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
GRACO INC.
----------------------------------------------
(Name of Registrant as Specified in its Charter)
----------------------------------------------------------------------
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1) Title of each class of securities to which transaction applies:_______
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paid previously. Identify the previous filing by registration statement
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<PAGE>
[LOGO]
GRACO INC.
4050 Olson Memorial Highway
Golden Valley, Minnesota 55422-5332
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
Dear Shareholder:
Please join us on Tuesday, May 6, 1997, at 1:00 p.m. for Graco's Annual
Meeting of Shareholders in the first floor auditorium of the Russell J. Gray
Technical Center, 88-11th Avenue N.E., Minneapolis, Minnesota.
At this meeting, shareholders will consider the following matters:
1. Election of two directors to serve for three-year terms.
2. Adoption of an amendment to the Long Term Stock Incentive Plan.
3. Ratification of the selection of independent auditors for the current
year.
4. Transaction of such other business as may properly come before the
meeting.
Shareholders of record at the close of business on March 7, 1997, are
entitled to vote at this meeting or any adjournment.
We encourage you to join us and participate in the meeting. If you are unable
to do so, a Proxy Card is enclosed for your use. When marked and returned, it
will authorize us to vote your shares according to your instructions.
If you do not return the Proxy Card and do not vote your shares in person at
the meeting, you will lose your right to vote on matters which are important to
you as a shareholder. Accordingly, if you do not plan to attend the meeting,
please execute and return the enclosed Proxy Card promptly. This will not
prevent you from voting in person if you decide to attend the meeting.
Sincerely,
/s/George Aristides /s/Robert M. Mattison
George Aristides Robert M. Mattison
President and Secretary
Chief Executive Officer
March 27, 1997
Golden Valley, Minnesota
================================================================================
YOUR VOTE IS IMPORTANT
We urge you to mark, date and sign the enclosed Proxy Card and return it
in the accompanying envelope as soon as possible. If you attend the
meeting, you may still revoke your proxy and vote in person if you wish.
================================================================================
<PAGE>
TABLE OF CONTENTS
Page
Election of Directors........................................2
Nominees and Other Directors...............................2
Meetings and Committees of the Board of Directors..........4
Nomination of Directors....................................5
Executive Compensation.....................................5
Report of the Management Organization and
Compensation Committee...............................5
Comparative Stock Performance Graph.....................7
Summary Compensation Table..............................8
Option/SAR Grants Table (Last Fiscal Year)..............9
Aggregated Option/SAR Exercises In Last Fiscal Year
and Fiscal Year-End Option/SAR Values...............10
Retirement Arrangements................................10
Directors' Fees........................................11
Beneficial Ownership of Shares............................11
Principal Shareholders.................................12
Section 16 Compliance..................................12
Adoption of an Amendment to Long Term Stock Incentive Plan..13
Ratification of Appointment of Independent Public Auditors..16
Other Matters...............................................16
Shareholder Proposals.......................................16
==============================================================================
A copy of the 1996 Graco Inc. Annual Report on Form 10-K, including the
Financial Statements and the Financial Statement Schedule, can be obtained
free of charge by calling (612) 623-6778 or writing:
Treasurer
Graco Inc.
P.O. Box 1441
Minneapolis, Minnesota
55440-1441
==============================================================================
1
<PAGE>
[LOGO]
GRACO INC.
4050 Olson Memorial Highway
Golden Valley, Minnesota 55422-5332
PROXY STATEMENT
FOR ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD MAY 6, 1997
Your proxy, represented by the accompanying Proxy Card, is solicited by the
Board of Directors of Graco Inc. ("Graco" or the "Company") in connection with
the Annual Meeting of the Shareholders of the Company to be held on May 6, 1997,
and any adjournments of that meeting.
The costs of the solicitation, including the cost of preparing and mailing
the Notice of Meeting and this Proxy Statement, will be paid by the Company.
Solicitation will be primarily by mailing this Proxy Statement to all
shareholders entitled to vote at the meeting. Proxies may be solicited by
officers of the Company personally, but at no compensation in addition to their
regular compensation as officers. The Company may reimburse brokers, banks and
others holding shares in their names for third parties, for the cost of
forwarding proxy material to, and obtaining proxies from, third parties. The
Proxy Statement and accompanying Proxy Card will be first mailed to shareholders
on or about March 27, 1997.
Proxies may be revoked at any time prior to being voted by giving written
notice of revocation to the Secretary of the Company. All properly executed
proxies received by management will be voted in the manner set forth in this
Proxy Statement or as otherwise specified by the shareholder giving the proxy.
Shares voted as abstentions on any matter (or a "withhold vote for" as to
directors) will be counted as shares that are present and entitled to vote for
purposes of determining the presence of a quorum at the meeting and as unvoted,
although present and entitled to vote, for purposes of determining the approval
of each matter as to which the shareholder has abstained. If a broker submits a
proxy which indicates that the broker does not have discretionary authority as
to certain shares to vote on one or more matters, those shares will be counted
as shares that are present and entitled to vote for purposes of determining the
presence of a quorum at the meeting, but will not be considered as present and
entitled to vote with respect to such matters.
Only shareholders of record as of the close of business on March 7, 1997, may
vote at the meeting or at any adjournment. As of that date, there were issued
and outstanding 17,217,589 common shares of the Company, the only class of
securities entitled to vote at the meeting. Each share registered to a
shareholder of record is entitled to one vote. Cumulative voting is not
permitted.
PROPOSAL 1
ELECTION OF DIRECTORS
NOMINEES AND OTHER DIRECTORS
The number of directors of the Company is currently fixed at ten members, two
of whom are executive officers of the Company. Members of the Board of Directors
serve for three-year terms, with a class of directors consisting of three or
four members being elected each year. Vacancies that occur during a term may be
filled by a majority vote of the directors then in office, though less than a
quorum, and directors so chosen hold office for a term expiring at the next
Annual Meeting of Shareholders.
Due to the recent resignation of Joe R. Lee, effective November 1, 1996,
there currently exists a vacancy in the class of directors which is up for
reelection. The Board Structure and Policy Committee is currently identifying
qualified candidates.
At the forthcoming Annual Meeting, two persons are to be elected to the
Company's Board of Directors. Proxies may not be voted for more than two
nominees. The Board has nominated George Aristides and Ronald O. Baukol for
three-year
2
<PAGE>
terms expiring in the year 2000. The nominees, George Aristides and Ronald O.
