<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 Section 240.14a-11(c) or
Section 240.14a-12
The GNI Group, Inc.
- --------------------------------------------------------------------------------
(Name of Registrant as Specified in its Charter)
- --------------------------------------------------------------------------------
(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 Rules 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:
Common Stock
- --------------------------------------------------------------------------------
(2) Aggregate number of securities to which transaction applies:
6,565,692 shares of Common Stock, par value $.01 per share
- --------------------------------------------------------------------------------
(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):
N/A
- --------------------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
N/A
- --------------------------------------------------------------------------------
(5) Total fee paid:
$125.00
- --------------------------------------------------------------------------------
/ / 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> 2
THE GNI GROUP, INC.
2525 BATTLEGROUND ROAD
DEER PARK, TEXAS 77536
September 30, 1996
Dear Stockholder:
You are cordially invited to attend the 1996 Annual Meeting of
Stockholders of The GNI Group, Inc. ("Company") to be held on Tuesday, October
29, 1996, at 8:30 a.m., Houston time, at the Four Seasons Hotel, 1300 Lamar
Street, Houston, Texas.
The accompanying Notice of 1996 Annual Meeting of Stockholders and
Proxy Statement describe the formal matters to be acted upon at the meeting.
In addition, we will discuss current matters concerning the future of the
Company and review the Company's operations during the past year. At the
conclusion of the meeting, an opportunity will be provided for questions and
discussion by the stockholders. A record of the Company's activities for the
fiscal year ended June 30, 1996, is contained in the Annual Report to
Stockholders that accompanies this proxy material.
The meeting will be held for the following purposes:
(1) to elect as directors the following five nominees to
serve on the Company's Board of Directors until the next annual
meeting of stockholders or until their successors have been duly
elected and qualified: Dr. Newton E. Dudney, M.D., Messrs. Titus H.
Harris, Jr., John W. Lyons, Jr., F. Oliver Nicklin, and Carl V Rush,
Jr.;
(2) to ratify the appointment of KPMG Peat Marwick, LLP
as the Company's independent auditor for the fiscal year ending June
30, 1997; and
(3) to transact such other business as may properly come
before the meeting and any adjournment thereof.
The Board of Directors has fixed the close of business on September 4,
1996, as the record date for determination of stockholders who are entitled to
receive notice of, and to vote, either in person or by proxy, at the annual
meeting and any adjournment thereof.
It is important that your shares be represented at the annual meeting
regardless of the number of shares you hold. Please take a moment to complete,
sign and mail the enclosed proxy card in the accompanying return envelope
promptly, regardless of whether you intend to be present at the annual meeting.
Your proxy is revocable at any time prior to its use. If you have multiple
accounts and receive more than one set of these materials, please be sure to
vote each proxy received. WE LOOK FORWARD TO SEEING YOU AT THE ANNUAL MEETING.
Sincerely,
THE GNI GROUP, INC.
Carl V Rush, Jr.
President
<PAGE> 3
THE GNI GROUP, INC.
2525 BATTLEGROUND ROAD
DEER PARK, TEXAS 77536
NOTICE OF 1996 ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD TUESDAY, OCTOBER 29, 1996
To the Stockholders of The GNI Group, Inc.:
Notice is hereby given that the 1996 Annual Meeting of Stockholders of
The GNI Group, Inc. ("Company") will be held at the time and place listed below
for the purposes listed below:
<TABLE>
<S> <C>
Time . . . . . . . . . . . 8:30 a.m., Tuesday, October 29, 1996
Place . . . . . . . . . . . Four Seasons Hotel
1300 Lamar Street
Houston, Texas
Items of Business . . . . . (1) to elect as directors the following five nominees to serve on the Company's
Board of Directors until the next annual meeting of stockholders or until
their successors have been duly elected and qualified: Dr. Newton E. Dudney,
M.D., Messrs. Titus H. Harris, Jr., John W. Lyons, Jr., F. Oliver Nicklin, and
Carl V Rush, Jr.;
(2) to ratify the appointment of KPMG Peat Marwick, LLP as the Company's
independent auditor for the fiscal year ending June 30, 1997; and
(3) to transact such other business as may properly come before the meeting and
any adjournment thereof.
Record Date . . . . . . . . . Holders of the Company's common stock, $.01 par value per share, of record at the close
of business on September 4, 1996, are entitled to notice of and to vote at the annual
meeting and any adjournment thereof.
Important . . . . . . . . . . . So that we may be sure your vote will be included, PLEASE SIGN, DATE AND MAIL YOUR
PROXY PROMPTLY in the return envelope provided, regardless of whether you plan to attend
the annual meeting. For your convenience, there is enclosed a return envelope requiring
no postage that is for your use in returning your proxy. If you attend the meeting, you
may revoke your proxy and vote in person. Additionally, your proxy is revocable at any
time prior to its use. A list of stockholders entitled to notice of and to vote at the
meeting will be available for examination at the office of the Company's transfer agent,
American Stock Transfer & Trust Company, 40 Wall Street, New York, New York, 10005 for
the ten days preceding the meeting.
</TABLE>
By Order of the Board of Directors,
Houston, Texas Titus H. Harris, III
September 30, 1996 Secretary
<PAGE> 4
THE GNI GROUP, INC.
2525 BATTLEGROUND ROAD
DEER PARK, TEXAS 77536
PROXY STATEMENT FOR 1996 ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON OCTOBER 29, 1996
GENERAL
This Proxy Statement is furnished to the stockholders of The GNI
Group, Inc., a Delaware corporation ("Company"), IN CONNECTION WITH THE
SOLICITATION BY AND ON BEHALF OF THE BOARD OF DIRECTORS OF THE COMPANY OF
PROXIES FOR USE AT THE 1996 ANNUAL MEETING OF STOCKHOLDERS OF THE COMPANY to be
held on Tuesday, October 29, 1996 ("Annual Meeting"), at 8:30 a.m., Houston
time, at the Four Seasons Hotel, 1300 Lamar Street, Houston, Texas, and any
adjournment thereof, for the purposes set forth herein. This definitive Proxy
Statement and the accompanying proxy card are being mailed to stockholders on
or about September 30, 1996.
