<PAGE> 1
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act of 1934
(Amendment No. )
Filed by the Registrant [ X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Sections 240.14a-11(c) or Section
240.14a-12
KIMBALL INTERNATIONAL, INC.
(Name of Registrant as Specified In Its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No Filing Fee Required
[ ] $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), 14a-6(i)(2) or
Item 22(a)(2) of Schedule 14A
[ ] $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3)
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11
1) Title of each class of securities to which transaction applies:
- --------------------------------------------------------------------------------
2) Aggregate number of securities to which transaction applies:
- --------------------------------------------------------------------------------
3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which the
filing fee is calculated and state how it was determined):
- --------------------------------------------------------------------------------
4) Proposed maximum aggregate value of transaction:
- --------------------------------------------------------------------------------
5) Total fee paid:
- --------------------------------------------------------------------------------
[ ] Fee paid previously with preliminary materials
[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was
paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
1) Amount Previously Paid:
- --------------------------------------------------------------------------------
2) Form, Schedule or Registration Statement No.:
- --------------------------------------------------------------------------------
3) Filing Party:
- --------------------------------------------------------------------------------
4) Date Filed:
- --------------------------------------------------------------------------------
<PAGE> 2
KIMBALL INTERNATIONAL, INC.
1600 ROYAL STREET
JASPER, INDIANA 47549
(812) 482-1600
------------------
NOTICE OF ANNUAL MEETING OF SHARE OWNERS
TO BE HELD OCTOBER 28, 1997
------------------
To the Share Owners of Kimball International, Inc.:
The annual meeting of our Share Owners of KIMBALL INTERNATIONAL, INC., an
Indiana corporation (the "Company"), will be held at the principal offices of
the Company, 1600 Royal Street, Jasper, Indiana on Tuesday, October 28, 1997, at
9:30 A.M., Eastern Standard Time, for the following purposes:
1. To elect eleven Directors of your Company.
2. To consider and act upon a proposed restatement to the Articles of
Incorporation of your Company which would have the effect of splitting each
issued share of Class A Common Stock and Class B Common Stock into two issued
shares of Class A Common Stock and Class B Common Stock, respectively, by means
of a two-for-one stock split, and in connection therewith increasing the number
of authorized shares of Class A Common Stock to 50,000,000 shares, increasing
the number of authorized shares of Class B Common Stock to 100,000,000 shares,
reducing the par value of the Company's Class A Common Stock and Class B Common
Stock to $.05 per share, increasing the dividend preference on the Class B
Common Stock to $.02 per share, and making certain technical amendments, all as
described in the accompanying proxy statement.
3. To consider and transact such other business as may properly come before
the meeting, or any adjournments thereof.
The Board of Directors has fixed the close of business on August 25, 1997,
for determining our Share Owners entitled to notice of and to vote at the
meeting and any adjournments thereof. Only Share Owners of record at the close
of business on that date will be entitled to vote. Voters of the shares of the
Company's Class A Common Stock are entitled to elect ten Directors, consider and
act upon approval of the proposed restatement of the Articles of Incorporation
and related stock split of your Company, and to vote upon all other matters to
be presented at the meeting. Voters of the shares of the Company's Class B
Common Stock are entitled to elect one Director, consider and act upon approval
of the proposed restatement of the Articles of Incorporation and related stock
split of your Company, but are not otherwise entitled to vote.
Proxies, being solicited on behalf of the Board of Directors, are enclosed
along with a return envelope which requires no postage if mailed in the United
States.
Whether or not you plan to attend the meeting, we urge you to execute and
return promptly the enclosed form of proxy. If you own both shares of Class A
Common Stock and Class B Common Stock, you will receive the Class A and Class B
proxies in separate mailings. Each of the proxies should be returned in the
envelope provided. The proxy is revocable and will not affect your right to vote
in person if you attend the meeting.
By Order of the Board of Directors
GARY P. CRITSER,
Secretary
September 15, 1997
PLEASE EXECUTE AND DATE THE ACCOMPANYING PROXY AND MAIL IT PROMPTLY.
<PAGE> 3
KIMBALL INTERNATIONAL, INC.
1600 ROYAL STREET
JASPER, INDIANA 47549
(812) 482-1600
------------------
ANNUAL MEETING OF SHARE OWNERS
OCTOBER 28, 1997
------------------
PROXY STATEMENT
This Proxy Statement is being mailed to our Share Owners of KIMBALL
INTERNATIONAL, INC. (the "Company") on or about September 15, 1997, and is
furnished in connection with the Board of Directors' solicitation of proxies to
be used at the Annual Meeting of Share Owners to be held October 28, 1997, at
the time and place and for the purpose of considering and acting upon the
matters specified in the Notice of Annual Meeting of Share Owners accompanying
this Proxy Statement.
Any of our Share Owners who execute and return a proxy may revoke the proxy
at any time prior to the voting thereof by either filing a written revocation
with the Secretary of the Company, submitting another duly executed proxy with a
later date, requesting the return of the proxy from the Secretary prior to the
vote, or attending the meeting and voting in person.