Baukol, have previously been elected as directors of the Company by the
shareholders.
Unless otherwise instructed not to vote for the election of directors,
proxies will be voted to elect the nominees. A director candidate must receive
the vote of a majority of the voting power of the shares present in order to be
elected.
The following information, as of March 7, 1997, is given as to the nominees
for election and as to the seven directors whose terms of office will continue
after the Annual Meeting. Except as noted below, each of the nominees and
directors has held the same position, or another executive position with the
same employer, for the past five years.
Nominees for election at this meeting to terms expiring in the year 2000:
George Aristides
Mr. Aristides, 61, is President and Chief Executive Officer of the Company.
From 1993 to 1995, he was President and Chief Operating Officer; from March
to June 1993, he was Executive Vice President; and from 1985 to March 1993,
he was Vice President, Manufacturing Operations and Controller. Mr. Aristides
has been a director of Graco since 1993.
Ronald O. Baukol
Mr. Baukol, 59, is Executive Vice President, International Operations,
Minnesota Mining and Manufacturing Company ("3M"), a diversified manufacturer
of industrial, commercial, consumer and health care products. Mr. Baukol has
been a director of Graco since 1989 and is a director of 3M and The Toro
Company.
Directors whose terms continue until 1998:
Dale R. Olseth
Mr. Olseth, 66, is Chairman and Chief Executive Officer, BSI Corporation, a
biotechnical company specializing in the modification of material surfaces.
Mr. Olseth has been a director of Graco since 1972 and is a director of The
Toro Company.
Charles M. Osborne
Mr. Osborne, 43, is Senior Vice President and Chief Financial Officer, Deluxe
Corporation, a printer of checks and business forms and a supplier of
electronic processing services to the financial payments industry. Mr.
Osborne has been a director of Graco since 1995 and is a director of
Printware Inc.
William G. Van Dyke
Mr. Van Dyke, 51, is Chairman, President and Chief Executive Officer,
Donaldson Company, Inc., a diversified manufacturer of air and liquid
filtration products. Mr. Van Dyke has been a director of Graco since 1995 and
is a director of Donaldson Company, Inc.
Directors whose terms continue until 1999:
David A. Koch
Mr. Koch, 66, is Chairman of the Board of the Company. He was formerly
Chairman and Chief Executive Officer from 1985 to 1995. Mr. Koch has been a
director of Graco since 1962 and is a director of ReliaStar Financial Corp.
Richard D. McFarland
Mr. McFarland, 67, is Vice Chairman, Dain Bosworth Incorporated, a brokerage
firm. Dain Bosworth Incorporated has performed investment banking services
for Graco in the past and this relationship is expected to continue. He was
formerly Chairman of Inter-Regional Financial Group, Inc., currently Interra
Financial. Mr. McFarland has been a director of Graco since 1969.
3
<PAGE>
Lee R. Mitau
Mr. Mitau, 48, is Executive Vice President, General Counsel and Secretary of
First Bank System, Inc., a regional bank holding company. First Bank National
Association has extended a credit line to the Company and also provides cash
management and foreign exchange services. The trustee of the Graco Employee
Retirement Plan is First Trust National Association. Both of these
associations are subsidiaries of First Bank System, Inc. From 1983 to 1995,
Mr. Mitau was a partner of Dorsey & Whitney LLP. Mr. Mitau has been a
director of Graco since 1990 and is a director of H.B. Fuller, Inc.
Martha A.M. Morfitt
Ms. Morfitt, 39, is Vice President, Green Giant Brands, Pillsbury Company, a
diversified marketer of packaged food products. From 1993 to February 1994,
she was Vice President, Team Leader, Green Giant Shelf Stable Vegetables,
Pillsbury Company, and from September 1990 to June 1993, she was Vice
President, General Manager, Fraser Valley Foods, Pillsbury Canada Limited.
Ms. Morfitt has been a director of Graco since 1995.
MEETINGS AND COMMITTEES OF THE BOARD OF DIRECTORS
During 1996, the Board of Directors met six times. Attendance of the
Company's directors at all Board and Committee meetings averaged 95 percent.
During 1996, each director, with the exception of Joe R. Lee and Gerard C.
Planchon, attended at least 75 percent of the aggregate number of meetings of
the Board and of all committees of the Board on which he or she served.
The Board of Directors has an Audit Committee, a Board Structure and Policy
Committee, a Management Organization and Compensation Committee, and a
Technology Committee. Membership as of March 7, 1997, the record date, was as
follows:
<TABLE>
<CAPTION>
<S> <C> <C> <C>
Management
Board Structure Organization
Audit and Policy and Compensation Technology
- ----------------- ------------------ ------------------ --------------------
L.R. Mitau, Chair D.R. Olseth, Chair R.O. Baukol, Chair W.G. Van Dyke, Chair
R.D. McFarland G. Aristides M. A.M. Morfitt G.Aristides
C.M. Osborne D.A. Koch D.R. Olseth R.O. Baukol
L.R. Mitau C.M. Osborne D.A. Koch
</TABLE>
Audit Committee (3 meetings in fiscal 1996)
o Reviews the accounting, control and legal compliance policies and
procedures of the Company.
Board Structure and Policy Committee (1 meeting in fiscal 1996)
o Evaluates policies related to Board membership and procedure;
o Reviews and makes recommendations on fees and benefits for directors; and
o Recommends to the Board of Directors nominees for the position of
director.
Management Organization and Compensation Committee (3 meetings in fiscal 1996)
o Develops the Company's philosophy on executive compensation;
o Determines the compensation of the Company's executive officers;
o Reviews and makes recommendations on management organization and
succession plans; and
o Administers the Company's stock option and incentive plans.
Technology Committee (1 meeting in fiscal 1996)
o Reviews and appraises the Company's technology and manufacturing programs,
policies, practices, personnel, investments, education and recognition;
o Reviews and appraises new product plans and introductions;
o Reviews and evaluates trends in technology and their anticipated impact on
the Company's operations; and
o Assesses the level and commercial value of the Company's proprietary
technology, its protection and its utilization.
4
<PAGE>
NOMINATION OF DIRECTORS
Shareholders may nominate candidates for election to the Board of Directors
who will be considered by the Board Structure and Policy Committee.
