<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:
<TABLE>
<S> <C>
/ / Preliminary proxy statement / / Confidential, for Use of the Commission
Only (as permitted by Rule 14a-6(e)(2))
/X/ Definitive proxy statement
/ / Definitive additional materials
/ / Soliciting material pursuant to Rule 14a-11(c) or Rule 14a-12
</TABLE>
THE HARPER GROUP, INC.
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
N/A
- --------------------------------------------------------------------------------
(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), 14a-6(i)(2)
or Item 22(a)2 of Schedule 14A.
/ / $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3).
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
----------------------------------------------------------------------
(2) Aggregate number of securities to which transaction applies:
----------------------------------------------------------------------
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the
filing fee is calculated and state how it was determined):
----------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
----------------------------------------------------------------------
(5) Total fee paid:
/ / Fee paid previously with preliminary materials.
/ / Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
(1) Amount previously paid:
----------------------------------------------------------------------
(2) Form, Schedule or Registration Statement No.:
----------------------------------------------------------------------
(3) Filing party:
----------------------------------------------------------------------
(4) Date filed:
----------------------------------------------------------------------
<PAGE> 2
(LOGO)
THE HARPER GROUP, INC.
260 TOWNSEND STREET
SAN FRANCISCO, CALIFORNIA 94107
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TUESDAY, MAY 14, 1996, 10:30 A.M.
TO THE STOCKHOLDERS:
Please be advised that the Annual Meeting of Stockholders of The Harper
Group, Inc. will be held at the office of the Company, 260 Townsend Street, San
Francisco, California, on Tuesday, May 14, 1996, at 10:30 a.m. for the following
purposes:
(1) To elect two Class II directors.
(2) To ratify and approve adoption of the 1995 Stock Option Plan for
Non-Employee Directors.
(3) To approve the amendment of the 1994 Omnibus Equity Incentive Plan
to increase the number of shares authorized for issuance
thereunder by 1,250,000.
(4) To transact such other business as may properly come before the
meeting.
Only stockholders of record on the books of the Company as of 5:00 P.M.,
March 22, 1996, will be entitled to vote at the meeting and any adjournment
thereof.
San Francisco, California
April 1, 1996
By Order of the Board of Directors
Robert H. Kennis
General Counsel and Secretary
STOCKHOLDERS ARE REQUESTED TO MARK, DATE, SIGN AND RETURN THE ENCLOSED
PROXY AS PROMPTLY AS POSSIBLE.
<PAGE> 3
THE HARPER GROUP, INC.
260 TOWNSEND STREET
SAN FRANCISCO, CALIFORNIA 94107
PROXY STATEMENT
The enclosed proxy is solicited by the Board of Directors of The Harper
Group, Inc. (the "Company") to be used at the Annual Meeting of Stockholders on
May 14, 1996, for the purposes set forth in the foregoing notice. This proxy
statement and the enclosed form of proxy were first sent to stockholders on or
about April 1, 1996.
If the enclosed form of proxy is properly signed and returned, the shares
represented thereby will be voted at the Annual Meeting in accordance with the
instructions specified thereon. If the proxy does not specify how the shares
represented thereby are to be voted, the proxy will be voted as recommended by
the Board of Directors. Any stockholder signing a proxy in the form accompanying
this Proxy Statement has the power to revoke it prior to or at the Annual
Meeting. A proxy may be revoked by a writing delivered to the Secretary of the
Company stating that the proxy is revoked, by a subsequent proxy signed by the
person who signed the earlier proxy, or by attendance at the Annual Meeting and
voting in person.
VOTING SECURITIES
Only stockholders of record on the books of the Company as of 5:00 P.M.,
March 22, 1996, will be entitled to vote at the Annual Meeting.
As of the close of business on March 22, 1996, there were outstanding
16,253,994 shares of Common Stock of the Company, entitled to one vote per
share. The holders of a majority of the outstanding shares of the Common Stock
of the Company, present in person or by proxy, will constitute a quorum for the
transaction of business at the Annual Meeting or any adjournment thereof.
Votes cast by proxy or in person at the Annual Meeting will be tabulated by
the election inspectors appointed for the meeting and will determine whether or
not a quorum is present. The election inspectors will treat abstentions as
shares that are present and entitled to vote for purposes of determining the
presence of a quorum but as unvoted for purposes of determining the approval of
any matter submitted to the stockholders for a vote. If a broker indicates on
the proxy that it does not have discretionary authority as to certain shares to
vote on a particular matter, those shares will not be considered as present and
entitled to vote with respect to that matter.
ELECTION OF DIRECTORS
The Certificate of Incorporation and By-laws of the Company provide for a
Board of Directors consisting of not less than three members, divided into three
classes. The size of the Board of Directors may be determined subject to the
foregoing minimum from time to time by the Board of Directors of the Company.
The size of the Board of Directors has currently been established at six.
Directors elected into a class at the annual meeting of stockholders in
each year serve three-year terms and until their successors have been duly
elected. Directors appointed by the Board of Directors of the Company to fill
vacancies or newly created directorships serve for the remainder of the term of
the class to which they are appointed. The Class II directors elected at the
Annual Meeting will serve until the 1999 Annual Meeting; Class I directors
elected at last year's Annual Meeting will serve until the 1998 Annual Meeting;
and Class III directors elected at the 1994 Annual Meeting will serve until the
1997 Annual Meeting.
The persons named below are the nominees to serve as Class II directors
until the 1999 Annual Meeting of Stockholders and until their successors have
been elected or until death, retirement, resignation or removal. The nominees
presently serve as Class II directors.
<PAGE> 4
In the absence of instructions to the contrary, shares represented by the
proxy will be voted and the proxies will vote for the election of such nominees
to the Board of Directors. If either of such nominees is unable or unwilling to
be a candidate for the office of director at the date of the Annual Meeting, or
any adjournment thereof, the proxies will vote for such substitute nominee as
shall be designated by the proxies. The management has no reason to believe that
such nominees will be unable or unwilling to serve if elected as directors. Set
forth below is certain information concerning the nominees which is based on
data furnished by them.
<TABLE>
<CAPTION>
SERVED AS
BUSINESS EXPERIENCE DURING PAST DIRECTOR
NOMINEES FOR DIRECTOR AGE FIVE YEARS AND OTHER INFORMATION SINCE
- ------------------------- --- ---------------------------------------------------- ----------
<S> <C> <C> <C>
Wesley J. Fastiff........ 63 President of Littler, Mendelson, Fastiff, Tichy & 1971
Mathiason, a law firm which was retained by the
Company to perform legal services in 1995.
Frank J. Wezniak......... 63 President and Chief Executive Officer of Karri 1987
Technology, Inc. (manufacturer of information
collection systems) since 1994. From 1987 to 1992,
Mr. Wezniak was President of Computer Identics
(manufacturer of bar code and data collection
information systems).
</TABLE>
Set forth below is certain information concerning the other directors which is
based on data furnished by them.
<TABLE>
<CAPTION>
SERVED AS
BUSINESS EXPERIENCE DURING PAST DIRECTOR
CONTINUING DIRECTORS AGE FIVE YEARS AND OTHER INFORMATION SINCE
- ------------------------- --- ---------------------------------------------------- ----------
<S> <C> <C> <C>
Peter Gibert............. 53 Chairman of the Board of Directors, President and 1992
Chief Executive Officer. From February 1984 to May
1991, Mr. Gibert was President and Chief Executive
Officer of Darrell J. Sekin and Co. (international
freight forwarder).
Edwin J. Holman.......... 49 President and Chief Operating Officer of Petrie 1995
Retail, Inc. (operator of retail stores). From 1993
to 1995, Mr. Holman was President and Chief
Operating Officer of Woodward and Lothrop, Inc.
(department stores located in the Mid-Atlantic
region). From 1981 to 1993, Mr. Holman was an
officer of Carter Hawley Hale Stores, Inc., most
recently Vice Chairman and Chief Operating Officer.
John M. Kaiser........... 56 Private businessman and real estate developer. From 1993
1979 to 1988, Mr. Kaiser was President of Expeditors
International of Washington, Inc. (international
freight forwarder).
Ray C. Robinson, Jr. .... 75 Private businessman. Mr. Robinson served as 1971
Secretary of the Company from 1971 until January
1986.
</TABLE>
FURTHER INFORMATION CONCERNING
THE BOARD OF DIRECTORS
COMMITTEES OF THE BOARD
During 1995, the Board of Directors held six meetings. The Company has an
Audit Committee, a Human Resources, Compensation and Nominating Committee and a
Strategic Planning and Mergers and Acquisitions Committee.
The members of the Audit Committee are Frank J. Wezniak (Chairman), Ray C.
Robinson, Jr., Edwin J. Holman and Wesley J. Fastiff. Among the functions
performed by the Audit Committee are to make recommendations to the Board of
Directors with respect to the engagement or discharge of independent auditors,
to review with the independent auditors the plan and results of the auditing
engagement, to review the Company's auditing procedures and system of internal
accounting controls and to make inquiries into matters within the scope of its
functions. During 1995, the Audit Committee held six meetings.
2
<PAGE> 5
The members of the Human Resources, Compensation and Nominating Committee
are Wesley J. Fastiff (Chairman), Ray C. Robinson, Jr., Frank J. Wezniak and
John M. Kaiser. Among the functions of the Human Resources, Compensation and
Nominating Committee are to propose nominees for membership on the Board of
Directors, review and make recommendations to the Board of Directors concerning
the compensation of the key management employees of the Company and to
administer the Company's stock option plans. During 1995, the Human Resources,
Compensation and Nominating Committee held eight meetings.
The members of the Strategic Planning and Mergers and Acquisitions
Committee are Peter Gibert (Chairman), John M. Kaiser, Ray C. Robinson, Jr. and
Edwin J. Holman. Among the functions of the Strategic Planning and Mergers and
Acquisitions Committee are to review and make recommendations to the Board of
Directors concerning proposed or potential acquisitions, mergers, joint
ventures, or other business combinations, and to consult with management
regarding acquisition strategy. During 1995, this Committee held one meeting.
COMPENSATION OF DIRECTORS
Directors are paid fees consisting of $13,000 per year and $750 for each
Board meeting attended. Directors who attend meetings of the Audit Committee,
Strategic Planning and Mergers and Acquisitions Committee or Human Resources,
Compensation and Nominating Committee receive an additional $500 for each
meeting. In addition, under the 1995 Stock Option Plan for Non-Employee
Directors Messrs. Robinson, Fastiff, Holman, Kaiser and Wezniak have each been
granted options to purchase 20,000 shares of Common Stock, subject to approval
of this plan at the Annual Meeting. See "Proposal to Approve the 1995 Stock
Option Plan for Non-Employee Directors."
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
During 1995, the Company retained the law firm of Littler, Mendelson,
Fastiff, Tichy & Mathiason to perform legal services for it. Mr. Fastiff, a
director of the Company and a member of the Human Resources, Compensation and
Nominating Committee, serves as president of Littler, Mendelson, Fastiff, Tichy
& Mathiason.
3
<PAGE> 6
EXECUTIVE COMPENSATION
COMPENSATION OF EXECUTIVE OFFICERS
The compensation paid to the Company's Chief Executive Officer and four
other most highly compensated executive officers for services in all capacities
to the Company and its subsidiaries during the last three fiscal years is set
forth below.
<TABLE>
<CAPTION>
ANNUAL COMPENSATION LONG TERM COMPENSATION
-------------------------------- AWARDS
OTHER -------------------------
ANNUAL RESTRICTED SECURITIES ALL OTHER
COMPENSA- STOCK UNDERLYING COMPENSA-
NAME AND PRINCIPAL POSITION YEAR SALARY($) BONUS($) TION($)(1) AWARDS($)(2) OPTIONS(#) TION($)(3)
- --------------------------- ---- --------- -------- --------- ------------ ---------- ----------
<S> <C> <C> <C> <C> <C> <C> <C>
Peter Gilbert.............. 1995 $240,000 $ 43,000 $94,000(4) -- -- $3,400
Chairman, President and 1994 $240,000 $150,000 -- $581,046 37,500(5) $4,700
Chief Executive Officer 1993 $240,000 $ 43,000 -- $5,500
Robert J. Diaz............. 1995 $210,000 $ 69,000 $97,600(6) -- -- $2,900
Senior Vice President, 1994 $ 17,500 $ 45,000 -- 50,000 --
Chief Financial Officer 1993 -- -- -- -- -- --
and Treasurer
Martin R. Collins.......... 1995 $150,000 $ 55,000 -- -- 15,000 $3,200
Vice President 1994 $150,000 $ 50,000 -- -- 5,000 $4,700
1993 $150,000 $ 40,000 -- -- 10,000(7) $3,330
Kim E. Wertheimer.......... 1995 $166,000 $100,000 -- -- 15,000 $4,900
Vice President 1994 $122,000 $ 75,000 -- -- 30,000 $3,100
1993 $109,000 $ 25,000 -- -- 2,500 --
Robert H. Kennis........... 1995 $138,000 $ 65,000 -- -- 17,500 $3,100
Vice President, Secretary 1994 $130,000 $ 50,000 -- -- 17,500 $4,700
and General Counsel 1993 $127,000 $ 40,000 -- -- 8,500(8) $2,700
</TABLE>
- ---------------
(1) While the named executive officers enjoy certain perquisites, for fiscal
years 1993, 1994 and 1995 these did not exceed the lesser of $50,000 or 10%
of each officer's salary and bonus.
