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
[ ] 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
Section 240.14a-11(c) or Section 240.14a-12
FAMILY DOLLAR STORES, INC.
(Name of Registrant as Specified In Its Charter)
(Name of Person(s) Filing Proxy Statement if other than Registrant)
Payment of Filing Fee (Check the appropriate box):
[x] No Fee Required
[ ] $125 per Exchange Act Rules 0-11(c)(1)(ii),
14a-6(i)(1), 14a-6(i)(2) or Item 22(a)(2) of Schedule 14A.
[ ] $500 per each party to the controversy pursuant to
Exchange Act Rule 14a-6(i)(3).
[ ] Fee computed on table below per Exchange Act
Rules 14a-6(i)(4) and 0-11.
1) Title of each class of securities to which transaction applies:
2) Aggregate number of securities to which transaction applies:
3) Per unit price or other underlying value of transaction
computed pursuant to Exchange Act Rule 0-11 (Set forth the
amount on which the filing fee is calculated and state how it
was determined):
4) Proposed maximum aggregate value of transaction:
5) Total fee paid:
[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee
was paid previously. Identify the previous filing by registration
statement number, or the Form or Schedule and the date of its filing.
1) Amount Previously Paid:
2) Form, Schedule or Registration Statement No.:
3) Filing Party:
4) Date Filed:
<PAGE>
FAMILY DOLLAR STORES, INC.
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD JANUARY 16, 1997
TO THE STOCKHOLDERS:
NOTICE IS HEREBY GIVEN that the Annual Meeting of Stockholders of
Family Dollar Stores, Inc. (the Company), will be held at 2:00 o'clock p.m.
on Thursday, January 16, 1997, at the office of the Company at 10401 Old
Monroe Road, Matthews, North Carolina, for the following purposes:
(1) To elect a Board of six directors;
(2) To consider and vote upon a proposal to amend the
Company's 1989 Non-Qualified Stock Option Plan;
(3) To consider and vote upon a proposal to approve the
Company's Incentive Profit Sharing Plan;
(4) To ratify the action of the Board of Directors in
selecting Price Waterhouse LLP as independent accountants
to audit the consolidated financial statements of the
Company and its subsidiaries for the current fiscal year;
and
(5) To transact such other business as may properly come
before the meeting or any adjournments thereof.
The Board of Directors has fixed the close of business on
November 18, 1996, as the record date for the determination of Stockholders
entitled to notice of and to vote at the meeting or any adjournments
thereof. The voting list of Stockholders will be available for inspection
in accordance with the By-Laws at the Company's office at 10401 Old Monroe
Road, Matthews, North Carolina, at least ten days prior to the meeting.
Each Stockholder who does not plan to attend the meeting is requested
to date, sign and return the accompanying proxy in the enclosed
postage-paid return envelope.
By Order of the Board of Directors
GEORGE R. MAHONEY, JR.
Executive Vice President-
General Counsel and Secretary
Matthews, North Carolina
November 21, 1996
<PAGE>
FAMILY DOLLAR STORES, INC.
Post Office Box 1017
Charlotte, North Carolina 28201-1017
PROXY STATEMENT
This Proxy Statement is furnished to the holders of the Common Stock
of Family Dollar Stores, Inc. (the Company) in connection with the
solicitation on behalf of the Board of Directors of the Company of proxies
to be used in voting at the Annual Meeting of Stockholders to be held on
January 16, 1997, or any adjournments thereof. This Proxy Statement
and the enclosed proxy were first sent to Stockholders on or about
November 21, 1996.
The enclosed proxy is for use at the meeting if the Stockholder will
not be able to attend in person. Any Stockholder giving a proxy may revoke
it at any time before it is exercised by delivering written notice of such
revocation to the Secretary of the Company or by attending the meeting and
voting. All shares represented by valid proxies received pursuant to this
solicitation and not revoked before they are exercised will be voted in the
manner specified therein. If no specification is made, the proxies will be
voted in favor of:
1. The election to the Board of Directors of the six
nominees named in the Proxy Statement;
2. The proposal to amend the Company's 1989 Non-
Qualified Stock Option Plan;
3. The proposal to approve the Company's Incentive
Profit Sharing Plan; and
4. The ratification of the action of the Board of
Directors in selecting Price Waterhouse LLP as
independent accountants to audit the consolidated
financial statements of the Company and its
subsidiaries for the current fiscal year.
The presence, in person or by proxy, of the holders of a majority of
the shares entitled to vote is necessary for a quorum at the meeting.
Directors are elected by a plurality of the votes of shares present in
person or represented by proxy at the meeting. The approval of the
amendment of the 1989 Non-Qualified Stock Option Plan, the approval of the
Incentive Profit Sharing Plan and the ratification of the selection of the
accountants each requires the affirmative vote of a majority of shares
present or represented by proxy at the meeting and entitled to vote in
respect thereto. Abstentions will be counted for the purpose of
determining the existence of a quorum and will have the same effect as a
<PAGE>
negative vote on any such matters other than the election of directors. If
a nominee holding shares for a beneficial owner indicates on the proxy that
it does not have discretionary authority as to certain shares to vote on a
particular matter, these shares will not be considered as present and
entitled to vote in respect to that matter, but will be counted for the
purpose of determining the existence of a quorum.
The cost of soliciting proxies for the meeting will be borne by the
Company. In addition to solicitation by mail, arrangements may be made
with brokerage firms, banks and other custodians, nominees and fiduciaries
to send proxy material to their principals. The Company will reimburse
these institutions for their reasonable costs in doing so. No solicitation
is to be made by specially engaged employees or other paid solicitors.
Only the holders of Common Stock of record at the close of business
on November 18, 1996, will be entitled to vote at the meeting. On such
date, 56,887,162 shares of Common Stock were outstanding and Stockholders
will be entitled to one vote for each share held.
<PAGE>
OWNERSHIP OF THE COMPANY'S SECURITIES
OWNERSHIP BY DIRECTORS AND OFFICERS
The following table sets forth, with respect to each director of the
Company, each of the executive officers named in the Summary Compensation
Table and all executive officers and directors as a group, the number of
shares beneficially owned and the percent of Common Stock so owned, all as
of November 1, 1996:
<TABLE>
<CAPTION>
Amount and
Nature of Beneficial Percent of
Name Ownership (1) Class
<S> <C> <C>
Leon Levine 8,786,458 (2) 15.5%
John D. Reier 82,200 *
George R. Mahoney, Jr. 220,600 *
R. David Alexander, Jr. 0 *
Phillip W. Thompson 27,000 *
Mark R. Bernstein 9,570 (3) *
James H. Hance, Jr. 4,000 *
James G. Martin 0 *
Thomas R. Payne 2,700 *
All Executive Officers and 10,126,870 17.7%
Directors of the Company
as a Group (21 persons)
* Less than one percent.