Recommendations should be made in writing and addressed to the Committee in care
of the Secretary of the Company at the Company's corporate headquarters. The
By-laws provide that timely notice must be received by the Secretary not less
than 60 days prior to the date of the Annual Meeting of Shareholders, the first
Tuesday in May of each year. The nominations must set forth (i) the name, age,
business and residential addresses and principal occupation or employment of
each nominee proposed in such notice; (ii) the name and address of the
shareholder giving the notice, as it appears in the Company's stock register;
(iii) the number of shares of capital stock of the Company which are
beneficially owned by each such nominee and by such shareholder; and (iv) such
other information concerning each such nominee as would be required under the
rules of the Securities and Exchange Commission in a proxy statement soliciting
proxies for the election of such nominee. Such notice must also include a signed
consent of each such nominee to serve as a director of the Company, if elected.
EXECUTIVE COMPENSATION
Report of the Management Organization and Compensation Committee
Overview
The Management Organization and Compensation Committee of the Board of
Directors (hereafter called "the Committee"), composed of four independent
nonemployee directors, is responsible for developing the Company's philosophy on
executive compensation. Consistent with this philosophy, the Committee develops
compensation programs for the Chief Executive Officer and each of the other
executive officers of the Company. On an annual basis, the Committee determines
the compensation to be paid to the Chief Executive Officer and other executive
officers, based on the provisions of the compensation plans.
Compensation plans which provide for grants or awards of Company stock are
approved by the Board of Directors and the shareholders of the Company. In 1993,
the Internal Revenue Code was amended to include a deductibility limit for
remuneration to certain executive officers [Section 162(m) of the Code].
Qualified performance-based compensation is not subject to this deductibility
limit. In order to qualify grants of stock options and stock appreciation rights
as performance-based compensation under Section 162(m), the Company's Long Term
Stock Incentive Plan must be amended to include a periodic per person aggregate
limit. The Long Term Stock Incentive Plan meets the requirements of Section
162(m) in all other respects. To meet the aggregate limit requirement, the
Committee has recommended to the Board of Directors that the Long Term Stock
Incentive Plan be amended to include an annual per person aggregate limit of
200,000 shares of Company stock subject to award or grant.
Executive Compensation Philosophy and Program
It is the Company's philosophy to set its executive compensation structure at
levels which are competitive with those of durable goods manufacturers of
comparable size. These levels are determined by consulting a variety of
independent third-party executive compensation surveys. Executive compensation
is then delivered through:
o base salaries which recognize the experience and performance of individual
executives;
o aggressive, performance-driven incentives which:
- enhance shareholder value,
- balance annual and long-term corporate objectives, and
- provide meaningful amounts of Company stock; and
o competitive benefits.
The specific components of the executive compensation program are described
below:
Base salary ranges are established by the Committee, using the fiftieth
percentile salary and trend data for comparably-sized durable goods
manufacturers, as published in a variety of independent third-party executive
compensation surveys. The actual base salary of each officer, within the range,
is determined by the executive's performance, which is evaluated annually by the
President and Chief Executive Officer and reviewed and approved by the
Committee. Both financial and management
5
<PAGE>
factors are considered in the evaluation.
The Annual Bonus Plan, available in 1996 to 14 executive officers and 69
other management employees, is structured to encourage growth in earnings by the
Company. The plan determines individual awards for executive officers by
measuring Company performance against corporate net earnings growth targets
established by the Committee in the first quarter of each year. Net earnings
targets for 1996 were established to exceed prior year earnings results. In
addition, the Chief Executive Officer has been given the authority to establish
divisional and regional growth targets for the executive officers in charge of
specific divisions and regions. Overall performance for the divisional and
regional executives is measured against both divisional and corporate targets.
Targets are set at one-half the maximum potential payout under the plan. In
1996, the Committee established a range of payouts as a percent of base salary
for executive positions as follows:
Minimum Payout as Maximum Payout as
Position a % of Base Salary a % of Base Salary
- ------------------------------------- ------------------ ------------------
Chairman 0% 80%
President and Chief Executive Officer 0% 80%
Vice President (Board-elected) 0% 60%
Vice President (By appointment) 0% 50%
The actual Annual Bonus Plan award is determined by evaluating corporate,
divisional and regional performance against the established financial
objectives. The 1996 corporate net earnings targets were exceeded; however, some
divisional and regional targets were not met. Awards were made to all executive
officers under the 1996 Annual Bonus Plan.
Under the Chairman's Award Program, the Chairman is also able to grant a
total of $100,000 in individual discretionary awards to recognize significant
contributions by selected executive officers and other management employees. No
awards to executives were made for 1996.
The Executive Long Term Incentive Program is structured to align the
interests of executive officers with those of all Graco shareholders. The Long
Term Incentive Program for 1996 consisted of stock options granted to the
executive officers. The number of stock options granted to each executive
officer was determined using competitive data for comparably-sized durable goods
manufacturers, as reflected in independent third-party long-term incentive
surveys. These options were non-incentive stock options with a 10-year duration
and a vesting schedule of 25 percent after two years, with 25 percent additional
vesting after years three, four and five. The value of the restricted shares
remaining to be vested under the 1991-1993 Executive Long Term Incentive Program
was considered in determining stock option awards made during 1996.
Executive officers are eligible to participate in the employee benefit
programs available to all Graco employees.
Compensation of the Chief Executive Officer
On an annual basis, the Committee is responsible for reviewing the individual
performance of the President and Chief Executive Officer and determining
appropriate adjustments in base pay and award opportunities under the Annual
Bonus Plan and Executive Long Term Incentive Program.
Awards made to the President and Chief Executive Officer under the Annual
Bonus Plan are determined by the growth in net earnings of the Company. Net
earnings in 1996 of $36.2 million represent an increase of 31 percent from 1995.
This growth in earnings exceeded the targets established for 1996 and yielded a
maximum bonus award to Mr. Aristides.
In reviewing Mr. Aristides' 1996 performance, the Committee recognized a
number of significant accomplishments including record net earnings, record
sales of $392 million, a 30 percent increase in earnings per share, continued
emphasis on expense management while maintaining high levels of customer
satisfaction, and continued superior return to Graco shareholders, particularly
in comparison to the Dow Jones Factory Equipment Index and the S&P 500 Index.
Based upon this analysis, the Committee increased Mr. Aristides' base salary
from $360,000 to $400,000, effective January 1, 1997. The Annual Bonus Plan
payout maximum for Mr. Aristides remained unchanged.