(2) The fair market value of these shares on the grant date was $17.75 per
share. The fair market value on the grant date, however, is not necessarily
indicative of the restricted stock's real value, which is impossible to
determine until the vesting date; it is at this point that executives
recognize income on the stock and must pay taxes on it. As of the end of
fiscal 1995, the aggregate restricted stock holdings for the named
executives consisted of 32,735 shares worth $581,046 at the then-current
fair market value (as represented by the closing price of the Company's
Common Stock on December 29, 1995), without giving effect to the diminution
of value attributable to the restrictions on such stock. Dividends are paid
on the restricted shares to the extent payable on the Company's Common Stock
generally. All shares granted to Mr. Gibert vest on January 1, 1997.
(3) The amounts shown consist of Company contributions under the Company's
Profit Saving Plan which has been qualified under sections 401 and 501 of
the Internal Revenue Code of 1986, as amended, and covers employees who
voluntarily enroll in the Plan the quarter after completing six months of
continuous service with the Company.
(4) Represents partial forgiveness of loan as discussed under "Transactions with
the Company" and compensation for its tax impact as discussed in the Report
on Executive Compensation.
(5) Consists of options held by Mr. Gibert to purchase 37,500 shares which were
granted in 1991 and repriced during 1994.
(6) Represents partial forgiveness of loan as discussed under "Transactions with
the Company" and compensation for its tax impact ($45,600) and relocation
expenses reimbursed by the Company ($52,000).
(7) Consists of options granted in 1992 to Mr. Collins to purchase 10,000 shares
which were repriced during 1993.
(8) Includes options granted in 1992 to Mr. Kennis to purchase 3,500 shares
which were repriced during 1993.
4
<PAGE> 7
OPTIONS GRANTED TO EXECUTIVE OFFICERS
The following table sets forth certain information regarding stock options
granted during 1995 to the executive officers named in the foregoing Summary
Compensation Table.
OPTION GRANTS
OPTION GRANTS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
POTENTIAL REALIZABLE
INDIVIDUAL GRANTS VALUE AT ASSUMED
-------------------------------------------------------------- ANNUAL RATES OF
NUMBER OF STOCK PRICE
SECURITIES PERCENT OF TOTAL APPRECIATION FOR
UNDERLYING OPTIONS GRANTED EXERCISE OR OPTION TERM(4)
OPTIONS TO EMPLOYEES IN BASE PRICE EXPIRATION ---------------------
NAME GRANTED(1) FISCAL YEAR ($/SH)(2) DATE(3) 5%($) 10%($)
- ---------------------- ---------- ---------------- ----------- ---------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
Peter Gibert.......... --(5) -- -- -- -- --
Robert J. Diaz........ -- -- -- -- -- --
Martin R. Collins..... 15,000 3.94% $17 2003 $102,000 $204,000
Kim E. Wertheimer..... 15,000 3.94% $17 2003 $102,000 $204,000
Robert H. Kennis...... 17,500 4.60% $17 2003 $119,000 $238,000
</TABLE>
- ---------------
(1) All options granted in fiscal 1995 are exercisable in annual increments of
25%, commencing one year from date of grant. Under the terms of the
Company's stock option plans, the Human Resources, Compensation and
Nominating Committee retains discretion, subject to plan limits, to modify
the terms of outstanding options.
(2) All options were granted at fair market value (average of high and low stock
prices for the Company's Common Stock as reported in the Western edition of
The Wall Street Journal) at date of grant.
(3) All options granted in fiscal 1995 were granted for a term of eight years.
(4) Realizable values are reported net of the option exercise price. The dollar
amounts under these columns are the result of calculations at the 5% of 10%
rates (determined from the price at the date of grant, not the stock's
current market value) set by the Securities and Exchange Commission and
therefore are not intended to forecast possible future appreciation, if any,
of the Company's stock price. Actual gains, if any, on stock option
exercises are dependent on the future performance of the Common Stock as
well as the optionholder's continued employment through the vesting period.
The potential realizable value calculation assumes that the optionholder
waits until the end of the option term to exercise the option.
(5) Excludes options to purchase 60,000 shares at an exercise price of $17.31
per share which were granted to Peter Gibert on February 26, 1996, subject
to stockholder approval at the 1996 Annual Meeting of the proposal to amend
the 1994 Omnibus Equity Incentive Plan to increase the number of shares
available for issuance thereunder.
There were no option exercises during 1995 by any of the executive officers
listed. The following table sets forth certain information with respect to stock
options held by each of the listed executive officers as of December 31, 1995.
5
<PAGE> 8
YEAR-END OPTION VALUE TABLE
<TABLE>
<CAPTION>
VALUE OF UNEXERCISED
NUMBER OF UNEXERCISED IN-THE-MONEY
OPTIONS AT FY-END(#) OPTIONS AT FY-END($)
------------------------- -------------------------
NAME EXERCISABLE/UNEXERCISABLE EXERCISABLE/UNEXERCISABLE
------------------------------------------------------------ -------------------------
<S> <C> <C>
Peter Gibert....................... 37,500/0 $ 65,625/$0
Kim E. Wertheimer.................. 8,250/42,250 $ 30,375/$112,675
Robert J. Diaz..................... 12,500/37,500 $ 46,875/$140,625
Martin R. Collins.................. 8,750/41,250 $ 25,313/$87,188
Robert H. Kennis................... 12,750/38,250 $ 76,375/$92,563
</TABLE>
EMPLOYMENT AGREEMENTS
The Company has an employment agreement with Peter Gibert pursuant to which
Mr. Gibert is employed as the Company's President and Chief Executive Officer.
Under the terms of this agreement, Mr. Gibert has been paid $20,000 per month,
subject to future increases in the discretion of the Board of Directors and a
bonus equal to the greater of (i) $43,000 or (ii) 10% of the amount by which the
Company's consolidated net profit before taxes (as particularly defined in the
agreement) exceeds 110% of the consolidated net profit before taxes for the
prior year. The agreement with Mr. Gibert provides for severance pay equal to
six months salary plus the minimum bonus of $43,000 in the event that the
agreement expires at the end of its term and Mr. Gibert's employment with the
Company is not continued.
Effective January 1, 1996, the Company entered into an amended employment
agreement with Peter Gibert. Under the terms of this amended agreement, Mr.
Gibert's base salary is increased to $31,250 per month through December 31,
1997. Mr. Gibert's bonus plan is as follows: if the Company's earnings per share
("EPS") for the calendar year are less than an 11% increase over the preceding
year, any bonus paid is subject to the discretion of the Board of Directors; if
the EPS increase over the preceding year is between 11% and 15%, then Mr. Gibert
is entitled to a minimum bonus of 20% of his base salary; if the EPS increase is
16% to 20% over the preceding year, the minimum bonus will be 40% of base
salary; and if the EPS increase over the preceding year is 21% or more, then the
minimum bonus will be 50% of base salary. The amended employment agreement also
provides for a grant of options to purchase at fair market value 60,000 shares
of Common Stock, half of which vest after 12 months and the balance vest after
24 months.
The Company also has an employment agreement with Kim Wertheimer, expiring
in November 1997. Under the terms of this agreement, Mr. Wertheimer is entitled
to a minimum salary of $14,000 per month and a bonus equal to the greater of (i)
$45,000 or (ii) .25 of 1% of the Company's income from operations if the
Company's income from operations is at least 110% of the previous year's. The
agreement with Mr. Wertheimer provides for an annual grant of options to
purchase 15,000 shares of Common Stock for three years, the payment of moving
expenses up to $20,000 and a $100,000 loan for relocation expenses to be
forgiven over five years as long as Mr. Wertheimer remains an employee of the
Company. This loan has not been advanced to date.
The agreement with Mr. Wertheimer also provides for the continuation of his
salary for up to 12 months in the event of termination of employment without
cause. The Company also has commitments to Robert Diaz and Robert Kennis to
provide for continuation of their salaries for up to 12 months in the event of
termination of employment without cause.
TRANSACTIONS WITH THE COMPANY
In February 1989, Peter Gibert executed a promissory note (the "Note") in
the principal amount of $717,944 in favor of Darrell J. Sekin & Co. ("Sekin").
The Note provided for bi-monthly payments of principal and interest (accruing
annually at 9.25%) and a maturity date of February 15, 1994. Payments under the
Note terminated in May 1991 when the Company acquired all of the outstanding
shares of Sekin. In June 1993, the Company agreed to defer the payments of
principal and interest until the termination of the employment agreement between
Mr. Gibert and the Company which is described above. Additionally, the
6
<PAGE> 9
interest rate on the Note was reduced to 5% effective June 1993. As of December
31, 1995, unpaid principal and accrued interest on the Note aggregated $239,909.
In August 1994, the Company agreed to forgive annually $50,000 of the
amount due under the Note on the condition that Mr. Gibert is an employee of the
Company and the Company has been profitable in the previous twelve months. The
entire balance owed under the Note will be forgiven in the event Mr. Gibert's
employment with the Company is terminated, unless such termination is with cause
in which case the entire balance becomes due and owing. Forgiveness of amounts
due under the Note commenced in 1995, during which $50,000 was forgiven.
In connection with Robert Diaz joining the Company in December 1994 and
relocating from Denver, Colorado the Company loaned Mr. Diaz $120,000 at an
annual interest rate of 6%. The loan is evidenced by a note, which provides that
payment shall not be due as long as Mr. Diaz is employed with the Company, and
that commencing April 1995, $25,000 shall be forgiven annually until the entire
amount of the note is forgiven. The balance outstanding under the note is
accelerated and immediately due if Mr. Diaz' employment is terminated under
certain circumstances. As of December 31, 1995, the unpaid principal and accrued
interest on the note aggregated $96,598.
HUMAN RESOURCES, COMPENSATION AND NOMINATING COMMITTEE
REPORT ON EXECUTIVE COMPENSATION
The Human Resources, Compensation and Nominating Committee (the
"Committee") of the Board of Directors is composed entirely of independent
directors, none of whom is an officer or employee of the Company or any of its
subsidiaries. The Committee is responsible for establishing the Company's
compensation policies, administering the Company's stock option plans, and
reviewing the Company's salary, profit sharing and incentive arrangements
generally. In addition, the Committee reviews the compensation levels of the
executive officers of the Company, including the Chief Executive Officer, and
evaluates their performance. The Committee reviews with the Board the
significant aspects of compensation for the executive officers of the Company.
In discharging our responsibilities as members of the Human Resources,
Compensation and Nominating Committee, our objective is to establish policies
which will enhance the long-term performance and growth of the Company, enable
the Company to attract and retain outstanding executives and employees, and
provide meaningful incentives without subjecting the Company to excessive costs.
The Company has historically relied principally on cash payments in the form of
salary and incentive payments to motivate its key executives and managers, and
secondarily on employee stock options.
The compensation policy of the Company, which is endorsed by the Committee,
is that a substantial portion of the annual compensation of each officer should
relate to and be contingent upon the performance of the Company, as well as the
individual contribution of each officer. As a result, a substantial portion of
each executive officer's compensation is "at risk" in the form of incentive
compensation, which is awarded based on performance of the individual and the
Company (or the appropriate business unit managed by the executive officer) for
the year in question. The determination of incentive compensation is based on a
qualitative evaluation of the individual's contribution to the Company's
performance, and is also tied to meeting or exceeding business plan income
projections.
Amendments to Section 162(m) of the Internal Revenue Code have eliminated
the deductibility of most compensation over a million dollars in any given year.
The Committee believes that it is highly unlikely that any of the Company's
executive officers would be eligible at any time in the foreseeable future to
receive compensation of more than a million dollars. However, the Committee
believes that it is important to retain the flexibility to maximize the
Company's tax deductions. Accordingly, it will be the policy of this Committee
to consider the impact, if any, of Section 162(m) on the Company and to document
as necessary specific performance goals and take all other reasonable steps in
order to seek to preserve the Company's tax deductions.