The execution and return of the enclosed proxy will not in any way
affect a stockholder's right to attend the Annual Meeting and vote in person.
Furthermore, a stockholder has the right to revoke his proxy at any time before
it is exercised (a) by filing with the Secretary of the Company a written
revocation or a duly executed proxy bearing a later date, or (b) by appearing
and voting in person at the Annual Meeting. UNLESS OTHERWISE MARKED, PROXIES
IN THE FORM OF THE ACCOMPANYING PROXY CARD THAT ARE PROPERLY EXECUTED AND
RETURNED WILL BE VOTED FOR (1) the Board of Directors' slate of five nominees
for positions on the Board of Directors of the Company; and (2) the
ratification of the appointment of KPMG Peat Marwick, LLP as the independent
auditor for the Company for the fiscal year ending June 30, 1997. The Board of
Directors is not presently aware of any other proposal that will be brought
before the Annual Meeting. However, should any additional matters be properly
brought before the Annual Meeting, the persons named in the proxy card will
vote such proxies in accordance with their best judgment and what they consider
to be the best interest of the Company and its stockholders.
The cost of soliciting proxies will be borne by the Company. In
addition to the use of the mails, proxies may be solicited by the directors,
officers and employees of the Company, without additional compensation, by
personal interview, telephone, telegram or otherwise. Arrangements also have
been made with brokerage firms and other custodians, nominees and fiduciaries
who hold the voting securities of record for the forwarding of solicitation
materials to the beneficial owners thereof. The Company will reimburse such
brokers, custodians, nominees and fiduciaries for the reasonable out-of-pocket
expenses incurred by them in connection therewith. The Company expects that
the aggregate expense of these services will be less than $10,000.
QUORUM, RECORD DATE AND OTHER VOTING MATTERS
The Board of Directors of the Company has fixed the close of business
on September 4, 1996, as the record date ("Record Date") for the determination
of stockholders entitled to notice of and to vote at the Annual Meeting and any
adjournment thereof. On the Record Date, the outstanding voting securities of
the Company consisted of 6,565,692 shares of common stock, $.01 par value per
share ("Common Stock"), with each share of Common Stock being entitled to one
vote. No shares of Common Stock are entitled to cumulative voting rights in
the election of directors. The presence at the Annual Meeting, in person or by
proxy, of the holders of a majority of the shares of Common Stock outstanding
on the Record Date will be necessary to constitute a quorum at the Annual
Meeting. Shares represented by a properly signed and returned proxy will be
counted as present at the Annual Meeting for purposes of determining a quorum,
without regard to whether the proxy is marked as casting a vote or abstaining.
Shares held by nominees that are voted on at least one matter coming before the
Annual Meeting will also be counted as present for purposes of determining a
quorum, even if the beneficial owner's discretion has been withheld (a
"non-vote") for voting on some or all other matters.
<PAGE> 5
The affirmative vote of the holders of a majority of the shares of
Common Stock outstanding on the Record Date that are present in person or
represented by proxy and entitled to vote at the Annual Meeting is required for
the election of directors (Proposal 1), and the ratification of the appointment
of KPMG Peat Marwick, LLP as the Company's independent auditor for the fiscal
year ending June 30, 1997 (Proposal 2). With respect to each matter submitted
to a vote of security holders, the following shall apply: under Delaware law
and the Company's Certificate of Incorporation and Bylaws, as amended,
abstentions are entitled to vote and broker non-votes are not entitled to vote.
Therefore, abstentions will have the same effect as votes against the proposals
on such matters. Broker non-votes, however, will be deemed shares not entitled
to vote on such matters, and therefore will not count as votes for or against
the proposals, and will not be included in calculating the number of votes
necessary for approval of such matters.
VOTING SECURITIES, PRINCIPAL STOCKHOLDERS AND MANAGEMENT INTERESTS
The following table sets forth, as of July 31, 1996, the shares of
Common Stock beneficially owned by (i) each person known to the Company to be
the beneficial owner of more than five percent of the outstanding shares of
Common Stock, (ii) each director and nominee for director, (iii) each executive
officer of the Company named in the section entitled: "Executive Compensation,"
and (iv) the directors and all executive officers as a group. This information
is based on public filings made with the SEC as of July 31, 1996, and certain
information supplied to the Company by the persons listed below:
<TABLE>
<CAPTION>
AMOUNT AND
NATURE OF(1)
NAME AND BENEFICIAL PERCENT OF(2)
ADDRESS OF OWNERSHIP OF OUTSTANDING
BENEFICIAL OWNER COMMON STOCK COMMON STOCK
---------------- ------------ ------------
<S> <C> <C>
Heartland Advisors, Inc. 720,400 10.1%
790 North Milwaukee Street
Milwaukee, WI 53202
Fleming Capital Management 596,400 8.4%
1285 Ave. of the Americas, 16th Floor
New York, NY 10019
F. Oliver Nicklin 110,113(3) 1.6%
233 South Wacker Drive, Suite 9600
Chicago, Illinois 60606
The Productivity Fund II 65,000(3) 0.9%
233 South Wacker Drive, Suite 9600
Chicago, Illinois 60606
Titus H. Harris, Jr. 267,555(4) 3.8%
5599 San Felipe, Suite 301
Houston, Texas 77056
John W. Lyons, Jr. 250,000 3.5%
P. O. Drawer 2789
Texas City, Texas 77590
Newton E. Dudney, M.D. 44,959(5) 0.6%
445 Medical Center Blvd., Suite 100
Webster, Texas 77598
Carl V Rush, Jr. 237,000(6) 3.3%
2525 Battleground Road
Deer Park, Texas 77536
</TABLE>
2
<PAGE> 6
<TABLE>
<S> <C> <C>
Titus H. Harris, III 179,870(7) 2.5%
2525 Battleground Road
Deer Park, Texas 77536
W. R. Reeves, Jr. 55,400(8) 0.8%
2525 Battleground Road
Deer Park, Texas 77536
David A. Swallow 28,000(9) 0.4%
2525 Battleground Road
Deer Park, Texas 77536
All Officers and Directors 1,199,397(10) 16.8%
as a Group(10 persons)(10)
</TABLE>
- -----------
(1) Except as otherwise indicated, each person possesses sole voting and
dispositive power with respect to the shares set forth beside his, her or
its name, subject to community property laws.