The Members of the Committee
Mr. Ronald O. Baukol
Ms. Martha A.M. Morfitt
Mr. Dale R. Olseth
Mr. Charles M. Osborne
6
<PAGE>
Comparative Stock Performance Graph
The graph below compares the cumulative total shareholder return on the
common stock of the Company for the last five fiscal years with the cumulative
total return of the S&P 500 Index and of the Dow Jones Factory Equipment Index
over the same period (assuming the value of investment in Graco common stock and
each index was 100 on December 27, 1991, and all dividends were reinvested).
Five Year* Cumulative Total Shareholder Returns
[GRAPH-Table Below Lists Data Points Included in Graph]
Dow Jones
Year Graco Inc. S&P500 Factory Esquipment
- ---- ---------- ------ ------------------
1991 100 100 100
1992 96 108 114
1993 151 119 134
1994 158 120 122
1995 226 165 143
1996 283 203 151
*Fiscal Year Ended Last Friday in December
7
<PAGE>
Summary Compensation Table
The following table shows both annual and long-term compensation awarded to
or earned by the Chief Executive Officer and by the four most highly compensated
executive officers of the Company whose total annual salary and bonus for 1996
exceeded $100,000.
<TABLE>
<CAPTION>
Long Term Compensation
Annual Compensation Awards
--------------------------------------------------- ----------------------------
(a) (b) (c) (d) (e) (f) (g) (i)
Other Restricted Securities All Other
Annual Stock Underlying Compen-
Name and Salary Bonus Compen- Award(s) Options/ sation
Principal Position Year ($)<F1><F2> ($)<F1><F3> sation ($) ($)<F4> SARs (#) ($)<F5><F6>
- ------------------ ---- -------- -------- ---------- ---------- ---------- ---------
<S> <C> <C> <C> <C> <C> <C> <C>
George Aristides 1996 $362,096 $287,992 0 0 17,418 $6,394
President and Chief 1995 309,613 215,600 0 0 90,630<F7> 5,401
Executive Officer 1994 281,800 187,817 0 0 15,630 2,407
David A. Koch 1996 183,780 144,000 0 0 0 7,739
Chairman of the 1995 376,534 297,615 0 0 9,942 6,325
Board 1994 352,808 232,596 0 0 9,942 2,766
Roger L. King 1996 180,864 68,083 0 0 4,533 4,777
Vice President 1995 181,032 108,000 0 0 6,798 4,671
and General Manager, 1994 173,696 86,227 0 0 6,798 2,631
European Operations
Robert A. Wagner 1996 174,530 52,497 $74,892<F8> 0 5,028 4,365
Vice President 1995 167,298 100,318 74,892<F8> 0 7,536 4,153
Asia Pacific and 1994 152,408 75,760 20,000<F9> 0 12,000 2,559
President, Graco K.K.
John L. Heller 1996 152,106 85,752 0 0 1,000 4,137
Vice President 1995 181,613 108,000 0 0 8,106 3,941
Latin America 1994 174,800 86,227 0 0 18,606 2,631
& Developing Markets
<FN>
<F1>
(1) Deferred compensation is included in Salary and Bonus in the year earned.
<F2>
(2) In addition to base salary, the reported figure includes amounts
attributable to (a) the imputed value of the group term life insurance benefit
for each of the named executive officers, and (b) for 1995, one week of pay in
lieu of vacation time for Mr. Koch due to his long tenure with the Company, a
benefit available to all Graco employees.
<F3>
(3) Bonus includes any awards under the Annual Bonus Plan and a $25,000
Chairman's Award for 1994 to Mr. Aristides under the Chairman's Award Program
described in the Management Organization and Compensation Committee Report.
<F4>
(4) Under the prior Graco Executive Long Term Incentive Program, participants
were eligible to receive restricted stock awards and performance-based cash
payouts. Restricted stock grants made in 1991 vested over six years (one-sixth
per year), except that the unvested balance of the award had the potential to
vest at the end of three years if certain financial goals were met. Since the
financial goals for 1991-1993 were not met, the balance of the 1991 restricted
stock grant did not vest at the end of 1993, and no cash awards were made under
the program. All of the remaining restricted shares will vest in 1997. As of
December 27, 1996, the market value and number of the unvested restricted share
holdings were: Mr. Aristides, $113,156 (4,549 shares); Mr. Koch, $274,172
(11,022 shares); Mr. King, $81,590 (3,280 shares); Mr. Heller, $68,556 (2,756
shares). Quarterly dividends and the $1.80 one-time special dividend paid on
March 21, 1994, to shareholders of record on March 7, 1994, are being held in
custody by the Company with a portion of the dividends released to each
executive as, and if, the corresponding shares vest. Interest is credited on the
dividends at 4 percent per year, which was the U.S. Treasury bill rate for the
average length of time before shares and dividends will be released to the
executives.
<F5>
(5) The compensation reported includes the Company contributions under the Graco
Employee Investment Plan (excluding employee contributions), plus Company
contributions under the Graco Employee Stock Ownership Plan. For 1996, the
8
<PAGE>
Company contribution accrued under the Graco Employee Investment Plan for each
of the named executive officers was $2,250. In 1996, Company contributions under
the Graco Employee Stock Ownership Plan had a fair market value at the date of
issuance of $573 for each eligible executive officer.
<F6>
(6) During 1994 and 1995, contributions attributable to compensation in excess
of $150,000 were accepted from certain executive officers by the Employee
Investment Plan. These excess contributions have been returned to the
participants. Employer matching contributions attributable to these amounts have
been left in the Plan and will be used to offset future employer contributions.
Amounts equivalent to the employer matching contributions have been paid to the
executives and these amounts appear in this column as income as follows: Mr.
Aristides $3,571; Mr. Koch $4,916; Mr. King $1,954; Mr. Wagner $1,542; and Mr.
Heller $1,314.
<F7>
(7) Includes a one-time 75,000 share stock option grant to recognize additional
responsibilities resulting from Mr. Aristides' election as President and Chief
Executive Officer.
<F8>
(8) The reported figure represents a goods and services cost differential
provided to Mr. Wagner as a result of his expatriate assignment.
<F9>
(9) The reported figure represents a payment to Mr. Wagner for miscellaneous
expenses associated with his expatriate assignment.
