<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 14A
(Rule 14a-101)
INFORMATION REQUIRED IN
PROXY STATEMENT
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934
Filed by the Registrant [X]
Filed by a party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary proxy statement
[X] Definitive proxy statement
[ ] Definitive additional materials
[ ] Soliciting material pursuant to Rule 14a-11(c) or Rule 14a-12
HANDLEMAN COMPANY
- - -------------------------------------------------------------------------------
(Name of registrant as specified in its charter)
HANDLEMAN COMPANY
- - -------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement)
Payment of filing fee (Check the appropriate box):
[X] $125 per Exchange Act Rule 0-11(c)(1)(ii), 14a-6(i)(1), or 14a-6(i)(2).
[ ] $500 per each party to the controversy pursuant to Exchange Act
Rule 14a-6(i)(4).
[ ] 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 transactions applies:
------------------------------------------------------------------------
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11:
------------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
------------------------------------------------------------------------
[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was
paid previously. Identify the previous filing by registration statement
number, or the form or schedule and the date of its filing.
(1) Amount previously paid:
------------------------------------------------------------------------
(2) Form, schedule or registration statement no.:
------------------------------------------------------------------------
(3) Filing party:
------------------------------------------------------------------------
(4) Date filed:
------------------------------------------------------------------------
<PAGE> 2
HANDLEMAN COMPANY
---------------------
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD SEPTEMBER 8, 1994
To the Shareholders:
You are cordially invited to attend the Annual Meeting of Shareholders of
Handleman Company (the "Company") to be held at the Somerset Inn, 2601 West Big
Beaver, Troy, Michigan 48084-3390, on Thursday, September 8, 1994, at 2:00
p.m., Eastern Daylight Time, for the following purposes:
(1) To elect three directors of the Company to serve until the Annual
Meeting of Shareholders in 1997.
(2) To consider such other business as may properly come before the
meeting.
Only shareholders of record at the close of business on July 15,
1994 will be entitled to vote at the meeting.
Your attention is called to the attached proxy statement and accompanying
proxy. It is important that your shares be represented and voted at the Annual
Meeting, regardless of whether or not you plan to attend in person. You are
therefore urged to sign, date and return the accompanying proxy card promptly
in the enclosed envelope, to which no postage need be affixed if mailed in the
United States. If you attend the meeting, you may withdraw your proxy and vote
your own shares.
A copy of the Annual Report of the Company for the fiscal year ended
April 30, 1994 accompanies this Notice.
By Order of the Board of Directors,
RICHARD J. MORRIS, Secretary
Troy, Michigan
August 2, 1994
<PAGE> 3
HANDLEMAN COMPANY
500 Kirts Boulevard
Troy, Michigan 48084-5299
---------------------------
PROXY STATEMENT FOR THE ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD SEPTEMBER 8, 1994
GENERAL INFORMATION
The Annual Meeting of Shareholders of Handleman Company (the "Company")
will be held at the Somerset Inn, 2601 West Big Beaver, Troy, Michigan
48084-3390, on Thursday, September 8, 1994, at 2:00 p.m., Eastern Daylight Time,
for the purposes set forth in the accompanying Notice of Annual Meeting of
Shareholders. The approximate mailing date for this proxy statement and the
proxy is August 2, 1994.
It is important that your shares be represented at the meeting. If it is
impossible for you to attend the meeting, please sign and date the enclosed
proxy and return it to the Company. The proxy is solicited by the Board of
Directors of the Company. The shares represented by valid proxies in the
enclosed form will be voted if received in time for the Annual Meeting. The
expenses in connection with the solicitation of proxies will be borne by the
Company and may include requests by mail and personal contact by its directors,
officers and employees. In addition, the Company has retained Corporate
Investor Communications, Inc., 111 Commerce Road, Carlstadt, New Jersey
07072-2586, to aid in the solicitation of proxies from brokers, banks, other
nominees and institutional holders at a fee not to exceed $4,500 plus
out-of-pocket expenses. The Company will reimburse brokers or other nominees
for their expenses in forwarding proxy materials to principals. Any person
giving a proxy has the power to revoke it at any time before it is voted.
VOTING SECURITIES AND PRINCIPAL HOLDERS THEREOF
Only holders of record of shares of $.01 par value common stock (the
"Common Stock") at the close of business on July 15, 1994 are entitled to
notice of, and to vote at, the meeting or at any adjournment or adjournments
thereof, each share having one vote. On such record date, the Company had
issued and outstanding 33,531,359 shares of Common Stock.
Based on information furnished to the Company by the State of Wisconsin
Investment Board ("SWIB"), P.O. Box 7842, Madison, Wisconsin 53707, SWIB owns
2,453,100 shares (7.3%) of the Company's outstanding Common Stock. Management
does not know of any other person who, as of July 15, 1994, beneficially owned
more than 5% of the Company's Common Stock.
1
<PAGE> 4
I. ELECTION OF DIRECTORS
The Board of Directors proposes that Messrs. Stephen Strome, James B.
Nicholson and Lloyd E. Reuss be elected as directors of the Company to hold
office until the Annual Meeting of Shareholders in 1997 or until their
successors are elected and qualified. The persons named in the accompanying
proxy intend to vote all valid proxies received by them for the election of
the nominees named above, unless such proxies are marked to the contrary. The
three nominees receiving the greatest number of votes cast at the Meeting or
its adjournment shall be elected. Abstentions, withheld votes and broker
non-votes will not be deemed votes cast in determining which nominees receive
the greatest number of votes cast. In case any nominee is unable or declines to
serve, which is not anticipated, it is intended that the proxies be voted in
accordance with the best judgment of the proxy holders.
The following information is furnished with respect to each nominee for
election as a director, each person whose term of office as a director will
continue after the Meeting and each executive officer of the Company named in
the Summary Compensation Table below.