7
<PAGE> 10
Peter Gibert's base salary for 1995 was initially based on his rights under
his five-year employment agreement with the Company dated May 21, 1991 (the
"Employment Agreement") described in the Company's proxy statement. The
Employment Agreement established Mr. Gibert's initial and minimum annual base
salary at $192,000, subject to annual review by the Committee. In 1992, the
Committee concluded that it was appropriate to increase Mr. Gibert's salary to
$20,000 per month effective May 1, 1992 -- an increase of $4,000 per month from
the minimum level specified in the Employment Agreement. In order to compensate
Mr. Gibert for the additional tax obligation resulting from the annual
forgiveness of the Promissory Note obligation discussed above under the caption
"Transactions with the Company," in August 1994 Mr. Gibert's salary was
increased by $44,000 in every year the Note is forgiven. In addition, the
Employment Agreement provided that Mr. Gibert was entitled to receive a bonus
equal to the greater of (i) $43,000 or (ii) 10% of the amount by which the
Company's "consolidated net profit before taxes" (as defined in the Employment
Agreement) for 1995 exceeds $110% of the "consolidated net profit before taxes"
for 1994. For 1995, the bonus will be $43,000.
Effective January 1, 1996, The Company entered into an amended employment
agreement with Peter Gibert. The Committee deemed this advisable in view of the
expiration of the original Employment Agreement with Mr. Gibert and his
contributions to the Company as Chief Executive Officer. Under the terms of this
amended agreement, Mr. Gibert's base salary is increased to $31,250 per month
through December 31, 1997. This is in recognition of Mr. Gibert's performance
and duties as Chief Executive Officer and in view of the fact that only one base
salary increase has been provided to Mr. Gibert since 1991. Mr. Gibert's bonus
plan is as follows: if the Company's earnings per share ("EPS") for the calendar
year are less than an 11% increase over the preceding year, any bonus paid is
subject to the discretion of the Board of Directors; if the EPS increase over
the preceding year is between 11% and 15%, then Mr. Gibert is entitled to a
minimum bonus of 20% of his base salary; if the EPS increase is 16% to 20% over
the preceding year, the minimum bonus will be 40% of base salary; and if the EPS
increase over the preceding year is 21% or more, then the minimum bonus will be
50% of base salary. The amended employment agreement also provides for a grant
of options to purchase at fair market value 60,000 shares of Common Stock, half
of which vest after 12 months and the balance vest after 24 months.
In March 1995 Mr. Gibert was granted 32,735 shares of restricted stock. 50%
of these shares vested on January 1, 1996 and the balance vests on January 1,
1997 contingent upon Mr. Gibert's remaining an employee or Director of the
Company. The perquisites and other benefits received by Mr. Gibert that are
reported in the Summary Compensation Table are generally provided pursuant to
his Employment Agreement.
February 26, 1996 Human Resources, Compensation and Nominating Committee
WESLEY J. FASTIFF, Chairman
FRANK J. WEZNIAK
RAY C. ROBINSON, JR.
JOHN M. KAISER
8
<PAGE> 11
PERFORMANCE GRAPH
The following graph compares the yearly percentage change in the Company's
cumulative total stockholder return on its Common Stock with the cumulative
total return of the NASDAQ Market Index and a peer group index consisting of the
Company, Expeditors International of Washington, Inc., Fritz Companies, Inc.,
Intertrans Corporation, Air Express International Corporation and Airborne
Freight Corporation. The performance graph shown below is not necessarily
indicative of future performance.
COMPARISON OF FIVE YEAR CUMULATIVE TOTAL RETURN* AMONG
THE HARPER GROUP, INC., NASDAQ MARKET INDEX AND
THE PEER GROUP INDEX LINES
<TABLE>
<CAPTION>
MEASUREMENT PERIOD THE HARPER NASDAQ MARKET
(FISCAL YEAR COVERED) GROUP, INC.: INDEX: PEER GROUP
<S> <C> <C> <C>
1990 100 100 100
1991 175 161 171
1992 128 187 177
1993 142 215 202
1994 126 210 237
1995 143 296 349
</TABLE>
- ---------------
* All returns reflect reinvestment of dividends.
PROPOSAL TO APPROVE THE 1995 STOCK OPTION
PLAN FOR NON-EMPLOYEE DIRECTORS
PRIOR PLANS
In 1992, the stockholders adopted the prior Stock Option Plan for
Non-Employee Directors (the "Prior Director Plan"), pursuant to which options to
purchase an aggregate of 30,000 shares of Common Stock were reserved for grants
to non-employee directors of the Company. Options to purchase an aggregate of
30,000 shares of Common Stock have been granted under the Prior Director Plan to
date, and no additional options will be granted under the Prior Director Plan.
To date, no stock options have been exercised under the Prior Director Plan. In
1994, the stockholders adopted the 1994 Omnibus Equity Incentive Plan, pursuant
to which an aggregate of 750,000 shares of the Company's Common Stock were
reserved for issuance. At the Annual Meeting, the stockholders will be asked to
approve an amendment to the 1994 Omnibus Equity
9
<PAGE> 12
Incentive Plan which increases the number of shares reserved for issuance to
2,000,000. See "Proposal to Amend the 1994 Omnibus Equity Incentive Plan."
GENERAL
The following discussion constitutes a brief description of the material
features of the 1995 Stock Option Plan for Non-Employee Directors (the "Director
Plan") and is qualified in its entirety by reference to the Director Plan which
is attached hereto as Exhibit A.
At a meeting held on August 21, 1995, the Board of Directors adopted the
Director Plan, subject to stockholder approval at the 1995 Annual Meeting and
approved the grant of nonqualified stock options to purchase 20,000 shares of
Common Stock to each of the Company's non-employee directors at an exercise
price of $17.34 per share, which was determined to be the fair market value of
the Common Stock as of such date.
The Director Plan provides for the grant of nonqualified stock options to
purchase an aggregate of 200,000 shares of Common Stock. The Director Plan is
intended to attract and retain the services of experienced and knowledgeable
independent directors for the benefit of the Company and its shareholders and to
provide additional incentive for such directors to continue to work for the best
interests of the Company and its shareholders.
ADMINISTRATION
The Director Plan is administered by the Human Resources, Compensation and
Nominating Committee of the Board of Directors of the Company (the "Committee").
However, because the principal terms of all option awards are set forth in the
Director Plan, the Committee will have no discretion to determine which
nonemployee directors will receive option awards or to set the number of shares
subject to such option awards.
OPTION GRANTS
The Director Plan provides that each director of the Company who was not
otherwise an employee of the Company or any subsidiary and had not been an
employee of the Company or any subsidiary for all or any part of the preceding
fiscal year be automatically granted options, subject to shareholder approval of
the Director Plan at the Annual Meeting, to purchase 20,000 shares on the
effective date of the Director Plan (August 21, 1995). The Director Plan further
provides that on the date that any person is for the first time elected by the
shareholders of the Company to the Board of Directors (which shall include the
date that a director appointed by the Board of Directors is for the first time
elected by the shareholders of the Company to the Board), options to purchase
20,000 shares (subject to adjustment for recapitalizations, stock splits and
similar events) shall automatically be granted to such newly elected director,
provided, however, that such automatic option grant shall only be made if (i)
the director is not otherwise an employee of the Company or any subsidiary on
the date of such election and has not been an employee for all or any part of
the preceding fiscal year, and (ii) the number of shares subject to future grant
under the Director Plan is sufficient to make all automatic grants required to
be made pursuant to the Director Plan on such date.
TERMS OF OPTIONS
The exercise price of the options which were conditionally granted under
the Director Plan on August 21, 1995 is equal to $17.34 per share, which the
Board determined to be the fair market value of the shares on August 21, 1995.
The exercise price of all other options granted under the Director Plan will be
the fair market value of the shares at the date of the option grant. Payment of
the exercise price shall be in cash.
Options to be granted under the Director Plan will not be exercisable for a
period of twelve months after the date of grant. Such options will become
exercisable in installments to the extent of one-quarter of the shares covered
by the option on the date one year after the date of grant, an additional
one-quarter of the shares covered by the option on the date two years after the
date of grant, an additional one-quarter of the
10
<PAGE> 13
shares covered by the option on the date three years after the date of grant and
the remaining shares covered by the option on the date four years after the date
of grant.
In the event that an optionee shall cease to be a director of the Company
for any reason other than his death, his option shall be exercisable, to the
extent it was exercisable at the date he ceased to be a director, for a period
of three months after such date, and shall then terminate. If an optionee dies
while a director of the Company, or within the three-month period after
termination of such status during which he is permitted to exercise an option in
accordance with the preceding sentence, such option may be exercised at any time
within one year after the optionee's death, but only to the extent the option
was exercisable at the time of death. Notwithstanding the foregoing, no option
granted under the Director Plan will be exercisable after the expiration of five
years from the date of its grant.
Options will not be transferable other than by will or the laws of descent
and distribution, and will be exercisable during the lifetime of an optionee
only by that optionee.
AMENDMENT
The Director Plan may be amended by the Board, except that shareholder
approval is required for any amendment which would increase the number of shares
subject to the Director Plan, increase the number of shares for which an option
may be granted to any optionee, change the designation of the class of persons
eligible to receive options under the Director Plan or the formula for grants,
provide for the grant of options having an option price per share less than fair
market value on the date of grant, extend the term during which options may be
exercised, or extend the final date upon which options under the Director Plan
may be granted.
GRANTS OF OPTIONS TO DIRECTORS
Five directors have been granted options under the Director Plan, subject
to approval of the Director Plan at the Annual Meeting. See "Terms of Options"
above and "Executive Compensation -- Compensation of Directors."
ADDITIONAL INFORMATION
In order to be adopted, the Director Plan must be approved by the holders
of a majority of the outstanding shares of Common Stock present or represented
and entitled to vote at the meeting.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR ADOPTION OF THE DIRECTOR PLAN.
PROPOSAL TO AMEND THE 1994 OMNIBUS EQUITY INCENTIVE PLAN
At the Annual Meeting held in May 1994 the stockholders of the Company
adopted the 1994 Omnibus Equity Incentive Plan (the "Plan") pursuant to which an
aggregate of 750,000 shares of the Company's Common Stock were originally
reserved for issuance to key employees and consultants of the Company and its
subsidiaries. On February 26, 1996, the Board of Directors of the Company
conditionally amended the Plan, subject to stockholder approval at the 1996
Annual Meeting, to increase the number of shares authorized for issuance under
the Plan by an additional 1,250,000 shares.
The reason for this increase is to ensure that a sufficient number of
shares of the Company's Common Stock is available under the Plan for awards to
attract, retain and motivate selected employees with outstanding experience and
ability. As of December 31, 1995, there were 1,105 shares remaining for awards
under the Plan, which would increase to 1,251,105 if the proposal is approved.
In addition, as of such date, options to purchase 974,884 shares of Common Stock
were outstanding under two prior stock option plans, and options to purchase
201,020 shares remained available for future grants under one of these prior
plans. One of the prior plans has expired and the other prior plan has not been
used following the adoption of the Plan. Set forth below is a summary of certain
of the principal features of the Plan.
11
<PAGE> 14
GENERAL
The Plan provides for the granting of stock options, stock appreciation
rights ("SARs"), restricted stock awards, performance unit awards and
performance share awards (collectively, "Awards") to key employees and
consultants of the Company and its subsidiaries.
PURPOSE
The purpose of the Plan is to promote the success, and enhance the value,
of the Company by linking the personal interests of participating employees and
consultants to those of the Company's stockholders and by providing such
employees and consultants with an incentive for outstanding performance. The
Plan is further intended to provide flexibility to the Company in its ability to
motivate, attract and retain the services of participating employees and
consultants upon whose judgment, interest and special efforts the Company is
largely dependent for the successful conduct of its operations.
ADMINISTRATION
The Plan is administered by the Human Resources, Compensation and
Nominating Committee of the Board of Directors of the Company (the "Committee").
OPTIONS
The price of the shares of the Company's Common Stock subject to each
option (the "option price") is set by the Committee but may not be less than 50%
of the fair market value on the date of grant in the case of an option that is
not an incentive stock option (a "nonqualified stock option"), and not less than
100% of the fair market value in the case of an incentive stock option. To date,
no options have been granted below fair market value under the Plan.
