ARRANGEMENTS
There are no employment contracts between the Company and any Executive
Officers of the Company.
The Named Executive Officers and certain other key employees of the Company
each have a Special Deferred Compensation Agreement pursuant to which on each
January 1 the Company credits to an account for such employee an amount equal to
two percent of the aggregate of the base salary paid in the preceding calendar
year and bonus paid or credited to such employee under the Profit Sharing Bonus
Plan for preceding calendar year results. The aggregate amount in such account
is to be paid to the employee, subject to certain forfeitures, following
termination of employment. Such amounts for calendar year 1995 have been
included in the Summary Compensation Table.
Named Executive Officers, except for Pamela J. Whipps, have deferred
compensation and receive benefits under the Company's Capital Accumulation Plan
(the "Capital Accumulation Plan") adopted in 1985. No current compensation is
being deferred by Executive Officers under the Capital Accumulation Plan at the
present time. Based upon the amount of such compensation deferred in 1985, 1986,
and 1987, the Company has agreed to pay certain annual amounts (a) on the first
day of each of the eighth through eleventh years following the deferral to each
such participant and (b) generally beginning at age 65 or upon retirement,
whichever occurs later, to each such participant or to designated beneficiaries
upon such participant's death after retirement, until such participant reaches
(or would have reached) age 80. These annual amortized amounts will be
calculated on the basis of attributing from 19 to 24 percent per annum interest
to the deferrals, with each payment under clause (a) above equaling the amount
of the original deferral. A lump sum benefit equal to any remaining balance of
deferred amounts, with annual interest at the rate noted below, will be paid in
lieu of any annual benefits if (i) a participant terminates employment with the
Company other than by death or disability prior to retirement (10 percent
interest) or the Company terminates the participant's employment for certain
reasons other than cause or competing with the Company (20 percent interest);
(ii) a participant dies prior to retirement (20 percent interest); or (iii) the
Capital Accumulation Plan is terminated by the Company because a change in
federal or state laws, or judicial or administrative interpretation thereof, has
materially affected its cost to the Company (20 percent interest). The Company
will make supplemental pension payments to persons participating in the Capital
Accumulation Plan to the extent pension benefits are reduced due to
participation in such plan. Distributions made and interest accrued in excess of
120 percent of the applicable federal long term interest rate provided under
Section 1274(d) of the Code for the benefit of the Named Executive Officers have
been included in the Summary Compensation Table.
Richard L. Molen, Thomas A. Frederick and Nancy A. Michaud have each
entered into a severance agreement with the Company pursuant to which the
Company has agreed to provide an irrevocable letter of credit from a commercial
bank (or to fund an escrow account if such letter of credit cannot be promptly
issued) in the event a change-in-control (as defined in the agreements) of the
Company is threatened. The letter of credit is to be for an amount equal to
three times the sum of each such person's current annual salary, bonus award for
the most recently completed fiscal year, and Long-Term Incentive Compensation
Plan award for the most recently completed period, plus two times the Company's
cost of current benefits for three years (unless the Company agrees to provide
the same) and a gross up amount for applicable excise taxes, if any. If the
employment of said person terminates, for any reason other than disability,
retirement or death, within two years after a
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change-in-control of the Company occurs, the person or the person's
beneficiaries shall be entitled to the above described amount in a lump sum
payment. If proper demand for such payment is not made within two years from the
date of the change-in-control event, the Company may terminate the letter of
credit or withdraw the funds in the escrow account. If such person's employment
is terminated prior to the occurrence of a change in control of the Company,
payment under the severance agreement is forfeited.