<TABLE>
<CAPTION>
Shares Percentage of
of Common Total
Shares Stock Common
of Common Beneficially Stock of the
Stock Owned as of Company
Positions and Offices Beneficially July 15, 1994 Beneficially Term
Name and Year First with the Company and Other Owned as of as Trustee Owned as of to
Became a Director Age Principal Occupations July 15, 1994 Only July 15, 1994 Expire
- - -----------------------------------------------------------------------------------------------------------------------------------
NOMINEES FOR ELECTION AS DIRECTORS FOR A THREE-YEAR TERM
<S> <C> <C> <C> <C> <C> <C>
Stephen Strome (1989) ........... 49 President and Chief Executive Officer
of the Company ........................258,229 (1) 0 * 1997
James B. Nicholson (1991) ........ 51 President and Chief Executive Officer
of Pressure Vessel Service, Inc. .........2,600 0 * 1997
Lloyd E. Reuss (1993) ........... 58 Former President of General Motors
Corporation .............................1,000 0 * 1997
DIRECTORS CONTINUING IN OFFICE
David Handleman (1946) ........... 78 Chairman of the Board .................415,755 (2) 201,275 (2) 1.84% 1996
Richard H. Cummings (1962) ...... 72 Retired Senior Vice Chairman of the
Board of Directors of NBD Bancorp,
Inc. and of NBD Bank, N.A. ...............2,700 0 * 1996
Gilbert R. Whitaker, Jr. (1990) .. 62 Provost and Executive Vice President
for Academic Affairs, the University
of Michigan .............................. 500 0 * 1996
Alan E. Schwartz (1969) ......... 68 Partner of the law firm of Honigman
Miller Schwartz and Cohn, which firm serves
as general counsel to the Company .........895 0 * 1995
John F. Daly (1983) .............. 71 Retired Chairman of the Board of
Directors and Chief Executive Officer
of Hoover Universal, Inc. and retired
Vice Chairman of the Board of
Directors of Johnson Controls, Inc. ......5,550 0 * 1995
Verne G. Istock (1990) ........... 53 Chairman of the Board of Directors and
Chief Executive Officer of NBD Bancorp, Inc.
and of NBD Bank N.A. .....................1,000 (3) 0 * 1995
OTHER EXECUTIVE OFFICERS
Lawrence R. Hicks ............... 49 Executive Vice President-Merchandising ..91,451 (1) 0 * --
Louis A. Kircos ................. 40 Executive Vice President-Corporate
Development and Subsidiaries ..........103,969 (1) 0 * --
Mario DeFilippo ................. 65 Senior Vice President-Video Purchasing ..61,798 (1) 0 * --
Richard J. Morris ............... 48 Senior Vice President-Finance,
Chief Financial Officer and Secretary ...28,763 (1) 0 * --
All Directors and Executive Officers as a group (17 persons) ..................1,119,978 (4) 201,275 3.94% --
</TABLE>
- - ----------------------------
* Less than 1%
2
<PAGE> 5
(1) The number shown above as beneficially owned by Messrs. Strome, Hicks,
Kircos, DeFilippo and Morris includes 213,232, 72,625, 66,902, 52,625 and
20,000 shares, respectively, which they have the right to acquire within
60 days of July 15, 1994 pursuant to the Company's stock option plans
(assuming, in certain instances that the stock price reaches certain
levels -- see "Option Grants in the Last Fiscal Year"), 35,239, 18,653,
18,251 and 8,763 shares which represent restricted stock awards granted
in June 1993, July 1993 and June 1994 to Messrs. Strome, Hicks, Kircos
and Morris, respectively, and 173 shares which have been credited to
each of Messrs. Strome, Hicks, Kircos and DeFilippo under the Company's
salary deferral plan (the "401(k) Plan"). The number of shares shown
above for Mr. Kircos does not include 4,000 shares owned outright by
his wife. Mr. Kircos disclaims beneficial ownership of the shares owned
by his wife.
(2) Mr. Handleman owns outright and has the sole voting and investment power
for 415,755 shares including 173 shares credited to him under the 401(k)
Plan, which are shown above as beneficially owned. The number shown above
as beneficially owned as trustee represents 201,275 shares held in
various trusts, with Mr. Handleman as one of the trustees. Mr. Handleman
has no interest in any of such shares held in trusts, other than as a
trustee. The number of shares shown above does not include 243,175 shares
owned outright by Marion Handleman, his wife. Mr. Handleman disclaims
beneficial ownership of the shares owned by his wife.
(3) Mr. Istock disclaims any interest in any shares of the Common Stock held
by the Trust Division of NBD Bank, N.A. or any affiliated banks.
(4) All executive officers and directors of the Company as a group (17
persons) beneficially owned 1,321,253 shares (3.94%) of the Company's
outstanding Common Stock as of July 15, 1994, including 543,134 shares
which they have the right to acquire within 60 days of that date pursuant
to the Company's stock option plans, 111,512 shares representing
restricted stock awards granted in June 1993, July 1993 and June 1994,
2,277 shares which have been credited to them under the 401(k) Plan and
201,275 shares held in trusts. The total excludes 247,175 shares held by
spouses of the Company's executive officers and directors.
3
<PAGE> 6
OTHER INFORMATION RELATING TO NOMINEES AND DIRECTORS
Following each director's name and the year in which he first became a
director is a brief account of the business experience of each nominee and
director of the Company during the past five years.
DAVID HANDLEMAN 1946
Mr. Handleman has served as Chairman of the Board. Mr. Handleman also
was Chief Executive Officer from December 1, 1974 to March 9, 1988 and from
December 12, 1989 to May 1, 1991. Mr. Handleman retired as an officer and
employee of the Company effective July 1, 1993, but is continuing in the
non-officer position of Chairman of the Board. Mr. Handleman also performs
services for the Company as part of an advisory and non-compete agreement
entered into with the Company in 1989.
ALAN E. SCHWARTZ 1969
Mr. Schwartz is a partner of the law firm of Honigman Miller Schwartz and
Cohn, Detroit, Michigan, which firm serves as general counsel for the Company.
It is expected that such law firm will continue to be retained by the Company
in the current fiscal year. Mr. Schwartz is also a director of the following
corporations: Comerica Incorporated, Core Industries Inc, The Detroit Edison
Company, Howell Industries, Inc., Pulte Corporation and Unisys Corporation.
STEPHEN STROME 1989
Mr. Strome has served as President and Chief Executive Officer of the Company
since May 1, 1991. From May 3, 1990 through April 30, 1991, Mr. Strome served
as President and Chief Operating Officer of the Company. From June 7, 1989
through May 2, 1990, Mr. Strome served as Executive Vice President and Chief
Operating Officer of the Company. Mr. Strome served as Executive Vice
President and President/Video & Home Computer Software Division of the Company
from September 9, 1987 until June 7, 1989.