</TABLE>
(1) All shares are held with sole voting and investment power, except
that Mr. Bernstein has shared voting power with respect to 7,070
shares held in the Profit Sharing Plan as set forth in note (3)
below. Includes those shares listed in the table which the
following persons have the right to acquire beneficial ownership
<PAGE>
of as of November 1, 1996, or within 60 days thereafter, pursuant to
the exercise of stock options: (i) Mr. Reier-48,200 shares,
Mr. Mahoney-45,850 shares, and Mr. Thompson-15,500 shares; and (ii)
all executive officers and directors as a group-208,210 shares.
(2) Does not include (i) the 5,347,195 shares listed in the table under
the caption "Ownership by Others" below as being held in irrevocable
trusts by NationsBank, N.A., as Trustee, for the benefit of certain
of Mr. Leon Levine's children and grandchildren, including 2,572,989
shares held in trust for the benefit of Mr. Leon Levine's son,
Mr. Howard R. Levine; (ii) 60,900 shares owned by Mr. Leon Levine's
wife; (iii) 80,550 shares held in trust by Mr. Leon Levine's daughter
for the benefit of another daughter; (iv) 810,000 shares held in trust
by Mr. Leon Levine's wife and one of his children for the benefit of
another child of Mr. Leon Levine; and (v) 831,165 shares beneficially
owned by Mr. Howard R. Levine. Mr. Leon Levine disclaims beneficial
ownership of the shares referred to in this note (2).
(3) This amount includes 7,070 shares held under the Parker, Poe, Adams &
Bernstein L.L.P. Profit Sharing Plan, but does not include 7,500
shares owned by Mr. Bernstein's wife. Mr. Bernstein disclaims
beneficial ownership of the shares owned by his wife.
OWNERSHIP BY OTHERS
On the basis of filings with the Securities and Exchange Commission and
other information, the Company believes that as of November 1, 1996, the
following Stockholders in addition to Leon Levine beneficially owned more
than 5% of the Company's Common Stock:
<TABLE>
<CAPTION>
Amount and
Nature of Beneficial Percent
Name and Address Ownership of Class
<S> <C> <C>
FMR Corp. 5,906,600 (1) 10.4%
82 Devonshire Street
Boston, Massachusetts 02109
NationsBank, N.A., as Trustee 5,347,195 (2) 9.4%
One NationsBank Plaza
Charlotte, North Carolina 28255
SC Fundamental Inc. 3,863,600 (3) 6.8%
The SC Fundamental Value Fund, L.P.
SC Fundamental Value BVI, Inc.
Gary N. Siegler and Peter M. Collery
712 Fifth Avenue
New York, New York 10019
</TABLE>
<PAGE>
(1) As set forth in a Schedule 13G dated November 8, 1996, Fidelity
Management & Research Company ("Fidelity"), 82 Devonshire Street,
Boston, Massachusetts 02109, a wholly owned subsidiary of FMR Corp.
and an investment adviser registered under Section 203 of the
Investment Advisers Act of 1940, is the beneficial owner of 5,884,700
shares as a result of acting as investment adviser to various
investment companies registered under Section 8 of the Investment
Company Act of 1940. Edward C. Johnson III, FMR Corp., through its
control of Fidelity, and the Funds each has sole power to dispose of
the 5,884,700 shares owned by the Funds. The sole power to vote or
direct the voting of the shares owned directly by the Fidelity Funds
resides with the Funds' Boards of Trustees. Fidelity carries out the
voting of the shares under written guidelines established by the
Funds' Boards of Trustees. Fidelity Management Trust Company, 82
Devonshire Street, Boston, Massachusetts 02109, a wholly owned
subsidiary of FMR Corp. and a bank as defined in Section 3(a)(6) of
the Securities Exchange Act of 1934, is the beneficial owner of
21,900 shares as a result of its serving as investment manager of the
institutional account(s). Edward C. Johnson III and FMR Corp.,
through its control of Fidelity Management Trust Company, have sole
voting and dispositive power over 21,900 shares owned by the
institutional account(s) as reported above.
Members of the Edward C. Johnson III family and trusts for their
benefit are the predominant owners of Class B shares of common stock
of FMR Corp., representing approximately 49% of the voting power of
FMR Corp. Mr. Johnson III owns 12.0% and Abigail P. Johnson
owns 24.5% of the aggregate outstanding voting stock of FMR Corp.
Mr. Johnson III is Chairman of FMR Corp. and Abigail P. Johnson is a
Director of FMR Corp. The Johnson family group and all other Class B
shareholders have entered into a shareholder's voting agreement under
which all Class B shares will be voted in accordance with the
majority vote of Class B shares. Accordingly, through their
ownership of voting common stock and the execution of the
shareholder's voting agreement, members of the Johnson family may be
deemed, under the Investment Company Act of 1940, to form a
controlling group with respect to FMR Corp.
(2) These shares are held with sole voting and investment power under
irrevocable trusts for the benefit of certain of Mr. Leon Levine's
children and grandchildren, including 2,572,989 shares held in trust
for the benefit of Mr. Howard R. Levine.
(3) As set forth in an Amendment dated October 25, 1995, to a Schedule
13D, as of October 18, 1995, SC Fundamental Inc. ("SC") had shared
voting and dispositive power with respect to 2,524,000 shares; The SC
Fundamental Value Fund, L.P. had shared voting and dispositive power
with respect to 2,524,000 shares; SC Fundamental Value BVI, Inc.
("BVI") had sole voting and dispositive power with respect to
1,339,600 shares; and Gary N. Siegler and Peter M. Collery each had
<PAGE>
shared voting and dispositive power with respect to 3,863,600 shares.
The Schedule 13D states that Mr. Siegler is a controlling
stockholder, the president and a director of SC and of BVI, and that
Mr. Collery a controlling stockholder, vice president, and a
director of SC and BVI.