The entire cost of soliciting proxies will be borne by your Company. In
addition to the use of the mails, proxies may be solicited by personal
interview, telephone and telegram by Directors, officers and employees of your
Company without extra compensation. Your Company will also reimburse brokerage
houses, custodians, nominees and fiduciaries for actual expenses incurred in
forwarding proxy material to beneficial owners.
The Annual Report to our Share Owners for the year ended June 30, 1997,
accompanies this Proxy Statement.
VOTING INFORMATION
Only Share Owners of record at the close of business on August 25, 1997,
will be entitled to vote at the Annual Meeting. On that date, there were
outstanding 7,216,296 shares of Class A Common Stock and 13,514,582 shares of
Class B Common Stock. Each share of Class A Common Stock is entitled to one vote
with respect to the election of the ten Directors, the proposal to approve the
restatement of the Articles of Incorporation and related two-for-one stock split
and any other matters submitted to a vote at the meeting. Each share of Class B
Common Stock is entitled to one vote with respect to the election of one
Director and the proposal to restate the Articles of Incorporation, but
otherwise is not entitled to vote.
With a quorum present at the meeting, Directors will be elected by the
plurality of the votes cast by the shares entitled to vote in the election at
the meeting, i.e., the nominees receiving the highest number of votes cast in
each category will be elected. The presence of a quorum requires that a majority
of outstanding shares be present at the meeting by proxy or in person.
Accordingly, neither the non-voting of shares nor withholding authority to vote
will affect the election of Directors. The affirmative vote of the holders of
the majority of the outstanding shares of each class of stock, voting
separately, is required for approval of the proposed restatement to the Articles
of Incorporation and related stock split. Abstentions from voting and
broker/non-votes will count as voting against the proposal.
All properly executed proxies received by the Board of Directors will be
voted. In the absence of contrary direction, the Board of Directors proposes to
vote the proxies FOR the election of each of the named nominees to the Board and
FOR approval of the restatement to your Company's Articles of Incorporation and
related two-for-one stock split.
<PAGE> 4
The Board of Directors knows of no other matters which may come up for
action at the meeting. However, if any other matter properly comes before the
meeting, the persons named in the proxy forms enclosed will vote in accordance
with their judgment on such matter.
Proposals which are desired to be presented at the 1998 annual meeting by
Share Owners of record in respect of such a meeting must be received by the
Company at its principal executive offices, 1600 Royal Street, Jasper, Indiana
47549, no later than May 18, 1998. Such proposals, however, must meet certain
requirements of regulations of the Securities and Exchange Commission for
inclusion in the Company's Proxy Statement.
SHARE OWNERSHIP INFORMATION
Under regulations of the Securities and Exchange Commission, persons who
have power to vote or dispose of shares of the Company, either alone or jointly
with others, are deemed to be beneficial holders of such shares. Because the
voting or dispositive power of certain shares listed in the following table is
shared, the same securities in such cases are listed opposite more than one name
in the table. The total number of shares of the Company listed in the table for
the Executive Officers and Directors shown, after elimination of such
duplication, is 2,466,220 shares of Class A Common Stock (34.2% of the
outstanding) and 1,686,082 shares of Class B Common Stock (12.5% of the
outstanding).
Set forth in the following table are the beneficial holdings as of August
15, 1997, of the Company's Class A Common Stock and Class B Common Stock on the
basis described above for each person, including nominees for election as
Directors, known to your Company who may be deemed to own more than 5% of either
class of your Company's outstanding shares, of all other nominees for election
as Directors, and of all Directors and Executive Officers as a group:
<TABLE>
<CAPTION>
SHARES BENEFICIALLY OWNED(A)(B)
------------------------------------
SOLE SHARED
VOTING AND VOTING AND
DISPOSITIVE DISPOSITIVE PERCENT
NAME POWER POWER OF CLASS
---- ----------- ----------- --------
<S> <C> <C> <C> <C>
HOLDERS, INCLUDING NOMINEES FOR
ELECTION AS A DIRECTOR, OF MORE
THAN 5% OF THE OUTSTANDING
SHARES OF EITHER CLASS
NOMINEES FOR ELECTION AS A DIRECTOR:
Thomas L. Habig(d)................................ Class A 48,847 1,051,312 15.2%
1600 Royal Street Class B 55,828 305,324 2.7%
Jasper, Indiana 47549
Douglas A. Habig(c)............................... Class A 474,050 1,007,819 20.5%
1600 Royal Street Class B 159,992 1,058,148 9.0%
Jasper, Indiana 47549
John B. Habig(d).................................. Class A 317,462 1,051,312 19.0%
1600 Royal Street Class B 132,860 334,505 3.5%
Jasper, Indiana 47549
James C. Thyen(c)................................. Class A 126,735 None 1.8%
1600 Royal Street Class B 54,382 772,296 6.1%
Jasper, Indiana 47549
OTHERS:
Arnold F. Habig(d)................................ Class A 434,448 622,646 14.6%
1600 Royal Street Class B 284,611 29,182 2.3%
Jasper, Indiana 47549
</TABLE>
2
<PAGE> 5
<TABLE>
<CAPTION>
SHARES BENEFICIALLY OWNED(A)(B)
------------------------------------
SOLE SHARED
VOTING AND VOTING AND
DISPOSITIVE DISPOSITIVE PERCENT
NAME POWER POWER OF CLASS
---- ----------- ----------- --------
<S> <C> <C> <C> <C>
The Kimball International, Inc.................... Class A None None None
Retirement Plan Class B 772,296 None 5.7%
Springs Valley Bank & Trust Co. -- Trustee
1500 Main Street
Jasper, Indiana 47546
A. C. Sermersheim Family(g)....................... Class A 405,500 None 5.6%