RICHARD H. CUMMINGS 1962
Mr. Cummings is the retired Senior Vice Chairman of the Board of Directors of
NBD Bancorp, Inc. and NBD Bank, N.A. Mr. Cummings is also a director of
Delaware North Companies, Inc. and Howell Industries, Inc.
JOHN F. DALY 1983
Mr. Daly is the retired Chairman of the Board of Directors of Hoover Universal,
Inc., a diversified manufacturer of industrial engineered parts and
components. He also served as Chief Executive Officer of that company. Mr.
Daly is also the retired Vice Chairman of the Board of Directors of Johnson
Controls, Inc., which acquired all of the outstanding shares of Hoover
Universal, Inc. in May, 1985. Mr. Daly is also a director of Comerica Bank &
Trust, F.S.B., Edwards Brothers, Inc., JPE, Inc. and Plasti-Line, Inc.
VERNE G. ISTOCK 1990
Mr. Istock is Chairman of the Board of Directors and Chief Executive Officer of
NBD Bancorp, Inc. and NBD Bank, N.A. and has served in such capacity since
January 1, 1994. From October 1, 1985 through December 31, 1993 Mr. Istock
served as Vice Chairman of the Board of NBD Bancorp, Inc. and NBD Bank, N.A.
Mr. Istock is also a director of Grand Trunk Corporation and of its
subsidiary Grand Trunk Western Railroad Company, and of Kelly Services, Inc.
and R.L. Polk & Company.
4
<PAGE> 7
GILBERT R. WHITAKER, JR. 1990
Mr. Whitaker has served as Provost and Executive Vice President for Academic
Affairs, the University of Michigan, since September 1, 1993. From September
1, 1990 through August 31, 1993 Mr. Whitaker served as Provost and Vice
President for Academic Affairs, the University of Michigan. From January 1,
1979 to September 1, 1990, Mr. Whitaker was Dean and Professor of Business
Economics, the University of Michigan. Mr. Whitaker is a director of the
following corporations: Johnson Controls, Inc., Lincoln National Corporation
and Structural Dynamics Research Corporation.
JAMES B. NICHOLSON 1991
Mr. Nicholson has served as President and Chief Executive Officer of
Pressure Vessel Service, Inc. since 1979. Mr. Nicholson is also a director of
Pressure Vessel Service, Inc., Amerisure Companies, Douglas & Lomason Company
and North American Mortgage Company.
LLOYD E. REUSS 1993
Mr. Reuss served as General Motors Corporation's Executive Vice President of
New Vehicles and Systems from April 6, 1992 through his retirement on January
1, 1993. Mr. Reuss served as President of General Motors Corporation
from August 1, 1990 through April 5, 1992. From May 22, 1987 through July 31,
1990 Mr. Reuss served as Executive Vice President of General Motors
Corporation's North American Automotive Operations. Mr. Reuss was elected a
director of the Company on June 16, 1993.
During the fiscal year ended April 30, 1994 the Board of Directors held six
meetings and took action by written consent three times in lieu of additional
meetings.
COMMITTEES OF THE BOARD OF DIRECTORS
The Company has a standing Executive Committee. The current members of the
Executive Committee are David Handleman (Chairman), Richard H. Cummings, Verne
G. Istock, Alan E. Schwartz and Stephen Strome. The Executive Committee meets
on call and has authority to act on most matters between Board meetings. During
fiscal year 1994, the Executive Committee held one meeting.
The Company has a standing Audit Committee. The current members of the
Audit Committee are Richard H. Cummings (Chairman), James B. Nicholson and
Lloyd E. Reuss. During fiscal year 1994, the Audit Committee held four
meetings. The duties of the Audit Committee are: recommending to the Board of
Directors the retention or discharge of the independent public accountants;
reviewing the arrangements and scope of the audit and non-audit engagements
and the compensation of the independent public accountants; reviewing with the
independent public accountants and the Company's financial officers the
adequacy of the Company's internal auditing, accounting and financial
controls; reviewing major changes in accounting policies; and reviewing the
scope, status and results of examinations conducted by the internal audit
department of the Company.
5
<PAGE> 8
The Company has a standing Compensation and Stock Option Committee. The
current members of the Compensation and Stock Option Committee are John F. Daly
(Chairman), David Handleman, Verne G. Istock and Gilbert R. Whitaker, Jr.
During fiscal year 1994, the Committee held three meetings and held informal
discussions in lieu of additional formal committee meetings and made
recommendations to the Board of Directors. The duties of the Committee are:
recommending to the Board of Directors the remuneration arrangements for senior
management; recommending to the Board of Directors compensation plans in which
officers are eligible to participate; and granting stock options, stock
appreciation rights and restricted stock awards under the Company's 1992
Performance Incentive Plan.
Until June 1993, the Board of Directors served as a Nominating Committee.
In June 1993, the Board of Directors established a Nominating Committee. The
current members of the Nominating Committee are James B. Nicholson (Chairman),
Verne G. Istock, Alan E. Schwartz and Stephen Strome. The Nominating Committee
considers the performance of incumbent directors and recommends to the
shareholders nominees for election as directors. The Nominating Committee will
consider nominees for directors recommended by shareholders, which
recommendations for the 1995 Annual Meeting of Shareholders should be submitted
to the Chairman of the Nominating Committee at the Company's executive offices,
no later than April 1, 1995.
CERTAIN TRANSACTIONS WITH EXECUTIVE OFFICERS AND DIRECTORS
Mr. Verne G. Istock, a director of the Company, is Chairman of the Board of
Directors and Chief Executive Officer of NBD Bank, N.A. ("NBD") and of its
parent, NBD Bancorp, Inc. The Company regularly transacts business with NBD.