</FN>
</TABLE>
Option/SAR Grants Table (Last Fiscal Year)
The following table shows the stock options granted to the named executives
during 1996, their exercise price and their grant date present value.
<TABLE>
<CAPTION>
Individual Grant Grant Date Value<F2>
------------------------------------------------------------ ----------------
(a) (b) (c) (d) (e) (f)
Number of % of Total
Securities Options/SARs Exercise Grant
Underlying Granted to or Base Date
Options/SARs Employees in Price Expiration Present
Name Granted (#)<F1> Fiscal Year ($/Sh) Date Value ($)
- ---------------- ------------ ------------ -------- ---------- ---------
<S> <C> <C> <C> <C> <C>
George Aristides 17,418 44.6% $20.00 02/28/06 $104,334
David A. Koch 0 0% 20.00 02/28/06 0
Roger L. King 4,533 11.6% 20.00 02/28/06 27,153
Robert A. Wagner 5,028 12.9% 20.00 02/28/06 30,118
John L. Heller 1,000 2.6% 20.00 02/28/06 5,990
<FN>
<F1>
(1) Non-incentive stock options were granted on March 1, 1996, in the amounts
shown on the table. The options may be exercised in equal installments over four
years, beginning with the second anniversary of date of grant.
<F2>
(2) The Black-Scholes option pricing model has been used to determine the grant
date present value of the grants. Annual volatility was calculated using monthly
returns for 36 months prior to the grant date; the interest rate was set using
U.S. Treasury securities of similar duration to the option period as of the
grant date; and dividend yield was established as the yield on the grant date. A
10 percent discount for nontransferability and a 3 percent discount to reflect
the possibility of forfeiture over a two-year period were applied. These grants
expire on February 28, 2006. The assumptions used in the model were annual
volatility of 25.15 percent, interest rate of 6.10 percent, dividend yield of
2.40 percent, and time to exercise of 10 years.
</FN>
</TABLE>
9
<PAGE>
Aggregated Option/SAR Exercises In Last Fiscal Year And Fiscal Year-End
Option/SAR Values
The following table shows the value of outstanding in-the-money options at
the end of the fiscal year for the named executive officers. There were no
option or SAR exercises by these officers during 1996.
<TABLE>
<CAPTION>
(a) (d) (e)
Number of
Securities Value of
Underlying Unexercised
Unexercised In-the-Money
Options/SARs Options/SARs
at FY-End (#) at FY-End ($)<F1>
Exercisable/ Exercisable/
Name Unexercisable Unexercisable
- ---------------- -------------- ----------------
<S> <C> <C>
George Aristides 41,408/119,770 $507,752/559,241
David A. Koch 2,486/17,398 $24,343/164,555
Roger L. King 35,450/16,429 $444,934/134,614
Robert A. Wagner 3,000/21,564 $35,938/201,718
John L. Heller 4,652/23,060 $52,115/235,840
<FN>
<F1>
(1) "Value at fiscal year-end" is the difference between $24.875, the closing
price of the Company's common stock on December 27, 1996, and the option price
multiplied by the number of shares subject to option.
</FN>
</TABLE>
Retirement Arrangements
The Company has an Employee Retirement Plan which provides pension benefits
for eligible regular, full- and part-time employees. Benefits under the
Retirement Plan consist of a fixed benefit which is designed to provide
retirement income at age 65 of 43.5 percent of average monthly compensation,
less 18 percent of Social Security-covered compensation (calculated in a life
annuity option) for an employee with 30 or more years of service. Average
monthly compensation is defined as the average of the five consecutive highest
years' salary during the last ten years of service, including base salary and
Annual Bonus Plan awards, but excluding Executive Long Term Incentive Program
awards. Benefits under the Graco Employee Retirement Plan vest upon five years
of benefit service.
Federal tax laws limit the annual benefits that may be paid from a
tax-qualified plan such as the Graco Employee Retirement Plan. The Company has
adopted an unfunded plan to restore benefits to executive officer retirees
impacted by the benefit limits, so that they will receive, in aggregate, the
benefits they would have been entitled to receive under the Graco Employee
Retirement Plan had the limits imposed by the tax laws not been in effect.
The following table shows the estimated aggregate annual benefits payable
under the Graco Employee Retirement Plan and the restoration plan for the
earnings and years of service specified. The years of benefit service for the
Chief Executive Officer and the executive officers listed in the Summary
Compensation Table are: Mr. Aristides, 23 years; Mr. Koch, 40 years; Mr. King,
26 years; Mr. Wagner, 5 years; and Mr. Heller, 24 years. A maximum of 30 years
is counted in the pension benefit calculation.
<TABLE>
<CAPTION>
Estimated Aggregate Annual Retirement Benefit
---------------------------------------------
Final Average 5 Years 10 Years 15 Years 20 Years 25 Years 30 Years
Compensation Service Service Service Service Service Service
- ------------- ------- ------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
$200,000 $13,673 $27,345 $ 41,018 $ 54,691 $ 68,364 $ 82,036
300,000 20,923 41,845 62,768 83,691 104,614 125,536
400,000 28,173 56,345 84,518 112,691 140,864 169,036
500,000 35,423 70,845 106,268 141,691 177,114 212,536
600,000 42,673 85,345 128,018 170,691 213,364 256,036
700,000 49,923 99,845 149,768 199,691 249,614 299,536
</TABLE>
From time to time, the Company has entered into deferred compensation
agreements with its executive officers, including those named in the Summary
Compensation Table. The agreements provide for the payment per year of $10,000
deferred compensation to each executive officer for ten years after retirement,
or to a beneficiary in the event of death prior to the expiration of the ten
year period. These agreements also include provisions for non-competition and
the payment of $5,000 per year in the event the officer becomes disabled prior
to age 65. The $5,000 per year disability payments cease upon the attainment of
age 65. In addition, it is the practice of the Company to continue to provide
base salary to any executive officer
10
<PAGE>
whose employment is involuntarily terminated by the Company for a period of
twelve months or until the officer secures other employment.
Directors' Fees
During 1996, the Company paid each director, except directors who also served
as officers, an annual retainer of $15,000, plus a meeting fee of $900 for each
Board meeting and $700 for each Committee meeting attended. Upon cessation of
service, nonemployee directors who have served for five full years will receive
quarterly payments for five years at a rate equal to the director's annual
retainer in effect on the director's last day of service on the Board.