Limited Partnership Class B 186,788 None 1.4%
1113 West 14th Street
Jasper, Indiana 47546
Barbara J. Habig(f)............................... Class A 361,865 None 5.0%
4949 Lampkins Ridge Road Class B 67,600 None (e)
Bloomington, Indiana 47401
OTHER NOMINEES:
Ronald J. Thyen(d)................................ Class A 115,837 None 1.6%
Class B 69,340 None (e)
Dr. Jack R. Wentworth............................. Class A None None None
Class B 1,046 None (e)
John T. Thyen(d).................................. Class A 133,655 None 1.9%
Class B 52,506 None (e)
Brian K. Habig(d)................................. Class A 148,097 None 2.1%
Class B 20,561 None (e)
Gary P. Critser................................... Class A 950 None (e)
Class B 31,097 3,370 (e)
Christine M. (Tina) Vujovich...................... Class A None None None
Class B 404 None (e)
Alan B. Graf, Jr. ................................ Class A None None None
Class B 2,505 None (e)
All Executive Officers and Directors as a Group (12
persons)(c)(d)....................................... Class A 1,800,081 666,139 34.2%
Class B 865,132 820,950 12.5%
</TABLE>
- ---------------
(a) Includes shares owned by spouse and children living in the household of the
individuals listed. Beneficial ownership is disclaimed as to such shares and
as to all other shares over which the named person does not have full
beneficial rights.
(b) Class A Common Stock is convertible at the option of the holder to Class B
Common Stock on a share-for-share basis. Amounts are reported and
percentages are calculated on an unconverted basis.
(c) Douglas A. Habig and James C. Thyen are among members of the Advisory
Committee of the Company's Retirement Plan. The Plan owns 772,296 shares of
Class B Common Stock. The Committee has the power to instruct the Trustee as
to the voting and disposition of these shares. The shares held by the Plan
are included in shares shown in the above table.
(d) Class B shares include the following shares, including stock appreciation
rights, subject to acquisition by exercise of stock options within sixty
days; Thomas L. Habig 17,500 shares; John B. Habig, Ronald J. Thyen, John T.
Thyen, and Arnold F. Habig 14,500 shares each; Brian K. Habig 5,000 shares;
and all executive officers and directors as a group 80,500 shares. The
percentage of Class B shares owned includes all shares which each person has
the right to acquire within 60 days.
(e) Totals are under one percent of the outstanding class of stock.
3
<PAGE> 6
(f) This information is derived from notification received by the Company on
Schedule 13G or other communications.
(g) This information is derived from notification received by the Company on
Schedule 13D and other communications. As disclosed in the Schedule 13D,
Jane M. Hackman, Shirley A. Lewis and Ronald J. Sermersheim each have joint
voting and dispositive power of the shares listed. In addition, Ms. Hackman,
Ms. Lewis and Mr. Sermersheim each vote individually and own on a direct
basis a total of 200,728 shares of Class A Common Stock and 565,314 shares
of Class B Common Stock.
ELECTION OF DIRECTORS
At the Annual Meeting, eleven Directors, constituting the full Board, are
to be elected to hold office until the next Annual Meeting of our Share Owners,
or until their successors are duly elected and qualified. Holders of shares of
the Company's Class A Common Stock are entitled to elect ten Directors, and
holders of shares of the Company's Class B Common Stock are entitled to elect
one Director. Each nominee is now a Director of the Company. If any such nominee
shall be unable to serve, the proxies will be voted to fill any vacancy so
arising in accordance with the discretionary authority of the persons named in
the proxies. The Board of Directors has no reason to believe that any such
nominee will be unable to serve. The nominees are:
NOMINEES FOR ELECTION AS DIRECTORS
BY HOLDERS OF CLASS A COMMON STOCK
<TABLE>
<CAPTION>
DIRECTOR
NAME PRINCIPAL OCCUPATION SINCE
---- -------------------- --------
<S> <C> <C>
Douglas A. Habig(a).................. Chairman of the Board of Directors and Chief 1973
Executive Officer of your Company; also Director of
NBD Indiana, Inc., a banking subsidiary of NBD Bank
N.A.; age 50
Thomas L. Habig(a)(c)................ Vice Chairman of the Board of Directors of your 1950
Company; age 69
James C. Thyen(b).................... President of your Company; age 53 1982
John B. Habig(a)..................... Senior Executive Vice President, Operations Officer, 1956
Electronics of your Company; age 64
Ronald J. Thyen(b)................... Senior Executive Vice President, Operations Officer, 1973
Furniture and Cabinets of your Company; age 60
Brian K. Habig(c).................... Executive Vice President, Sales and Marketing, 1992
Kimball Office Group of your Company; age 40
John T. Thyen(b)..................... Senior Executive Vice President, Marketing and Sales 1990
of your Company; age 58
Gary P. Critser...................... Senior Executive Vice President, Secretary, 1990
Treasurer of your Company; age 60
Christine M. (Tina) Vujovich......... Vice President, Worldwide Marketing, Bus and Light 1994
Commercial Automotive and Environmental Management,
Cummins Engine Co., Inc.; also Director of Irwin
Union Bank, a banking subsidiary of Irwin Financial
Corporation; age 45
Alan B. Graf, Jr. ................... Executive Vice President and Chief Financial 1996
Officer, Federal Express Corporation; age 44
</TABLE>
4
<PAGE> 7
NOMINEE FOR ELECTION AS DIRECTOR
BY HOLDERS OF CLASS B COMMON STOCK
<TABLE>
<CAPTION>
DIRECTOR
NAME PRINCIPAL OCCUPATION SINCE
---- -------------------- --------
<S> <C> <C>
Dr. Jack R. Wentworth................ Arthur M. Weimer Professor Emeritus of Business 1984
Administration, Indiana University; former Dean of
the School of Business, Indiana University; also
Director of Lone Star Industries and Market Facts,
Inc.; age 69
</TABLE>
- ---------------
(a) Thomas L. Habig, Douglas A. Habig and John B. Habig are brothers.