(2) The percentages are based on (a) there being 6,565,692 outstanding shares
of Common Stock as of July 31, 1996, and (b) there being options to
purchase a total of 554,483 shares of Common Stock granted under the
Company's stock option plans that are currently exercisable or will be so
within 60 days after July 31, 1996.
(3) Includes 65,000 shares of Common Stock owned by The Productivity Fund II
("TPF2"), and 42,150 shares of Common Stock owned by First Analysis
Corporation ("FAC"). Mr. Nicklin may be deemed to be the beneficial owner
of these shares due to his status as the President of FAC, which controls
the general partner of TPF2. Mr. Nicklin disclaims beneficial ownership
of (i) the shares of Common Stock beneficially owned by TPF2, and (ii) the
shares of Common Stock beneficially owned by FAC, except for the
following: (a) his pro rata portion of TPF2, as a stockholder of FAC,
which portion is equal to approximately 302 shares of Common Stock, and
(b) his pro rata portion of FAC, as a stockholder of FAC, which portion is
equal to approximately 26,526 shares of Common Stock.
(4) Includes 106,500 shares of Common Stock (1.5%) owned by a family member as
to which Mr. Harris disclaims any beneficial interest.
(5) Dr. Dudney's shares are pledged to a commercial bank.
(6) Includes 200,000 shares of Common Stock (2.8%) with respect to which Mr.
Rush has the right to acquire upon the exercise of options granted under
the Company's stock option plans.
(7) Includes 122,500 shares of Common Stock (1.7%) with respect to which Mr.
Harris has the right to acquire upon the exercise of options granted under
the Company's stock option plans.
(8) Includes 35,000 shares of Common Stock (0.5%) with respect to which Mr.
Reeves has the right to acquire upon the exercise of options granted under
the Company's stock option plans.
(9) Includes 25,000 shares of Common Stock (0.4%) with respect to which Mr.
Swallow has the right to acquire upon the exercise of options granted
under the Company's stock option plans.
(10) Includes an aggregate of 407,500 shares of Common Stock (5.7%) with respect
to which various officers and directors of the Company have the right to
acquire within 60 days upon the exercise of options granted under the
Company's stock option plans.
Under the credit agreement with its commercial bank, the Company
granted a security interest in all of the outstanding capital stock of its
subsidiaries to secure its obligations. In the event of a default by the
Company under the credit agreement with the bank, the bank could foreclose on
the pledged stock. Because the Company is organized in a holding company
structure with the principal operating assets at the subsidiary level, the
transfer of ownership of the pledged stock resulting from the foreclosure would
effectively cause a change of control of the Company.
3
<PAGE> 7
PROPOSAL 1 - ELECTION OF DIRECTORS
Pursuant to the Company's Bylaws (as amended), the Board of Directors
has fixed the number of positions on the Company's Board of Directors at five.
Accordingly, five persons are proposed to be elected and qualified as members
of the Company's Board of Directors at the Annual Meeting. Each director
elected will hold office until the next annual meeting of stockholders or until
his successor has been elected and qualified. The persons named in the
accompanying proxy have been nominated by the Board of Directors.
Directors will be elected by the vote of the holders of a majority of
the shares of Common Stock outstand-ing on the Record Date which are present in
person or represented by proxy and entitled to vote at the Annual Meeting. It
is the intention of the persons named as proxies in the enclosed proxy to vote
in favor of the persons listed below unless otherwise indicated on the proxy.
Each of the nominees has consented to be named in this Proxy Statement and to
serve as a director if elected. All five of the nominees are currently
directors of the Company and are standing for re-election. Although the Board
of Directors has no reason to believe that any of the nominees will be unable
or unwilling to serve if elected, should any of the nominees become unable or
unwilling to serve as a director if elected, the shares of Common Stock
represented by the proxies will be voted for the election of such other persons
as may be nominated by the Board of Directors.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE ELECTION OF THE
SLATE OF DIRECTORS NAMED ON THE ENCLOSED PROXY AND, UNLESS OTHERWISE MARKED TO
THE CONTRARY, DULY EXECUTED PROXIES RECEIVED FROM STOCKHOLDERS WILL BE VOTED
FOR THE SLATE OF DIRECTORS NAMED ON THE ENCLOSED PROXY.
INFORMATION ABOUT DIRECTOR NOMINEES
Set forth below is certain information regarding each of the five
nominees for election as a director. Each director elected will serve until the
next annual meeting of stockholders or until his successor has been duly
elected and qualified:
<TABLE>
<CAPTION>
POSITIONS WITH DIRECTOR
NAME AGE THE COMPANY SINCE
---- --- -------------- --------
<S> <C> <C> <C>
Newton E. Dudney, M.D. 70 Director; Member of Compensation and 1972
Nominating Committees
Titus H. Harris, Jr. 65 Director; Chairman of the Board; Member 1979
of Executive, Audit, Compensation, and
Nominating Committees
John W. Lyons, Jr. 58 Director; Member of Executive, Audit, and 1979
Compensation Committees
F. Oliver Nicklin 53 Director; Member of Executive, Audit, 1988
Compensation, and Nominating Committees
Director; Member of Executive Committee;
Carl V Rush, Jr. 41 President and Chief Executive Officer 1987
</TABLE>
NEWTON E. DUDNEY, M.D.
Newton E. Dudney, M.D., has been a director of the Company since 1972.
He also has been a physician engaged in private practice in League City, Texas,
since 1954.
4
<PAGE> 8
TITUS H. HARRIS, JR.
Titus H. Harris, Jr. has been a director of the Company since 1979 and
Chairman of the Board since 1987. He is currently Chairman of the investment
banking firm of Harris Webb & Garrison, Inc., a position he has held since
1994. From 1991 to 1994, Mr. Harris was a registered representative at Cowen &
Co., an investment banking firm. From 1983 to 1991, Mr. Harris was Senior Vice
President of the investment banking firm of Lovett Underwood Neuhaus & Webb,
Inc., and its predecessor, Lovett Mitchell Webb & Garrison, Inc. Mr. Harris is
the father of Titus H. Harris, III, the Executive Vice President, Chief
Financial Officer and Secretary of the Company.