In 1994, shareholders approved a Nonemployee Director Stock Plan. Under this
Plan, a nonemployee director may elect to receive all or part of the director's
annual retainer in the form of shares of the Company's common stock instead of
cash. Six directors have elected to receive part of their annual retainer in
Company stock under this Plan.
In 1996, shareholders approved a Nonemployee Director Stock Option Plan.
Under this Plan, nonemployee directors receive an initial option grant of 2,000
shares upon first appointment or election and an annual option grant of 1,500
shares on the date of the Company's Annual Shareholders Meeting. Options granted
under the Plan are non-statutory, have a ten-year duration and may be exercised
in equal installments over four years, beginning with the first anniversary of
date of grant. The option exercise price is the fair market value on the date of
grant.
BENEFICIAL OWNERSHIP OF SHARES
The following information, furnished as of March 7, 1997, indicates
beneficial ownership of the common shares of the Company by each director, each
nominee for election as director, the executive officers listed in the Summary
Compensation Table who are still executive officers on that date, and by all
directors and executive officers as a group. Except as otherwise indicated, the
persons listed have sole voting and investment power.
<TABLE>
<CAPTION>
Percent of
Amount and Nature of Common Stock
Name of Beneficial Owner Beneficial Ownership<F1> Outstanding*
- ------------------------ -------------------- ------------
<S> <C> <C>
G. Aristides<F2><F3> 157,735
R. O. Baukol 2,786
J. L. Heller 61,871
R. L. King 93,887
D. A. Koch<F2><F3><F4> 4,903,431 28.5%
R. D. McFarland<F2><F3> 61,846
L. R. Mitau 1,196
M. A.M. Morfitt<F3> 1,264
D. R. Olseth<F3> 9,755
C. M. Osborne 887
W. G. Van Dyke 1,050
R. A. Wagner 20,210
All directors and
executive officers as a
group (21 persons) <F2><F3><F4><F5> 5,399,073 31.4%
* Less than one 1 percent, if no percentage is given.
<FN>
<F1>
(1) Includes 146,084 shares with respect to which executive officers have a
right, as of May 6, 1997, to acquire beneficial ownership upon the exercise of
vested stock options.
<F2>
(2) Includes the following shares owned by spouses of directors and named
executive officers as to which the director or executive officer may be deemed
to share voting and investment power: Mr. Aristides, 46,398; Mr. Koch, 44,994;
and Mr. McFarland, 15,396 shares.
11
<PAGE>
<F3>
(3) Excludes the following shares as to which beneficial ownership is
disclaimed: (i) 451,855 shares owned by the Graco Employee Retirement Plan and
44,933 unallocated shares held by the Graco Employee Stock Ownership Plan, as to
which Messrs. McFarland, Aristides, Koch, Olseth and Ms. Morfitt and certain
executive officers of the Company share voting and investment power as members
of the Company's Investment Committee; (ii) 29,251 shares held by The Graco
Foundation; and (iii) 232,500 shares held by the Greycoach Foundation as to
which Mr. Koch shares voting and investment power as a director.
<F4>
(4) Includes 4,529,095 shares held by the Clarissa L. Gray Trust, of which Mr.
Koch's wife, Barbara Gray Koch, and their children are the beneficiaries and as
to which Mr. Koch shares voting and investment power as trustee. See "Principal
Shareholders."
<F5>
(5) If the shares referred to in footnote 3 above, as to which one or more
directors and designated executive officers share voting power, were included,
the number of shares beneficially owned by all directors, nominees for election
as director and executive officers would be 6,157,612 shares, or 35.8 percent of
the outstanding shares.
</FN>
</TABLE>
Principal Shareholders
The following table identifies each person or group known to the Company to
beneficially own more than 5 percent of the outstanding common shares of the
Company, the only class of security entitled to vote at the Annual Meeting.
<TABLE>
<CAPTION>
Beneficial Percent
Ownership of Class
---------------- --------
<S> <C> <C>
Trust under the Will of Clarissa L. Gray,
and David A. Koch<F1><F2> 4,903,431 shares 28.5%
State of Wisconsin Investment Board<F3> 925,025 shares 5.4%
<FN>
<F1>
(1) Includes 4,529,095 shares owned by the Clarissa L. Gray Trust. Mr. Koch is
one of the trustees of the Trust and the beneficiaries of the Trust are Mrs.
Koch and their children. The other trustees are Paul M. Torgerson, a partner at
Dorsey & Whitney LLP, Minneapolis, Minnesota, and First Bank of South Dakota,
N.A., Sioux Falls, South Dakota. The Trustees share voting and dispositive
power. Includes 374,336 shares owned by David A. Koch or Mrs. Koch.
<F2>
(2) Excludes the following shares as to which beneficial ownership is
disclaimed: (i) 451,855 shares owned by the Graco Employee Retirement Plan and
44,933 unallocated shares held by the Graco Employee Stock Ownership Plan, as to
which Messrs. McFarland, Aristides, Koch, Olseth and Ms. Morfitt and certain
executive officers of the Company share voting and investment power as members
of the Company's Investment Committee; (ii) 29,251 shares held by The Graco
Foundation; and (iii) 232,500 shares held by the Greycoach Foundation as to
which Mr. Koch shares voting and investment power as a director.
<F3>
(3) Ownership information is as of December 31, 1996. A Schedule 13G filed by
this independent agency of the State of Wisconsin indicates that the agency has
sole voting and dispositive power.
</FN>
</TABLE>
Section 16(a) Beneficial Ownership Reporting Compliance
The Company's executive officers, directors and 10 percent shareholders are
required under the Securities Exchange Act of 1934 and regulations promulgated
thereunder to file initial reports of ownership of the Company's securities and
reports of changes in that ownership with the Securities and Exchange
Commission. Copies of these reports must also be provided to the Company.
Based upon its review of the reports and any amendments made thereto
furnished to the Company, or written representations that no reports were
required, the Company believes that all reports were filed on a timely basis by
reporting persons during and with respect to 1996, except for a late filing for
393 split-adjusted shares which were inadvertently omitted from the initial
beneficial ownership report of Clayton R. Carter and a late filing for 134
split-adjusted shares which were inadvertently omitted from the initial
beneficial ownership report of Thomas Fay.