(b) Ronald J. Thyen, James C. Thyen and John T. Thyen are brothers.
(c) Brian K. Habig is the son of Thomas L. Habig.
At the December 1996 meeting, the Board appointed Alan B. Graf, Jr. as a
Director representing Class A Common Stock Share Owners replacing Leonard B.
Marshall, Jr. who died unexpectedly in June 1996. Mr. Graf has been an employee
of Federal Express Corporation since 1980. In 1987 Mr. Graf was appointed Vice
President, in 1991 Senior Vice President and Chief Financial Officer, and in
1996 to his present position of Executive Vice President and Chief Financial
Officer. He is a member of a four-person Executive Committee of Federal Express
Corporation responsible for planning and executing all sales, marketing,
operations and customer service functions of the corporation.
Each of the other ten nominees is also currently a Director of the Company
and has been employed for more than the past five years by the same employer in
the capacity shown above, or some other executive capacity, except for Christine
M. Vujovich and Dr. Jack R. Wentworth. During June 1993, Dr. Wentworth retired
from the position of Dean of the School of Business, Indiana University, a
position held since 1984. From 1993 through 1996, Dr. Wentworth was the Arthur
M. Weimer Professor of Business Administration, Indiana University, and
effective January 1, 1997, was named the Arthur M. Weimer Professor Emeritus of
Business Administration, Indiana University. Ms. Vujovich has been an employee
of Cummins Engine Co., Inc., of Columbus, Indiana, since 1978. Ms. Vujovich has
held various management positions with Cummins since 1983. From 1985 to 1989,
Ms. Vujovich was Vice President -- Customer Engineering and was named Vice
President, Product Planning and Environmental Management in 1989. In 1996 Ms.
Vujovich was appointed Vice President of Worldwide Marketing, Bus and Light
Commercial Automotive and Environmental Management of Cummins.
In addition, the responsibilities and titles of certain executive officers
of your Company who are also Directors were changed by the Board effective July
1, 1997, as follows:
- Douglas A. Habig from President and Chief Executive Officer to Chairman
of the Board of Directors and Chief Executive Officer.
- Thomas L. Habig from Chairman of the Board of Directors to Vice Chairman
of the Board of Directors.
- James C. Thyen from Senior Executive Vice President, Chief Financial and
Administrative Officer and Treasurer to President.
- Gary P. Critser from Senior Executive Vice President, Chief Accounting
Officer and Secretary to Senior Executive Vice President, Secretary,
Treasurer.
- Brian K. Habig from Vice President, General Manager, Office Furniture,
Strategic Operations Planning and Administration to Executive Vice
President, Sales and Marketing, Kimball Office Group.
5
<PAGE> 8
INFORMATION CONCERNING THE BOARD OF DIRECTORS AND COMMITTEES
Your Board has four standing Committees: the Executive Committee, the Audit
Committee, the Compensation Committee and the Stock Option Committee. The
Executive Committee currently consists of Thomas L. Habig, Douglas A. Habig,
James C. Thyen, John B. Habig, Ronald J. Thyen, John T. Thyen and Gary P.
Critser. The By-Laws of the Company provide, except to the extent limited by
Indiana law, that the Executive Committee may exercise during the intervals
between the meetings of the Board all powers of the Board of Directors with
reference to the conduct of the business of your Company. At the Board of
Directors meetings, all actions of the Executive Committee are reaffirmed.
During the 1997 fiscal year this Committee met three times while the Board of
Directors met six times.
The Audit Committee consists of three members of the Board: Dr. Jack R.