Options granted under the Plan are exercisable at the times and on the
terms established by the Committee, provided that options granted to officers
who are subject to section 16(b) of the Securities and Exchange Act of 1934 (the
"Exchange Act") may not be exercised until six months following the date of
grant. Subject to the foregoing limitation, the Committee may accelerate the
exercisability of any option.
The option price must be paid in full in cash or its equivalent at the time
of exercise. The Committee also may permit payment of the option price by the
tender of previously acquired shares of the Company's stock or such other legal
consideration which the Committee determines to be consistent with the Plan's
purpose and applicable law.
STOCK APPRECIATION RIGHTS
The Plan permits the grant of three types of SARs: Affiliated SARs,
Freestanding SARs, Tandem SARs, or any combination thereof, none of which have
been granted under the Plan thus far. An Affiliated SAR is an SAR that is
granted in connection with a related option and which will be deemed to
automatically be exercised simultaneously with the exercise of the related
option. A Freestanding SAR is an SAR that is granted independently of any
options. A Tandem SAR is an SAR that is granted in connection with a related
option, the exercise of which requires a forfeiture of the right to purchase a
share under the related option (and when a share is purchased under the option,
the SAR is similarly cancelled).
The Committee has complete discretion to determine the number of SARs
granted to any optionee or recipient and the terms and conditions pertaining to
such SARs. However, the grant price must be at least equal to the fair market
value of a share of the Company's Common Stock on the date of grant in the case
of a Freestanding SAR and equal to the option price of the related option in the
case of an Affiliated or Tandem SAR. An SAR that is granted to an officer who is
subject to section 16(b) of the Exchange Act ("Section 16(b)") may not be
exercised until at least six months following the date of grant. To date, the
Company has not made an SAR award.
12
<PAGE> 15
RESTRICTED STOCK AWARDS
The Plan permits the grant of restricted stock awards which are restricted
Common Stock bonuses that vest in accordance with terms established by the
Committee. Restricted Stock granted to an officer subject to Section 16(b) may
not vest prior to six months following the date of its grant. The Committee may
impose restrictions and conditions on the shares, including, without limitation,
restrictions based upon the achievement of specific performance goals
(Company-wide, divisional and/or individual), and/or restrictions under
applicable federal or state securities laws. The Committee may accelerate the
time at which any restrictions lapse, and/or remove any restrictions.
PERFORMANCE UNIT/SHARE AWARDS
The Plan permits the grant of performance unit and performance share awards
which are bonuses credited to an account established for the recipient and
payable in cash, Common Stock, or a combination thereof. Each performance unit
has an initial value that is established by the Committee at the time of its
grant. Each performance share has an initial value equal to the fair market
value of a share of the Company's Common Stock on the date of its grant. The
number and/or value of performance units/shares that will be paid out to
recipients will depend upon the extent to which performance goals established by
the Committee are satisfied. The payment date for performance unit/share awards
granted to officers and directors subject to Section 16(b) may not be less than
six months from the date of grant.
After a performance unit/share award has vested, the recipient will be
entitled to receive a payout of the number of performance units/shares earned by
the recipient, to be determined as a function of the extent to which the
corresponding performance goals have been achieved. The Committee also may waive
the achievement of any performance goals for such performance unit/share.
Subject to the applicable award agreement, performance units/shares awarded
to recipients will be forfeited to the Company upon the earlier of the
recipient's termination of employment or the date set forth in the award
agreement. To date, the Company has not made a performance unit/share award.
NONTRANSFERABILITY OF AWARDS
Awards granted under the Plan may not be sold, transferred, pledged,
assigned, or otherwise alienated or hypothecated, other than by will or by the
applicable laws of descent and distribution. However, an optionee or recipient
may designate one or more beneficiaries to receive any exercisable or vested
awards following his or her death.
NEW PLAN BENEFITS
Regulations recently adopted by the Securities and Exchange Commission
require disclosure of benefits to the executive officers of the Company named in
the summary compensation table and to certain other categories of award
recipient, if such benefits are determinable. In addition to the grants of stock
options set forth below, it is likely that substantial additional grants will be
made to such persons and others during the life of the Plan, and it is
impossible to determine the amount or terms of such future grants.
The following table sets forth as of February 28, 1996 (a) the aggregate
number of shares of the Company's Common Stock subject to awards granted under
the Plan since January 1, 1995, and (b) the dollar value of such awards based on
the difference between the exercise prices and $17.75 per share, the closing
price for the shares of Common Stock on February 28, 1996.
13
<PAGE> 16
<TABLE>
<CAPTION>
NUMBER OF DOLLAR VALUE OF
NAME OF INDIVIDUAL OF GROUP OPTIONS GRANTED OPTIONS GRANTED
------------------------------------------------------- --------------- ---------------
<S> <C> <C>
Peter Gibert........................................... 92,735(1) $ 607,446
Robert J. Diaz......................................... -- --
Martin R. Collins...................................... 15,000 $ 11,250
Kim E. Wertheimer...................................... 15,000 $ 11,250
Robert H. Kennis....................................... 17,500 $ 13,125
All executive officers, as a group..................... 140,235 $ 643,071
All employees who are not executive officers, as a
group................................................ 300,399 $ 670,653
All directors who are not executive officers, as a
group................................................ 106,000(2) --
</TABLE>
- ---------------
(1) Includes options to purchase 60,000 shares at an exercise price of $17.31
per share which were granted to Peter Gibert on February 26, 1996, subject
to stockholder approval at the 1996 Annual Meeting of the proposal to amend
the 1994 Omnibus Equity Incentive Plan to increase the number of shares
available for issuance thereunder.
(2) Includes options to purchase 20,000 shares at an exercise price of $17.34
per share which were granted to each of five non-employee directors on
August 21, 1995, subject to stockholder approval at the 1996 Annual Meeting
of the proposal to adopt the 1995 Stock Option Plan for Non-Employee
Directors.
REQUIRED VOTE
The affirmative vote of a majority of shares present in person or by proxy
at the Annual Meeting and entitled to vote is required to approve the proposed
amendment to the Plan.
THE BOARD OF DIRECTORS RECOMMENDS THAT THE STOCKHOLDERS VOTE "FOR" THE
APPROVAL OF THE AMENDMENT TO THE PLAN.
OWNERSHIP OF MANAGEMENT AND PRINCIPAL STOCKHOLDERS
The following table indicates, as to each named director and each named
executive officer, as to all directors and executive officers as a group, and as
to each beneficial owner of 5% or more of the Company's Common Stock the number
of shares and percentage of the Company's Common Stock beneficially owned as of
February 28, 1996.
<TABLE>
<CAPTION>
COMMON STOCK BENEFICIALLY OWNED
AS OF FEBRUARY 28, 1996
--------------------------------
NAME NUMBER OF SHARES PERCENT
-------------------------------------------------------- ---------------- -------
<S> <C> <C>
Peter Gibert(1)......................................... 1,070,438(2)(3)(9) 6.6%
Ray C. Robinson, Jr.(1)................................. 1,709,247(4) 10.5%
Wesley J. Fastiff....................................... 75,433(5)(6) 0.5%
Edwin J. Holman......................................... 6,000(6) --
Frank J. Wezniak........................................ 6,685(6) --
John M. Kaiser.......................................... 20,000(6) --
Robert J. Diaz.......................................... 12,500(7) --
Martin R. Collins....................................... 8,815(8)(9) --
Kim E. Wertheimer....................................... 73,332(10) 0.5%
Robert H. Kennis........................................ 13,334(9)(11) --
All directors and officers as a group (10 persons)...... 2,997,634 18.4%
John H. Robinson(1)..................................... 1,028,037 6.3%
Westport Asset Management, Inc.(1)...................... 1,314,750 8.1%
</TABLE>
- ---------------
(1) John H. Robinson and Ray C. Robinson, Jr. are brothers. The address of Ray
C. Robinson, Jr., Peter Gibert and John H. Robinson is 260 Townsend Street,
San Francisco, California 94107. The address of Westport Asset Management,
Inc. is 253 Riverside Ave., Westport, Connecticut 06880.
14
<PAGE> 17
(2) Excludes 147,451 shares (0.9%) held by Jeffrey L. Oerke, as trustee of an
irrevocable trust for the benefit of the children of Peter Gibert and their
descendants. As to such excluded shares, Mr. Gibert disclaims any
beneficial interest.
(3) Includes 37,500 shares issuable upon exercise of outstanding options
exercisable within 60 days of February 28, 1996 and 32,735 shares of
restricted stock.
(4) Consists of 1,709,247 shares held by Ray C. Robinson, Jr. and Craig Howard
Robinson as co-trustees of a revocable trust for the benefit of Ray C.
Robinson, Jr., his wife and their descendants.
(5) Includes 69,433 shares held by Wesley J. Fastiff and Bonnie B. Fastiff as
co-trustees of a revocable trust for the benefit of Wesley J. Fastiff, his
wife and their descendants.
(6) Includes 6,000 shares issuable upon exercise of outstanding options
exercisable within 60 days of February 28, 1996.
(7) Includes 12,500 shares issuable upon exercise of outstanding options
exercisable within 60 days of February 28, 1996.
(8) Includes 8,750 shares issuable upon exercise of outstanding options
exercisable within 60 days of February 28, 1996.
(9) Includes shares contributed into the officers' Section 401(k) Plan which
were previously held by the Company's profit sharing plan.
(10) Includes 8,250 shares issuable upon exercise of outstanding options
exercisable within 60 days of February 28, 1996.
(11) Includes 12,750 shares issuable upon exercise of outstanding options
exercisable within 60 days of February 28, 1996.
SECTION 16(A) INFORMATION
Section 16(a) of the Securities Exchange Act of 1934 requires the Company's
officers and directors, and persons who own more than ten percent of a
registered class of the Company's equity securities, to file reports of
ownership and changes in ownership with the Securities and Exchange Commission.
Officers, directors and greater than ten-percent shareholders are required by
SEC regulation to furnish the Company with copies of all Section 16(a) forms
they file.
Based solely on its review of the copies of such forms received by it, or
written representations from certain reporting persons that no Forms 5 were
required for those persons, the Company believes that, during the period from
January 1, 1995 to December 31, 1995 all filing requirements applicable to its
officers, directors and greater than ten-percent beneficial owners were complied
with, except that Patrick Morrison filed a Form 5 with respect to 300 shares of
stock sold by him in October 1995 which was not timely reported.
AUDITORS
Deloitte & Touche LLP, independent certified public accountants, serves as
the Company's principal accountants. Representatives of Deloitte & Touche LLP
will be present at the Annual Meeting with the opportunity to make a statement
if they desire to do so and will be available to respond to appropriate
questions.
OTHER MATTERS
As of the date of this Proxy Statement, there are no other matters which
management intends to present or has reason to believe others will present to
the meeting. If other matters properly come before the meeting, those who act as
proxies will vote in accordance with their judgment.
15
<PAGE> 18
STOCKHOLDER PROPOSALS
If any stockholder intends to present a proposal for action at the
Company's 1997 Annual Meeting and wishes to have such proposal set forth in
management's proxy statement, such stockholder must forward the proposal to the
Company so that it is received on or before December 2, 1996. Proposals should
be addressed to the Company at 260 Townsend Street, San Francisco, California
94107, Attention: Corporate Secretary.
COST OF SOLICITATION
All expenses in connection with the solicitation of this proxy, including
the charges of brokerage houses and other custodians, nominees or fiduciaries
for forwarding documents to stockholders, will be paid by the Company.
Dated: April 1, 1996.
By Order of the Board of Directors
Robert H. Kennis, Secretary
16
<PAGE> 19
EXHIBIT A
DIRECTOR STOCK OPTION PLAN
THE HARPER GROUP, INC.
1995 STOCK OPTION PLAN FOR NON-EMPLOYEE DIRECTORS
(EFFECTIVE AUGUST 21, 1995)
ARTICLE I
GENERAL
1. PURPOSE.
This 1995 Stock Option Plan for Non-Employee Directors (the "Plan") is
intended to attract and retain the services of experienced and knowledgeable
independent directors of The Harper Group, Inc. (the "Company") for the benefit
of the Company and its shareholders and to provide additional incentive for such
directors to continue to work for the best interests of the Company and its
shareholders.
2. ADMINISTRATION.
The Plan shall be administered by the Human Resources, Compensation and
Nominating Committee of the Board of Directors of the Company (the "Committee").
The Committee shall, subject to the provisions of the Plan, grant options under
the Plan and shall have the power to construe the Plan, to determine all
questions arising thereunder and to adopt and amend such rules and regulations
for the administration of the Plan as it may deem desirable.