Timothy G. Howard and Pamela J. Whipps have each entered into a severance
agreement with the Company which would require the Company to immediately fund
an escrow account for each of them in the event a change-in-control (as defined
in the agreement) of the Company is threatened. In such event, the Company must
deposit into such account for the benefit of such employee an amount equal to
two times the sum of his or her current annual salary, bonus award for the most
recently completed year, and the Long-Term Incentive Compensation Plan payment
awarded, or to be awarded, determined by whichever date is nearest to the date
of the occurrence requiring the escrow deposit. If such employee's employment
terminates, for any reason other than disability, retirement, or death, within
two years after a change-in-control of the Company occurs, then such employee
shall be entitled to benefit payments from such escrow in the aggregate amount
described above. Payment of such escrow fund amount shall be made in 24 monthly
installments. The escrow account shall terminate and all funds therein shall be
returned to the Company two years following deposit of said funds in the escrow
account if proper demand for said funds is not made by such employee under the
terms of the severance agreement. If such employee's employment is terminated
prior to the occurrence of a change-in-control of the Company, escrow payments
are forfeited.
Mr. Molen receives benefits under a Restricted Stock Unit Program (the "COO
Program") dated January 1, 1987, whereby he received grants of 11,250 restricted
units (adjusted to reflect subsequent stock splits) on January 1, 1987, 1988,
1989, 1990, and 1991. When earned, a restricted unit is equivalent to a share of
the Company's Common Stock valued at fair market value (as defined in the COO
Program). The restricted units will fully vest on January 1, 1997, 1998, 1999,
2000, and 2001, respectively, subject to (i) earlier vesting due to, among other
things, a change-in-control of the Company (as described in the COO Program),
and (ii) forfeiture due to, among other things, termination for cause. Upon
grant, the restricted units accumulate additional restricted units equal to
dividends paid on the Company's Common Stock. Once vested, the then actual value
of each restricted unit will be paid in cash. The COO Program requires Mr. Molen
not to compete with the Company for a period of five years following termination
of his employment.
Mr. Molen also may receive benefits under the 1993 CEO Long-Term
Performance Plan ("CEO Plan"), effective January 1, 1993. Under the CEO Plan,
Mr. Molen may earn a performance award in the form of a cash payment if, and
only if, the Company achieves the requisite Total Shareholder Return (as defined
in the CEO Plan to include the annual rate of growth of the Common Stock and the
dividends paid on such stock) on a Beginning Share Price (as defined in the CEO
Plan) during the applicable performance period. Five performance periods were
established, three of which began January 1, 1993, and end December 31, 1995,
1996, and 1997, respectively. The fourth and fifth performance periods began
January 1, 1994, and 1995, respectively, and end December 31, 1998, and 1999,
respectively. For the performance period beginning January 1, 1993 and ended
December 31, 1995, the Beginning Share Price was $16.25 and a Total Shareholder
Return of 15 percent or greater was required at the end of the performance
period for the receipt of a performance award by Mr. Molen. A Total Shareholder
Return of 15 percent was not achieved for this period, and, thus, no award was
made. The Compensation Committee of the Board of Directors administers the CEO
Plan. In the event Mr. Molen ceases to be employed by the Company for any reason
other than death, permanent disability or change of control (as defined in the
CEO Plan) prior to completion of a performance period, the performance award
will be forfeited, and no payment with respect thereto shall be made to Mr.
Molen unless determined otherwise by the Compensation
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<PAGE> 21
Committee. In the event of (a) death or permanent disability, or (b) a change of
control, subsequent to which Mr. Molen's employment is terminated, Mr. Molen, or
his estate, as the case may be, will be entitled to receive payment with respect
to the performance award(s) for the performance period(s) ending the last day of
the calendar year in which the death, disability or change of control occurs.
Generally, a "change-of-control" or "change-in-control", with respect to
the above-referenced plans and agreements, is the acquisition by another person
or persons other than directly from the Company of more than 20 percent of the
Company's outstanding shares of Common Stock; a merger, consolidation or other
combination of the Company with one or more corporations as a result of which
more than 49 percent of the voting stock of the merged, consolidated or combined
corporation is held by former shareholders of the corporations other than the
Company; a tender offer for, or a request for invitations for the tender of,
shares of Common Stock of the Company by any person; or the election to the
Board of Directors of the Company by the shareholders of two or more persons not
nominated as candidates for the Board of Directors in proxy statements furnished
during such period on behalf of the Board of Directors of the Company.