Wentworth (Chairperson), Christine M. Vujovich, and Alan B. Graf, Jr., who are
not salaried employees of the Company and who are, in the opinion of the Board
of Directors, free from any relationship that would interfere with the exercise
of independent judgment as a Committee member. The Committee, which met two
times during the 1997 fiscal year, annually recommends to the Board of Directors
the appointment of a firm of independent auditors and reviews with the
independent auditors and approves the plan and scope of their audit for each
fiscal year. The Committee also reviews with the independent auditors the
adequacy of internal accounting and financial controls and reviews directly with
the Company's Audit and Management Services Department the activities of the
department and the results of their internal control reviews and tests. The
Committee receives periodic and written reports directly from the Company's
Audit and Management Services Department between meeting dates. In addition, the
Committee reviews and approves fees paid to the independent auditors for both
audit and non-audit services.
The members of the Compensation Committee are: Douglas A. Habig
(Chairperson), Dr. Jack R. Wentworth, Christine M. Vujovich, James C. Thyen, and
Gary P. Critser. The Committee's responsibilities consist of making all
determinations with respect to the compensation of the Chief Executive Officer
and to establish and maintain general compensation policies with respect to all
other Executive Officers of your Company. Members of the Committee also serve as
the Stock Option Committee of your Company's 1987 and 1996 Stock Incentive
Programs. The Compensation and Stock Option Committees each met once during
fiscal year 1997.
All Directors receive compensation of $16,000 per year. Directors who are
not Company employees receive an additional $2,000 for each meeting attended.
Directors who are Company employees receive an additional $1,500 for each
meeting attended. The Chairperson of the Audit Committee of the Board of
Directors receives $3,500 per meeting, and other Audit Committee members receive
$2,500 per meeting. Members of the Compensation Committee who are not Company
employees receive $1,000 per meeting. Members of the Executive Committee and the
Stock Option Committee receive no additional compensation for their service on
these committees.
Your Company maintains the 1996 Director Stock Compensation and Option
Plan, approved by Share Owners at the 1996 annual meeting, which allows
Directors to receive their annual retainer and meeting fees in shares of Class B
Common Stock and receive grants of nonqualified stock options in connection with
that election.
All Directors during fiscal year 1997 attended in excess of 75% of the
aggregate of the total number of meetings of the Board of Directors and the
total number of meetings held by all committees of the Board on which the
Directors served.
6
<PAGE> 9
COMPENSATION OF EXECUTIVE OFFICERS
The following table shows, for the fiscal years indicated, the aggregate
cash compensation, including incentive compensation, paid by your Company to the
Chief Executive Officer and each of the four other most highly compensated
Executive Officers of your Company during the years ended June 30, 1997, 1996
and 1995:
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG TERM
ANNUAL COMPENSATION COMPENSATION
-------------------------------------------- ------------
SECURITIES
OTHER ANNUAL UNDERLYING ALL OTHER
SALARY BONUS COMPENSATION OPTIONS/SARS COMPENSATION
NAME AND PRINCIPAL POSITION YEAR ($) ($) ($)(1) (#) ($)(2)
--------------------------- ---- ------ ----- ------------ ------------ ------------
<S> <C> <C> <C> <C> <C> <C>
Douglas A. Habig (4)......... 1997 $279,600 $318,324 $37,847 6,000(3) $38,572
Chairman of the Board and 1996 264,600 258,045 36,271 6,000(3) 28,868
Chief Executive Officer 1995 247,800 243,503 34,965 6,000(3) 24,645
Thomas L. Habig (4).......... 1997 $251,400 $269,148 $37,723 6,000 $42,685
Vice Chairman of the Board 1996 241,300 224,764 40,018 6,000 31,009
1995 227,600 211,585 38,434 6,000 25,850
James C. Thyen (4)........... 1997 $243,200 $265,376 $37,984 5,131(3) $33,567
President 1996 228,200 215,074 40,632 5,000(3) 24,775
1995 211,400 199,726 38,415 5,000(3) 21,507
John B. Habig................ 1997 $227,800 $238,100 $48,134 5,000 $35,866
Senior Executive Vice 1996 215,200 192,387 43,956 5,000 26,050
President, Operations
Officer, Electronics 1995 198,700 179,534 44,021 5,000 21,081
John T. Thyen................ 1997 $227,800 $234,904 $39,790 5,000 $32,416
Senior Executive Vice 1996 215,200 190,164 32,753 5,000 23,876
President, Marketing and
Sales 1995 198,700 177,233 33,804 5,000 20,245
</TABLE>
- ---------------
(1) Includes Director fees, Executive tax assistance program, and along with
other Officers and certain employees, supplemental group medical and life
insurance, and automotive allowances.
(2) For 1997 includes on behalf of the named individuals all other compensation
as follows:
<TABLE>
<CAPTION>
COMPANY PAYMENTS SPLIT-DOLLAR
TO RETIREMENT AND LIFE INSURANCE
SUPPLEMENTAL EMPLOYEE PREMIUM
RETIREMENT PLANS VALUE
--------------------- --------------
<S> <C> <C>
Douglas A. Habig.............................. $34,816 $ 3,756
Thomas L. Habig............................... $31,041 $11,644
James C. Thyen................................ $29,713 $ 3,854
John B. Habig................................. $27,604 $ 8,262
John T. Thyen................................. $27,179 $ 5,237
</TABLE>
- ---------------
(3) These individuals were granted a stock ownership equivalent award payable
solely in cash five years after date of grant in an amount equal to the
appreciation, if any, in the fair market value of the number of shares of
Class B Common Stock of the Company, indicated above, from date of grant to
five years after date of grant, subject to earlier payout if the individual
dies, becomes totally disabled or retires at age 62 or later. For James C.