The interpretation and construction by the Committee of any provisions of
the Plan or of any option granted under it shall be final. No member of the
Committee shall be liable for any action or determination made in good faith
with respect to the Plan or any option granted under it.
3. ELIGIBILITY.
Each director of the Company who is not otherwise an employee of the
Company or any subsidiary as of the effective date of the Plan (August 21, 1995)
and has not been an employee of the Company or any subsidiary for all or any
part of the fiscal year preceding such effective date shall automatically be
granted options to purchase 20,000 shares (subject to adjustment as provided in
Article III hereof) on the effective date of the Plan.
In addition, on the date that any person is for the first time elected by
the shareholders of the Company to the Board of Directors (which shall include
the date that a director appointed by the Board of Directors is for the first
time elected by the shareholders of the Company to the Board), options to
purchase 20,000 shares (subject to adjustment as provided in Article III hereof)
shall automatically be granted to such newly elected director; provided,
however, that such automatic option grant shall only be made if (i) the director
is not otherwise an employee of the Company or any subsidiary on the date of
such election and has not been an employee for all or any part of the preceding
fiscal year, and (ii) the number of shares subject to future grant under the
Plan is sufficient to make all automatic grants required to be made pursuant to
the Plan on such date.
4. SHARES OF STOCK SUBJECT TO THE PLAN.
The shares that may be issued under the Plan shall be authorized and
unissued or reacquired shares of the Company's common stock (the "Common
Stock"). The aggregate number of shares which may be issued under the Plan shall
not exceed 200,000 shares of Common Stock, unless an adjustment is required in
accordance with Article III.
A-1
<PAGE> 20
5. AMENDMENT OF THE PLAN.
The Board of Directors may, insofar as permitted by law, from time to time,
suspend or discontinue the Plan or revise or amend it in any respect whatsoever,
except that no such amendment shall alter or impair or diminish any rights or
obligations under any option theretofore granted under the Plan without the
consent of the person to whom such option was granted. In addition, without
further shareholder approval, no such amendment shall (A) materially increase
the benefits accruing to participants under the Plan, (B) materially increase
the number of securities which may be issued under the Plan, or (C) materially
modify the requirements as to eligibility for participation in the Plan,
provided, that shareholder approval is not required if such approval is not
required in order to assure the Plan's continued qualification under Rule 16b-3
promulgated under the Securities Exchange Act of 1934, as amended. The Plan's
provisions regarding the formula for determining the amount, exercise price, and
timing of options to be granted under the Plan shall in no event be amended more
than once every six months, other than to comport with changes in the Internal
Revenue Code of 1986, as amended.
6. APPROVAL OF SHAREHOLDERS.
All options granted under the Plan before the Plan is approved by
affirmative vote at the next meeting of shareholders of the Company, or any
adjournment thereof, of the holders of a majority of the outstanding shares of
Common Stock present in person or by proxy and entitled to vote at the meeting
shall be subject to such approval. No option granted hereunder may become
exercisable unless and until such approval is obtained.
7. TERM OF PLAN.
Options may be granted under the Plan until August 21, 2000, the date of
termination of the Plan. Notwithstanding the foregoing, each option granted
under the Plan shall remain in effect until such option has been satisfied by
the issuance of shares or terminated in accordance with its terms and the terms
of the Plan.
8. RESTRICTIONS.
All options granted under the Plan shall be subject to the requirement
that, if at any time, the Committee shall determine, in its discretion, that the
listing, registration or qualification of the shares subject to options granted
under the Plan upon any securities exchange or under any state or federal law,
or the consent or approval of any government regulatory body, is necessary or
desirable as a condition of, or in connection with, the granting of such option
or the issuance, if any, or purchase of shares in connection therewith, such
option may not be exercised in whole or in part unless such listing,
registration, qualification, consent or approval shall have been effected or
obtained free of any conditions not acceptable to the Committee.
9. NONASSIGNABILITY.
No option shall be assignable or transferable by the grantee except by will
or by the laws of descent and distribution. During the lifetime of the optionee,
the option shall be exercisable only by him, and no other person shall acquire
any rights therein.
10. WITHHOLDING TAXES.
Whenever shares of Common Stock are to be issued under the Plan, the
Company shall have the right to require the optionee to remit to the Company an
amount sufficient to satisfy federal, state and local withholding tax
requirements prior to the delivery of any certificate or certificates for such
shares.
11. DEFINITION OF "FAIR MARKET VALUE".
For the purposes of this Plan, the term "fair market value," when used in
reference to the date of grant of an option or the date of surrender of Common
Stock in payment for the purchase of shares pursuant to the exercise of an
option, as the case may be, shall be the last sale price in the NASDAQ National
Market
A-2
<PAGE> 21
System on such date as published in the Wall Street Journal or if no report is
available for such date, the next preceding date for which a report is
available, provided that the last sale price on such preceding date is not less
than 100% of the fair market value of the Common Stock on the date the option is
granted. If the Common Stock is hereafter listed on one or more securities
exchanges, "fair market value" thereafter shall be the mean between the highest
and the lowest sale prices of the Common Stock quoted in the Transactions Index
of each such exchange as averaged with such mean price as reported on any and
all other exchanges, as published in the Wall Street Journal and determined by
the Committee, or if no sale price was quoted in any such Index for such date,
then as of the next preceding date on which such sale price was quoted, provided
that the mean on such preceding date is not less than 100% of the fair market
value of the Common Stock on the date the option is granted.
ARTICLE II
STOCK OPTIONS
1. AWARD OF STOCK OPTIONS.
Awards of stock options shall be made under the Plan under all the terms
and conditions contained herein. Each option granted under the Plan shall be
evidenced by an option agreement duly executed on behalf of the Company and by
the director to whom such option is granted, which option agreements may but
need not be identical and shall comply with and be subject to the terms and
conditions of the Plan. Any option agreement may contain such other terms,
provisions and conditions not inconsistent with the Plan as may be determined by
the Committee. The date on which any option is granted shall be the date of the
Committee's authorization of such grant or such later date as may be determined
by the Committee at the time such grant is authorized.
2. TERM OF OPTIONS AND EFFECT OF TERMINATION.
Notwithstanding any other provision of the Plan, no option granted under
the Plan shall be exercisable after the expiration of five years from the date
of its grant.
In the event that any outstanding option under the Plan expires by reason
of lapse of time or otherwise is terminated for any reason, then the shares of
the Common Stock subject to any such option which have not been issued pursuant
to the exercise of the option shall again become available in the pool of shares
for Common Stock for which options may be granted under the Plan.
3. TERMS AND CONDITIONS OF OPTIONS.
Options granted pursuant to the Plan shall be evidenced by agreements in
such form as the Committee shall from time to time determine, which agreements
shall comply with the following terms and conditions.
A. Number of Shares
Each option agreement shall state the number of shares to which the option
pertains.
B. Option Price
Each option agreement shall state the option price per share (or the method
by which such price shall be computed). The option price per share of options
granted on the effective date of the Plan shall be $17.34 which is hereby
determined to be equal to 100% of the fair market value of a share of Common
Stock on August 21, 1995. The option price per share of all other options
granted under the Plan shall be equal to 100% of the fair market value of a
share of the Common Stock on the date such option is granted.
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C. Medium and Time of Payment
The option price shall be payable upon the exercise of an option in the
legal tender of the United States. Upon receipt of payment, the Company shall
deliver to the optionee (or person entitled to exercise the option) a
certificate or certificates for the shares of Common Stock to which the option
pertains.
D. Exercise of Options
Options granted under the Plan shall not be exercisable for a period of 12
months after the date of grant. Subject to the conditions stated herein and in
the option agreements, options shall become exercisable in installments to the
extent of one-quarter of the shares covered by the option on the date 12 months
after the date of grant, an additional one-quarter of the shares covered by the
option on the date 24 months after the date of grant, an additional one-quarter
of the shares covered by the option on the date 36 months after the date of
grant, and the remaining shares covered by the option on the date 48 months
after the date of grant. Shares entitled to be purchased but not so purchased
during any period described in the foregoing sentences may be purchased during
any subsequent period within the five-year term of the option.
To the extent that an option has become exercisable and subject to the
restrictions and limitations set forth in this Plan and in the option agreement,
it may be exercised in whole or in part or in such lesser amount as may be
authorized by the option agreement, provided, however, that no option shall be
exercised for fewer than ten shares. If exercised in part, the unexercised
portion of an option shall continue to be held by the optionee and may
thereafter be exercised as herein provided.
E. Termination of Directorship Except by Death
In the event any optionee shall cease to be a director of the Company for
any reason other than his death, his option shall be exercisable, to the extent
it was exercisable at the date he ceased to be a director, for a period of three
months after such date, and shall then terminate. Such option may be exercised
at any time within such three-month period and prior to the date on which the
option expires by its term.
F. Death of Optionee and Transfer of Option
If the optionee dies while a director of the Company, or within the
three-month period after termination of such status during which he is permitted
to exercise an option in accordance with Subsection 3(E) of this Article II,
such option may be exercised at any time within one year after the optionee's
death, but only to the extent the option was exercisable at the time of death.
Such option may be exercised at any time within such one-year period and prior
to the date on which the option expires by its terms. During such period, such
option may be exercised by any person or persons designated by the optionee on a
Beneficiary Designation Form adopted by the Committee for such purpose, or, if
there is no effective Beneficiary Designation Form on file with the Committee,
by the executors or administrators of the optionee's estate or by any person or
persons who shall have acquired the option directly from the optionee by his
will or the applicable law of descent and distribution.
ARTICLE III
RECAPITALIZATIONS AND REORGANIZATIONS
The number of shares of Common Stock covered by the Plan, the number of
shares and price per share of each outstanding option, and the number of shares
subject to each grant provided for in Article I, Section 3 hereof shall be
proportionately adjusted for any increase or decrease in the number of issued
and outstanding shares of Common Stock resulting from a subdivision or
consolidation of shares or the payment of a stock dividend or any other increase
or decrease in the number of issued and outstanding shares of Common Stock
effected without receipt of consideration by the Company.
If the Company shall be the surviving corporation in any merger or
consolidation, each outstanding option shall pertain to and apply to the
securities to which a holder of the same number of shares of Common Stock
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that are subject to that option would have been entitled. A dissolution or
liquidation of the Company, or a merger or consolidation in which the Company is
not the surviving corporation, shall cause each outstanding option to terminate,
unless the agreement of merger or consolidation shall otherwise provide;
provided that, in the event such dissolution, liquidation, merger or
consolidation will cause outstanding options to terminate, each optionee shall
have the right immediately prior to such dissolution, liquidation, merger or
consolidation to exercise his option in whole or in part without regard to any
limitations on the exercisability of such option other than (i) the expiration
date of the option, (ii) the limitation set forth in Section 9 of Article I, and
(iii) the ten share limitation set forth in Section 3(D) of Article II.
To the extent that the foregoing adjustments relate to stock or securities
of the Company, such adjustments shall be made by the Committee, whose
determination in that respect shall be final, binding and conclusive.
The grant of an option pursuant to the Plan shall not affect in any way the
right or power of the Company to make adjustments, reclassifications,
reorganizations or changes of its capital or business structure or to merge or
to consolidate or to dissolve, liquidate or sell, or transfer all or any part of
its business or assets.
ARTICLE IV
MISCELLANEOUS PROVISIONS
1. RIGHTS AS A SHAREHOLDER.
An optionee or a transferee of an option shall have no rights as a
shareholder with respect to any shares covered by an option until the date of
the receipt of payment (including any amounts required by the Company pursuant
to Section 10 of Article I) by the Company. No adjustment shall be made as to
any option for dividends (ordinary or extraordinary, whether in cash, securities
or other property) or distributions or other rights for which the record date is
prior to such date, except as provided in Article III.
2. PURCHASE FOR INVESTMENT.
Unless the shares of Common Stock to be issued upon exercise of an option
granted under the Plan have been effectively registered under the Securities Act
of 1933 as now in force or hereafter amended, the Company shall be under no
obligation to issue any shares of Common Stock covered by any option unless the
person who exercises such option, in whole or in part, shall give a written
representation and undertaking to the Company which is satisfactory in form and
scope to counsel to the Company and upon which, in the opinion of such counsel,
the Company may reasonably rely, that he is acquiring the shares of Common Stock
issued to him pursuant to such exercise of the option for his own account as an
investment and not with a view to, or for sale in connection with, the
distribution of any such shares of Common Stock, and that he will make no
transfer of the same except in compliance with any rules and regulations in
force at the time of such transfer under the Securities Act of 1933, or any
other applicable law, and that if shares of Common Stock are to be issued
without such registration, a legend to this effect may be endorsed upon the
securities so issued.
