<PAGE> 1
SCHEDULE 14A
(Rule 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. )
Filed by the registrant [X]
Filed by a party other than the registrant [ ]
Check the appropriate box:
[ ] Preliminary proxy statement [ ] Confidential, for Use of the
Commission Only (as permitted by
Rule 14a-6(e)(2))
[X] Definitive proxy statement
[ ] Definitive additional materials
[ ] Soliciting material pursuant to Rule 14a-11(c) or Rule 14a-12
HANDLEMAN COMPANY
- - -------------------------------------------------------------------------------
(Name of Registrant as Specified in Its Charter)
HANDLEMAN COMPANY
- - -------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
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)
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:
- - --------------------------------------------------------------------------------
[ ] 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
HANDLEMAN COMPANY
_______________
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD SEPTEMBER 4, 1996
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 Wednesday, September 4, 1996, 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 1999.
(2) To consider such other business as may properly come before the
meeting.
Only shareholders of record at the close of business on July 12, 1996 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
27, 1996 accompanies this Notice.
By Order of the Board of Directors,
RICHARD J. MORRIS, Secretary
Troy, Michigan
July 25, 1996
<PAGE> 3
HANDLEMAN COMPANY
500 KIRTS BOULEVARD
TROY, MICHIGAN 48084-4142
_______________
PROXY STATEMENT FOR THE ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD SEPTEMBER 4, 1996
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 Wednesday, September 4, 1996, 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 July 25, 1996.
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 $4,000 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 12, 1996 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 33,496,410 shares of Common Stock.
Based on information filed with the Securities and Exchange Commission
("SEC"), (a) Joseph L. Harrosh, 40900 Grimmer Blvd., Fremont, California 94538,
owns 5,214,600 shares (15.6%) of the Company's outstanding Common Stock, (b)
the Ryback Management Corporation, advisor to the Lindner Funds, 7711
Carondelet Avenue, Suite 700, P.O. Box 16900, St. Louis, Missouri 63105 owns
4,131,900 shares (12.3%) of the Company's outstanding Common Stock (c) the
State of Wisconsin Investment Board, P.O. Box 7842, Madison, Wisconsin 53707,
owns 3,157,100 shares (9.4%) of the Company's outstanding Common Stock.
Management does not know of any other person who, as of July 12, 1996,
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. David Handleman, Richard
H. Cummings and Gilbert R. Whitaker, Jr. be elected as Directors of the Company
to hold office until the Annual Meeting of Shareholders in 1999 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 as of
April 27, 1996 named in the Summary Compensation Table below.
<TABLE>
<CAPTION>
Percentage of
Total
Shares Common
of Common Stock of the
Stock Company
Positions and Offices Beneficially Beneficially Term
Name and Year First with the Company and Other Owned as of Owned as of to
Became a Director Age Principal Occupations July 12, 1996 July 12, 1996 Expire
- - -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
NOMINEES FOR ELECTION AS DIRECTORS FOR A
THREE-YEAR TERM
David Handleman (1946)............ 80 Chairman of the Board........................... 380,773 (1) 1.1% 1999
Richard H. Cummings (1962)........ 74 Retired Senior Vice Chairman of the
Board of Directors of NBD Bancorp,
Inc. and of NBD Bank............................ 2,700 * 1999
Gilbert R. Whitaker, Jr. (1990)... 64 Professor of Business Economics and Provost
Emeritus, the University of Michigan............ 500 1999
DIRECTORS CONTINUING IN OFFICE
Alan E. Schwartz (1969)........... 70 Partner of the law firm of Honigman Miller
Schwartz and Cohn............................... 895 * 1998
John M. Barth (1995).............. 50 Executive Vice President of Johnson
Controls, Inc................................... 0 -- 1998
Stephen Strome (1989)............. 51 President and Chief Executive Officer
of the Company.................................. 274,515 (2) * 1997
James B. Nicholson (1991)......... 53 President and Chief Executive Officer of
Pressure Vessel Service, Inc.................... 2.600 * 1997
Lloyd E. Reuss. (1993)............ 60 Former President of General Motors
Corporation..................................... 1,000 * 1997
OTHER EXECUTIVE OFFICERS
Peter J. Cline.................... 49 Executive Vice President-President of Handleman
Entertainment Resources......................... 57,770 (2) * --
Lawrence R. Hicks................. 51 Executive Vice President-Sales and
Merchandising................................... 80,822 (2) * --
Louis A. Kircos................... 42 Executive Vice President-President of North
Coast Entertainment............................. 121,985 (2) * --
Richard J. Morris................. 50 Senior Vice President-Finance,
Chief Financial Officer and Secretary........... 41,409 (2) * --
All Directors and Executive Officers as a group (13 persons)............................... 987,178 (3) 2.9% --
</TABLE>
- - ---------------
* Less than 1%
2
<PAGE> 5
(1) Mr. Handleman owns outright and has the sole voting and investment power
for 380,773 shares including 191 shares credited to him under the
Company's salary deferral plan (the "401(k) Plan") which are shown above
as beneficially owned. 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.