Loans to the Company from NBD during fiscal year 1994 included borrowings under
a four-year, $147,000,000 revolving credit arrangement entered into on June 24,
1991 with a consortium of banks, for which NBD acts as agent. NBD's commitment
pursuant to the revolver is $45,150,000. NBD's share of the maximum aggregate
amount of all borrowings under the revolver during fiscal year 1994 was
$41,157,000 and, at April 30, 1994, was $21,531,000. Rates under the revolver
ranged from 3.6% to 6.8% during fiscal year 1994. During fiscal year 1994,
NBD also provided financing to the Company pursuant to five limited obligation
revenue bonds at rates ranging from 2.4% to 4.6%. The maximum principal amount
outstanding under the revenue bonds during fiscal year 1994 was $10,260,000,
and the principal amount outstanding thereunder at April 30, 1994 was
$7,400,000. During fiscal year 1994, the Company paid NBD $1,582,329 as
interest, consisting of $1,031,034 under the revolving credit arrangement and
$533,475 under the revenue bonds. In addition to interest, the Company paid
NBD $89,730 in conjunction with its services as agent under the revolving
credit arrangement and $277,132 for trustee fees, transfer agent fees, advisory
services fees and other fees and expenses.
Comerica Bank ("Comerica") is also part of the consortium of banks
providing the Company with the revolving credit arrangement described above.
Mr. Alan E. Schwartz, a director of the Company, is a director of Comerica's
parent, Comerica Incorporated. Mr. John F. Daly, a director of the Company, is
a director of Comerica Bank & Trust, F.S.B., a subsidiary of Comerica
Incorporated. Comerica's commitment pursuant to the revolver is $22,050,000.
Comerica's share of the maximum aggregate amount of all borrowings under the
revolver during fiscal year 1994 was $20,100,000 and, at April 30, 1994, was
$10,515,000. During fiscal year 1994, the Company paid Comerica $503,528 as
interest under the revolving credit arrangement and $54,985 for other fees and
expenses.
The Company expects to continue to engage in transactions with NBD and
Comerica in the ordinary course of business in the future. In the opinion of
management, the Company's commercial dealings with NBD and Comerica are on
terms as favorable as those available from other third-party banks.
6
<PAGE> 9
Mr. David Handleman, Chairman of the Board of the Company since 1974,
retired as an officer and employee of the Company effective July 1, 1993. Mr.
Handleman continues as a director of the Company and as the non-officer
Chairman of the Board. Effective July 1, 1993, and during his lifetime Mr.
Handleman will receive annual payments of $300,000 per year in consideration
of his performance of advisory and related services to the Company and
execution of a non-competition covenant entered into with the Company in 1989.
Such amount is in addition to the annual amount ($288,564) Mr. Handleman
receives pursuant to the Company's pension plan. In addition, the Company paid
$78,801 for certain life insurance, health insurance, automobile and club dues
benefits for Mr. Handleman while he served as an officer of the Company until
July 1, 1993, and through April 30, 1994 pursuant to his agreement with the
Company. In October and December 1993 the Company loaned Richard J. Morris,
Senior Vice President-Finance, Chief Financial Officer and Secretary, the
aggregate sum of $141,895 to facilitate the purchase of his home in connection
with his move from New York and the commencement of his employment with the
Company. The loan, which bears interest at 6% per annum, is to be repaid upon
the sale of his New York home. The loan remained outstanding at April 30, 1994.
COMPENSATION OF EXECUTIVE OFFICERS AND DIRECTORS
COMPENSATION OF DIRECTORS
Officers of the Company who are directors do not receive any additional
compensation for services as a director or as a committee member. During
fiscal year 1994, each director who was not an officer of the Company received
a director's fee in the annual amount of $16,000 and fees for attendance at
Board meetings which would aggregate an additional $6,000 if the director
attended all scheduled Board meetings. Each member on a Committee of the Board
of Directors was paid at the rate of $750 for each Committee meeting attended.
In addition, during fiscal year 1994, each Committee Chairman received an
annual fee of $3,000. Directors are reimbursed for travel and other expenses
related to attendance at Board and Committee meetings. The Company has adopted
a Director Retirement Plan which provides that after 10 years of service any
non-employee director will be, upon retirement, entitled to receive 50% of the
annual director fee then in effect for the lesser of the number of years the
participant served as a non-employee director of the Company or the life of the
participant. The Company has approved a Deferral Plan For Payment of Director
Fees which permits members of the Board of Directors to elect to defer to a
future date all or any portion of their director fees (including retainer fees,
attendance fees and committee fees), with interest to be added to deferred
amounts. Mr. David Handleman is not entitled to receive director fees during
the term of his advisory agreement. See "Certain Transactions with Executive
Officers and Directors" for additional information regarding amounts paid to
Mr. David Handleman for advisory services.
Under resolutions of the Board of Directors presently in effect, if a
corporate officer or director should die while serving in such capacity, the
Company will pay to the surviving spouse, or if there is no surviving spouse
then to the decedent's estate, the equivalent of one year's salary (excluding
bonuses) based upon the amount being received by the decedent at the time of
his or her death, in 24 equal monthly installments commencing one month after
death.
7
<PAGE> 10
SUMMARY COMPENSATION TABLE
The following table sets forth information for each of the fiscal years
ended May 2, 1992, May 1, 1993 and April 30, 1994 concerning the compensation of
the Company's Chief Executive Officer and each of the Company's other four most
highly compensated executive officers (collectively, the "named executive
officers") whose annual salary and bonus exceeded $100,000.
<TABLE>
<CAPTION>
Long Term
Compensation Awards
Annual Compensation (7)
-------------------------------------- -------------
Other Annual Options/SARs All Other
Fiscal Salary Bonus Compensation Underlying Securities Compensation
Name and Position Year ($) ($) ($) (#) ($)
- - ------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Stephen Strome (1) 1994 344,230 -- -- 115,000 --
President and Chief 1993 298,463 140,000 -- 25,000 --
Executive Officer 1992 280,000 140,000 * 22,591 *
Lawrence R. Hicks (2) 1994 191,845 -- -- 30,000 --
Executive Vice President 1993 182,425 62,000 -- 7,500 --
- Merchandising 1992 173,192 60,000 * 7,500 *
Louis A. Kircos (1) (3) 1994 186,500 -- -- 36,409 --
Executive Vice President 1993 174,407 62,000 -- 7,500 --
- Corporate Development 1992 162,683 60,000 * 13,784 *
and Subsidiaries
Mario DeFilippo 1994 184,997 -- -- -- 60,000 (4)
Senior Vice President 1993 177,660 64,000 -- -- --
- Video Purchasing 1992 169,598 59,150 * 7,000 *
Richard J. Morris (5) 1994 129,385 -- 34,498 (6) 20,000 --
Senior Vice President
- Finance, Chief Financial
Officer & Secretary
</TABLE>
* Under the Securities and Exchange Commission's transition rules on executive
compensation, amounts of Other Annual Compensation and All Other
Compensation are not shown for the fiscal year ended May 2, 1992.