ELECTION OF DIRECTORS
At the meeting, six directors are to be elected to serve for the
ensuing year and until their respective successors are elected and
qualified. One current member of the Board of Directors, Thomas R. Payne,
who has served on the Board of Directors for 26 years, is retiring and is
not a nominee. Accordingly, the Board of Directors has reduced the number
of directors from seven to six effective with the meeting. Votes pursuant
to the enclosed proxy will be cast for the election as directors of the six
nominees named below unless authority is withheld. All six nominees are
now members of the Board of Directors. If for any reason any nominee shall
not be a candidate for election as a director at the meeting, an event not
now anticipated, the enclosed proxy will be voted for such substitute as
shall be designated by the Board of Directors.
The following information is furnished with respect to the nominees:
<TABLE>
<CAPTION>
Year First
Elected
Name of Nominee Principal Occupation Age Director
<S> <C> <C> <C>
Leon Levine (1) Chairman of the Board, 59 1969
Chief Executive Officer and
Treasurer of the Company
John D. Reier (1) President and 56 1994 (2)
Chief Operating Officer
of the Company
George R. Mahoney, Jr. (1) Executive Vice President- 54 1987 (3)
General Counsel and
Secretary of the Company
Mark R. Bernstein (4)(5) Partner in the law firm 66 1980 (7)
of Parker, Poe,
Adams & Bernstein L.L.P.
<PAGE>
<S> <C> <C> <C>
James H. Hance, Jr. (6) Vice Chairman- 52 1995 (8)
Chief Financial Officer
NationsBank Corporation
James G. Martin (4)(5)(6) Vice President, Research 60 1996 (9)
Carolinas HealthCare System
</TABLE>
(1) Member of the Executive Committee of the Board of Directors.
Mr. Leon Levine is the father of Mr. Howard R. Levine, Senior Vice
President-Merchandising and Advertising of the Company.
(2) Mr. Reier was employed by the Company as Senior Vice President-
General Merchandise Manager in 1987, and was promoted to Senior
Vice President-Merchandising and Advertising in that year. He was
elected President and Chief Operating Officer in November 1994.
(3) Mr. Mahoney was employed by the Company as General Counsel in 1976,
and also has served as Vice President and Secretary since 1977,
Senior Vice President since 1984, and Executive Vice President
since October 1991.
(4) Member of the Stock Option Committee of the Board of Directors.
(5) Member of the Compensation Committee of the Board of Directors.
(6) Member of the Audit Committee of the Board of Directors.
(7) Mr. Bernstein has been a partner in the law firm named above for
more than the last five years.
(8) Mr. Hance has been Vice Chairman of NationsBank Corporation since
1993 and Chief Financial Officer since 1988. He also is a
director of Caraustar Industries, Inc., Lance, Inc. and Summit
Properties, Inc.
(9) Mr. Martin has been associated with the Carolinas HealthCare
System since January 1993, and currently is Vice President,
Research. He served as Governor of the State of North Carolina
from 1985 to 1993 and was a member of the United States House of
Representatives, representing the Ninth District of North
Carolina, from 1973 until 1984. He also is a director of Duke
Power Company and J.A. Jones, Inc.
(10) Directors who are not employees of the Company are paid $2,000 for
each Board meeting attended and $500 for each Audit Committee and
Compensation Committee meeting attended. Directors who are
employees of the Company receive no additional compensation for
each Board or Committee meeting attended.
<PAGE>
COMMITTEES OF THE BOARD OF DIRECTORS
The Executive Committee, which met on one occasion and acted by
unanimous written consent in lieu of meetings on two occasions during the
fiscal year ended August 31, 1996, is authorized under Delaware corporate
laws and the Company's By-Laws to exercise certain of the powers of the
Board of Directors.
The principal functions of the Audit Committee, which met with the
Company's independent accountants two times during fiscal 1996 are to (i)
recommend to the Board of Directors the firm to be engaged as the
Company's independent accountants, (ii) review with the independent
accountants the scope of the audit and the audit report, (iii) consult
with the independent accountants regarding internal accounting controls,
and (iv) review non-audit services to be performed by the independent
accountants.
The principal function of the Stock Option Committee, which acted
by unanimous written consent in lieu of meetings on 23 occasions during
fiscal 1996, is to administer the 1989 Non-Qualified Stock Option Plan,
including determination of the employees who are to be granted options
under the Plan and the number of shares subject to each option.
The principal functions of the Compensation Committee, which met
three times during fiscal 1996, are to review compensation policies for
executive officers of the Company, establish the compensation of the
Chairman of the Board and Chief Executive Officer and review and approve
the pre-tax earnings goal and the payment of bonuses under the Incentive
Profit Sharing Plan.
There was no nominating committee of the Board of Directors nor any
other committee which performed a similar function during fiscal 1996.
The Board of Directors met four times, and acted by unanimous
written consent in lieu of meetings on two occasions, during fiscal 1996.
<PAGE>
EXECUTIVE COMPENSATION
SUMMARY COMPENSATION TABLE
The following table sets forth information concerning the compensation
during fiscal years 1996, 1995 and 1994 of the Company's Chief Executive
Officer and the four other most highly compensated executive officers
who served in such capacities as of August 31, 1996.
<TABLE>
<CAPTION>
Annual Compensation Long-Term Compensation
Awards Payouts
All
Fiscal Other Long-Term Other
Year Annual Restricted Securities Incentive Compen-
Name and Principal Ended Bonus Compen- Stock Underlying Plan sation
Position August 31, Salary($) ($)(1) sation($) Award(s)($) Options(#)(2) Payouts($) ($)(3)
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Leon Levine 1996 850,000 341,375 - - 0 - 13,280
Chairman of the Board, 1995 800,000 0 - - 0 - 12,678
Treasurer and Chief 1994 800,000 0 - - 0 - 8,986
Executive Officer
John D. Reier 1996 300,000 124,907 - - 0 - 2,861
President and Chief 1995(4) 285,006 0 - - 75,000 - 4,233
Operating Officer 1994 224,561 0 - - 8,000 - 2,463
George R. Mahoney, Jr. 1996 214,700 60,957 - - 0 - 13,988
Executive Vice President- 1995 211,597 0 - - 30,000 - 12,801
General Counsel and 1994 205,646 0 - - 13,500 - 10,090
Secretary
R. David Alexander, Jr. 1996 200,000 50,769 - - 0 - 2,269
Senior Vice President- 1995(5) 3,077 0 - - 25,000 - 0
Distribution and 1994 - - - - - - -
Transportation
Phillip W. Thompson 1996 180,000 40,319 - - - - 16,023
Senior Vice President- 1995 175,654 0 - - 10,000 - 4,578
Store Operations 1994 168,320 0 - - 5,000 - 6,978
</TABLE>
<PAGE>
(1) Includes amounts payable under the Company's Incentive Profit
Sharing Plan and a discretionary bonus paid in December 1995 as
follows: Mr. Levine-$80,000, Mr. Reier-$32,657, Mr. Mahoney-$15,870,
Mr. Alexander-$769 and Mr. Thompson-$10,979.