(2) The number shown above as beneficially owned by Messrs. Strome, Cline,
Hicks, Kircos and Morris includes 236,190, 40,000, 66,333, 79,090 and
28,333 shares, respectively, which they have the right to acquire within
60 days of July 12, 1996 pursuant to the Company's stock option plans
(assuming, in certain instances that the stock price reaches certain
levels -- see "Aggregated Option Exercises in the Last Fiscal Year and
Fiscal Year-End Option Values"), 28,531, 16,893, 14,280, 14,061 and 12,377
shares which represent restricted stock awards granted to Messrs. Strome,
Cline, Hicks, Kircos and Morris, respectively, and 209, 75, 209, 191, and
699 shares which have been credited to Messrs. Strome, Cline, Hicks,
Kircos and Morris, respectively, under 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.
(3) All Executive Officers and Directors of the Company as a group (13
persons) beneficially owned 987,178 shares (2.9%) of the Company's
outstanding Common Stock as of July 12, 1996, including 470,696 shares
which they have the right to acquire within 60 days of that date pursuant
to the Company's stock option plans, 97,985 shares representing restricted
stock awards granted in June 1994 and June 1995, and 1,660 shares which
have been credited to them under the 401(k) Plan. 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.
[PHOTO]
DAVID HANDLEMAN 1946
Mr. Handleman has served as Chairman of the Board. Mr. Handleman was also 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.
[PHOTO]
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: Core Industries Inc, the Detroit Edison Company, DTE Energy
Company, Howell Industries, Inc., Pulte Corporation and Unisys Corporation.
[PHOTO]
GILBERT R. WHITAKER, JR. 1990
Mr. Whitaker is Professor of Business Economics and Provost Emeritus, the
University of Michigan. He served as Provost and Executive Vice President for
Academic Affairs, the University of Michigan from September 1, 1993 to August
31, 1995. From September 1, 1990 through August 31, 1993, Mr. Whitaker served
as Provost and Vice President for Academic Affairs, the University of Michigan.
Mr. Whitaker is a director of the following corporations: Johnson Controls,
Inc., Lincoln National Corporation and Structural Dynamics Research
Corporation.
[PHOTO]
RICHARD H. CUMMINGS 1962
Mr. Cummings is the retired Senior Vice Chairman of the Board of Directors of
NBD Bancorp, Inc. and NBD Bank. Mr. Cummings is also a director of Howell
Industries, Inc.
[PHOTO]
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.
[PHOTO]
JAMES B. NICHOLSON 1991
Mr. Nicholson has served as President and Chief Executive Officer of Pressure
Vessel Service, Inc. since 1979. Mr. Nicholson is a director of Pressure
Vessel Service, Inc. and North American Mortgage Company. Mr. Nicholson is
also Chairman of the Board of Amerisure Companies and Vice Chairman of the
Board of Directors of Douglas & Lomason Company.
4
<PAGE> 7
[PHOTO]
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. Mr. Reuss is a director of International
Speedway Corporation and U.S. Suger Corporation. Mr. Reuss is also Vice
Chairman of the Board of Directors of Detroit Mortgage & Realty.
[PHOTO]
JOHN M. BARTH 1995
Mr. Barth has served as Executive Vice President of Johnson Controls, Inc.
since October 1, 1992. Mr. Barth served as Vice President and General Manager
of the Plastics Technology Group and the Automotive Systems Group of Johnson
Controls, Inc. from March 27, 1990 to September 30, 1992. Mr. Barth is a
director of Comerica Bank-Ann Arbor, N.A. and Edwards Brothers.