3. OTHER PROVISIONS.
The option agreements authorized under the Plan shall contain such other
provisions, including, without limitation, restrictions upon the exercise of the
option or restrictions required by any applicable securities laws, as the
Committee shall deem advisable.
4. APPLICATION OF FUNDS.
The proceeds received by the Company from the sale of Common Stock pursuant
to the exercise of the options will be used for general corporate purposes.
5. NO OBLIGATION TO EXERCISE OPTION.
The granting of an option shall impose no obligation upon the optionee to
exercise such option.
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EXHIBIT B
THE HARPER GROUP, INC.
1994 OMNIBUS EQUITY INCENTIVE PLAN
SECTION 1
ESTABLISHMENT, PURPOSE AND DURATION
1.1 Establishment of the Plan. The Harper Group, Inc., a
Delaware corporation (the "Company"), hereby establishes an incentive
compensation plan to be known as the "The Harper Group, Inc. 1994 Omnibus Equity
Incentive Plan" (the "Plan"). The Plan permits the grant of Nonqualified Stock
Options, Incentive Stock Options, SARs, Restricted Stock, Performance Units, and
Performance Shares. The Plan is effective as of February 28, 1994, subject to
ratification by an affirmative vote of the holders of a majority of Shares.
Grants of Awards under the Plan may be made prior to receipt of such vote;
provided, however, that such grants shall be null and void if such vote is not
received.
1.2 Purpose of the Plan. The purpose of the Plan is to promote
the success, and enhance the value, of the Company by linking the personal
interests of Participants to those of Company shareholders, and by providing
Participants with an incentive for outstanding performance.
The Plan is further intended to provide flexibility to the
Company in its ability to motivate, attract, and retain the services of
Participants upon whose judgment, interest, and special effort the successful
conduct of its operation largely is dependent.
1.3 Duration of the Plan. The Plan shall commence on the date
specified in Section 1.1, and shall remain in effect, subject to the right of
the Board of Directors to terminate the Plan at any time pursuant to Section 13
until all Shares subject to the Plan have been purchased or acquired pursuant to
the provisions of the Plan. However, without further stockholder approval, no
Incentive Stock Option may be granted under the Plan on or after February 28,
2004.
SECTION 2
DEFINITIONS
The following terms shall have the meanings set forth below,
unless plainly required by the context:
2.1 "Affiliated SAR" means a SAR that is granted in connection
with a related Option, and which will be deemed to automatically be exercised
simultaneous with the exercise of the related Option.
<PAGE> 25
2.2 "Award" means, individually or collectively, a grant under
the Plan of Nonqualified Stock Options, Incentive Stock Options, SARs,
Restricted Stock, Performance Units, or Performance Shares.
2.3 "Award Agreement" means an agreement entered into by each
Participant and the Company, setting forth the terms and provisions applicable
to Awards granted to Participants under this Plan.
2.4 "Board" or "Board of Directors" means the Board of
Directors of the Company.
2.5 "Code" means the Internal Revenue Code of 1986, as
amended. Reference to a specific section of the Code shall include such section,
any valid regulation promulgated thereunder, and any comparable provision of any
future legislation amending, supplementing or superseding such section.
2.6 "Committee" means the committee, as specified in Section
3, appointed by the Board to administer the Plan with respect to grants of
Awards.
2.7 "Company" means The Harper Group, Inc., a Delaware
corporation, or any successor thereto.
2.8 "Consultant" means any consultant, independent contractor,
or other person who provides significant services to the Company or its
Subsidiaries, but who is neither an employee of the Company or its Subsidiaries,
nor a Director of the Company.
2.9 "Director" means any individual who is a member of
the Board of Directors of the Company.
2.10 "Disability" means a permanent and total disability
within the meaning of Code Section 22(e)(3).
2.11 "Employee" means any employee of the Company or of the
Company's, whether such employee is so employed at the time the Plan is adopted
or becomes so employed subsequent to the adoption of the Plan. Directors who are
not otherwise employed by the Company shall not be considered Employees.
2.12 "Exchange Act" means the Securities Exchange Act of 1934,
as amended from time to time, or any successor Act thereto. Reference to a
specific section or regulation of the Exchange Act shall include such section or
regulation, any valid regulation promulgated thereunder, and any comparable
provision of any future legislation amending, supplementing or superseding such
section or regulation.
2.13 "Fair Market Value" means the average of the
highest and lowest quoted selling prices for Shares on the
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relevant date, or if there were no sales on such date, the weighted average of
the means between the highest and lowest quoted selling prices on the nearest
day before and the nearest day after the relevant date, as determined by the
Committee.
2.14 "Freestanding SAR" means a SAR that is granted
independently of any Options.
2.15 "Incentive Stock Option" or "ISO" means an option to
purchase Shares, which is designated as an Incentive Stock Option and is
intended to meet the requirements of Section 422 of the Code.
2.16 "Insider" shall mean an Employee who, on the relevant
date, is a Company director, Company officer (within the meaning of Rule 16a-1
promulgated under the Exchange Act), or beneficial owner of 10% or more of the
Shares.
2.17 "Nonqualified Stock Option" or "NQSO" means an option to
purchase Shares which is not intended to be an Incentive Stock Option.
2.18 "Option" means an Incentive Stock Option or a
Nonqualified Stock Option.
2.19 "Option Price" means the price at which a Share may be
purchased by a Participant pursuant to an Option, as determined by the
Committee.
2.20 "Participant" means an Employee of the Company who has
outstanding an Award granted under the Plan.
2.21 "Performance Unit" means an Award granted to an Employee
pursuant to Section 9.
2.22 "Performance Share" means an Award granted to an
Employee, pursuant to Section 9 herein.
2.23 "Period of Restriction" means the period during which the
transfer of Shares of Restricted Stock is limited in some way (based on the
passage of time, the achievement of performance goals, or upon the occurrence of
other events as determined by the Committee, in its discretion), and the Shares
are subject to a substantial risk of forfeiture, as provided in Section 8.
2.24 "Restricted Stock" means an Award granted to a
Participant pursuant to Section 8.
2.25 "Retirement" shall have the meaning for each respective
individual Participant ascribed to it in the pension plan of the Company
applicable to each such respective Participant.
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2.26 "Shares" means the shares of common stock of the
Company.
2.27 "Stock Appreciation Right" or "SAR" means an Award,
granted alone or in connection with a related Option, designated as a SAR,
pursuant to the terms of Section 7.
2.28 "Subsidiary" means any corporation in which the Company
owns directly, or indirectly through subsidiaries, at least fifty percent (50%)
of the total combined voting power of all classes of stock, or any other entity
(including, but not limited to, partnerships and joint ventures) in which the
Company owns at least fifty percent (50%) of the combined equity thereof.
2.29 "Tandem SAR" means a SAR that is granted in connection
with a related Option, the exercise of which shall require forfeiture of the
right to purchase a Share under the related Option (and when a Share is
purchased under the Option, a SAR shall similarly be cancelled).
2.30 "Window Period" means the period beginning on the third
business day following the date of public release of the Company's quarterly
sales and earnings information, and ending on the twelfth business day following
such date.
SECTION 3
ADMINISTRATION
3.1 The Committee. The Plan shall be administered by the
Committee. The Committee shall consist of not less than two (2) Directors. The
members of the Committee shall be appointed from time to time by, and shall
serve at the pleasure of, the Board of Directors. The Committee shall be
comprised solely of Directors who are "disinterested persons" under Rule 16b-3
under the Exchange Act.
3.2 Authority of the Committee. The Committee shall have full
power, except as limited by law or by the Certificate of Incorporation or Bylaws
of the Company, and subject to the provisions herein, to determine the size and
types of Awards; to determine the terms and conditions of such Awards in a
manner consistent with the Plan; to construe and interpret the Plan and any
Award Agreement or instrument entered into under the Plan; to establish, amend,
or waive rules and regulations for the Plan's administration; and (subject to
the provisions of Section 13 herein) to amend the terms and conditions of any
outstanding Award to the extent such terms and conditions are within the
discretion of the Committee as provided in the Plan. Further, the Committee
shall make all other determinations which may be necessary or advisable for the
administration of the Plan. As permitted by law, the Committee may delegate its
powers; provided, however, that only the Committee may administer the Plan with
respect to Insiders.
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3.3 Decisions Binding. All determinations and decisions made
by the Committee pursuant to the provisions of the Plan and all related orders
or resolutions of the Board of Directors shall be final, conclusive, and binding
on all persons, including the Company, its shareholders, Employees,
Participants, and their estates and beneficiaries, and shall be given the
maximum deference permitted by law.
SECTION 4
SHARES SUBJECT TO THE PLAN
4.1 Number of Shares. Subject to adjustment as provided in
Section 4.3, the total number of Shares available for grant under the Plan may
not exceed 2,000,000. These 2,000,000 Shares may be either authorized but
unissued or reacquired Shares.
The following rules will apply for purposes of the
determination of the number of Shares available for grant under the Plan:
(a) While an Award is outstanding, it shall be counted
against the authorized pool of Shares, regardless of
its vested status.
(b) The grant of an Option or Restricted Stock shall
reduce the Shares available for grant under the Plan
by the number of Shares subject to such Award.
(c) The grant of a Tandem SAR shall reduce the number of
Shares available for grant by the number of Shares
subject to the related Option (i.e., there is no
double counting of Options and their related Tandem
SARs); provided, however, that, upon the exercise of
such Tandem SAR, the authorized Share pool shall be
credited with the appropriate number of Shares
representing the number of shares reserved for such
Tandem SAR less the number of Shares actually
delivered upon exercise thereof or the number of
Shares having a Fair Market Value equal to the cash
payment made upon such exercise.
(d) The grant of an Affiliated SAR shall reduce the
number of Shares available for grant by the number of
Shares subject to the SAR, in addition to the number
of Shares subject to the related Option; provided,
however, that, upon the exercise of such Affiliated
SAR, the authorized Share pool shall be credited with
the appropriate number of Shares representing the
number of shares reserved for such Affiliated SAR
less the number of Shares actually delivered upon
exercise thereof or the
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number of Shares having a Fair Market Value equal to
the cash payment made upon such exercise.
(e) The grant of a Freestanding SAR shall reduce the
number of Shares available for grant by the number of
Freestanding SARs granted; provided, however, that,
upon the exercise of such Freestanding SAR, the
authorized Share pool shall be credited with the
appropriate number of Shares representing the number
of shares reserved for such Freestanding SAR less the
number of Shares actually delivered upon exercise
thereof or the number of Shares having a Fair Market
Value equal to the cash payment made upon such
exercise.
(f) The Committee shall in each cash determine the
appropriate number of Shares to deduct from the
authorized pool in connection with the grant of
Performance Units and/or Performance Shares.
(g) To the extent that an Award is settled in cash rather
than in Shares, the authorized Share pool shall be
credited with the appropriate number of Shares having
a Fair Market Value equal to the cash settlement of
the Award.
4.2 Lapsed Awards. If any Award granted under this Plan is
cancelled, terminates, expires, or lapses for any reason (with the exception of
the termination of a Tandem SAR upon exercise of the related Option, or the
termination of a related Option upon exercise of the corresponding Tandem SAR),
any Shares subject to such Award again shall be available for the grant of an
Award under the Plan. However, in the event that prior to the Award's
cancellation, termination, expiration, or lapse, the holder of the Award at any
time received one or more "benefits of ownership" pursuant to such Award (as
defined by the Securities and Exchange Commission, pursuant to any rule or
interpretation promulgated under Section 16 of the Exchange Act), the Shares
subject to such Award shall not be made available for regrant under the Plan.
4.3 Adjustments in Authorized Shares. In the event of any
merger, reorganization, consolidation, recapitalization, separation,
liquidation, stock dividend, split-up, Share combination, or other change in the
corporate structure of the Company affecting the Shares, such adjustment shall
be made in the number and class of Shares which may be delivered under the Plan,
and in the number and class of and/or price of Shares subject to outstanding
Options, SARs, and Restricted Stock granted under the Plan, as may be determined
to be appropriate and equitable by the Committee, in its sole discretion, to
prevent dilution or diminishment of Awards; and provided that the number of
Shares subject to any Award shall always be a whole number.
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SECTION 5
ELIGIBILITY AND PARTICIPATION
5.1 Eligibility. Persons eligible to participate in this Plan
include all Employees and Consultants of the Company and its Subsidiaries, as
determined by the Committee, including Employees who are members of the Board,
but excluding Directors who are not Employees.