(2) Stock options were granted pursuant to the Company's 1989
Non-Qualified Stock Option Plan.
(3) Includes (a) Company contributions to the Employee Savings and
Retirement Plan and Trust for fiscal years 1996, 1995 and 1994,
respectively, as follows: Mr. Levine-$2,250, $2,250 and $2,250, Mr.
Reier-$2,250, $3,410 and $1,942, Mr. Mahoney-$2,263, $2,217 and
$3,616 and Mr. Thompson-$2,268, $2,212 and $3,208; and (b)
reimbursement of expenses under the Company's Medical Expense
Reimbursement Plan of certain medical care costs for fiscal years
1996, 1995 and 1994, respectively, as follows: Mr. Levine-$11,030,
$10,428 and $6,736, Mr. Reier-$611, $823 and $521, Mr. Mahoney-
$11,725, $10,584 and $6,474, Mr. Alexander-$2,269, $0 and $0 and
Mr. Thompson-$13,755, $2,366 and $3,770.
(4) Mr. Reier was elected President and Chief Operating Officer in
November 1994.
(5) Mr. Alexander was employed by the Company in August 1995.
<PAGE>
OPTION GRANTS, EXERCISES AND FISCAL YEAR-END VALUES
No options to acquire shares of the Company's Common Stock were granted
during the fiscal year ended August 31, 1996, to the executive officers
named in the Summary Compensation Table.
The following table sets forth all options exercised during the fiscal
year ended August 31, 1996, by the executive officers named in the Summary
Compensation Table, and the number and value of unexercised options held by
such executive officers at fiscal year-end. No options have been granted
to, or exercised by, Leon Levine.
<TABLE>
<CAPTION>
Number of Securities Value of Unexercised
Shares Value Underlying Unexercised In-the-Money
Acquired on Realized Options at FY-End(#) Options at FY-End($)(2)
Name Exercise(#) ($)(1) Exercisable Unexercisable Exercisable Unexercisable
<S> <C> <C> <C> <C> <C> <C>
John D. Reier 20,000 125,000 48,200 62,800 127,850 281,150
George R. Mahoney, Jr. 10,000 71,250 45,850 38,150 42,575 123,550
R. David Alexander, Jr. 0 0 0 25,000 0 0
Phillip W. Thompson 1,500 14,250 15,500 14,500 7,250 44,000
</TABLE>
<PAGE>
(1) The value realized is calculated based on the difference between the
option exercise price and the closing market price of the Company's
Common Stock on the date prior to the date of the exercise
multiplied by the number of shares to which the exercise relates.
(2) The closing price of the Company's Common Stock as reported on the New
York Stock Exchange Composite tape on August 31, 1996, was $17.25 and
is used in calculating the value of unexercised options.
EMPLOYMENT CONTRACTS AND TERMINATION OF EMPLOYMENT AND
CHANGE-IN-CONTROL ARRANGEMENTS
John D. Reier's compensation arrangement with the Company provides
that for the fiscal year ended August 31, 1996, he was to be paid a base
salary of $5,769 per week ($300,000 per annum), and for the fiscal year
ending August 31, 1997, he is to be paid a base salary of $6,250 per week
($325,000 per annum). In addition, under the Company's Incentive Profit
Sharing Plan, he may receive a bonus for each fiscal year based on
approximately 50% of the base salary he receives for the fiscal year,
subject to the achievement of pre-tax earnings goals established by the
Company. In the event Mr. Reier's employment is terminated by the Company
prior to August 31, 1997, for reasons other than for cause or medical
disability, the Company will pay Mr. Reier sixty days of his base salary
then in effect in two equal monthly installments. If Mr. Reier accepts
new employment, the unpaid balance of the payments is reduced by the
compensation Mr. Reier receives from the new employment.
COMPENSATION COMMITTEE AND STOCK OPTION COMMITTEE INTERLOCKS
AND INSIDER PARTICIPATION
The Compensation Committee of the Board of Directors during the
fiscal year ended August 31, 1996, was composed of Mark R. Bernstein and
Thomas R. Payne. Neither member of the Compensation Committee was an
officer or employee of the Company. Mr. Bernstein is a partner in the law
firm of Parker, Poe, Adams & Bernstein L.L.P., which rendered legal
services to the Company during the last fiscal year and which is
performing legal services for the Company during the current fiscal year.
The Stock Option Committee of the Board of Directors during the
period from September 1, 1995, through January 18, 1996, was composed of
Leon Levine and Thomas R. Payne, and during the period from
January 18, 1996, through August 31, 1996, was composed of
Mark R. Bernstein and Thomas R. Payne. Mr. Levine, Mr. Bernstein
and Mr. Payne are not eligible to receive options under the Company's 1989
Non-Qualified Stock Option Plan.
<PAGE>
REPORT OF THE COMPENSATION COMMITTEE AND STOCK OPTION COMMITTEE
OF THE BOARD OF DIRECTORS ON EXECUTIVE COMPENSATION
The objectives of the Company's executive compensation program are
to provide a competitive total compensation package that enables the
Company to attract and retain key executives, and to offer compensation
opportunities that are directly related to the annual and long-term
performance of the Company. The Company seeks to link a significant
portion of compensation to the Company's performance such that executive
officers will have a strong incentive to meet the Company's goals and
their compensation will then be aligned with the interests of the
Company's shareholders. With these objectives, the compensation of
executive officers consists primarily of (i) a base salary; (ii) annual
incentive compensation in the form of a bonus based on the achievement of
pre-tax earnings goals and the executive's contributions to meeting the
goals; and (iii) long-term incentive compensation in the form of stock
options.
BASE SALARY. The base salary of executive officers is reviewed
annually by the Compensation Committee. In determining the salary level,
the Compensation Committee takes into consideration the responsibilities,
experience and performance of the executives, their contributions to the
Company's operating performance, including the achievement of pre-tax
earnings goals, and competitive salary practices of other companies in the
retail industry, including companies in the S&P Retail Composite Index and
other companies in the retail industry with sales comparable to the sales
of the Company.