During the fiscal year ended April 27, 1996 the Board of Directors held
seven 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,
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 1996, the Executive Committee held four meetings and took action by
written consent one time in lieu of an additional meeting.
The Company has a standing Audit Committee. The current members of the
Audit Committee are Richard H. Cummings (Chairman), John M. Barth and Lloyd E.
Reuss. During fiscal year 1996, the Audit Committee held five meetings. The
duties of the Audit Committee are briefly: 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.
The Company has a standing Compensation and Stock Option Committee. The
current members of the Compensation and Stock Option Committee are James B.
Nicholson (Chairman), Lloyd E. Reuss and Gilbert R. Whitaker, Jr. During
fiscal year 1996, the Committee held three 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.
The Company has a standing Nominating Committee. The current members of
the Nominating Committee are Alan E. Schwartz (Chairman), John M. Barth, James
B. Nicholson and Stephen Strome. During fiscal year 1996 the Nominating
Committee held one meeting. 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 1997 Annual Meeting
of Shareholders should be submitted to the Chairman of the Nominating Committee
at the Company's executive offices, no later than March 5, 1997.
5
<PAGE> 8
CERTAIN TRANSACTIONS WITH EXECUTIVE OFFICERS AND DIRECTORS
Mr. Verne G. Istock, was a Director of the Company until December 6, 1995
when he resigned from the Board. Mr. Istock is Chairman of the Board of
Directors of NBD Bank ("NBD") and of its parent, First Chicago NBD Corporation.
The Company regularly transacts business with NBD. Loans to the Company from
NBD during fiscal year 1996 included borrowings under a five-year, $145,000,000
unsecured revolving credit arrangement expiring in July 1999 with a consortium
of banks, for which NBD acts as agent. NBD's commitment pursuant to the
revolver is $49,300,000. NBD's share of the maximum aggregate amount of all
borrowings under the revolver during fiscal year 1996 was $34,680,000 and at
April 27, 1996 was $15,300,000. Rates under the revolver ranged from 5.9% to
8.8% during fiscal year 1996. During fiscal 1996, NBD also provided financing
to the Company in the form of short-term borrowings under a line of credit at
rates on an as offered basis not to exceed the prime rate, and financing
pursuant to two limited obligation bonds at rates ranging from 3.4% to 5.2%.
The maximum principal amount outstanding under the short-term borrowings and
revenue bonds during fiscal year 1996 was $41,200,000, and the principal amount
outstanding at April 27, 1996 was $6,200,000. During fiscal year 1996, the
Company paid NBD $1,576,907 as interest consisting of $1,045,650 under the
revolving credit arrangement, $284,676 under the line of credit and $246,581
under the revenue bonds. In addition to interest, the Company paid NBD
$255,009 in conjunction with its services as agent under the revolving credit
arrangement and $214,077 for placement fees, trustee 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, served as a director of
Comerica's parent, Comerica Incorporated during fiscal year 1996. Comerica's
commitment pursuant to the revolver is $33,640,000. Comerica's share of the
maximum aggregate amount of all borrowings under the revolver during fiscal
year 1996 was $23,664,000 and, at April 27, 1996, was $10,440,000. During
fiscal 1996, Comerica also provided financing to the Company in the form of
short-term borrowings under a line of credit at rates on an as offered basis
not to exceed the prime rate at rates ranging from 6.1% to 6.3%. During fiscal
year 1996, the Company paid Comerica $1,261,814 as interest under the revolving
credit arrangement and $226,387 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.
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 $90,025
for certain life insurance, health insurance, automotive and club dues benefits
for Mr. Handleman pursuant to his agreement with the Company.
The Company purchased at their appraised values the prior residences of
Messrs. Cline and Morris in connection with the Company relocation program for
Executive Officers. The homes were sold during fiscal 1996. The Company
recorded an expense in fiscal 1996 of $45,614 and $27,317 in connection with
the ownership and sale of the former homes of Messrs. Cline and Morris,
respectively.