Thyen, 1997 also includes options in the amount of 131 shares under the 1996
Director Stock Compensation and Option Plan.
(4) Compensation shown in this schedule is earnings for responsibilities up to
June 30, 1997, and does not reflect new responsibilities effective July 1,
1997.
7
<PAGE> 10
CASH BONUS PLANS
Your Company has a Profit Sharing Bonus Plan in which all Executive
Officers and eligible salaried employees participate. Effective July 1, 1996,
the plan was amended and is now based on "Economic Value Added" or "EVA" (EVA is
a registered trademark of Stern Stewart & Co.) philosophy whereby the Company's
cost of capital is deducted from income to arrive at an Economic Profit. The
Compensation Committee believes that changes in Economic Profit correlate with
long-term Share Owner value. The amount of bonus earned during a fiscal year is
based upon achieving predetermined Economic Profit levels (the higher the
Economic Profit, the higher the bonus earned). The Economic Profit levels
required to achieve bonus are based in part on external benchmarks.
Capital from which the cost of capital is computed includes all assets
deployed (with certain adjustments to reflect current economic costs) less
current liabilities. Capital computed for the individual business unit plans
exclude all cash and cash investments while capital computed for the Officers'
plan includes these less productive assets. This motivates the business units to
generate cash and the Officers to seek out and deploy the Company's cash and
cash investments in business investments that generate returns in excess of your
Company's cost of capital.
The plan is structured whereby eligible employees with more responsibility
to impact profitability have a greater percentage of their total compensation at
risk, allowing for a greater incentive to increase Economic Profit. The plan is
also designed to pay bonuses at an increasing percent of base salary the higher
the Economic Profit that is achieved; so higher levels of Economic Profit result
in a greater amount of each dollar of profit being paid out in bonus than at
lower profit levels, again providing a greater incentive to increase Economic
Profit. Once a minimum threshold of Economic Profit is attained, eligible
employees may earn bonuses ranging from 4% to 100% of base salary. Officers,
including Executive Officers, may earn a bonus ranging from 20% to 100% of base
salary, while other participants may earn a bonus ranging from 4% to 100% of
base salary, depending upon responsibility level. The plan is also structured
whereby business unit and group participants may earn a higher bonus as a
percent of salary than Officers.
Because no single incentive plan is perfect and special situations occur
where an individual achievement may not be adequately recognized by the Profit
Sharing Bonus Plan, there is a supplemental bonus plan reviewed and approved on
an annual basis by your Board of Directors, where a maximum of 2.4% of the
Company's overall annual net income (before bonuses paid pursuant to the
Company's Profit Sharing Bonus Plan) may be designated as supplemental bonuses
to those eligible employees at the discretion of the Chairman of the Board and
Vice Chairman of the Board. The 2.4% is an effective 1.5% on a comparative
after-tax basis. Any award to the Chief Executive Officer under this
supplemental bonus plan must be approved and awarded by the Compensation
Committee of the Board of Directors.
Under your Company's bonus plans, with certain exceptions, bonuses are
accrued annually and paid in five installments over the succeeding fiscal year.
Except for provisions relating to retirement, death and permanent disability,
participants must be actively employed on each payment date to be eligible to
receive the bonus.
RETIREMENT PLANS
Your Company maintains a defined contribution retirement plan with a 401(K)
provision for all eligible domestic employees. The plan provides for voluntary
employee contributions as well as a discretionary annual Company contribution as
determined by the Board of Directors based on income of the Company as defined
in the plan. Each eligible employee's Company contribution is defined as a
percent of eligible compensation, the percent being identical for all eligible
employees, including Executive Officers. Participant accounts are fully vested
after seven years of participation. All Executive Officers were fully vested at
June 30, 1997. The Retirement Trust account is fully funded and fully vested.
For those eligible employees, who, under the 1986 Tax Reform Act, are deemed to
be highly compensated, their individual Company contribution under the
retirement plan is reduced. For employees who are eligible, there is a
nonqualified, unfunded Supplemental Employee Retirement Plan (SERP) in which
your Company contributes to the account of each individual an
8
<PAGE> 11
amount equal to the reduction in the contribution under the defined contribution
retirement plan arising from the provisions of the 1986 Tax Reform Act.