INCENTIVE PROFIT SHARING PLAN. The Compensation Committee also
reviews and approves a pre-tax earnings goal established by the Company
each fiscal year under the Company's Incentive Profit Sharing Plan. This
Plan provides for payments, not exceeding 5% of the Company's consolidated
earnings before income taxes and before deducting payments under the Plan
or any other incentive compensation arrangement, to executive officers and
other supervisory personnel if such goal is achieved. The amount of the
bonus is based on a percentage of the employee's base salary, and for
executive officers the percentage ranges from 20% to 50%. The percentage
is higher for the more senior executive officers as a greater portion of
the senior executives' compensation is tied to the achievement of pre-tax
earnings goals. In the event the pre-tax earnings goal is exceeded, the
amount of the bonus increases by 2% for each 1% by which the goal is
exceeded, to a maximum of 50% additional bonus for exceeding the goal by
25%. If the pre-tax earnings goal is not achieved, the amount of the
bonus decreases by 5% for each 1% by which the goal is not achieved, with
no bonus being paid if pre-tax earnings are below 90% of the goal. As
92.3% of the pre-tax earnings goal for the fiscal year ended August 31,
1996, was achieved, the bonus will be 61.5% of the bonus that would have
been paid if 100% of the goal had been achieved. As less than 90% of the
pre-tax earnings goal for the fiscal year ended August 31, 1995, was
achieved, no bonuses under the Incentive Profit Sharing Plan were paid for
that fiscal year. In view of the change in merchandising strategy that
made it more difficult to achieve the pre-tax earnings goal in fiscal
1995, and the progress made in fiscal 1995 in implementing the change from
promotional pricing to everyday low pricing, the Compensation Committee
<PAGE>
authorized and approved the payment in December 1995 of 25% of the bonus
that would have been paid if 100% of the pre-tax earnings goal had been
achieved. Except for the Chairman of the Board and Chief Executive
Officer and the President and Chief Operating Officer, the annual
individual performance rating of each executive officer by that officer's
supervisor may increase or decrease the amount of bonus paid. The
performance rating is based on a variety of criteria, including the
effectiveness of the officers in executing their managerial
responsibilities and their impact on the financial results of the Company
(such as sales, pre-tax earnings and shareholders' return on average
equity). The Compensation Committee reviews and approves the payment of
bonuses under the Incentive Profit Sharing Plan.
STOCK OPTIONS. To establish another link between compensation and
management's performance in creating value for shareholders, evidenced by
increases in the Company's stock price, executive officers, other than the
Chairman and Chief Executive Officer, receive grants of stock options
typically on an annual basis. The Company encourages stock ownership by
executives, but has not established target levels for equity holdings by
executives. Grants are made by the Stock Option Committee of the Board of
Directors in order for the grants to satisfy tax and securities law
requirements. The Compensation Committee considers the grant of stock
options by the Stock Option Committee in reviewing the compensation of
executive officers. Under the Company's 1989 Non-Qualified Stock Option
Plan, the exercise price for each option is the fair market value per
share of Common Stock on the date of the grant. Fair market value per
share is the average of the highest price and lowest price at which the
Common Stock is sold regular way on the New York Stock Exchange on the
date of the grant. Options have a term of five years, and may not be
exercised prior to the expiration of two years from the date of the grant.
Thereafter, each option becomes exercisable in cumulative installments of
not more than 40% of the number of shares subject to the option after two
years, 70% after three years and 100% after four years. Such vesting
schedule encourages executives to remain in the employ of the Company.
With limited exceptions, no option is exercisable unless the optionee has
been continuously employed by the Company from the date of grant to the
date of exercise. In determining the number of options to be granted, the
Stock Option Committee takes into account the executive's base salary and
level of responsibilities and the annual individual performance rating of
the executive, as well as the number of options granted in prior years.
COMPENSATION OF CHIEF EXECUTIVE OFFICER. In determining the
compensation of Leon Levine, the Chairman of the Board and Chief Executive
Officer of the Company, the Compensation Committee takes into account the
fact that long-term compensation in the form of stock options, retirement
plans and similar benefits is an important element of the compensation of
most Chief Executive Officers. Mr. Levine has never been granted stock
options in view of the fact that as the founder of the Company, he always
has owned a substantial percentage of the Company's Common Stock. As of
November 1, 1996, he owned directly 8,786,458 shares representing
approximately 15.5% of the outstanding Common Stock. See "Ownership of
the Company's Securities." With this ownership interest, Mr. Levine has
the incentive without the grant of stock options to maximize stock price
appreciation. In addition, the Company does not have any retirement plan
<PAGE>
or similar benefits for the Chief Executive Officer or any executive
officers, other than the Employee Savings and Retirement Plan, a 401(k)
Plan under which contributions by the Company are limited. In the fiscal
year ended August 31, 1996, the amount of the Company's contribution for
Mr. Levine was $2,250. Accordingly, the substantial portion of
Mr. Levine's compensation is his base salary and bonus under the Incentive
Profit Sharing Plan.
The base salary of the Chief Executive Officer is established by the
Compensation Committee annually based on consideration of the
same general factors as are described above with respect to the
determination of the base salary of other executive officers. For the
fiscal year ended August 31, 1996, Mr. Levine received a base salary of
$850,000. Mr. Levine will receive a base salary for the fiscal year
ending August 31, 1997, of $875,000.
The incentive compensation element of the compensation of the Chief
Executive Officer is based on the Company's achievement of its pre-tax
earnings goal. Under the Company's Incentive Profit Sharing Plan, the
Chief Executive Officer's bonus is based on 50% of his base salary. The
amount of the bonus is subject to increase or decrease based on the level
of pre-tax earnings in the manner described above with respect to the
bonus for other executive officers. For the fiscal year ended August 31,
1996, the Chief Executive Officer will be paid a bonus of $261,375 under
the Incentive Profit Sharing Plan as the Company achieved 92.3% of the
pre-tax earnings goal. In addition, as described under "Incentive Profit
Sharing Plan" above, Mr. Levine was paid $80,000 in December 1995,
representing 25% of the bonus that would have been paid if 100% of the
pre-tax earnings goal for the fiscal year ended August 31, 1995, had been
achieved.