6
<PAGE> 9
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 1996, 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. Non-Committee
Directors who are requested in advance to participate in any Committee meeting
are paid the $750 meeting fee. In addition, during fiscal year 1996, 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 any Director or Committee member fees during the term of
his advisory agreement. See "Certain Transactions with Executive Officers and
Directors" for additional information regarding amounts paid to Mr. 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 April 30, 1994, April 29, 1995, and April 27, 1996 concerning the
compensation of the Company's Chief Executive Officer and each of the Company's
other four most highly compensated Executive Officers as of April 27, 1996
(collectively, the "named Executive Officers") whose annual salary and bonus
exceeded $100,000 and an Executive Officer who resigned prior to April 27,
1996.
<TABLE>
<CAPTION>
Annual Compensation Long Term Compensation Awards
------------------------------------------------------- -----------------------------
(2) (5) Options/SARs (7)
Other Annual Restricted Underlying All Other
(1) Fiscal Salary Bonus Compensation Stock Awards Securities Compensation
Name and Principal Position Year ($) ($) ($) (#) (#) ($)
- - ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Stephen Strome 1996 422,692 -- -- 14,783 115,000 717
President and Chief 1995 403,077 115,000 -- 13,748 -- --
Executive Officer 1994 344,230 -- -- -- 115,000 --
Peter J. Cline 1996 252,692 -- -- 8,845 30,000 1,302
Executive Vice President 1995 240,000 47,000 36,372 (3) 8,048 30,000 --
- President of Handleman 1994 29,615 (4) -- -- -- -- --
Entertainment Resources
Lawrence R. Hicks 1996 213,769 -- -- 7,478 25,000 1,081
Executive Vice President 1995 204,845 40,575 -- 6,802 -- --
- Sales and Merchandising 1994 191,845 -- -- -- 30,000 --
Louis A. Kircos 1996 210,461 -- -- 7,354 30,000 701
Executive Vice President 1995 200,385 40,000 -- 6,707 -- --
- President of North Coast 1994 186,500 -- -- -- 36,409 --
Entertainment
Richard J. Morris 1996 185,308 -- -- 6,509 25,000 1,500
Senior Vice President 1995 174,731 34,500 -- 5,868 -- --
- Finance, Chief Financial 1994 129,385 -- 34,498 (3) -- 20,000 --
Officer and Secretary
Joseph R. Szmadzinski (6) 1996 188,264 -- -- -- -- --
Senior Vice President 1995 80,769 34,000 -- -- -- --
- Technology
</TABLE>
- - -----------------
(1) Pursuant to the Company's 401(k) Plan, Mr. Strome deferred $3,667,
$3,120 and $3,468 of his salary and Mr. Kircos deferred $3,667, $2,192 and
$3,382 of his salary during the fiscal years ended April 30, 1994, April
29, 1995 and April 27, 1996, respectively. Messrs. Cline, Hicks and
Morris deferred $6,000, $4,323 and $6,000 of their salaries, respectively,
during the fiscal year ended April 27,1996.
(2) Non-cash compensation did not exceed the lesser of $50,000 or 10% of
individual cash compensation for any Executive Officer during fiscal 1996.
(3) Includes $1,740, $6,930 and $27,702 paid during fiscal 1995 to or on
behalf of Mr. Cline for certain life insurance, automobile benefits and
relocation expenses respectively. Non-cash compensation did not exceed the
lesser of $50,000 or 10% of individual cash compensation for any other
Executive Officer during fiscal 1995. Includes $348, $3,796 and $30,354
paid during fiscal 1994 to Mr. Morris for certain life insurance,
automobile benefits and relocation expenses, respectively. Non-cash
compensation did not exceed the lesser of $50,000 or 10% of individual
cash compensation for any other Executive Officer during fiscal 1994.
(4) Includes a one time payment of $25,000 made upon joining the Company in
April 1994.
8
<PAGE> 11
(5) Restricted shares granted during the fiscal year ended April 1994 were
issuable if consolidated return on shareholders' equity exceeded a
predetermined threshold of performance in the fiscal 1994 through 1996
performance period. The threshold performance level was not met and,
therefore, the restricted stock awards of 8,596, 4,740, 4,618 and 2,895
shares granted to Messrs. Strome, Hicks, Kircos and Morris,
respectively, were canceled. See Long-Term Incentive Plan-Awards in Last
Fiscal Year for information regarding restricted stock awards for the
fiscal year ended April 27, 1996.