JOHN W. LYONS, JR.
John W. Lyons, Jr. has been a director of the Company since 1979. He
is an attorney engaged in private practice since 1970, most recently as a
partner in the firm of Lyons & Plackemeier of Texas City, Texas.
F. OLIVER NICKLIN
F. Oliver Nicklin has been a director of the Company since 1988.
Since 1981, he has been a director, President and Treasurer of First Analysis
Corporation and a director and President of its subsidiary, First Analysis
Securities Corporation, an investment banking firm. Mr. Nicklin also is a
director of American Waste Services, Inc., an industrial waste management
company.
CARL V RUSH, JR.
Carl V Rush, Jr. has been a director and President of the Company
since 1987 and Chief Executive Officer since 1989. From 1985 to 1987, he was
Vice President -- Finance and Administration of the Company. Mr. Rush was
self-employed as a financial and management consultant from 1983 to 1985. From
1980 to 1983, he served in various management positions with Booker Oil
Services, a petroleum services company.
MEETINGS OF THE COMPANY'S BOARD OF DIRECTORS AND ITS COMMITTEES
The Board of Directors of the Company held seven meetings in fiscal
1996. In fiscal 1996, no incumbent director attended fewer than 75% of the
aggregate of (i) the total number of meetings of the Board of Directors and
(ii) the total number of meetings held by all committees on which such director
served. The Board of Directors has four standing committees -- Executive,
Audit, Compensation and Nominating -- which perform delegable functions on
behalf of the entire Board of Directors.
Executive Committee
During fiscal 1996, the Executive Committee consisted of one inside
director, Carl V Rush, Jr., and three outside directors, Titus H. Harris, Jr.,
John W. Lyons, Jr. and F. Oliver Nicklin. No meetings were held in fiscal
1996. The Executive Committee is authorized to act for the Board of Directors
to the full extent allowed by Delaware law.
Audit Committee
During fiscal 1996, the Audit Committee consisted of three outside
directors: Titus H. Harris, Jr., and John W. Lyons, Jr. and F. Oliver Nicklin.
One meeting was held in fiscal 1996. The Audit Committee annually reviews and
recommends to the full Board of Directors the firm to be engaged to audit the
accounts of the Company and its subsidiaries. Additionally, the Audit
Committee reviews with such independent auditors the plan and results of the
auditing engagement and the scope and results of the Company's procedures for
internal auditing, inquires as to the adequacy of internal accounting controls,
and considers the independence of the auditing firm.
5
<PAGE> 9
Compensation Committee
During fiscal 1996, the Compensation Committee consisted of four outside
directors: Newton E. Dudney, M.D., Titus H. Harris, Jr., John W. Lyons, Jr. and
F. Oliver Nicklin. Two meetings were held in fiscal 1996. The Compensation
Committee's responsibility is to discuss and approve (i) the recommendations of
management with regard to the granting of stock options to employees and (ii)
the compensation to be paid to executive officers.
Nominating Committee
During fiscal 1996, the Nominating Committee consisted of three outside
directors: Newton E. Dudney, M.D., Titus H. Harris, Jr., and F. Oliver
Nicklin. One meeting was held in fiscal 1996. Activities of the Nominating
Committee include nominating candidates to serve on the Board of Directors and
selecting directors to serve on committees for the coming fiscal year. The
Nominating Committee will consider stockholder recommendations for nominations
to the Board of Directors, provided that written notice is received by the
Company at its principal executive offices in conformity with all applicable
legal provisions, including Rule 14a-8 of the General Rules and Regulations
under the Securities Exchange Act of 1934. These recommendations must be
accompanied by a full statement of qualifications and an indication of the
candidate's willingness to serve.
INFORMATION ABOUT EXECUTIVE OFFICERS
Set forth below is certain information regarding the Company's executive
officers. All officers are elected to serve until their successors are duly
elected and qualified:
<TABLE>
<CAPTION>
POSITION(S) WITH OFFICER
NAME AGE THE COMPANY SINCE
---- --- ---------------- -------
<S> <C> <C> <C>
Carl V Rush, Jr. 41 Director; President and 1985
Chief Executive Officer
Titus H. Harris, III 36 Executive Vice President, Chief 1985
Financial Officer and Secretary
Donna L. Ratliff 49 Treasurer and Assistant Secretary 1985
W. R. Reeves, Jr. 48 Vice President - Environmental 1990
and Regulatory Affairs
David A. Swallow 46 Executive Vice President and General 1996
Manager of GNI Chemicals Corp.
Dawn S. Born 40 Vice President and General Counsel 1996
</TABLE>
CARL V RUSH, JR.
See "Information about Director Nominees" above.
TITUS H. HARRIS, III
Mr. Harris has been Chief Financial Officer of the Company since 1990,
Executive Vice President since 1989 and Secretary since 1987. From 1985 to
1989, he was Vice President of the Company. From 1984 to 1985, Mr. Harris was
a financial consultant to CRB Investments, Inc., a leveraged buy-out firm.
From 1982 to 1984, he attended the Graduate School of Business of the
University of Chicago, from which he received an M.B.A. Mr. Harris is the son
of Titus H. Harris, Jr., a director and the Chairman of the Board of the
Company.
6
<PAGE> 10
DONNA L. RATLIFF
Ms. Ratliff has been Treasurer of the Company since 1985 and Assistant
Secretary since 1987. From 1984 to 1985, she was Controller of Santa Fe Supply
Co., a wholesale picture framing supply and distribution company. From 1979 to
1984, Ms. Ratliff was Secretary and Treasurer of Gill Services, Inc., a
petroleum services company.