(1) Pursuant to the Company's 401(k) Plan, Mr. Strome deferred $5,000, $3,100
and $3,667 of his salary and Mr. Kircos deferred $5,000. $3,110 and
$3,667 of his salary, respectively, during the fiscal years ended May 2,
1992, May 1, 1993 and April 30, 1994.
(2) Mr. Hicks was Senior Vice President - Merchandising until April 25, 1994,
and Executive Vice President - Merchandising thereafter.
(3) Mr. Kircos was Senior Vice President - Finance until March 1993, Senior
Vice President - Corporate Development and Subsidiaries until April 25,
1994 and Executive Vice President - Corporate Development and Subsidiaries
thereafter.
(4) Represents payment to Mr. DeFilippo for services rendered to the Company in
postponing his retirement date.
(5) Mr. Morris was elected Vice President - Finance, Chief Financial Officer
and Secretary on August 2, 1993, and was elected Senior Vice President -
Finance, Chief Financial Officer and Secretary effective April 25, 1994.
(6) Includes $348, $3,796 and $30,354 paid during fiscal 1994 to Mr. Morris for
certain life insurance, automobile benefits and moving and transition
expenses, respectively. Non-cash compensation did not exceed the lesser of
$50,000 or 10% of individual cash compensation for any other executive
officer.
(7) See Long-Term Incentive Plan-Awards in Last Fiscal Year for information
regarding restricted stock awards for the fiscal year ended April 30, 1994.
No restricted stock awards were granted in prior years.
8
<PAGE> 11
OPTION GRANTS IN THE LAST FISCAL YEAR
The following table provides details regarding stock options granted to the
named executive officers in the last fiscal year. In addition, in accordance
with SEC rules, hypothetical gains that would exist for the respective options
are shown. These gains are based on assumed rates of annual compounded stock
price appreciation of 5% and 10% from the date the options were granted over
the full option term. Of course, actual gains, if any, on stock option
exercises and stock accruals are dependent on the future performance of the
Common Stock and the overall stock market conditions. There can be no
assurance that the amounts reflected in the table will be achieved.
<TABLE>
<CAPTION>
Potential Realizable Value at
Assumed Annual Rates of
Stock Price Appreciation
% of Total For Option Term (1 )
Number of Options Granted -----------------------------
Options Granted to Employees Exercise Price
Name (2) in Fiscal Year Per Share (4) Expiration Date 5% 10%
- - -----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Stephen Strome 115,000 44.5% $14.25 June 15, 2003 $343,123 $2,611,650
Lawrence R. Hicks 30,000 11.6% $14.25 June 15, 2003 $ 89,600 $ 681,300
Louis A. Kircos 30,000 11.6% $14.25 June 15, 2003 $ 89,600 $ 681,300
6,409 (3) 2.5% $13.75 June 6, 2001 $ 55,374 $ 140,421
Mario DeFilippo 0 -- -- -- -- --
Richard J. Morris 20,000 7.7% $14.25 July 29, 2003 $ 59,736 $ 454,200
</TABLE>
- - -----------------
(1) In accordance with SEC rules, these columns show gains that might exist for
the respective options over a period of 10 years. This valuation is
hypothetical; if the stock price does not increase above the exercise
price, compensation to the named executive officers will be zero. A 5% and
10% annually compounded increase in the Company's stock price from $14.25
per share at the date of grant to the end of the 10-year option term would
result in stock prices of $23.21 and $36.96 per share, respectively.
(2) Each option (other than the reload option for 6,409 shares to Mr. Kircos
noted in footnote (3)) becomes exercisable one-third when the Company's
stock price exceeds $20.00 per share; one-third when the Company's stock
price exceeds $25.00 per share; and one-third when the Company's stock
price exceeds $30.00 per share.
(3) Represents a reload option granted to Mr. Kircos based on his using
previously owned Handleman shares to exercise a stock option. In order to
qualify for receipt of a reload option, the shares used to exercise an
option must have been held for one year. Sale within one year of the shares
received in the option exercise will cancel the reload option. The reload
option expires on the same date as the original option.
(4) The exercise price may be paid in cash, by delivery of already owned shares
subject to certain conditions, or pursuant to a cashless exercise procedure
under which the optionee provides irrevocable instructions to a brokerage
firm to sell the purchased shares and to remit to the Company, out of the
sale proceeds, an amount equal to the exercise price plus all applicable
withholding taxes. The Compensation and Stock Option Committee has approved
the issuance of reload options in certain circumstances and with certain
restrictions. A reload option is an option granted to an employee when the
employee exercises an option using previously owned shares.
9
<PAGE> 12
AGGREGATED OPTION EXERCISES IN THE LAST FISCAL YEAR
AND FISCAL YEAR-END OPTION VALUES
The following table sets forth information concerning stock options
exercised by the named executive officers during the fiscal year ended April
30, 1994, as well as the value of unexercised options held by such persons on
April 30, 1994. This table also includes the number of shares covered by both
exercisable and non-exercisable stock options as of the last day of the fiscal
year. The exercise price of all outstanding stock options, exercisable or
unexercisable, held by such persons on April 30, 1994 was higher than the
market price ($10.88 per share) of the Company's Common Stock as of such date.
The number of exercisable stock options shown in the following table includes
options exercisable when the Company's stock price reaches certain levels (see
footnote (2) to "Option Grants in the Last Fiscal Year").