(6) Mr. Szmadzinski resigned as an Executive Officer of the Company on March
29, 1996. Accordingly, stock options granted on November 7, 1994 and June
14, 1995 of 20,000 and 25,000 shares, respectively, and restricted stock
granted on June 14, 1995 of 6,460 shares were canceled upon his
termination of employment.
(7) Represents amounts contributed to the named Executive Officers' 401(k)
Plan accounts for the Company matching of employee contributions.
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 accordance with SEC
rules, hypothetical gains that would exist for the 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 (3) Expiration Date 5% 10%
- - -------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Stephen Strome 115,000 34.2% $10.06 June 13, 1999 $249,550 $537,050
Peter J. Cline 30,000 8.9% $10.06 June 13, 1999 $ 65,100 $140,100
Lawrence R. Hicks 25,000 7.4% $10.06 June 13, 1999 $ 54,250 $116,750
Louis A. Kircos 30,000 8.9% $10.06 June 13, 1999 $ 65,100 $140,100
Richard J. Morris 25,000 7.4% $10.06 June 13, 1999 $ 54,250 $116,750
</TABLE>
- - -------------------
(1) In accordance with SEC rules, these columns show gains that might exist
for the option over the option term. This valuation is hypothetical; if
the stock price does not increase above the exercise price, compensation
to the named Executive Officer will be zero. A 5% and 10% annually
compounded increase in the Company's stock price from $10.06 per share at
the date of grant to the end of the option term would result in stock
prices of $12.23 and $14.73 per share, respectively. The Company's
closing stock price on April 27, 1996 was $6.00 per share.
(2) The options become exercisable one-third each year beginning June 14,
1996.
(3) 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
There were no stock options exercised by the named Executive Officers
during the fiscal year ended April 27, 1996. The following table sets forth 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 27,
1996 was higher than the market price ($6.00 per share) of the Company's Common
Stock as of such date. The number of exercisable stock options shown in the
following table includes options exercisable within 60 days of July 12, 1996
when the Company's stock price reaches certain levels.
<TABLE>
<CAPTION>
Number of
Unexercised
Options at Fiscal
Year-End
Exercisable/
Name of Individual Unexercisable
--------------------------------------
<S> <C>
Stephen Strome
Exercisable 236,190
Unexercisable 76,667
Peter J. Cline
Exercisable 40,000
Unexercisable 20,000
Lawrence R. Hicks
Exercisable 66,333
Unexercisable 16,667
Louis A. Kircos
Exercisable 79,090
Unexercisable 20,000
Richard J. Morris
Exercisable 28,333
Unexercisable 16,667
</TABLE>
10
<PAGE> 13
LONG-TERM INCENTIVE PLAN--
AWARDS IN LAST FISCAL YEAR
The following table sets forth the restricted stock awards made under the
Company's Long-Term Incentive Plan to the named Executive Officers during the
fiscal year ended April 27, 1996. The amount of the restricted stock award
eventually issued to and retained by participants depends upon the extent to
which the consolidated return on shareholders' equity exceeds the required
performance level for the subject fiscal years. If the threshold performance
level is not met, no restricted stock awards can be retained by the
participant.
<TABLE>
<CAPTION>
Performance Estimated Future Payouts Under
Number of or Other Non-Stock Price-Based Plans
Shares, Period Until --------------------------------
Units or Maturation
Other or Payout Threshold Target Maximum
Name Rights (Fiscal Years) ($) ($) ($)
- - --------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Stephen Strome 14,783 1996-1998 74,358 148,716 297,432
Peter J. Cline 8,845 1996-1998 44,490 88,980 177,960
Lawrence R. Hicks 7,478 1996-1998 37,614 75,228 150,456
Louis A. Kircos 7,354 1996-1998 36,991 73,982 147,964
Richard J. Morris 6,509 1996-1998 32,740 65,480 130,960
</TABLE>
The performance target is based on return on beginning shareholders'
equity achieved during fiscal years 1996, 1997 and 1998. Fifty percent of the
shares vest and are paid out in June 1999 and the balance is vested and paid
out in June 2000. 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. The threshold for the restricted stock awards made during the
fiscal year ended April 27, 1996 is based on a 10% return on beginning
shareholders' equity for the fiscal 1996 through fiscal 1998 performance
period. Cash dividends are paid on the restricted stock holdings reported above
on the normal dividend payment dates. Dividends have not been paid on the
Company's common stock since January 10, 1996.