W. R. REEVES, JR.
Mr. Reeves has been Vice President -- Environmental and Regulatory
Affairs of the Company since 1990. He was Vice President -- Sales and
Marketing of Disposal Systems, Inc.("DSI"), a subsidiary of the Company since
1987, from 1985 to 1990. From 1983 to 1985, Mr. Reeves was employed by DSI as
a Sales Representative. From 1981 to 1983, Mr. Reeves was Manager of Cleanup
Operations for CECOS International, Inc., a subsidiary of Browning-Ferris
Industries, Inc.
DAVID A. SWALLOW
Mr. Swallow joined the Company in February, 1995 as Vice President of
Corporate Development for GNI Chemicals Corporation ("GNIC"), a subsidiary of
the Company. In January 1996, Mr. Swallow became an Executive Vice President
and General Manager of GNIC. Prior to joining the Company, Mr. Swallow was
Vice President-Commercial for Dixie Chemical Company, Inc. from 1990 to 1995
and held various management positions with Monsanto Chemical Company for the
sixteen years prior to 1990.
DAWN S. BORN
Ms. Born has been Vice President and General Counsel of the Company
since January, 1996. From October, 1994 to December, 1995, Ms. Born was
Director of Corporate Development and Contract Restructuring for Enron Capital
& Trade Resources, Inc., a subsidiary of Enron Corporation, a global energy
company. For more than thirteen years prior to October, 1994, Ms. Born
practiced law at the Houston-based law firm of Bracewell & Patterson, L.L.P.,
focusing on corporate finance and mergers and acquisitions, the final seven
years as a partner.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934 requires the
directors and officers of the Company, and persons who own more than 10% of a
registered class of the equity securities of the Company, to file reports of
ownership and changes of ownership with the SEC and the NASDAQ/NMS, and to
furnish to the Company copies of all Section 16(a) reports that they file.
Based solely on a review of the copies of such Section 16(a) reports received
by it, or written representations from certain reporting persons that no Forms
5 were required for those persons, except as set forth below, the Company
believes that during fiscal 1996, its officers, directors and greater than 10%
stockholders complied with all applicable filing requirements.
COMPENSATION OF DIRECTORS AND EXECUTIVE OFFICERS
DIRECTORS COMPENSATION
Directors are reimbursed by the Company for all out-of-pocket expenses
incurred in attending meetings of the Board of Directors. Outside directors,
other than the Chairman of the Board, are paid a fee for attending meetings of
the Board of Directors of $300 per board meeting. The Chairman of the Board of
the Company is paid $5,000 per quarter in lieu of any other compensation for
services to the Company.
7
<PAGE> 11
EXECUTIVE COMPENSATION
REPORT OF COMPENSATION COMMITTEE
The Company's Executive Compensation Program is administered and
reviewed annually by the Compensation Committee, which is a committee of the
board of directors (the "Committee") composed of the following non-employee,
outside directors: Newton E. Dudney, M.D., Titus H. Harris, Jr., John W.
Lyons, Jr. and F. Oliver Nicklin. None of the members of the Committee have
interlocking or other relationships with the Company that would jeopardize
their independence as Committee members. The Committee's responsibility is to
discuss and approve (i) the compensation (including cash and non-cash
compensation) to be paid to executive officers of the Company and (ii) the
recommendations of management with regard to the granting of stock options to
employees. This report sets forth the Company's compensation policy and
guidelines and the major elements of executive compensation and the basis by
which fiscal year 1996 compensation determinations were made by the Committee
with respect to the executive officers of the Company, including the executive
officers who are named in the compensation tables.
Compensation Policy and Guidelines. The Committee believes that the
goals of executive compensation should be to attract and retain high-quality
executive officers who will contribute to the long-term success of the Company
and to align executive compensation with the Company's long-term business
objectives and performance. The Committee believes that its goals are best met
by providing the executive officers with compensation that combines (i) a base
salary at competitive levels with (ii) annual cash incentives and stock options
tied to the Company's long-term business objectives. The Committee's decisions
are predominately subjective in nature, in that the Committee considers the
following factors in making its decisions: (a) the financial performance of
the Company, (b) the Company's progress toward achieving long-term strategic
objectives, (c) an analysis of the strengths and weaknesses of the individual
executive officers, (d) the Committee's perception of such individual's
historical performance and expected future contributions to the success of the
Company, and (e) the general competitiveness of the Company's executive
compensation program compared with a group of companies that includes companies
engaged in the same business as the Company and growth companies of similar
size as the Company (collectively, the "Comparison Group"). None of the
companies in the Comparison Group are included in the Peer Group used in the
Performance Graph because the companies in the Peer Group are greater in size
and have a longer operating history than the Company. The Committee believes
that its overall executive compensation program is in the median range of the
Comparison Group.
Compensation Program Elements. The particular elements of the
compensation programs for the Company's executive officers are explained in
more detail below.
Base Salary. Base salary levels are primarily determined by the
Committee in consideration of the financial performance of the Company
and compensation of executive officers of companies in the Comparison
Group. Based in part on the findings contained in a compensation
study conducted near the beginning of fiscal 1995 by an outside
consultant that included a portion of the Comparison Group of
companies, the Committee believed that base salary levels for most of
the Company's executive officers was considered to be reasonable in
relation to companies in the Comparison Group. The Committee did
elect to adjust the base salary of one of the Company's executive
officers during fiscal 1996, primarily based on that executive
officer's individual historical performance and expected future
contributions to the success of the Company.
Bonus and Other Annual Compensation. Beginning with fiscal 1995, the
Company adopted a formula-based annual incentive program for the
Company's Chief Executive Officer ("CEO") and Chief Financial Officer
("CFO") (the "Formula Program") that is tied solely and directly to
annual, calendar-year fully-diluted earnings per share ("EPS"). The
Company does not pay a bonus to the CEO and CFO under the Formula
Program until a pre- determined EPS target has been achieved. Upon
the achievement of such target, the CEO and the CFO receive a bonus,
the amount of which is determined based on the amount by which EPS
exceeds the pre-determined target. The Company's CEO and CFO each
received a cash bonus pursuant to this incentive program as a result
of the pre-determined target for calendar 1995 having been exceeded.