PROPOSAL TO AMEND THE HUFFY CORPORATION 1988 STOCK OPTION PLAN
AND RESTRICTED SHARE PLAN
The Board of Directors of the Company, at its meeting on December 11, 1995,
approved an amendment to the Company's 1988 Stock Option Plan and Restricted
Share Plan (the "1988 Plan") which was originally approved by the Shareholders
on April 15, 1988 and amended by the Shareholders on April 24, 1992. The
amendment increases the number of shares subject to the 1988 Plan which expires
in 1998. The purpose of the 1988 Plan is to provide an additional incentive to
employees of the Company and its subsidiaries to increase Shareholder value and
to remain in the employ of the Company or its subsidiaries.
The 1988 Plan allows the grant of incentive or non-qualified options to
acquire shares of the Company's Common Stock, alone or with stock appreciation
rights ("SARs"), and an opportunity to subscribe for shares of Common Stock
subject to restrictions set forth in the 1988 Plan ("Restricted Shares"). No
incentive options, SARs or Restricted Shares have been granted under the 1988
Plan and there is no present intention to do so. Only non-qualified options have
been granted. See "Executive Compensation", "Stock Options", and "Option
Exercises and Holdings" for information about options granted in 1995.
The 1988 Plan is administered by the Compensation Committee of the Board of
Directors (the "Committee") consisting of non-employee Directors who are not
eligible to participate in the 1988 Plan or any similar plan. The Committee
selects employee participants and determines the terms and conditions and types
of options and SARs, including number of shares, exercisability, and price. The
1988 Plan contains no predetermined performance measures or other criteria for
determining the number of options to be granted to participants. The Committee
also fixes the terms and restrictions on the offer and sale of Restricted
Shares.
Options granted under the 1988 Plan may be "incentive options" or
"non-qualified options" for federal tax purposes. Incentive options must meet
the provisions of Section 422A of the Internal Revenue Code of 1986, as amended.
No taxable income for federal income tax purposes results to the optionee from
the exercise of an incentive option at the time of exercise. Any gain recognized
on the sale of stock acquired on exercise of an incentive option is considered
as long-term capital gain for federal income tax purposes if the stock has been
held at least one year after it was acquired on exercise of the option and if at
least two years have expired after the grant of the option. Except as hereafter
indicated, the Company is not entitled to any deduction with respect to the
grant or exercise of any incentive option. The option price for incentive
options must be at least 100 percent of the fair market value of the stock on
the date of grant, unless the optionee owns over 10 percent of the Com-
18
<PAGE> 22
pany's voting stock in which case it must be at least 110 percent. Incentive
options must expire within five years from grant.
Non-qualified options possess no tax benefit and upon exercise result in
taxable gain as ordinary income equal to the difference between the market price
on the date of exercise and the option price. This amount is generally treated
as a tax deductible expense to the Company at the time of exercise. The option
price for a non-qualified option may not be less than $1.00 per share.
SARs may be granted together with an option under the 1988 Plan which gives
an optionee the right to request that he or she be allowed to surrender the
option and receive in exchange therefor cash or shares, or any combination,
equal to the excess of the fair market value, on the date of the request, of one
share of Common Stock over the per share option exercise price multiplied by the
number of shares covered by the option so surrendered. All amounts received upon
the exercise of a SAR are taxable as ordinary income to the recipient and are
generally treated as a tax deductible expense to the Company.
Restricted Shares with all the pertinent terms of sale set by the Committee
may be offered for sale under the 1988 Plan. At purchase, a subscription
agreement is executed containing the applicable restrictions, terms of grant and
providing that the purchase price must be paid in full within ten years from the
date. Payment can be in various forms but all cash dividends on the shares must
be credited to and applied against the unpaid balance. Although subscribers have
the status of Shareholders, no stock certificates are issued until the shares
are fully paid and the shares may not be pledged, sold, margined or otherwise
encumbered until the restrictions end. There are no tax advantages for the
subscriber of Restricted Shares.