DEDUCTIBILITY OF COMPENSATION. Internal Revenue Code Section 162(m)
provides that publicly held companies may not deduct in any taxable year
compensation in excess of $1 million paid to the Chief Executive Officer
or any of the four other highest paid executive officers which is not
"performance-based" as defined in Section 162(m). No such officer was
paid compensation in excess of the deductibility limit during the fiscal
year ended August 31, 1996. At the Annual Meeting of Stockholders on
January 16, 1997, Stockholders will consider and vote upon proposals to
approve an amendment to the 1989 Non-Qualified Stock Option Plan and to
approve the Incentive Profit Sharing Plan for the purpose of preserving
the future deductibility of all compensation paid under said Plans. The
Compensation Committee will continue to monitor this issue and will
determine what additional steps, if any, it may take in response to such
provision.
This report is submitted by the following members of the
Compensation Committee and Stock Option Committee:
Thomas R. Payne-
Compensation Committee and Stock Option Committee
Mark R. Bernstein-
Compensation Committee and Stock Option Committee
Leon Levine-
Stock Option Committee
<PAGE>
STOCK PERFORMANCE GRAPH
The following graph sets forth the yearly percentage change in the
cumulative total shareholder return on the Company's Common Stock during
the five fiscal years ended August 31, 1996, compared with the cumulative
total returns of the S&P Midcap 400 Index and the S&P Retail Composite
Index. The comparison assumes $100 was invested on August 31, 1991, in
the Company's Common Stock and in each of the foregoing indices, and that
dividends were reinvested.
<TABLE>
<CAPTION>
COMPARISON OF FIVE YEAR
CUMULATIVE TOTAL RETURN
AMONG FAMILY DOLLAR STORES, INC.,
THE S & P MIDCAP 400 INDEX
AND THE S & P RETAIL
COMPOSITE INDEX
8/91 8/92 8/93 8/94 8/95 8/96
<S> <C> <C> <C> <C> <C> <C>
Family Dollar Stores, Inc. 100 140 159 106 157 153
S & P Midcap 400 100 111 138 144 173 194
S & P Retail Composite 100 106 116 117 119 144
</TABLE>
RELATED TRANSACTIONS
Legal services were rendered to the Company during the year ended
August 31, 1996, and are being rendered to the Company during the year
ending August 31, 1997, by Parker, Poe, Adams & Bernstein L.L.P., of which
Mark R. Bernstein, a director of the Company, is a partner.
The Company has commercial banking relationships with subsid-
iaries of NationsBank Corporation, of which James H. Hance, Jr.,
a director of the Company, is Vice Chairman and Chief Financial Officer.
Since December 1994, a subsidiary of the Company has leased space in
a building in Charlotte, North Carolina, from 9517 Monroe, LLC, for
processing merchandise returned from stores. 9517 Monroe, LLC is a
limited liability company in which Leon Levine, the Chairman of the Board
of the Company, and his brother, Alvin E. Levine, each owns a 50%
interest. A total of $210,958 in rents was paid to 9517 Monroe, LLC, for
the year ended August 31, 1996. The current rent payable for the leasing
of approximately 80,600 square feet is $19,545 per month ($234,540
annually). The present term of the lease for 57,000 square feet of the
space is for one year expiring March 31, 1997, and the Company's
subsidiary has two successive one-year options to extend the term. The
lease for the other 23,600 square feet of space is on a month-to-month
term. The Company believes that the rents for this leased space are
competitive with amounts that would be paid to an unaffiliated entity to
lease similar space.
<PAGE>
AMENDMENT TO
1989 NON-QUALIFIED STOCK OPTION PLAN
On November 8, 1996, the Company's Board of Directors declared it
advisable that the 1989 Non-Qualified Stock Option Plan (the "Plan") be
amended to (i) increase by 500,000 the number of shares of Common Stock
available for issuance thereunder, and (ii) meet the requirements of
Section 162(m) of the Internal Revenue Code and any regulations thereunder
("Section 162(m)") in order to preserve for the Company the future
deductibility of all compensation that option grantees may be deemed to
receive in connection with awards under the Plan that are intended to be
performance-based. The changes to the Plan to meet the requirements of
Section 162(m) provide that (i) if any member of the Stock Option
Committee of the Board of Directors does not meet the qualifications for
an "outside director" established from time to time under Section 162(m),
then that member shall be replaced with another director meeting the
qualifications such that the Stock Option Committee shall always be
comprised of at least two "outside directors," and (ii) the maximum number
of options to purchase shares of Common Stock that may be granted under
the Plan to any individual during any twelve month period may not exceed
150,000. The amendment to the Plan was adopted by the Board of Directors,
subject to approval of Stockholders.
The Plan is the only stock option plan under which options may be
granted. When the Plan was originally approved by Stockholders in January
1989, a maximum of 350,000 shares were available for issuance thereunder,
subject to adjustments for stock splits and similar events. The Plan was
amended effective December 1, 1991, to increase by 750,000 the number of
shares of Common Stock available for issuance thereunder, also subject to
adjustments for stock splits and similar events. The number of shares of
Common Stock available for issuance under the Plan was adjusted as a
result of a 2-for-1 stock split effective February 10, 1992. The effect
of the proposed amendment will be to increase the number of shares
available for issuance under the Plan from 1,561,390 shares to 2,061,390
shares.
As of November 10, 1996, 638,610 shares of Common Stock had been
purchased pursuant to the exercise of options under the Plan. There also
were options outstanding under the Plan to 265 employees to purchase a
total of 1,253,300 shares with an average per share option price of
$16.08, and expiration dates ranging from January 5, 1997, to October 30,
2001. Accordingly, 308,090 shares were available under the Plan for the
granting of options. Approximately 275 employees may be considered
eligible to participate in the Plan, including 16 executive officers.
Leon Levine is not eligible to participate in the Plan. Other directors
of the Company who are employees, including Mr. Reier and Mr. Mahoney, are
eligible to receive options. The timing and amount of such options, and
the amount of options to be granted to all executive officers and other
employeees, are matters within the Stock Option Committee's discretion and
cannot be determined at this time, except that under the proposed
amendment the maximum number of options to purchase shares of Common Stock
that may be granted to any individual during any twelve month period may
not exceed 150,000.
<PAGE>
In the opinion of the Board of Directors, the amendment to the Plan
will further the interests of the Company by strengthening its ability to
attract and retain the services of key employees, and will furnish
additional incentives to these employees by encouraging them to become
owners or increase their ownership of the Company's Common Stock.