Generally, at the discretion of the Committee, other annual
compensation is provided to the Company's other executive officers in
the form of cash bonuses. The Committee's decision to award an annual
bonus to such other executive officers is based primarily upon an
analysis of the financial performance and operational achievements of
the Company, as well
8
<PAGE> 12
as the particular executive officer's job performance and the specific
accomplishments of the executive officer during the preceding
twelve-month period.
In fiscal 1996, the Committee authorized the payment of a cash bonus
to one of the executive officers named in the compensation tables.
Moreover, in previous fiscal years, a discretionary bonus has been
paid to such executive officers and may be paid in future years. In
addition to the foregoing, the Committee may elect to provide to the
executive officers other forms of cash and non-cash compensation when
the Committee deems it in the best interest of the Company to do so
based upon the factors recited above.
Stock Option Program. Currently, the Committee utilizes stock option
grants to provide an incentive for the executive officers to manage
the Company for the long-term benefit of its owners as opposed to the
short-term benefit of the executive officers. Accordingly, the
Committee grants stock options at or above fair market value, thus
tying the value of the grant to the future performance of the
Company's Common Stock.
Under the Formula Program, based on an internal estimate of EPS, each
year the Committee grants to the CEO and the CFO a number of incentive
stock options determined by subtracting a threshold amount from the
estimated EPS, by subtracting therefrom an amount equal to the
difference between the preceding calendar year's actual EPS and the
estimated EPS for such year, and by multiplying the result thereof by
a pre-determined base number. Pursuant to the provisions of the
Formula Program, the Committee made grants in fiscal 1996 of incentive
stock options to the CEO and the CFO of the Company, and may make
additional grants in future years of incentive stock options to the
CEO and the CFO of the Company under the Formula Program.
The Committee's decision to grant stock options to such other
executive officers is based primarily upon an analysis of the
financial performance and operational achievements of the Company, as
well as the particular executive officer's job performance and the
Committee's perception of the potential long-term contribution of such
officer. The Committee did not grant any stock options to any of the
other executive officers named in the compensation tables in fiscal
1996.
Discussion of Fiscal 1996 Compensation for the Chief Executive
Officer. The Committee believes that the vision and leadership of the CEO is
important in achieving the Company's long-term strategic business objectives.
Based in part on the findings contained in a compensation study conducted near
the beginning of fiscal 1995 by an outside consultant that included a portion
of the Comparison Group of companies, the Committee believed that the base
salary level for the Company's CEO was considered to be reasonable in relation
to companies in the Comparison Group. Therefore, the Committee did not adjust
the base salary paid to the CEO in fiscal 1996. Other than pursuant to the
Formula Program, the Committee did not pay an annual cash bonus to the CEO in
fiscal 1996. Likewise, other than pursuant to the Formula Program, grants of
incentive stock options to the CEO were not made by the Committee during fiscal
1996.
Summary. The main elements of the program: base salary, annual bonus,
and stock option plans, are typical of executive compensation programs in other
public companies and serve to provide appropriate reward for ongoing as well as
strategic efforts of the Company's executives. The Committee is continually
evaluating the compensation of the CEO and other executive officers. The
Committee believes that competitive executive officer compensation programs are
necessary for the ongoing retention of the executive employees who are
essential to the future development of the Company and growth in stockholder
value.
THE COMPENSATION COMMITTEE OF THE BOARD OF DIRECTORS
Titus H. Harris, Jr., Chairman John W. Lyons, Jr.
Newton E. Dudney, M.D. F. Oliver Nicklin
Notwithstanding Securities and Exchange Commission ("SEC") filings by the
Company that have incorporated or that may incorporate by reference other SEC
filings (including this Proxy Statement) in their entirety, the Report of
Compensation Committee on Executive Compensation shall not be incorporated by
reference into such filings and shall not be deemed to be "filed" with the SEC
except as specifically provided otherwise or to the extent required by Item 402
of Regulation S-K.
9
<PAGE> 13
SUMMARY COMPENSATION TABLE
The following table summarizes the compensation paid by the Company
for the three fiscal years ended June 30, 1996 to its Chief Executive Officer
and to the other executive officers of the Company whose annual cash
compensation received from the Company for services rendered during fiscal 1996
exceeded $100,000 (the "Named Executive Officers").
<TABLE>
<CAPTION>
ANNUAL COMPENSATION LONG TERM COMPENSATION(1)
-------------------------------------- ---------------------------------
AWARDS PAYOUTS
---------------------- -------
RESTRICTED STOCK ALL OTHER
NAME AND OTHER ANNUAL STOCK UNDERLYING LTIP COMPEN-
PRINCIPAL POSITION YEAR SALARY($) BONUS($) COMPENSATION($) AWARD(S)($) OPTIONS(#) PAYOUTS SATION(2)
------------------ ---- --------- -------- --------------- ----------- ---------- ------- ---------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Carl V Rush, Jr. . . . . . . . . . 1996 $183,250 $20,400 $ -0- $-0- 17,000 $-0- $ 465
President and Chief . . . . . 1995 183,250 -0- -0- -0- 165,000 -0- 919
Executive Officer . . . . . . . 1994 150,000 -0- 35,000 -0- -0- -0- 3,148
Titus H. Harris, III . . . . . . . 1996 148,500 10,200 -0- -0- 8,500 -0- 2,753
Exec. Vice President, Chief . . 1995 148,500 -0- -0- -0- 82,500 -0- 2,474
Financial Officer & Secretary 1994 120,000 -0- 25,000 -0- -0- -0- 2,783
W. R. Reeves, Jr. . . . . . . . . . 1996 98,750 10,000 -0- -0- -0- -0- 2,513
Vice President-Environmental 1995 90,000 -0- -0- -0- -0- -0- 2,513
and Regulatory Affairs . . . . . 1994 90,000 20,000 -0- -0- -0- -0- 2,987
David A. Swallow . . . . . . . . . 1996 139,000 -0- -0- -0- 25,000 -0- 1,073
Exec. Vice Pres. & General . . . 1995 45,253(3) 10,000 -0- -0- 75,000 -0- -0-
Manager, GNI Chemicals . . . . . 1994 -0- -0- -0- -0- -0- -0- -0-
</TABLE>
- ---------------------
(1) The Company has a 1991 Stock Option Plan, as amended (the "1991 Plan"),
for the benefit of the Company's employees, including its executive
officers. The 1991 Plan authorizes the Company, upon the
recommendation of the Compensation Committee, to grant options to
purchase a total of 600,000 shares of Common Stock to selected
employees of the Company. The 1991 Plan provides for the granting of
"incentive stock options" within the meaning of Section 422 of the
Internal Revenue Code. The 1991 Plan also provides for the granting of
options that do not comply with Section 422. The options granted under
the 1991 Plan have tandem tax withholding rights. The Company also has
a 1995 Management Equity Incentive/Stock Option Plan (the "1995 Plan")
for the benefit of the Company's executive officers. The 1995 Plan
authorizes the Company, upon the recommendation of the Compensation
Committee, to grant options to purchase a total of 500,000 shares of
Common Stock to selected executive officers of the Company. The 1995
Plan provides for the granting of "incentive stock options" within the
meaning of Section 422 of the Internal Revenue Code. The 1995 Plan
also provides for the granting of options that do not comply with
Section 422. The options granted under the 1995 Plan have tandem tax
withholding rights.