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 27, 1996, 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 1996.
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>
$150,000* $19,208 $38,415 $57,623
</TABLE>
*Compensation which may be considered for any purpose under a qualified pension
plan is limited for 1996 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 1996 is $120,000.
As of April 27, 1996, the credited years of service under the plan for the
named Executive Officers were as follows: 18 for Stephen Strome; 22 for
Lawrence R. Hicks; 14 for Louis A. Kircos; 3 for Richard J. Morris and 2 for
Peter J. Cline.
12
<PAGE> 15
SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN
The Company sponsors a supplemental executive retirement plan (the "SERP")
covering a select group of management employees of the Company. The SERP
provides supplemental retirement income, and death and disability benefits.
Covered employees with five or more years of service are entitled to monthly
retirement income beginning at normal retirement age (65). The SERP permits
early retirement at ages 55-64 for employees with 10 or more years of service.
The computation of benefits under the SERP is based upon a formula which takes
into consideration retirement age, years of service up to a maximum of 30
years, and average annual compensation during the highest five consecutive
years within the 10 years preceding retirement. 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 SERP. 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 total and permanent disability is
entitled to receive a disability retirement benefit.
The compensation covered by the SERP includes all earnings from the
Company as reported on the member's W-2 form, for base pay, overtime, and bonus
payments, plus salary deferrals under the Company's 401(k) Plan. No maximum
applies to compensation covered under the SERP.
The benefit amount calculated under the formula is offset by benefits
provided under the pension plan.
The following table illustrates current annual benefits payable under the
SERP upon normal retirement at age 65 to persons in certain compensation and
years of service classifications. These benefits are in addition to
benefits payable under the Company pension plan.
<TABLE>
<CAPTION>
Final Average Ten Years Twenty Years Thirty Years
Compensation of Service of Service of Service
------------------------------------------------------
<S> <C> <C> <C>
$250,000 $18,292 $36,585 $54,877
350,000 33,292 66,585 99,877
450,000 48,292 96,585 144,877
550,000 63,292 126,585 189,877
</TABLE>
As of April 27, 1996, the credited years of service under the SERP for the
Executive Officers were as follows: 18 for Stephen Strome; 22 for Lawrence R.
Hicks; 14 for Louis A. Kircos; 3 for Richard J. Morris; and 2 for Peter J.
Cline.
13
<PAGE> 16
PERFORMANCE GRAPH
The following line graph compares 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-year
period.
COMPARISON OF FIVE YEAR CUMULATIVE
TOTAL RETURN AMONG COMPANY,
S&P 500 AND RUSSELL 2500
[PERFORMANCE GRAPH]
<TABLE>
<CAPTION>
1991 1992 1993 1994 1995 1996
---------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
HANDLEMAN 100 100 107 82 79 45
S&P 500 100 111 118 120 137 175
RUSSELL 2500 100 120 139 156 172 229
</TABLE>
The above chart 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 1991. It shows the cumulative total return for the Company's last five
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.
14
<PAGE> 17
REPORT OF COMPENSATION AND STOCK OPTION COMMITTEE
INTRODUCTION
Decisions on compensation of the Company's Executive Officers are made by
the three members of the Compensation and Stock Option Committee (the
"Committee") of the Board. The members of the Committee are Messrs. James B.
Nicholson (Chairman), Lloyd E. Reuss 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 Executive Officers 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
(which disallows certain deductions for executive compensation exceeding
$1,000,000 per year) 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 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 both quantitative results and subjective
performance review. In fiscal 1996, the Committee took into account the
financial performance of the Company, which reflected a loss on beginning
shareholders' equity and which was therefore below the minimum targeted return
established by the Committee. Accordingly, no bonuses were paid in fiscal 1996
to any Executive Officers pursuant to the bonus program. However, a very
limited number of bonuses were paid to certain key employees based solely on
their individual initiative and contribution to corporate performance.