DESCRIPTION OF THE PLAN
A brief description of the Plan is set forth below.
1. ADMINISTRATION. The Plan is administered and interpreted by the
Stock Option Committee of the Board of Directors. The Stock Option
Committee consists of two or more members of the Board of Directors who
are ineligible to receive options under the Plan. Under the Plan as
proposed to be amended, if any member of the Stock Option Committee does
not meet the qualifications of an "outside director" established from time
to time under Section 162(m), then that member shall be replaced by
another director meeting the qualifications such that the Stock Option
Committee shall always be comprised of at least two "outside directors."
The Board of Directors may suspend, terminate or amend the Plan. No such
amendment, however may affect the determination of officers and directors
to participate in the Plan or of the timing, pricing and amount of grants
all of which determinations shall be made by the Stock Option Committee.
In addition, without Stockholder approval, no amendment may materially
increase the benefits under the Plan, or increase the number of shares
subject to the Plan, or materially modify the requirements as to
eligibility for participation thereunder.
2. STOCK SUBJECT TO THE PLAN. Currently a maximum of 1,561,390
shares of Common Stock of the Company may be issued and sold under the
Plan, except as such number may be adjusted to reflect stock splits and
dividends, mergers, recapitalizations or similar events. If the amendment
is approved, this number will change from 1,561,390 to 2,061,390 shares.
Any shares subject to an option which terminates, is cancelled or expires
prior to exercise may again be subjected to an option under the Plan. No
option may be granted after November 30, 1998.
3. ELIGIBILITY. Options may be granted only to officers and other
key employees (including those who are also directors except
Leon Levine).
4. OPTION PRICE. Options may be granted to purchase shares of the
Company's Common Stock at prices which are not less than the fair market
value of the Common Stock on the date the option is granted. Fair market
value per share is defined in the Plan as the average of the highest price
and the lowest price at which the Common Stock is sold regular way on the
New York Stock Exchange on the date of the grant of the option. The
purchase price of the optioned shares must be paid in full on exercise of
an option.
<PAGE>
5. PERIOD OF OPTION. Options will have a term of not more than
five years. Options may not be exercised prior to the expiration of two
years from the date of grant. Thereafter, each option will become
exercisable in cumulative installments as to not more than 40% of the
number of shares subject to the option after two years, 70% after three
years, and 100% after four years.
6. LIMITATIONS. With limited exceptions, no option is exercisable
unless the optionee has been continuously employed by the Company or a
subsidiary from the date of grant to the date of exercise. Options are
not transferable other than by will or by laws of descent and
distribution.
On November 10, 1996, the closing price of the Company's Common
Stock on the New York Stock Exchange was $17.75.
Under current regulations, for federal income tax purposes the
Company will not be entitled to a deduction, and the optionee will not be
required to recognize income, upon the grant of an option under the Plan.
An optionee exercising an option granted under the Plan will recognize
ordinary income, and the Company will be entitled to a deduction (subject
to the reasonableness of the compensation and the Company's compliance
with Section 162(m) and any applicable withholding obligations) on the
date the option is exercised. The amount of such income and such
deduction both will be equal to the excess of the fair market value on
that date of the shares of Common Stock acquired over the amount paid
therefor.
The affirmative vote of the holders of a majority of the shares of
Common Stock present or represented by proxy at the meeting and entitled
to vote in respect thereto is required to approve the amendment to the
Plan. If Stockholders do not approve the amendment, the number of shares
available for issuance will not be increased and there will be no
additional grants of options under the Plan to the Chief Executive Officer
and the four other most highly compensated executive officers. The Board
of Directors recommends that the Stockholders vote for approval of the
amendment to the Plan.
<PAGE>
APPROVAL OF INCENTIVE PROFIT SHARING PLAN
On November 8, 1996, the Company's Board of Directors declared it
advisable to seek Stockholder approval of the Company's Incentive Profit
Sharing Plan ("the Plan") in order to meet the requirements of Section
162(m) of the Internal Revenue Code and any regulations thereunder
("Section 162(m)") in order to preserve for the Company the future
deductibility of all compensation paid under the Plan. The Company has
had the Plan for many years, and Stockholder approval is being sought for
the purpose of meeting the requirements of Section 162(m). A brief
description of the Plan is set forth below.
1. ADMINISTRATION. The Plan is administered and interpreted by the
Compensation Committee, which is comprised of two or more members of the
Board of Directors meeting the qualifications of an "outside director"
under Section 162(m). If any member does not meet these qualifications,
then that member shall be replaced by another director meeting the
qualifications such that the Compensation Committee shall always be
comprised of at least two "outside directors." The Board of Directors may
suspend, terminate or amend the Plan. No such amendment, however, may
increase the maximum amount which may be appropriated annually under the
Plan without Stockholder approval. In addition, no such amendment,
suspension or termination may apply to any payment to any participant made
prior to the effective date of such amendment, suspension or termination.
2. DETERMINATION OF GOALS AND ELIGIBILITY. The Compensation
Committee reviews and approves a pre-tax earnings goal established by the
Company each year under the Plan. Approximately 160 officers and key
supervisory personnel have been deemed eligible by the Compensation
Committee to participate in the Plan.
3. DETERMINATION OF BONUSES. Based on the achievement of the pre-tax
earnings goal, the Plan provides for cash bonus payments to eligible
participants, including executive officers. The amount of bonus cannot
exceed, in the aggregate, 5% of the Company's consolidated earnings before
income taxes in the preceding fiscal year and before deducting payments
under the Plan or any other incentive compensation arrangement. Also, the
amount of bonus paid for any fiscal year of the Company to any one
individual participant cannot exceed $1 million. The amount of the bonus
is based on a percentage of the employee's base salary, and for executive
officers the percentage ranges from 20% to 50%. The percentage is higher
for the more senior executive officers as a greater portion of the senior
executives' compensation is tied to the achievement of pre-tax earnings
goals. In the event the pre-tax earnings goal is exceeded, the amount of
the bonus increases by 2% for each 1% by which the goal is exceeded, to a
maximum of 50% additional bonus for exceeding the goal by 25%. If the
pre-tax earnings goal is not achieved, the amount of the bonus decreases
by 5% for each 1% by which the goal is not achieved, with no bonus being
paid if pre-tax earnings are below 90% of the goal. Except for the
Chairman of the Board and Chief Executive Officer and the President and
Chief Operating Officer, the annual individual performance rating of each
executive officer by that officer's supervisor may increase or decrease
the amount of bonus paid. The performance rating is based on a variety of
<PAGE>
criteria, including the effectiveness of the officers in executing their
managerial responsibilities and their impact on the financial results of
the Company (such as sales, pre-tax earnings and shareholders' return on
average equity). The Compensation Committee reviews and approves the
payment of bonuses under the Plan. For the fiscal year ended August 31,
1996, when the Company achieved 92.3% of the pre-tax earnings goal, the
amount of bonuses payable under the Plan is as follows: (i) the executive
officers named in the Summary Compensation Table: Leon Levine - $261,375,
John D. Reier - $92,250, George R. Mahoney, Jr. - $45,087, R. David
Alexander, Jr. - $50,000, Phillip W. Thompson - $29,340; (ii) all current
executive officers as a group, other than the executive officers named in
the Summary Compensation Table: $195,302; (iii) all other employees:
$529,497.