OPTION GRANTS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
INDIVIDUAL GRANTS IN 1997
----------------------------------------------------- POTENTIAL REALIZED
% OF TOTAL VALUE AT ASSUMED
NUMBER OF OPTIONS/SAR EXERCISE ANNUAL RATES OF STOCK
SECURITIES GRANTED TO OR PRICE APPRECIATION FOR
UNDERLYING EMPLOYEES STRIKE THE 5-YR OPTION/SAR TERM(1)
OPTIONS/SARS IN FISCAL PRICE EXPIRATION ---------------------------
NAME GRANTED (#) YEAR ($) DATE 5% ($) 10% ($)
---- ------------ ----------- -------- ---------- ------ -------
<S> <C> <C> <C> <C> <C> <C>
Thomas L. Habig........... 6,000 2.8% $27.54 7/17/01 $45,625 $100,811
Douglas A. Habig.......... 6,000(4) 2.8% $27.54 7/17/01 $45,625 $100,811
John B. Habig............. 5,000 2.3% $27.54 7/17/01 $38,020 $84,009
James C. Thyen............ 111 .1% $35.81 10/21/01 $1,098 $2,425
5,000(4) 2.3% $27.54 8/12/01 $38,020 $84,009
20 -- $36.62 4/20/02 $202 $447
John T. Thyen............. 5,000 2.3% $27.54 7/17/01 $38,020 $84,009
All Optionees............. 217,419 100% $27.59(2) 7/17/01 $1,656,002 $3,659,071
through
4/20/02
All Share Owners(3)....... N/A N/A N/A N/A $157,809,000 $348,697,000
All Optionees' potential
gain as a percent of all
Share Owner gain........ 1.0% 1.0%
</TABLE>
- ---------------
(1) Potential realizable values are based upon assumed rates of appreciation
prescribed by the Securities and Exchange Commission. Under these rules it
is assumed the Company's Class B Common Stock will appreciate in value from
the date of grant to the end of the award term (5 years from date of grant)
at annualized rates of 5% and 10%. The 5% and 10% rates prescribed by the
Securities and Exchange Commission are not intended to forecast possible
future appreciation of the Company's stock.
(2) Weighted average per share exercise price of all options issued in fiscal
year ended June 30, 1997.
(3) The amounts shown represent a hypothetical return to all holders of your
Company's common stock, assuming that all Share Owners purchased their
shares at a per share purchase price of $27.59, the weighted average of the
exercise prices for all options granted during the period, and that all
Share Owners hold the shares continuously for a 5 and 10-year period. The
amounts were computed based upon 20,715,180 shares outstanding at June 30,
1997. The computed increase in market value to Share Owners is shown for
comparative purposes only. It is not a prediction of future stock
appreciation.
(4) Securities shown are stock ownership equivalents.
Your Company's 1996 Stock Incentive Program (1996 Plan) was approved by
Share Owners at the October 1996 Annual Meeting replacing the 1987 Stock
Incentive Program. The 1996 Plan permits a variety of benefits consisting of
Incentive Stock Options, Nonqualified Stock Options, Stock Appreciation Rights,
Restricted Stock Awards and Performance Shares. All Incentive Stock and
Nonqualified Stock Options issued were granted at 100% of fair market value on
date of grant. Options generally become exercisable two years from date of grant
and expire five years from date of grant. The options have certain provisions
relating to termination of employment by reason of disability or retirement and
provisions regarding death of the option's holder. Under certain circumstances,
the options may be forfeited.
9
<PAGE> 12
Options issued during 1997 include 166,062 shares of Incentive Stock
Options, 32,500 shares of Nonqualified Stock Options with Stock Appreciation
Rights, 2,857 shares of Nonqualified Stock Options, and 16,000 shares of stock
ownership equivalent awards. These Incentive Stock Options and Nonqualified
Stock Options were issued under the 1987 Plan which expired August 10, 1997,
except for 1,119 shares issued under the 1996 Director Stock Compensation and
Option Plan. Shares issued to Thomas L. Habig, John B. Habig and John T. Thyen
are Nonqualified Stock Options with Stock Appreciation Rights. Shares issued to
Douglas A. Habig and James C. Thyen are stock ownership equivalent awards. James
C. Thyen also received Nonqualified Stock Options under the 1996 Director Stock
Compensation and Option Plan. As members of the Stock Option Committee, these
two individuals are not eligible to participate in the 1987 Stock Incentive
Plan. Provisions of the stock ownership equivalent awards are described
elsewhere in this proxy statement.
Stock options and stock ownership equivalent awards only produce value to
executives if the price of your Company stock appreciates, thereby increasing
the link of interest of executives with those of Share Owners.
AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL YEAR
AND FISCAL YEAR END OPTION/SAR VALUES
The following table sets forth information with respect to the named
Executive Officers concerning the exercise of options during the last fiscal
year and unexercised options held as of the end of this fiscal year:
<TABLE>
<CAPTION>
NUMBER OF SECURITIES VALUE OF UNEXERCISED
UNDERLYING UNEXERCISED OPTIONS IN-THE-MONEY OPTIONS AT
SHARES AT YEAR END 1997 (#) YEAR END 1997 ($)(1)
ACQUIRED ON VALUE ------------------------------- -----------------------------
NAME EXERCISE (#) REALIZED ($) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
---- ------------ ------------ ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Thomas L. Habig....... None None 11,500 12,000 $153,435 $164,520
Douglas A. Habig...... None None None 23,500(2) 0 $317,955
John B. Habig......... None None 9,500 10,000 $126,975 $137,100
James C. Thyen........ None None None 19,631(2) 0 $264,640
John T. Thyen......... None None 9,500 10,000 $126,975 $137,100
</TABLE>
- ---------------
(1) Based on the NASDAQ quoted closing price as published in the Wall Street
Journal for the last business day of the fiscal year ($40.25 per share).
(2) Securities shown are stock ownership equivalents, except for 131 shares for
James C. Thyen.