15
<PAGE> 18
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 Executive Officers 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. In
fiscal 1996, 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 been to utilize vesting
periods to encourage key employees to continue in the employ of the Company,
and to grant options 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.
In fiscal 1996, restricted shares awarded totaled 148,291 (net of
forfeitures) and may only be vested if goals are reached, but could increase to
a maximum of 261,482 if maximum targets are reached. See "Long-Term Incentive
Plan-Awards in Last Fiscal Year" for information regarding restricted stock
awards for the fiscal year ended April 27, 1996. 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. Dividends have not been paid on the Company's common stock since
January 10, 1996. 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. A
portion of restricted shares granted during the fiscal year ended April 1994
were issuable if consolidated return on shareholders' equity exceeded a
predetermined threshold of performance in the fiscal 1994 through fiscal 1996
performance period. The threshold performance level for this portion was not
met and, therefore, the restricted stock awards of 8,596, 4,740, 4,618 and
2,895 shares granted to Messrs. Strome, Hicks, Kircos, and Morris,
respectively, were canceled. Due to performance goals not having been met, the
Company reversed a fiscal 1995 compensation expense accrual of $150,000 in
fiscal 1996 related to restricted stock.
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.
16
<PAGE> 19
CHIEF EXECUTIVE OFFICER COMPENSATION
The Committee approved an increase in Mr. Strome's annual base compensation
effective June 12, 1995 of $15,000, representing a 3.7% increase, to an annual
base salary of $425,000. The increase was designed to place Mr. Strome's salary
to a level closer to the median level of compensation of chief executive
officers of other companies considered by the Committee and its outside
consultant. No bonus was paid to Mr. Strome for fiscal year 1996 since the
Company's performance goal under its bonus program was not met (see "Bonus
section"). In fiscal 1996, Mr. Strome was awarded a non-qualified Stock option
grant to purchase 115,000 shares of the Company's stock (see Option Grants in
the Last Fiscal Year). The goal of the option is to insure attention to the
Company's long-term strategies and objectives, and provide payouts for
performance that increases shareholders value. Mr. Strome was also awarded a
restricted stock grant totaling 14,783 shares in fiscal 1996 (see "Stock Plans"
section for vesting provisions of the restricted stock program). During fiscal
1994, Mr. Strome was awarded 8,956 restricted shares. These shares were to be
issued based on the extent that consolidated return on shareholders' equity
exceeded the performance target for the fiscal 1994-1996 performance period.
The threshold performance level was not met and these shares were canceled (see
Long-Term Compensation Awards in the Summary Compensation Table). The Committee
believes Mr. Strome's compensation to be competitive with compensation practices
of the companies included in the survey prepared by the outside consultant.
BY THE COMPENSATION AND STOCK OPTION COMMITTEE:
James B. Nicholson (Chairman)
Lloyd E. Reuss
Gilbert R. Whitaker, Jr.
17
<PAGE> 20
II. OTHER MATTERS
RELATIONSHIP WITH INDEPENDENT PUBLIC ACCOUNTANT
Coopers & Lybrand L.L.P. 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 27, 1996. The Company's
independent public accountant is appointed by the Board of Directors after
receiving recommendations from the Audit Committee. Coopers & Lybrand L.L.P.
has been reappointed for fiscal year 1997.
Representatives from Coopers & Lybrand L.L.P. 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 1997
Annual Meeting of Shareholders must be received by the Company at its principal
executive offices by March 5, 1997.
By Order of the Board of Directors,
RICHARD J. MORRIS, Secretary
Dated: July 25, 1996
18
<PAGE> 21
- - --------------------------------------------------------------------------------
- - --------------------------------------------------------------------------------
- - --------------------------------------------------------------------------------
- - --------------------------------------------------------------------------------
HANDLEMAN COMPANY
ANNUAL MEETING OF SHAREHOLDERS
SEPTEMBER 4, 1996
PROXY SOLICITED BY THE BOARD OF DIRECTORS OF HANDLEMAN COMPANY
Stephen Strome, James B. Nicholson 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
4, 1996, 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>
David Handleman Richard H. Cummings Gilbert R. Whitaker, Jr.
(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 1996.
Dated: , 1996
(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.