(2) No Named Executive Officer had "perquisites and other personal
benefits" with a value greater than the lesser of $50,000 or 10% of
reported salary and bonus. The Company maintains a 401(k) plan. For
fiscal years 1994, 1995 and 1996, the All Other Compensation column
includes amounts paid by the Company pursuant to the Company's 401(k)
plan. Each participant is able to direct the Company to contribute to
the plan a minimum of 2% and a maximum of 12% of the participant's
eligible earnings, subject to certain limitations set forth in the plan
and the Internal Revenue Code of 1986, as amended (the "Code").
Subject to certain restrictions, the Company is required to make
mandatory contributions and also is permitted to make discretionary
contributions to the plan, at rates determined by the Compensation
Committee, which are allocated to each participant based on the
participant's contributions to the plan.
(3) Mr. Swallow joined the Company in February, 1995. Therefore, Mr.
Swallow's compensation for fiscal 1995 reflects only the partial period
that he had been employed by the Company.
10
<PAGE> 14
OPTION GRANTS IN LAST FISCAL YEAR
The following table provides information on option grants in
fiscal 1996 to the Named Executive Officers.
<TABLE>
<CAPTION>
POTENTIAL REALIZABLE
INDIVIDUAL GRANTS VALUE AT ASSUMED
--------------------------------- ANNUAL RATES OF
NUMBER OF PERCENT OF TOTAL STOCK PRICE
SECURITIES OPTIONS APPRECIATION FOR
UNDERLYING GRANTED TO EXERCISE OPTION TERM
OPTIONS EMPLOYEES IN PRICE EXPIRATION -----------------------------
NAME GRANTED(#) FISCAL YEAR ($/SHARE) DATE 5% ($) 10% ($)
- ---- ------------ ---------------- --------- ---------- ------------- ------------
<S> <C> <C> <C> <C> <C> <C>
Carl V Rush, Jr. . . . . 17,000(1) 16.9% 5.00 01/23/06 53,456 135,468
Titus H. Harris, III . . . 8,500(1) 8.5% 5.00 01/23/06 26,728 67,734
W. R. Reeves, Jr. . . . . . . -0- -0-
David A. Swallow . . . . . 25,000(1) 24.9% 6.69 10/27/05 105,143 266,454
</TABLE>
- -----------------------
(1) Stock options granted on January 23, 1996 under the Company's 1995
Plan. Of Mr. Rush's option grants, all 17,000 options will be fully
exercisable on January 23, 1998. Of Mr. Harris's option grants, all
8,500 options will be fully exercisable on January 23, 1998. Stock
options granted on October 27, 1995 under the Company's 1991 Plan. Of
Mr. Swallow's option grants, 8,333 options will be fully exercisable on
October 27, 1996, 8,333 will be fully exercisable on October 27, 1997,
and 8,334 options will be fully exercisable on October 27, 1998. See
also footnote No. 1 to the Summary Compensation Table above.
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR
AND FISCAL YEAR-END OPTION VALUES
The following table provides information on option exercises in fiscal
1996 by the Named Executive Officers and the value of such officers'
unexercised options at June 30, 1996.
<TABLE>
<CAPTION>
NUMBER OF SECURITIES VALUER OF UNEXERCISED IN-
UNDERLYING UNEXERCISED THE-MONEY OPTIONS AT
SHARES VALUE OPTIONS AT FISCAL YEAR-END(#) FISCAL YEAR-END($)
ACQUIRED ON REALIZED ------------------------------ ----------------------------
NAME EXERCISE(#) ($) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- ---- ------------- -------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Carl V Rush, Jr. . . . . . . . . -0- -0- 200,000 57,000 187,500 54,250
Titus H. Harris, III . . . . . . -0- -0- 122,500 28,500 103,125 27,125
W. R. Reeves, Jr. . . . . . . . . -0- -0- 35,000 -0- 12,500 -0-
David A. Swallow . . . . . . . . -0- -0- 25,000 50,000 -0- -0-
</TABLE>
11
<PAGE> 15
COMPARATIVE STOCK PERFORMANCE
The performance graph shown below was prepared by Research Data Group,
for use in this proxy statement. As required by applicable rules of the SEC,
the graph was prepared based upon the following two assumptions: (i) $100 was
invested in the Company's Common Stock, the S&P 500 and the Dow Jones
Industrial & Commercial Services - Pollution Control & Waste Management Index
("Industry Index") on July 1, 1991, the first day of the Company's fiscal year
ended June 30, 1992; and (ii) the Industry Index assumes dividend reinvestment.
COMPARISON OF FIVE YEAR CUMULATIVE TOTAL RETURN*
AMONG GNI GROUP, INC., THE S & P 500 INDEX
AND THE DOW JONES POLLUTION CONTROL & WASTE MANAGEMENT INDEX
[PERFORMANCE GRAPH]
6/91 6/92 6/93 6/94 6/95 6/96
---- ---- ---- ---- ---- ----
GNI GROUP, INC. $100 $121 $167 $ 62 $154 $108
S & P 500 $100 $113 $129 $131 $165 $208
DOW JONES POLLUTION CONTROL & $100 $ 89 $ 92 $ 82 $ 93 $ 97
WASTE MANAGEMENT
* $100 INVESTED ON 06/30/91 IN STOCK OR INDEX -
INCLUDING REINVESTMENT OF DIVIDENDS.