5.2 Actual Participation. Subject to the provisions of the
Plan, the Committee in its sole discretion, shall select from all eligible
Employees and Consultants, those to whom Awards shall be granted, and the
Committee, in its sole discretion, shall determine the nature and amount of each
Award.
SECTION 6
STOCK OPTIONS
6.1 Grant of Options. Subject to the terms and provisions of
the Plan, Options may be granted to Employees and Consultants at any time and
from time to time as shall be determined by the Committee. The Committee shall
have discretion in determining the number of Shares subject to Options granted
to each Participant. The Committee may grant ISOs, NQSOs, or a combination
thereof.
6.2 Award Agreement. Each Option grant shall be evidenced by
an Award Agreement that shall specify the Option Price, the duration of the
Option, the number of Shares to which the Option pertains, the conditions of
exercise of the Options, and such other provisions as the Committee shall
determine. The Award Agreement also shall specify whether the Option is intended
to be an ISO or a NQSO.
6.3 Option Price. The Option Price for each grant of an Option
shall be determined by the Committee in its sole discretion.
6.3.1 Nonqualified Stock Options. In the case of a
Nonqualified Stock Option, the Option Price shall be not less than fifty percent
(50%) of the Fair Market Value of a Share on the date that the Option is
granted.
6.3.2 Incentive Stock Options. In the case of an
Incentive Stock Option, the Option Price shall be not less than one-hundred
percent of the Fair Market Value of a Share on the date that the Option is
granted; provided, however, that if at the time the Option is granted, the
Employee (together with persons whose stock ownership is attributed to the
Employee pursuant to Section 424(d) of the Code) owns stock possessing more
than 10% of the total combined voting power of all classes of stock of the
Company or any of its Subsidiaries, the Option
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Price shall be not less than one-hundred and ten percent (110%) of the Fair
Market Value of a Share on the date that the Option is granted.
6.4 Duration of Options. Each Option shall expire at such time
as the Committee, in its sole discretion, shall determine; provided, however,
that no Incentive Stock Option may be exercised after the expiration of 10 years
from the date the Option was granted; provided, further, no Incentive Stock
Option granted to an Employee who, together with persons whose stock ownership
is attributed to the Employee pursuant to Section 424(d) of the Code, owns stock
possessing more than 10% of the total combined voting power of all classes of
the stock of the Company or any of its Subsidiaries, may be exercised after the
expiration of 5 years from the date the Option was granted. After the Option is
granted, the Committee, in its sole discretion, may extend the maximum term of
such Option.
6.5 Exercise of Options. Options granted under the Plan shall
be exercisable at such times and be subject to such restrictions and conditions
as the Committee, in its sole discretion, shall determine. After an Option is
granted, the Committee, in its sole discretion, may accelerate the
exercisability of the Option. However, in no event may any Option granted to an
Insider be exercisable until six (6) months following the date of its grant.
6.6 Payment. Options shall be exercised by the Participant's
delivery of a written notice of exercise to the Secretary of the Company,
setting forth the number of Shares with respect to which the Option is to be
exercised, accompanied by full payment for the Shares.
The Option Price upon exercise of any Option shall be payable
to the Company in full in cash or its equivalent. The Committee, in its sole
discretion, also may permit exercise (a) by tendering previously acquired Shares
having an aggregate Fair Market Value at the time of exercise equal to the total
Option Price (provided that the Shares which are tendered must have been held by
the Participant for at least six (6) months prior to their tender to satisfy the
Option Price), or (b) by any other means which the Committee, in its sole
discretion, determines to provide legal consideration for the Shares, and to be
consistent with the Plan's purpose and applicable law.
As soon as practicable after receipt of a written notification
of exercise and full payment, the Company shall deliver to the Participant, in
the Participant's name, Share certificates in an appropriate amount based upon
the number of Shares purchased under the Option(s).
6.7 Restrictions on Share Transferability. The Committee may
impose such restrictions on any Shares acquired pursuant to the exercise of an
Option under the Plan, as it may
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deem advisable, including, without limitation, restrictions under applicable
Federal securities laws, under the requirements of any national securities
exchange or system upon which such Shares are then listed and/or traded, and
under any blue sky or state securities laws applicable to such Shares.
6.8 Certain Additional Provisions for Incentive Stock
Options.
6.8.1 Exercisability. The aggregate Fair Market Value
(determined at the time the Option is granted) of the Shares with respect to
which Incentive Stock Options are exercisable for the first time by any Employee
during any calendar year (under all plans of the Company and its Subsidiaries)
shall not exceed $100,000.
6.8.2 Termination of Employment. No Incentive Stock
Option may be exercised more than three months after the Participant's
termination of employment for any reason other than Disability or death,
unless (a) the Participant dies during such three-month period, and (b) the
Award Agreement permits later exercise. No Incentive Stock Option may be
exercised more than one year after the Participant's termination of employment
on account of Disability, unless (a) the Participant dies during such one-year
period, and (b) the Award Agreement permits later exercise.
6.8.3 Employees Only. Incentive Stock Options may
be granted only to persons who are Employees at the time of grant.
Consultants shall not be eligible to receive Incentive Stock Options.
6.9 Nontransferability of Options. No Option granted under the
Plan may be sold, transferred, pledged, assigned, or otherwise alienated or
hypothecated, other than by will, the laws of descent and distribution, or as
allowed under Section 10. All Options granted to a Participant under the Plan
shall be exercisable during his or her lifetime only by such Participant.
SECTION 7
STOCK APPRECIATION RIGHTS
7.1 Grant of SARs. Subject to the terms and conditions of the
Plan, a SAR may be granted to an Employee or Consultant at any time and from
time to time as shall be determined by the Committee, in its sole discretion.
The Committee may grant Affiliated SARs, Freestanding SARs, TandemSARs, or any
combination thereof.
The Committee shall have complete discretion to determine the
number of SARs granted to any Participant, and consistent with the provisions of
the Plan, the terms and conditions pertaining to such SARs. However, the grant
price of
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a Freestanding SAR shall be at least equal to the Fair Market Value of a Share
on the date of grant of the SAR. The grant price of Tandem or Affiliated SARs
shall equal the Option Price of the related Option. In no event shall any SAR
granted to an Insider become exercisable within the first six (6) months after
the date it was granted.
7.2 Exercise of Tandem SARs. Tandem SARs may be exercised for
all or part of the Shares subject to the related Option upon the surrender of
the right to exercise the equivalent portion of the related Option. A Tandem SAR
may be exercised only with respect to the Shares for which its related Option is
then exercisable.
Notwithstanding any other provision of this Plan to the
contrary, with respect to a Tandem SAR granted in connection with an ISO: (i)
the Tandem SAR will expire no later than the expiration of the underlying ISO;
(ii) the value of the payout with respect to the Tandem SAR may be for no more
than one hundred percent (100%) of the difference between the Option Price of
the underlying ISO and the Fair Market Value of the Shares subject to the
underlying ISO at the time the Tandem SAR is exercised; and (iii) the Tandem SAR
may be exercised only when the Fair Market Value of the Shares subject to the
ISO exceeds the Option Price of the ISO.
7.3 Exercise of Affiliated SARs. Affiliated SARs shall be
deemed to be exercised upon the exercise of the related Options. The deemed
exercise of Affiliated SARs shall not necessitate a reduction in the number of
related Options.
7.4 Exercise of Freestanding SARs. Freestanding SARs shall be
exercisable on such terms and conditions as shall be determined by the
Committee, in its sole discretion.
7.5 SAR Agreement. Each SAR grant shall be evidenced by an
Award Agreement that shall specify the grant price, the term of the SAR, the
conditions of exercise and such other provisions as the Committee, in its sole
discretion, shall determine.
7.6 Term of SARs. The term of a SAR granted under the Plan
shall be determined by the Committee, in its sole discretion.
7.7 Payment of SAR Amount. Upon exercise of a SAR, a
Participant shall be entitled to receive payment from the Company in an amount
determined by multiplying:
(a) The difference between the Fair Market Value of a
Share on the date of exercise over the grant
price; times
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(b) The number of Shares with respect to which the SAR
is exercised.
At the discretion of the Committee, the payment upon SAR
exercise may be in cash, in Shares of equivalent value, or in some combination
thereof.
7.8 Rule 16b-3 Requirements. Notwithstanding any other
provision of the Plan, the Committee may impose such conditions on exercise of a
SAR (including, without limitation, the right of the Committee to limit the time
of exercise to specified periods) as may be required to satisfy the requirements
of Rule 16b-3 promulgated under the Exchange Act.
For example, if the Participant is an Insider, the ability of
the Participant to exercise SARs for cash will be limited to the Window Periods
during each year. However, if the Committee determines that the Participant no
longer is an Insider, or if the Federal securities laws change to permit
Insiders greater freedom of exercise of SARs, then the Committee may permit
Insiders to exercise SARs at other times.
7.9 Nontransferability of SARs. No SAR granted under the Plan
may be sold, transferred, pledged, assigned, or otherwise alienated or
hypothecated, other than by will, the laws of descent and distribution, or as
permitted under Section 10. Further, all SARs granted to a Participant under the
Plan shall be exercisable during his or her lifetime only by such Participant.
SECTION 8
RESTRICTED STOCK
8.1 Grant of Restricted Stock. Subject to the terms and
provisions of the Plan, the Committee, at any time and from time to time, may
grant Shares of Restricted Stock to eligible Employees and Consultants in such
amounts as the Committee, in its sole discretion, shall determine.
8.2 Restricted Stock Agreement. Each Restricted Stock grant
shall be evidenced by an Award Agreement that shall specify the Period (or
Periods) of Restriction, the number of Restricted Stock Shares granted, and such
other terms and conditions as the Committee, in its sole discretion, shall
determine.
8.3 Transferability. Except as provided in this Section 8,
Shares of Restricted Stock may not be sold, transferred, pledged, assigned, or
otherwise alienated or hypothecated until the end of the applicable Period of
Restriction established by the Committee and specified in the Award Agreement,
or upon earlier satisfaction of any other conditions, as specified by the
Committee in its sole discretion and set forth in the Award Agreement. However,
in no event may
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any Restricted Stock granted to an Insider become vested in a Participant prior
to six (6) months following the date of its grant. All rights with respect to
the Restricted Stock granted to a Participant under the Plan shall be available
during his or her lifetime only to such Participant.
8.4 Other Restrictions. The Committee, in its sole discretion,
may impose such other restrictions on any Shares of Restricted Stock as it may
deem advisable including, without limitation, restrictions based upon the
achievement of specific performance goals (Company-wide, divisional, and/or
individual), and/or restrictions under applicable Federal or state securities
laws; and may legend the certificates representing Restricted Stock to give
appropriate notice of such restrictions.
8.5 Certificate Legend. In addition to any legends placed on
certificates pursuant to Section 8.4, each certificate representing Shares of
Restricted Stock shall bear the following legend:
"The sale or other transfer of the shares of stock represented
by this certificate, whether voluntary, involuntary, or by
operation of law, is subject to certain restrictions on
transfer as set forth in the The Harper Group, Inc. 1994
Omnibus Equity Incentive Plan, and in a Restricted Stock
Agreement. A copy of the Plan and such Restricted Stock
Agreement may be obtained from the Secretary of The Harper
Group, Inc."
8.6 Removal of Restrictions. Except as otherwise provided in
this Section 8, Shares of Restricted Stock covered by each Restricted Stock
grant made under the Plan shall become freely transferable by the Participant
after the last day of the Period of Restriction. The Committee, in its
discretion, may accelerate the time at which any restrictions shall lapse,
and/or remove any restrictions. After the Shares are released from restrictions,
the Participant shall be entitled to have the legend or legends required by
Section 8.4 and 8.5 removed from his or her Share certificate.
8.7 Voting Rights. During the Period of Restriction,
Participants holding Shares of Restricted Stock granted hereunder may exercise
full voting rights with respect to those Shares unless otherwise provided in the
Award Agreement.
8.8 Dividends and Other Distributions. During the Period of
Restriction, Participants holding Shares of Restricted Stock granted hereunder
shall be entitled to receive all dividends and other distributions paid with
respect to those Shares while they are so held, unless otherwise provided in the
Award Agreement. If any such dividends or distributions are paid in Shares, the
Shares shall be subject to the same restrictions on transferability and
forfeitability as the Shares of Restricted Stock with respect to which they were
paid.
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<PAGE> 36
In the event that any dividend or distribution constitutes a
"derivative security" or an "equity security" pursuant to the rules promulgated
under Section 16 of the Exchange Act, such dividend or distribution shall be
subject to a vesting period equal to the longer of: (i) the remaining vesting
period of the Shares of Restricted Stock with respect to which the dividend or
distribution is paid; or (ii) six months. The Committee shall establish
procedures for the application of this provision.