12
<PAGE>
PROPOSAL 2
PROPOSAL TO AMEND THE LONG TERM STOCK INCENTIVE PLAN TO INCLUDE AN ANNUAL PER
PERSON AGGREGATE LIMIT
On February 14, 1997, the Board of Directors approved an amendment to the
Long Term Stock Incentive Plan (the "Plan") to include an annual per person
aggregate limit. At the 1997 Annual Meeting, shareholders are being asked to
approve this amendment.
Since 1982, the Company has maintained the Plan or a predecessor plan
pursuant to which officers and other key employees of the Company may acquire
common shares of the Company ("Common Stock"). As of March 7, 1997, 2,144,481 of
the shares authorized to be issued under the Plan had been issued in connection
with awards of restricted shares or upon exercise of stock options or were
reserved for issuance upon exercise of outstanding options.
In 1993, the Internal Revenue Code was amended to include a deductibility
limit for remuneration to certain executive officers [Section 162(m) of the
Code]. Qualified performance-based compensation is not subject to this
deductibility limit. In order to qualify grants of stock options and stock
appreciation rights as performance-based compensation under Section 162(m), the
Plan must be amended to include a periodic per person aggregate limit. The Plan
meets the requirements of Section 162(m) in all other respects.
To meet the aggregate limit requirement, the Board recommends shareholder
approval of an amendment to the Plan to include an annual per person aggregate
limit of 200,000 shares of Common Stock subject to award or grant.
The Plan, as amended, is described below.
KEY FEATURES OF THE PLAN
Eligibility
o Officers of the Company
o Key employees of the Company
Stock Options
Grant
o Determined by Committee
Manner of Exercise
o Options are exercised by optionee paying the option price in cash or by
delivering shares already owned by the optionee (stock-for-stock) having a
fair market value equal to the option price or by a combination of cash
and shares
Exercise Price
o Exercise price is the fair market value of a share on the date of grant
o Fair market value is the last sale price reported by the New York Stock
Exchange on the business day immediately preceding the date as of which
fair market value is being determined.
Vesting
o Determined by Committee
Term
o Not to exceed 10 years
Income Tax Consequences
o Options granted may or may not qualify for special tax treatment under the
Internal Revenue Code of 1986, as amended (the "Code")
Number of Authorized Shares
o 3,475,000 shares of Common Stock
13
<PAGE>
Restricted Stock Awards
Award
o Determined by Committee
Conditions and Restrictions
o Determined by Committee
o Grantee is entitled to vote shares and receive dividends during
restriction period
o No transfer of unvested shares permitted
o If grantee's employment terminates during restriction period, unvested
shares may be forfeited
Vesting
o Determined by Committee
o May be conditioned on or accelerated by performance criteria
Income Tax Consequences
o Grant does not result in income to grantee or deduction for the Company
for Federal income tax purposes
o Grantee recognizes ordinary income and the Company receives deduction for
fair market value of shares when restrictions lapse
Adjustment
o Grants adjusted for future stock dividend or distribution,
recapitalization, merger, consolidation, split-up, combination, or
exchange of shares.
SUMMARY OF THE PLAN
The Plan authorizes a committee of three or more persons (the "Committee")
designated by the Board of Directors to grant incentive stock options,
non-qualified stock options, restricted stock awards or other forms of stock
awards approved by the Committee to officers or other key employees of the
Company. Members of the Committee are not eligible to receive grants under the
Plan. The Committee is authorized to establish rules and regulations for the
operation of the Plan, select persons to receive grants and determine the number
of shares subject to grants.
If there is a stock split, stock dividend, or other relevant change affecting
the Company's common shares, appropriate adjustments will be made in the number
of shares subject to the Plan and in the number of shares and price in all
outstanding grants made prior to the event. Any shares subject to an option,
right or other award which for any reason expires or terminates without issuance
or final vesting will again be available for grant or award under the Plan.
The Plan will terminate in December 2001 unless terminated earlier by the
Board of Directors. The Board can amend the Plan as it deems advisable, but
unless the shareholders approve, no amendment can materially increase the
maximum number of common shares which may be issued under the Plan or materially
modify the requirements for participation in the Plan.
GRANTS UNDER THE PLAN
Stock Options
The Committee may grant options qualifying as incentive stock options under
the Code, as amended, or options which do not qualify for special tax treatment.
The term of an option cannot exceed ten years from the date of grant. The
exercise price of any option will be the fair market value of a share of Graco
common stock on the date of grant. The fair market value of a share of Graco
common stock is the last sale price reported by the New York Stock Exchange on
the business day immediately preceding the date as of which fair market value is
being determined. As of March 7, 1997 the last sale price reported by the New
York Stock Exchange on the preceding business day was $31.625. The optionee may
pay the option price in cash or, if permitted by the Committee, by delivering to
the Company common shares already owned by the optionee that have a fair market
value equal to the option price or a combination of cash and shares. Option
holders may not use shares received upon the substantially simultaneous exercise
of a portion of a stock option to satisfy the exercise price for additional
portions of their options.
14
<PAGE>
Restricted Stock Awards
The Committee may also issue shares as restricted stock awards. Most
restricted stock awards have been made pursuant to long-term compensation
programs approved by the Committee and the Board of Directors. Each award
typically sets forth a restriction period during which the grantee must remain
in the employment of the Company and may also condition or accelerate vesting
based on performance criteria. If the grantee's employment terminates prior to
the time a grant (or any portion thereof) vests, the unvested portion of the
grant terminates and the grantee must return the shares to the Company. However,
the Committee can provide complete or partial exceptions to that requirement as
it deems equitable. The grantee cannot dispose of the unvested shares prior to
expiration of the restriction period. During this period, the grantee is
entitled to vote the shares and receive dividends. Each share certificate issued
as part of such an award bears a legend giving notice of the restrictions in the
grant. No restricted stock awards have been made since 1992.
Outstanding Options and Restricted Shares
The number of grantees varies from year to year. As of March 7, 1997,
approximately 114 employees, including present officers, had options and 4
officers held restricted share awards. See "EXECUTIVE COMPENSATION," "Summary
Compensation Table," for additional information about awards under the Plan to
officers and directors during the last three years. See "EXECUTIVE
COMPENSATION," "Option/SAR Grants Table (Last Fiscal Year)," and "Aggregated
Option/SAR Exercises In Last Fiscal Year And Fiscal Year-End Option/SAR Values,"
for additional information about awards under the Plan to officers during 1996.