FISCAL YEAR ENDING JUNE 30.
Graph produced by Research Data Group 01-August-96
1666TGNU
12
<PAGE> 16
PROPOSAL 2 - SELECTION OF AUDITOR
The second proposal for consideration and action by the stockholders at
the Annual Meeting is the ratification of the appointment of KPMG Peat Marwick,
LLP as the independent auditor of the Company for the fiscal year ended June
30, 1997. KPMG Peat Marwick, LLP served the Company as independent auditor for
the fiscal year ended June 30, 1996. Although the Company is not required to
solicit the consent of the stockholders to the ratification of the appointment
of the independent auditor of the Company for fiscal year ended June 30, 1997,
the Company elects to do so. Representatives of KPMG Peat Marwick, LLP have
been invited to the Annual Meeting and the Company expects them to be present.
They will have the opportunity to make a statement, if they desire to do so,
and to respond to appropriate questions. The ratification of the appointment
of KPMG Peat Marwick, LLP requires the affirmative vote of the holders of a
majority of the shares of Common Stock outstanding on the Record Date which are
present in person or represented by proxy and entitled to vote at the Annual
Meeting. In the event that the stockholders do not ratify the appointment of
KPMG Peat Marwick, LLP as the independent auditor of the Company, the Board of
Directors will consider retaining other independent auditors.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE RATIFICATION OF
THE APPOINTMENT OF KPMG PEAT MARWICK, LLP AS THE INDEPENDENT AUDITOR OF
THE COMPANY FOR THE FISCAL YEAR ENDING JUNE 30, 1997, AND, UNLESS MARKED TO
THE CONTRARY, DULY EXECUTED PROXIES RECEIVED FROM STOCKHOLDERS WILL BE VOTED
FOR THE RATIFICATION OF SUCH APPOINTMENT.
STOCKHOLDERS' PROPOSALS FOR THE 1997 ANNUAL MEETING
Proposals of stockholders to be considered by the Company for inclusion
in the proxy material for the 1997 Annual Meeting of Stockholders must be
received by the Secretary of the Company no later than June 2, 1997. Such
proposals must be in conformity with all applicable legal provisions, including
Rule 14a-8 of the General Rules and Regulations under the Securities Exchange
Act of 1934.
OTHER MATTERS
The Board of Directors knows of no other matters to be brought before
the Annual Meeting. However, if other matters should properly come before the
Annual Meeting, it is the intention of the persons named in the accompanying
proxy to vote such proxy in accordance with their judgment on such matters.
FORM 10-K
A copy of the 1996 Annual Report on Form 10-K filed with the SEC may be
obtained, without charge, by writing the Secretary, The GNI Group, Inc., 2525
Battleground Road, P. O. Box 220, Deer Park, Texas 77536.
By order of the Board of Directors
Titus H. Harris, III
Secretary
13
<PAGE> 17
P R O X Y THE GNI GROUP, INC. P R O X Y
2525 BATTLEGROUND ROAD, DEER PARK, TX 77536
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby appoints Titus H. Harris, Jr. and John W. Lyons,
Jr. as Proxies, each with the power to appoint his substitute, and hereby
authorizes them to represent and to vote, as designated below, all of the
shares of Common Stock of The GNI Group, Inc. held of record by the undersigned
on September 4, 1996 at the 1996 Annual Meeting of Stockholders to be held on
Tuesday, October 29, 1996 at 8:30 a.m., Houston time, at the Four Seasons
Hotel, 1300 Lamar Street, Houston, Texas or any adjournment thereof.
1. ELECTION OF DIRECTORS
FOR all Nominees listed Below WITHHOLD AUTHORITY
(except as to the contrary below) to vote for all nominees listed below
N. E. Dudney, M.D., T. H. Harris, Jr., J. W. Lyons, Jr., F. O. Nicklin,
Jr., and C. V Rush, Jr.
(INSTRUCTIONS: TO WITHHOLD AUTHORITY TO VOTE FOR ANY INDIVIDUAL NOMINEE,
WRITE THAT NOMINEE'S NAME ON THE SPACE PROVIDED BELOW.)
---------------------------------------------------------------------------
2. PROPOSAL TO RATIFY THE APPOINTMENT OF KPMG PEAT MARWICK, LLP as the
Company's independent auditor for the fiscal year ending June 30, 1997.
FOR AGAINST ABSTAIN
(TO BE SIGNED ON REVERSE SIDE)
<PAGE> 18
3. In their discretion, the Proxies are authorized to vote upon such other
business as may properly come before the meeting and any adjournment
thereof.
THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED IN THE MANNER DIRECTED HEREIN
BY THE UNDERSIGNED STOCKHOLDER. IF NO DIRECTION IS MADE, THIS PROXY WILL BE
VOTED FOR PROPOSALS 1 AND 2.
I plan to attend the Annual Meeting. PLEASE SIGN EXACTLY AS NAME APPEARS
BELOW. WHEN SHARES ARE HELD BY
JOINT TENANTS, BOTH SHOULD SIGN.
WHEN SIGNING AS ATTORNEY, EXECUTOR,
ADMINISTRATOR, TRUSTEE OR GUARDIAN,
PLEASE GIVE FULL TITLE AS SUCH. IF
A CORPORATION, PLEASE SIGN IN FULL
CORPORATE NAME BY PRESIDENT OR
OTHER AUTHORIZED OFFICER. IF A
PARTNERSHIP, PLEASE SIGN IN
PARTNERSHIP NAME BY AUTHORIZED
PERSON.
DATED: , 1996
-----------------------
------------------------------------
(STOCKHOLDER'S SIGNATURE)
------------------------------------
(STOCKHOLDER'S SIGNATURE)
PLEASE MARK, SIGN, DATE, AND RETURN THE PROXY CARD PROMPTLY USING THE ENCLOSED
ENVELOPE.