8.9 Return of Restricted Stock to Company. Subject to the
applicable Award Agreement and Section 8.6, upon the earlier of (a) the
Participant's termination of employment, or (b) the date set forth in the Award
Agreement, the Restricted Stock for which restrictions have not lapsed shall
revert to the Company and, subject to Section 4.2, again shall become available
for grant under the Plan.
SECTION 9
PERFORMANCE UNITS AND PERFORMANCE SHARES
9.1 Grant of Performance Units/Shares. Subject to the terms of
the Plan, Performance Units and Performance Shares may be granted to eligible
Employees and Consultants at any time and from time to time, as shall be
determined by the Committee, in its sole discretion. The Committee shall have
complete discretion in determining the number of Performance Units and
Performance Shares granted to each Participant.
9.2 Value of Performance Units/Shares. Each Performance Unit
shall have an initial value that is established by the Committee at the time of
grant. Each Performance Share shall have an initial value equal to the Fair
Market Value of a Share on the date of grant. The Committee shall set
performance goals in its discretion which, depending on the extent to which they
are met, will determine the number and/or value of Performance Units/Shares that
will be paid out to the Participants. The time period during which the
performance goals must be met shall be called a "Performance Period."
Performance Periods of Awards granted to Insiders shall, in all cases, exceed
six (6) months in length.
9.3 Earning of Performance Units/Shares. After the applicable
Performance Period has ended, the holder of Performance Units/Shares shall be
entitled to receive a payout of the number of Performance Units/Shares earned by
the Participant over the Performance Period, to be determined as a function of
the extent to which the corresponding performance goals have been achieved.
Notwithstanding the preceding sentence, after the grant of a Performance
Unit/Share, the Committee, in its sole discretion, may waive the achievement of
any performance goals for such Performance Unit/Share.
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9.4 Form and Timing of Payment of Performance Units/Shares.
Payment of earned Performance Units/Shares shall be made in a single lump sum,
within forty-five (45) calendar days following the close of the applicable
Performance Period. The Committee, in its sole discretion, may pay earned
Performance Units/Shares in the form of cash, in Shares (which have an aggregate
Fair Market Value equal to the value of the earned Performance Units/Shares at
the close of the applicable Performance Period) or in a combination thereof.
Prior to the beginning of each Performance Period,
Participants may, in the discretion of the Committee, elect to defer the receipt
of any Performance Unit/Share payout upon such terms as the Committee shall
determine.
9.5 Cancellation of Performance Units/Shares. Subject to the
applicable Award Agreement, upon the earlier of (a) the Participant's
termination of employment, or (b) the date set forth in the Award Agreement, all
remaining Performance Units/Shares shall be forfeited by the Participant to the
Company, and subject to Section 4.2, the Shares subject thereto shall again be
available for grant under the Plan.
9.6 Nontransferability. Performance Units/Shares may not be
sold, transferred, pledged, assigned, or otherwise alienated or hypothecated,
other than by will or by the laws of descent and distribution. Further a
Participant's rights under the Plan shall be exercisable during the
Participant's lifetime only by the Participant or the Participant's legal
representative.
SECTION 10
BENEFICIARY DESIGNATION
As provided in this Section 10, each Participant under the
Plan may name a beneficiary or beneficiaries (who may be named contingently or
successively) to whom any benefit under the Plan is to be paid in case of the
Participant's death before he or she receives any or all of such benefit and/or
who may exercise any vested Award under the Plan following the Participant's
death. Each such designation shall revoke all prior designations by the same
Participant and must be in a form and manner acceptable to the Committee. In the
absence of any such designation, benefits remaining unpaid at the Participant's
death shall be paid to the Participant's estate and, subject to the terms of the
Plan, any unexercised vested Award may be exercised by the administrator or
executor of the Participant's estate.
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SECTION 11
DEFERRALS
The Committee, in its sole discretion, may permit a
Participant to defer such Participant's receipt of the payment of cash or the
delivery of Shares that would otherwise be due to such Participant by virtue of
the exercise of an Option or SAR, the lapse or waiver of restrictions with
respect to Restricted Stock, or the satisfaction of any requirements or goals
with respect to Performance Units/Shares. Any such deferral elections shall be
subject to such rules and procedures as shall be determined by the Committee
from time to time.
SECTION 12
RIGHTS OF EMPLOYEES
12.1 No Effect on Employment or Service. Nothing in the Plan
shall interfere with or limit in any way the right of the Company to terminate
any Participant's employment or service at any time, with or without cause. For
purposes of the Plan, transfer of employment of a Participant between the
Company and any one of its Subsidiaries (or between Subsidiaries) shall not be
deemed a termination of employment.
12.2 Participation. No Employee or Consultant shall have the
right to be selected to receive an Award under this Plan, or, having been so
selected, to be selected to receive a future Award.
SECTION 13
AMENDMENT, SUSPENSION, OR TERMINATION
13.1 Amendment, Suspension, or Termination. The Board, in its
sole discretion, may alter, amend or terminate the Plan, or any part thereof, at
any time and for any reason; provided, however, that without further stockholder
approval, no such alteration or amendment shall (a) materially increase the
benefits accruing to participants under the Plan, (b) materially increase the
number of securities which may be issued under the Plan, or (c) materially
modify the requirements as to eligibility for participation in the Plan;
provided, further, that stockholder approval is not required if such approval is
not required in order to assure the Plan's continued qualification under Rule
16b-3 promulgated under the 1934 Act. Neither the amendment, suspension, nor
termination of the Plan shall, without the consent of the Participant, alter or
impair any rights or obligations under any Award theretofore granted. No Award
may be granted during any period of suspension nor after termination of the
Plan.
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SECTION 14
WITHHOLDING
14.1 Tax Withholding. Prior to the delivery of any Shares of
cash pursuant to the Plan, the Company shall have the power and the right to
deduct or withhold, or require a Participant to remit to the Company, an amount
sufficient to satisfy Federal, state, and local taxes (including the
Participant's FICA obligation) required by law to be withheld with respect to
any Awards.
14.2 Shares Withholding. The Committee may, in its absolute
discretion, permit a Participant to satisfy such tax withholding obligation, in
whole or in part, by electing to have the Company withhold Shares having a value
equal to the amount required to be withheld or by delivering to the Company
already-owned shares to satisfy the withholding requirement. The amount of the
withholding requirement shall be deemed to include any amount which the
Committee agrees may be withheld at the time the election is made, not to exceed
the amount determined by using the maximum federal, state or local marginal
income tax rates applicable to the Participant with respect to the Award on the
date that the amount of tax to be withheld is to be determined (the "Tax Date").
The value of the Shares to be withheld or delivered will be based on their Fair
Market Value on the Tax Date. Such elections will be subject to the following
restrictions: (1) the election must be made on or before the Tax Date; (2) the
election will be irrevocable; and (3) the election will be subject to the
disapproval of the Committee. Each election by an Optionee or Grantee whose
transactions in shares of Common Stock are subject to Section 16(b) of the
Exchange Act will be subject to the following additional restrictions: (1) the
election may not be made within six months of the grant of the Award (except
that this limitation will not apply in the event the death or disability of the
Participant occurs prior to the expiration of the six-month period), and (2) the
election must be made either at least six months before the Tax Date or within a
Window Period.
SECTION 15
INDEMNIFICATION
Each person who is or shall have been a member of the
Committee, or of the Board, shall be indemnified and held harmless by the
Company against and from any loss, cost, liability, or expense that may be
imposed upon or reasonably incurred by him or her in connection with or
resulting from any claim, notion, suit, or proceeding to which he or she may be
a party or in which he or she may be involved by reason of any action taken or
failure to act under the Plan or any Award Agreement and against and from any
and all amounts paid by him or her in settlement thereof, with the Company's
approval,
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<PAGE> 40
or paid by him or her in settlement thereof, with the Company's approval, or
paid by him or her in satisfaction of any judgment in any such action, suit, or
proceeding against him or her, provided he or she shall give the Company an
opportunity, at its own expense, to handle and defend the same before he or she
undertakes to handle and defend it on his or her own behalf. The foregoing right
of indemnification shall not be exclusive of any other rights of indemnification
to which such persons may be entitled under the Company's Articles of
Incorporation or Bylaws, as a matter of law, or otherwise, or any power that the
Company may have to indemnify them or hold them harmless.
SECTION 16
SUCCESSORS
All obligations of the Company under the Plan, with respect to
Awards granted hereunder, shall be binding on any successor to the Company,
whether the existence of such successor is the result of a direct or indirect
purchase, merger, consolidation, or otherwise, of all or substantially all of
the business and/or assets of the Company.
SECTION 17
LEGAL CONSTRUCTION
17.1 Gender and Number. Except where otherwise indicated by
the context, any masculine term used herein also shall include the feminine; the
plural shall include the singular and the singular shall include the plural.
17.2 Severability. In the event any provision of the Plan
shall be held illegal or invalid for any reason, the illegality or invalidity
shall not affect the remaining parts of the Plan, and the Plan shall be
construed and enforced as if the illegal or invalid provision had not been
included.
17.3 Requirements of Law. The granting of Awards and the
issuance of Shares under the Plan shall be subject to all applicable laws,
rules, and regulations, and to such approvals by any governmental agencies or
national securities exchanges as may be required.
Notwithstanding any other provision set forth in the Plan, if
required by the then-current Section 16 of the Exchange Act, any "derivative
security" or "equity security" offered pursuant to the Plan to any Insider may
not be sold or transferred for at least six (6) months after the date of grant
of such Award. The terms "equity security" and "derivative security" shall have
the meanings ascribed to them in the then-current rules promulgated under
Section 16 of the Exchange Act.
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17.4 Securities Law Compliance. With respect to Insiders,
transactions under this Plan are intended to comply with all applicable
conditions of Rule 16b-3 or its successors under the Exchange Act. To the extent
any provision of the Plan, Award Agreement or action by the Committee fails to
so comply, it shall be deemed null and void, to the extent permitted by law and
deemed advisable by the Committee.
17.5 Governing Law. The Plan and all Award Agreements
hereunder, shall be construed in accordance with and governed by the laws of the
State of California.
17.6 Captions. Captions are provided herein for convenience
only, and are not to serve as a basis for interpretation or construction of the
Plan.
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<PAGE> 42
PROXY
THE HARPER GROUP, INC.
PROXY FOR ANNUAL MEETING OF STOCKHOLDERS MAY 14, 1996
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby appoints PETER GIBERT and ROBERT H. KENNIS, or
any of them, each with power of substitution, as proxies of the undersigned, to
attend the Annual Meeting of Stockholders of THE HARPER GROUP, INC. to be held
at the office of the Company at 260 Townsend Street, San Francisco, California,
on May 14, 1996, at 10:30 A.M., and any adjournment thereof, and to vote the
number of shares the undersigned would be entitled to vote if personally present
on the following:
STOCKHOLDERS ARE URGED TO MARK, DATE, SIGN AND RETURN THIS PROXY
PROMPTLY IN THE ENVELOPE PROVIDED, WHICH REQUIRES NO POSTAGE IF MAILED IN THE
UNITED STATES.
(Continued, and to be signed, on reverse side)
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<PAGE> 43
Please mark
your votes as
indicated in
this example. /X/
FOR WITHHOLD
the nominees AUTHORITY
listed below to vote for
(except as marked the nominees
to the contrary below) listed below
/ / / /
(1) The election of two Class II Directors for a three year term.
(INSTRUCTION: TO WITHHOLD AUTHORITY TO VOTE FOR EITHER NOMINEE, STRIKE A
LINE THROUGH THE NOMINEE'S NAME BELOW.)
Nominees: Wesley J. Fastiff and Frank J. Wezniak
(2) To ratify and approve adoption of the 1995 Stock Option Plan for
Non-Employee Directors.
FOR AGAINST ABSTAIN
/ / / / / /
(3) To approve the amendment of the 1994 Omnibus Equity Incentive Plan to
increase the number of shares authorized for issuance by 1,250,000.
FOR AGAINST ABSTAIN
/ / / / / /
(4) In their discretion, upon any and all such other matters as may properly
come before the meeting or any adjournment thereof.
This proxy will be voted as directed. In the absence of contrary directions,
this proxy will be voted FOR the election of the directors listed above and FOR
Proposals 2 and 3.
Signature(s)____________________________________ Dated _________________, 1996
The signature should correspond exactly with the name appearing on the
certificate evidencing your Common Stock. If more than one name appears, all
should sign. Joint owners should each sign personally.
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