<TABLE>
<CAPTION>
Number of
Unexercised
Options at Fiscal
Year-End
Shares Acquired Value Exercisable/
Name of Individual on Exercise # Realized Unexercisable
- - -------------------------------------------------------------------------------
<S> <C> <C> <C>
Stephen Strome 0 --
Exercisable 188,232
Unexercisable 25,000
Lawrence R. Hicks 0 --
Exercisable 65,125
Unexercisable 7,500
Louis A. Kircos 7,500 $15,000
Exercisable 59,402
Unexercisable 13,909
Mario DeFilippo 0 --
Exercisable 52,625
Unexercisable --
Richard J. Morris 0 --
Exercisable 20,000
Unexercisable --
</TABLE>
10
<PAGE> 13
LONG-TERM INCENTIVE PLAN--
AWARDS IN LAST FISCAL YEAR
The following table sets forth the restricted stock awards made under the
Company's Long-Term Incentive Plan to the named executives during the fiscal
year ended April 30, 1994. No restricted stock awards were granted in prior
fiscal years. The amount of the restricted stock award eventually issued to and
retained by participants depends upon the extent to which the consolidated
return on shareholders' equity exceeds the required performance level for the
subject fiscal years. If the threshold performance level is not met, no
restricted stock awards can be retained by the participant.
<TABLE>
<CAPTION>
Performance
Number of or Other Estimated Future Payouts under
Shares, Period Until Non-Stock Price-Based Plans
Units or Maturation ------------------------------
Other or Payout Threshold Target Maximum
Name Rights (Fiscal Years) ($) ($) ($)
----------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Stephen Strome 12,895 1994-1995 91,877 183,754 367,508
8,596 1994-1996 61,247 122,493 244,986
Lawrence R. Hicks 7,111 1994-1995 50,666 101,332 202,664
4,740 1994-1996 33,773 67,545 135,090
Louis A. Kircos 6,926 1994-1995 49,348 98,696 197,392
4,618 1994-1996 32,903 65,806 131,612
Mario DeFilippo -- -- -- -- --
Richard J. Morris 2,895 1994-1996 20,627 41,253 82,506
</TABLE>
The plan consists of two segments. In the first segment, performance
targets are based on return on beginning shareholders' equity achieved during
fiscal years 1994 and 1995. Fifty percent of the shares vest and are paid out
in June 1995 and the balance is vested and paid out in June 1996. In the second
segment, performance targets are based on return on beginning shareholders'
equity achieved during fiscal years 1994, 1995 and 1996. Fifty percent of the
shares vest and are paid out in June 1997 and the balance is vested and paid
out in June 1998. In addition to achieving the performance threshold, the
participant must remain in the Company's employ until the subject vesting date
except where the employment is terminated due to death, permanent disability or
normal retirement. The Compensation and Stock Option Committee establishes the
threshold, target and maximum return on beginning shareholders' equity for each
fiscal year. Cash dividends are paid on the restricted stock holdings reported
above on the normal dividend payment dates.
11
<PAGE> 14
PENSION PLAN
The Company has a pension plan (the "plan") covering all employees of the
Company who have reached the age of 21 and completed one year of service,
except for employees covered by a collective bargaining agreement which does
not provide for plan coverage. The plan provides pension benefits, death
benefits and disability benefits for covered employees. For the fiscal year
ended April 30, 1994, employees with five or more years of service were
entitled to monthly pension benefits beginning at normal retirement age (65).
The computation of benefits under the plan is based upon a formula which
takes into consideration retirement age, years of service up to 30 years,
average annual compensation during the highest five consecutive year period
within the 10 years preceding retirement, and the average of the taxable wage
base for social security purposes over the employee's career. The plan permits
early retirement at ages 55-64 for employees with 10 or more years of service.
A death benefit equal to a portion of the employee's accrued benefit is paid to
the employee's spouse if the employee dies after becoming vested under the
plan. An employee with 10 or more years of service whose employment by the
Company terminates prior to his or her normal retirement date on account of his
or her permanent and total disability is entitled to receive a disability
retirement benefit.
The compensation covered by the plan includes all earnings from the Company
as reported on the employee's W-2 form, for base pay plus overtime and bonus
payments only, plus salary deferrals under the Company's 401(k) Plan, up to a
maximum of $150,000 for calendar year 1994.
The following table illustrates current annual benefits payable under the
plan upon retirement at age 65 to persons in certain compensation and years of
service classifications. The benefits are computed on the basis of a straight
life annuity and are not subject to deductions for social security or other
offset amounts.
<TABLE>
<CAPTION>
Final Average Ten Years Twenty Years Thirty Years
Compensation of Service of Service of Service
- - -------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
$125,000 ....................................... $15,920 $31,839 $47,759
$150,000 ....................................... 19,420 38,839 58,259
$175,000* ....................................... 22,920 45,839 68,759
$200,000* ....................................... 26,420 52,839 79,259
$225,000* ....................................... 28,111 58,222 87,333
</TABLE>
*Compensation which may be considered for any purpose under a qualified pension
plan is limited for 1994 to $150,000.
The Internal Revenue Code limits the benefits which can be paid from any
funded pension plan that qualifies for federal tax exemption. The amount for
calendar year 1994 is $118,800.
As of April 30, 1994, the credited years of service under the plan for the
named executive officers were as follows: 16 for Stephen Strome; 20 for
Lawrence R. Hicks; 14 for Mario DeFilippo; 12 for Louis A. Kircos; and 0 for
Richard J. Morris.
12
<PAGE> 15
Performance Graphs
The following line graphs compare the cumulative total shareholder return
for the Company's Common Stock with the cumulative total return of the Standard
& Poor's 500 Composite Index and the Russell 2500 Index, for the past five and
ten year periods.
COMPARISON OF FIVE YEAR CUMULATIVE
TOTAL RETURN AMONG COMPANY. S&P 500
AND RUSSELL 2500
<TABLE>
<CAPTION>
1989 1990 1991 1992 1993 1994
- - ------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Handleman 100 62 67 70 78 60
S&P 500 100 111 130 148 162 170
Russell 2500 100 99 113 135 156 176
</TABLE>
Assumes an investment of $100 in the Company's Common Stock, the S&P 500
Composite Index and Russell 2500 Index as of the last day of fiscal 1989. It
shows the cumulative total return for the Company's last five fiscal years
assuming reinvestment of dividends.
COMPARISON OF TEN YEAR CUMULATIVE
TOTAL RETURN AMONG COMPANY. S&P 500
AND RUSSELL 2500
<TABLE>
<CAPTION>
1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994
- - ----------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Handleman 100 184 261 192 222 375 234 253 261 291 226
S&P 500 100 118 160 203 190 234 258 303 346 377 397
Russell 2500 100 117 161 184 173 204 202 230 276 319 359
</TABLE>
Assumes an investment of $100 in the Company's Common Stock, the S&P 500
Composite Index and Russell 2500 Index as of the last day of fiscal 1984. It
shows the cumulative total return for the Company's last 10 fiscal years
assuming reinvestment of dividends.