FEDERAL INCOME TAX CONSEQUENCES
Stock Options
The grant of an incentive stock option or a non-qualified stock option is not
expected to result in income to the optionee or in a deduction for the Company.
The exercise of a "non-qualified" stock option will result in ordinary income
for the optionee and, assuming that, as expected, the grants qualify under
Section 162(m) of the Code, a deduction for the Company measured by the
difference between the option price and the fair market value of the shares
received at the time of exercise, except in the case of officers subject to
Section 16(b) of the Securities Exchange Act of 1934, who are subject to special
rules. Income tax withholding would be required.
The exercise of an "incentive" stock option would not result in income for
the optionee if the optionee (i) does not dispose of the shares within two years
after the date of grant nor one year after the transfer of shares upon exercise,
and (ii) is an employee of the Company or a subsidiary of the Company from the
date of grant until three months before the exercise date. If these requirements
are met, the basis of the shares upon later disposition would be the option
price. Any gain will be taxed to the optionee as long-term capital gain and the
Company would not be entitled to a deduction. Under current law capital gains
may be taxed at a lower rate than ordinary income. The excess of the market
value on the exercise date over the option price is an item of tax preference,
potentially subject to the 21% alternative minimum tax.
If the optionee disposes of the shares prior to the expiration of either of
the holding periods, the optionee would have taxable compensation, and assuming
that, as expected, the grants qualify under Section 162(m) of the Code, the
Company would be entitled to a deduction equal to the lesser of the fair market
value of the shares on the exercise date minus the option price or the amount
realized on disposition minus the option price. Any gain in excess of the
ordinary income portion would also be taxable at the same rate.
Restricted Stock Awards
Generally, the grant of a restricted stock award should not result in income
for the grantee or in a deduction for the Company for Federal income tax
purposes, assuming the shares transferred are subject to restrictions resulting
in a "substantial risk of forfeiture" as intended by the Company. Dividends paid
while the stock remains subject to restriction would be treated as compensation
for Federal income tax purposes. At the time the restrictions lapse, the grantee
will recognize ordinary income, and the Company would be entitled to a deduction
measured by the fair market value of the shares at the time of lapse.
15
<PAGE>
SHAREHOLDER APPROVAL
The Board of Directors recommends that shareholders vote FOR approval of the
amendment to the Plan. Proxies solicited by the Board will be so voted, unless
shareholders specify otherwise on their proxies.
The affirmative vote of a majority of the shares present or represented and
entitled to vote at the 1997 Annual Meeting is required to approve the amendment
to the Plan. In the event this Proposal 2 does not receive the required
affirmative vote, the amendment will not be put into effect.
PROPOSAL 3
PROPOSAL TO RATIFY THE APPOINTMENT OF INDEPENDENT PUBLIC AUDITORS
Deloitte & Touche LLP has acted as independent auditors for the Company since
1962. The Board of Directors recommends ratification of the selection of
Deloitte & Touche LLP as independent auditors for the current year. If the
shareholders do not ratify the selection of Deloitte & Touche LLP, the selection
of the independent auditors will be reconsidered by the Board of Directors. A
representative of Deloitte & Touche LLP will be present at the meeting and will
have the opportunity to make a statement if so desired and be available to
respond to any shareholder questions.
OTHER MATTERS
The Board of Directors is not aware of any matter, other than those stated
above, which will or may properly be presented for action at the meeting. If any
other matters properly come before the meeting, it is the intention of the
persons named in the enclosed form of proxy to vote the shares represented by
such proxies in accordance with their best judgment.
SHAREHOLDER PROPOSALS
The Company did not receive any request from shareholders relating to matters
to be submitted for a vote at the 1997 Annual Meeting. Any shareholder wishing
to have any matter considered for submission at the next Annual Meeting must
request such submission in writing, directed to the Secretary of the Company at
the address shown on page 1 of this statement, not later than November 28, 1997.
YOU ARE RESPECTFULLY REQUESTED TO EXERCISE YOUR RIGHT TO VOTE BY FILLING IN
AND SIGNING THE ENCLOSED PROXY CARD AND RETURNING IT PROMPTLY IN THE ENVELOPE
ENCLOSED FOR YOUR CONVENIENCE. In the event that you attend the meeting, you may
revoke your proxy and vote your shares in person if you wish.
For the Board of Directors
/s/Robert M. Mattison
Robert M. Mattison
Secretary
Dated: March 27, 1997
(C) 1997 Graco Inc. 3/97 6.5M Printed in U.S.A.
16
<PAGE>
[LOGO]
GRACO INC.
4050 Olson Memorial Highway
Golden Valley, Minnesota 55422
This Proxy is Solicited by the Board of Directors for use at the Graco Inc.
Annual Meeting on Tuesday, May 6, 1997.
The shares of common stock of Graco Inc. which you are entitled to vote on March
7, 1997, will be voted as you specify on this card.
By signing this proxy, you revoke all prior proxies and appoint George Aristides
and Mark W. Sheahan as Proxies, each with full power of substitution, to vote
your shares as specified on this card and at their discretion on any other
matter which may properly come before the Annual Meeting or any adjournment
thereof.
Item 1. Election of Directors __ FOR ALL __ WITHHOLD FOR ALL
NOMINEES: George Aristides Ronald O. Baukol
(INSTRUCTION: To withhold authority to vote for any individual
nominee, strike a line through the nominee's name in the list above)
Item 2. Adoption of an amendment to the Long Term Stock Incentive Plan
__ FOR __ AGAINST __ ABSTAIN
Item 3. Ratification of Appointment of Deloitte & Touche LLP as
Independent Auditors
__ FOR __ AGAINST __ ABSTAIN
PLEASE SIGN AND DATE THE REVERSE SIDE BEFORE MAILING
In their discretion, the Proxies are authorized to vote upon such other business
as may properly come before the meeting. This proxy properly executed will be
voted in the manner directed by the undersigned. If no choice is specified, this
proxy will be voted "FOR" Items 1 through 3.
Please sign exactly as your name(s) appears at left. In the case of joint
owners, each should sign. If signing as executor, trustee, guardian or in any
other representative capacity or as an officer of a corporation, please indicate
your full title.
Dated:_________________________ , 1997
______________________________________
Signature
PLEASE MARK, SIGN, DATE AND ______________________________________
RETURN THE PROXY CARD PROMPTLY Signature
USING THE ENCLOSED ENVELOPE.