The 1988 Plan, as amended, presently provides for 1,125,000 shares of
Common Stock to be available. At December 31, 1995, approximately 81,000 shares
remained available. Management estimates that option grants to employees over
the next one to two years will amount to approximately 700,000 shares, based on
current option grant policies which are expected to continue. Accordingly, the
Board of Directors has approved an amendment to the 1988 Plan which, if approved
by the Shareholders, would increase the number of shares available under the
1988 Plan by 650,000 additional shares, to a new total of 1,775,000. The
proposed amendment is contained in the resolution attached hereto as Annex 1.
The proposal adds an annual limitation to the 1988 Plan restricting the
number of shares that may be granted in any one year to an employee. This
restriction will allow the Company to treat any gain realized either from the
exercise of a non-qualified stock option by an employee or from a disqualifying
sale of incentive stock option stock by an employee as performance-based
compensation. In such circumstances the Company will be able to deduct such
gain.
The affirmative vote of the holders of a majority of the Company's Common
Stock present in person or by proxy at the Annual Meeting and entitled to vote
is required to adopt the resolution. Proxies will be voted in favor of the
resolution unless otherwise instructed by the Shareholders. Abstentions and
shares not voted by brokers and other entities holding shares on behalf of
beneficial owners will have the same effect as votes cast against the
resolution, provided such shares are properly present at the meeting in person
or by proxy. The Board of Directors recommends a vote for the adoption of the
resolution.
RATIFICATION OF APPOINTMENT OF INDEPENDENT PUBLIC ACCOUNTANTS
The Board of Directors, upon recommendation of its Audit Committee, has
appointed the firm of KPMG Peat Marwick LLP as independent public accountants
for the Company for calendar year 1996, subject to ratification by the
Shareholders and any future contingencies that may require reconsideration. The
firm of KPMG Peat Marwick LLP has served as independent public accountants for
the Company since 1962. The Board of Directors recommends ratification of this
appointment although it is not required by law. One or more members
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<PAGE> 23
of KPMG Peat Marwick LLP will attend the Annual Meeting with an opportunity to
make a statement if they desire to do so and to respond to such appropriate
questions as may be asked by Shareholders.
The proposal to ratify the appointment of KPMG Peat Marwick LLP requires
the affirmative vote of the holders of a majority of the shares of Common Stock
present in person or represented by proxy at the meeting. Abstentions and shares
not voted by brokers and other entities holding shares on behalf of beneficial
owners will have the same effect as votes cast against the resolution, provided
such shares are properly present at the meeting in person or by proxy. The Board
of Directors recommends a vote for this proposal.
SHAREHOLDER PROPOSALS
Proposals of Shareholders intended to be presented at the 1997 Annual
Meeting of Shareholders must be received by the Company by November 9, 1996, for
inclusion in the Company's Proxy Statement and proxy relating to the 1997 Annual
Meeting of Shareholders.
OTHER MATTERS
The Board of Directors does not intend to present to the meeting any
matters other than those hereinbefore mentioned. It does not know of anything
that will be presented by other parties. However, if any other matters shall
properly come before the meeting, it is the intention of the persons named in
the enclosed form of proxy to vote thereon according to their discretion and
best judgment.
By order of the Board of Directors
/s/ Nancy A. Michaud
Nancy A. Michaud
Secretary
Dayton, Ohio
March 7, 1996
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<PAGE> 24
ANNEX 1
PROPOSED AMENDMENT TO THE 1988 PLAN
RESOLVED, THAT the Huffy Corporation 1988 Stock Option Plan and Restricted Share
Plan be amended as follows:
Section 5(a) of the Plan is hereby amended in its entirety to read as set forth
below:
"5. SHARES SUBJECT TO THE PLAN
(a) The total number of shares of Common Stock which may be issued under the
Plan shall not exceed 1,775,000 shares, subject, however, to adjustments
required under the provisions of Section 5(d) hereof. The number of shares of
Common Stock that may be made subject to options granted to an employee under
the Plan during any calendar year shall not exceed fifteen percent (15%) of the
total number of shares of Common Stock which may be issued under the Plan."