The Company does not believe it feasible to provide a peer group comparison
since any entities that could conceivably be deemed "peers" are either
privately held companies or subsidiaries or divisions of larger publicly-held
companies. Therefore, the Company has selected the Russell 2500 index on the
basis of similar market capitalization.
13
<PAGE> 16
REPORT OF COMPENSATION AND STOCK OPTION COMMITTEE
INTRODUCTION
Decisions on compensation of the Company's executives are made by the four
members of the Compensation and Stock Option Committee (the "Committee") of the
Board. The members of the Committee are Messrs. John F. Daly (Chairman), David
Handleman, Verne G. Istock and Gilbert R. Whitaker, Jr.
GENERAL POLICIES
The overall objective of the Committee with respect to compensation of
executive officers is to provide a compensation program that is intended to
attract, retain and reward key management personnel who contribute to the
long-term success of the Company and to motivate executives to achieve goals
which support business strategies and business objectives of the Company.
To achieve these objectives, key management employees are paid salaries and
bonuses and are granted stock options and restricted stock awards based on
corporate performance and individual initiative and achievements. The
Committee used the services of an outside compensation consulting firm which
provided advice with respect to the reasonableness of compensation paid to its
key management employees. The consultant provided the Committee with
compensation surveys based on comparisons to different groups of corporations
with approximately the same sales volume as the Company. The Committee has
not taken into account the impact of Section 162(m) of the Internal Revenue
Code in determining the level of executive compensation since there is no
immediate relationship between the Company's compensation levels and the
provisions of Section 162(m).
SALARIES
Individual salary determinations of the Company's key management employees
are based on experience and sustained performance and by comparison to pay
practices with companies included in the outside consultant's compensation
survey.
BONUSES
Under the Company's bonus program, the Committee establishes a bonus pool
and specific bonus payments based on a targeted return on beginning
shareholders' equity. Key management employees participate in the bonus program.
Awards under the program are based, first, on attaining the targeted return on
equity and, second, on each participant's contribution to the Company's
business results based on subjective performance review. In fiscal 1994, the
Committee took into account the financial performance of the Company, which
reflected a 9.6% return on beginning shareholders' equity and which was below
the minimum targeted return established by the Committee. Accordingly, no
bonuses were paid to any executive officers pursuant to the overall bonus
program. Bonuses were only paid to certain selected key employees based solely
on their individual initiative and contribution to corporate performance.
STOCK PLANS
The Company's shareholders approved the adoption of the Handleman Company
1992 Performance Incentive Plan (the "Plan") which authorizes the granting of
stock options, stock appreciation rights and restricted stock. The Committee
believes that stock ownership by executives and stock-based performance
compensation arrangements foster an interest in the enhancement of
shareholder value and thus align management's interests with that of the
shareholders. Thus, in fiscal 1994, stock options and restricted stock were
awarded pursuant to the Plan to key employees in amounts reflecting the
participant's position and ability to influence the Company's overall
performance. In determining the size of individual awards, the Committee
considered the amount of options outstanding and previously granted, both in
the aggregate and with respect to the particular executive, and the amount of
options remaining available for grant under the Plan. The Committee's policy
has
14
<PAGE> 17
been to utilize vesting periods to encourage key employees to continue in the
employ of the Company, and to grant options with a term of 10 years to provide
a long-term incentive. Generally, the exercise price of the options is at least
the fair market value of the underlying shares on the date of the grant. Thus,
such options have value only if the price of the underlying share increases.
However, with respect to certain senior officers the options granted during
fiscal 1994 which have an exercise price of $14.25 per share can only be
exercised in the following manner: one-third of such options when the
Company's stock price exceeds $20.00 per share; one-third when the Company's
stock price exceeds $25.00 per share; and the balance when the Company's stock
price exceeds $30.00 per share. In fiscal 1994, restricted shares awarded
totaled 185,521 (net of forfeitures) and may only be vested if goals are
reached, but could increase to a maximum of 330,396 if maximum targets were
reached. Restricted shares are held in the custody of the Company and vest only
if specified returns on shareholders' equity are reached. These shares are
treated as outstanding for purposes of calculating earnings per share and may
be voted by the participant. Cash dividends are paid on the restricted stock
holdings on the normal dividend payment dates. The number of shares which may
vest will be prorated to the extent the performance goals are achieved. If the
minimum performance goals under which an award is issued are not satisfied, the
shares are forfeited. The Company did not record any compensation expense
related to restricted stock in fiscal 1994 because related performance goals
were not achieved.
OTHER COMPENSATION
At various times in the past the Company has adopted certain broad-based
employee benefit plans in which key management employees have been permitted to
participate and has adopted certain executive officer retirement, life and
health insurance and automotive plans. Other than with respect to the Company's
401(k) Plan, which includes a Company Common Stock Fund so as to further align
employees' and shareholders' long-term financial interests, benefits under
these plans are not directly or indirectly tied to Company performance.
CHIEF EXECUTIVE OFFICER COMPENSATION
The Committee approved an increase in Mr. Stephen Strome's annual base
compensation in June 1993 of $50,000, representing a 16.67% increase, to an
annual base salary of $350,000 for fiscal year 1994. The study prepared by the
compensation consultant indicated that Mr. Strome's salary was below the median
of the salary range for the companies included in its survey, which was
primarily a reflection of Mr. Strome's recent election as CEO at the beginning
of fiscal 1992. Mr. Strome was not paid a bonus for fiscal year 1994 since the
Company's performance goal under its bonus program was not met (see "Bonus"
section). In June 1993, the Committee awarded Mr. Strome a non-qualified stock
option grant to purchase 115,000 shares of the Company's stock. The option
becomes exercisable one-third when the Company's stock exceeds $20.00 per
share; one-third when the stock price exceeds $25.00 per share and one-third
when the stock price exceeds $30.00 per share. The goal of the option is to
ensure attention to the Company's long-term strategies and objectives, and
provide payouts for performance that significantly increases shareholder
value. These goals are reflected in the feature which requires that the
Company's stock reach certain prices before the options can be exercised. The
grant has a term of 10 years from the date of grant. Mr. Strome was also
awarded restricted stock grants totaling 21,491 shares in fiscal year 1994 (see
"Stock Plans" section for vesting provisions of the restricted stock program).