The affirmative vote of the holders of a majority of the shares of
Common Stock present or represented by proxy at the meeting and entitled
to vote in respect thereto is required to approve the Plan. If
Stockholders do not approve the Plan, there will be no additional awards
of bonuses under the Plan to the Chief Executive Officer and the four
other most highly compensated executive officers. The Board of Directors
recommends that the Stockholders vote for approval of the Plan.
RATIFICATION OF SELECTION OF INDEPENDENT ACCOUNTANTS
The Board of Directors has selected the firm of Price Waterhouse LLP
as independent accountants to audit and report on the consolidated
financial statements of the Company and its subsidiaries for the year
ending August 31, 1997, and to perform such other appropriate accounting
and related services as may be required by the Board of Directors. The
affirmative vote of the holders of a majority of the shares of Common
Stock present or represented by proxy at the meeting and entitled to vote
in respect thereto is required to ratify the selection of Price Waterhouse
LLP for the purposes set forth above. The Board of Directors recommends
that the Stockholders vote for ratification of the selection of Price
Waterhouse LLP. If the Stockholders do not ratify the selection of Price
Waterhouse LLP, the selection of independent accountants will be
reconsidered by the Board of Directors.
Price Waterhouse LLP served as the Company's independent accountants
for the year ended August 31, 1991, and for each subsequent fiscal year.
Representatives of Price Waterhouse LLP are expected to be present
at the Annual Meeting of Stockholders and will have an opportunity to make
a statement if they desire to do so and to respond to appropriate
questions.
<PAGE>
STOCKHOLDER PROPOSALS
Proposals of Stockholders intended to be presented at the next
Annual Meeting of Stockholders in January 1998, and to be included in the
Proxy Statement and form of proxy, must be received by the Company on or
before July 27, 1997. Any such proposals should be in writing and be sent
to the Secretary, Family Dollar Stores, Inc., P. O. Box 1017, Charlotte,
North Carolina 28201-1017.
OTHER MATTERS
Management knows of no other matters to be brought before the
meeting. However, if any other matters do properly come before the
meeting, it is intended that the shares represented by the proxies in the
accompanying form will be voted in accordance with the best judgment of
the person voting the proxies.
Whether Stockholders plan to attend the meeting or not, they are
respectfully urged to sign, date and return the enclosed proxy which will,
of course, be returned to them at the meeting if they are present and so
request.
<PAGE>
PROXY
FAMILY DOLLAR STORES, INC.
PROXY FOR ANNUAL MEETING OF STOCKHOLDERS ON JANUARY 16, 1997
The undersigned hereby appoints Leon Levine, John D. Reier and
George R. Mahoney, Jr., or any one of them, with full power of
substitution, proxies of the undersigned to the Annual Meeting of
Stockholders of Family Dollar Stores, Inc. to be held at 2:00 p.m. on
Thursday, January 16, 1997, at the office of the Company at 10401 Old
Monroe Road, Matthews, North Carolina, or at any adjournments thereof,
with all the powers which the undersigned would possess if personally
present, and instructs them to vote upon any matter which may properly
be acted upon at this meeting, and specifically as indicated below:
<TABLE>
<CAPTION>
<S> <C> <C>
[ ] [ ]
1. ELECTION OF DIRECTORS FOR ALL NOMINEES WITHHOLD AUTHORITY
(Mark only one) Listed below (except as to vote for all
shown to the contrary nominees listed below
below)
</TABLE>
Nominees: Leon Levine, John D. Reier, George R. Mahoney, Jr.,
Mark R. Bernstein, James H. Hance, Jr., James G. Martin
(INSTRUCTION: To withhold authority to vote for any individual nominee,
print that nominee's name below)
2. Approval of proposed amendment to the 1989 Non-Qualified
Stock Option Plan:
<TABLE>
<CAPTION>
<S> <C> <C>
FOR [ ] AGAINST [ ] ABSTAIN [ ]
</TABLE>
3. Approval of Incentive Profit Sharing Plan:
<TABLE>
<CAPTION>
<S> <C> <C>
FOR [ ] AGAINST [ ] ABSTAIN [ ]
</TABLE>
<PAGE>
4. Ratification of the selection of Price Waterhouse LLP as Independent
Accountants:
<TABLE>
<CAPTION>
<S> <C> <C>
FOR [ ] AGAINST [ ] ABSTAIN [ ]
</TABLE>
5. In their discretion, upon such other business as may properly come before
the meeting or any adjournments thereof.
(Please Sign on Reverse Side)
(Continued from other side)
This Proxy, if received and correctly signed, will be voted in accordance
with the choices specified. If a choice is not specified, this Proxy will be
voted in favor of the election of the Directors named, for the approval of the
proposed amendment to the 1989 Non-Qualified Stock Option Plan, for the approval
of the Incentive Profit Sharing Plan and for the ratification of the selection
of the independent accountants.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
This proxy is revocable, and the undersigned retains the right to attend this
meeting and to vote his stock in person.
The undersigned hereby acknowledges receipt of the Notice of Annual Meeting of
Stockholders and Proxy Statement.
Dated this day of , 19
(Please sign exactly as your name appears at
left. If there is more than one owner, each
should sign. When signing as a fiduciary or
representative, please give full title as
such. If the signer is a corporation, please
sign full corporate name by duly authorized
officer. If a partnership, please sign in
partnership name by authorized person.)
PLEASE SIGN AND RETURN PROXY PROMPTLY IN THE ACCOMPANYING
ENVELOPE. NO POSTAGE IS REQUIRED.