1
<PAGE> 25
HUFFY CORPORATION
PROXY SOLICITED BY THE BOARD OF DIRECTORS
FOR ANNUAL MEETING OF SHAREHOLDERS, APRIL 26, 1996
P The undersigned hereby appoints Richard L. Molen, Geoffrey W. Smith
R and Thomas C. Sullivan, and each of them, his or her proxies, with
O power of substitution, to vote all shares of Common Stock of HUFFY
X CORPORATION, an Ohio corporation, which he or she may be entitled
Y to vote at the Annual Meeting of Shareholders of said Corporation
to be held April 26, 1996, and at any adjournment(s) thereof, on
the following matters, all of which are described in the Proxy
Statement, receipt of which is hereby acknowledged:
Election of Directors, Nominees:
(For a term of three years)
Jack D. Michaels,
James F. Robeson,
Patrick W. Rooney,
(For a term expiring in 1997)
Joseph P. Viviano
THIS PROXY WILL BE VOTED AS DIRECTED. IN THE ABSENCE OF ANY
SPECIFICATIONS TO THE CONTRARY, THIS PROXY WILL BE VOTED FOR THE
ELECTION OF ALL LISTED NOMINEES AND FOR ALL THE OTHER MATTERS LISTED
ON THE REVERSE SIDE OF THIS CARD. EXCEPT FOR THE MATTERS LISTED ON
THE REVERSE SIDE OF THIS CARD, THE BOARD OF DIRECTORS AT PRESENT
KNOWS OF NO BUSINESS OTHER THAN OF A ROUTINE NATURE TO BE BROUGHT
BEFORE THE MEETING. IF ANY OTHER BUSINESS IS BROUGHT BEFORE THE
MEETING, THIS PROXY WILL BE VOTED ACCORDING TO THE APPOINTED
PROXIES' DISCRETION AND BEST JUDGMENT. IF CUMULATIVE VOTING IS
ELECTED FOR THE ELECTION OF DIRECTORS, VOTES CAST PURSUANT TO THIS
PROXY WILL BE DISTRIBUTED AMONG THE ABOVE NOMINEES AT THE DISCRETION
OF SAID PROXIES.
/ SEE REVERSE /
/ SIDE /
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DIRECTIONS TO HUFFY SERVICE FIRST, INC.
[MAP]
<PAGE> 26
<TABLE>
<S> <C> <C>
/ X / PLEASE MARK YOUR |
VOTES AS IN THIS |
EXAMPLE. |____
</TABLE>
<TABLE>
<CAPTION>
WITH AB- AB-
FOR HELD FOR AGAINST STAIN FOR AGAINST STAIN
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1. Election of / / / / 2. Proposal to / / / / / / 3. Ratification of / / / / / /
Directors* Amend the Stock Appointment of KPMG
(see reverse) Option Plan Peat Marwick LLP as
*(Instruction to withhold authority Independent Public
to vote for any individual nominee, Accountants for
write that nominee's name in the Calendar Year 1996
space below)
- ------------------------------------ The undersigned ratifies all that said proxies, or
any of them, or their substitute or substitutes, may
lawfully do by virture hereof, and revokes any
proxies heretofore given by the undersigned to
vote at said Annual Meeting or adjournment(s)
thereof.
Change / /
of (indicate change of address
Address in the space below and
mark the box to the left.)
Will / /
Attend
Annual
Meeting
</TABLE>
<TABLE>
<S> <C> <C>
SIGNATURE(S) ____________________________________________________ DATE __________ ______________________________________
SIGNATURE(S) ____________________________________________________ DATE _________ ______________________________________
NOTE: Please sign exactly as name appears opposite. If signing in fiduciary or
representative capacity, please give full title as such. If shares are
registered in more than one name, all holders must sign. If signature is
for a corporation, the handwritten signature and title of an authorized
officer is required, together with the full corporate name.
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</TABLE>
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