The Committee believes such stock option and restricted stock grants to be
competitive with long-term compensation award practices of the companies
included in the compensation survey prepared by the outside compensation
consultant.
BY THE COMPENSATION AND STOCK OPTION COMMITTEE:
John F. Daly (Chairman)
David Handleman
Verne G. Istock
Gilbert R. Whitaker, Jr.
15
<PAGE> 18
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
John F. Daly, David Handleman, Verne G. Istock and Gilbert R. Whitaker,
Jr., currently serve as members of the Company's Compensation and Stock Option
Committee (the "Committee"). Mr. Handleman is the only Committee member who
was, at any one time during the fiscal year ended April 30, 1994, an officer or
employee of the Company or any of its subsidiaries (and Mr. Handleman retired
as an officer on July 1, 1993), and none of the other Committee members is a
former officer of the Company or any of its subsidiaries. See "Certain
Transactions with Executive Officers and Directors" above for additional
information regarding transactions between Mr. Handleman and the Company. As
noted above, Verne G. Istock, a director of the Company and a member of the
Committee, is Chairman of the Board of Directors and Chief Executive Officer of
NBD and of its parent, NBD Bancorp, Inc. and Mr. Daly, a director of the
Company and a member of the Committee, is a director of Comerica Bank &
Trust, F.S.B., a subsidiary of Comerica Incorporated, the parent of Comerica. As
also noted above, the Company regularly transacts business with NBD and
Comerica. See "Certain Transactions with Executive Officers and Directors"
above for a description of such business.
II. OTHER MATTERS
RELATIONSHIP WITH INDEPENDENT PUBLIC ACCOUNTANT
Coopers & Lybrand is the independent public accountant for the Company and
its subsidiaries and has reported on the Company's consolidated financial
statements for the fiscal year ended April 30, 1994. The Company's independent
public accountant is appointed by the Board of Directors after receiving
recommendations from the Audit Committee. Coopers & Lybrand has been
reappointed for fiscal year 1995.
Representatives from Coopers & Lybrand are expected to be present at the
Annual Meeting of Shareholders and will have the opportunity to make a
statement at the meeting if they desire to do so, and are expected to be
available to respond to appropriate questions.
OTHER PROPOSALS
Neither the Company nor the members of its Board of Directors intend to
bring before the Annual Meeting any matters other than those set forth in the
Notice of Annual Meeting, and they have no present knowledge that any other
matters will be presented for action at the Meeting by others. However, if any
other matters properly come before the Meeting, it is the intention of the
persons named in the enclosed form of proxy to vote in accordance with their
best judgment.
A shareholder proposal which is intended to be presented at the 1995 Annual
Meeting of Shareholders must be received by the Company at its principal
executive offices by April 1, 1995.
By Order of the Board of Directors,
RICHARD J. MORRIS, Secretary
Dated: August 2, 1994
16
<PAGE> 19
- - --------------------------------------------------------------------------------
HANDLEMAN COMPANY
ANNUAL MEETING OF SHAREHOLDERS
SEPTEMBER 8, 1994
PROXY SOLICITED BY THE BOARD OF DIRECTORS OF HANDLEMAN COMPANY
David Handleman, Richard H. Cummings and Alan E. Schwartz, and
each of them, are hereby authorized to represent and vote the stock of
the undersigned at the Annual Meeting of Shareholders to be held
September 8, 1994, and at any adjournment thereof:
1. THE BOARD RECOMMENDS A VOTE FOR THE NOMINEES LISTED BELOW.
<TABLE>
<S> <C> <C>
ELECTION OF / / FOR all nominees listed below / / WITHHOLD AUTHORITY
DIRECTORS (except as marked to the contrary below) to vote for all nominees
listed below
</TABLE>
Stephen Strome James B. Nicholson Lloyd E. Reuss
(INSTRUCTION: To withhold authority to vote for any individual
nominee, write that nominee's name in the space provided below)
----------------------------------------------------------------------
2. In their discretion with respect to any other matters that may
properly come before the meeting.
THE SHARES REPRESENTED BY THIS PROXY WILL BE VOTED IN ACCORDANCE
WITH THE SPECIFICATIONS MADE HEREIN. IF NO SPECIFICATIONS ARE MADE,
THIS PROXY WILL BE VOTED FOR THE ELECTION OF THE NOMINEES FOR
DIRECTORS LISTED ABOVE.
- - --------------------------------------------------------------------------------
(Continued and to be signed on other side)
- - --------------------------------------------------------------------------------
(Continued from other side)
THE UNDERSIGNED HEREBY REVOKES ANY PROXY OR PROXIES HERETOFORE
GIVEN TO VOTE SUCH STOCK, AND HEREBY RATIFIES AND CONFIRMS ALL THAT
SAID ATTORNEYS AND PROXIES, OR THEIR SUBSTITUTES, MAY DO BY VIRTUE
HEREOF. IF ONLY ONE ATTORNEY AND PROXY SHALL BE PRESENT AND ACTING,
THEN THAT ONE SHALL HAVE AND MAY EXERCISE ALL THE POWERS OF SAID
ATTORNEYS AND PROXIES.
THE UNDERSIGNED HEREBY ACKNOWLEDGES RECEIPT OF THE NOTICE OF SAID
ANNUAL MEETING OF SHAREHOLDERS, THE PROXY STATEMENT RELATING THERETO
AND THE ANNUAL REPORT FOR 1994.
Dated: , 1994
-----------------
-----------------------------
-----------------------------
(Signature(s) of
Shareholders(s))
The signature(s) of
shareholder(s) should
correspond exactly with the
name(s) stenciled hereon.
Joint owners should sign
individually. When signing as
attorney, executor,
administrator, trustee or
guardian, please give your
full title as such.
PLEASE PROMPTLY DATE, SIGN
AND MAIL THIS PROXY
IN THE ENCLOSED ENVELOPE.
- - --------------------------------------------------------------------------------