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
OVERVIEW
Your Company applies a consistent philosophy to compensation for all
employees, including senior management. The goal of the Compensation Program is
to align compensation with business objectives and performance as a key link in
the achievement of your Company's Mission. The Committee's responsibility as
delegated by the Board of Directors is to establish the general compensation
policies with respect to your Company's Executive Officers and to make all
determinations with respect to the compensation of the Company's Chief Executive
Officer. The members of the Committee are also members of the Stock Option
Committee of the Company's 1987 and 1996 Stock Incentive Programs.
COMPENSATION PHILOSOPHY
Since its founding, Kimball International has linked all employees'
compensation to the financial success of your Company. Through the use of
incentives, including commissions, profit sharing bonuses, a defined
contribution retirement plan funded in part through a percentage share of
corporate profits, retirement plan trust investments in Company stock, and a
stock option plan, all employees are linked in a common interest with Share
Owners in the Company's short and long-term performance. Total compensation is
viewed as more
10
<PAGE> 13
than cash payments and unrelated pieces. The total compensation package is
planned and managed to keep various elements of compensation in balance to help
maintain the link of a common interest with Share Owners.
This basic philosophy is acknowledged in your Company's Mission and Guiding
Principles communicated to all employees which state in part:
"Profits are the ultimate measure of how efficiently and effectively
we serve our customers and are the only true source of long-term job
security. Profitability and financial resources give us the freedom to
shape our future and achieve our vision."
and
"We want employees to share in their Company's success, both
financially and through personal growth and fulfillment."
Our philosophies are translated into practice through specific compensation
plans. In this regard, every Kimball International employee has a portion of his
or her compensation linked to Company performance.
Most production employees are paid, either on an individual basis or
through team participation, incentives based upon units of production.
Compensation rises and falls with success in improving productivity and
production processes. Holiday and vacation compensation is tied directly to
incentive compensation.
Field sales personnel compensation includes commissions related to
sales. Compensation rises and falls with success in making sales.
Salaried employees at all levels participate in a common Profit
Sharing Bonus Plan. Effective for the fiscal year beginning July 1, 1996,
this plan was amended to link to Economic Profit. It is believed the change
to Economic Profit for the incentive bonus plan will help focus our
decision makers on the most effective use of capital and will improve the
focus of providing excellent returns on the investments of you, our Share
Owners. The Profit Sharing Bonus Plan goals are based in part on external
benchmarks as guidelines which help to assure a consistent focus and
reasonable benchmark on providing these returns. Further, the plan places a
proportionately higher share of compensation at risk at each level of
management.
Key personnel participated in the 1987 Stock Incentive Program and
will participate in the 1996 Stock Incentive Program, strengthening the
link to a common interest with Share Owners.
The Retirement Plan for all employees is funded in part through
Company contributions directly related to Company profitability. In
addition, all employees who are eligible to participate in the plan are
indirectly Share Owners through the 772,296 shares of your Company stock
held in the Retirement Trust.
The Cash Bonus Plans, Stock Incentive Programs, and Retirement Plans are
described elsewhere in this proxy statement.
Combining the Profit Sharing and Supplemental Bonus Plans for short-term
incentive and the 1987 and 1996 Stock Incentive Plans for long-term incentive, a
total of approximately 125 managers, including senior management, have in excess
of 50% of their total potential compensation tied to Company performance related
to profitability and Share Owners' returns.
The Committee believes that your Company's historical and ongoing strategy
of strongly linking a significant portion of compensation of all employees to
Company financial performance serves in the best interests of Share Owners by
enabling employees to share in Company risk and success. It is the Committee's
intent to continue this strategy, refining programs consistent with changing
business needs, to assure a continuing commitment to financial success.
11
<PAGE> 14
CHIEF EXECUTIVE OFFICER'S COMPENSATION
In the context of historical practice, the annual salary of the Chief
Executive Officer is based upon numerous subjective factors, including
responsibility level, overall conduct of corporate affairs and leadership in
progress towards achieving strategic objectives. The Committee does not target
any specific quartile of public survey data for any component of the Chief
Executive Officer's total compensation, nor utilize any specific target or
formula. While the Committee does review compensation of the Chief Executive
Officers of other manufacturing companies of similar size in sales, there is no
special attempt to set Mr. Habig's compensation in any particular relationship
to the comparative data. In consultation with Thomas L. Habig (with the Chief
Executive Officer absent from this portion of the meeting and not voting), the
Committee, based on factors discussed above, unanimously increased Douglas A.
Habig's salary during July 1996 from an annualized base of $265,200 to $280,800.
Under your Company's Profit Sharing Bonus Plan described elsewhere in this
Proxy Statement, the CEO's bonus for 1997 amounted to 68% of 1997 salary, while
under this plan the percent earned was 57% and 59% in 1996 and 1995
respectively. Under the Supplemental Bonus Plan, also described elsewhere, for
1997 the Committee, in consultation with Thomas L. Habig (with the CEO absent
from this portion of the meeting and not voting), unanimously awarded Douglas A.
Habig a bonus of $125,000. Under this plan, Mr. Douglas A. Habig was awarded
$105,000 in 1996 and $95,000 in 1995 respectively. These awards were based upon
the Committee's subjective evaluations of Mr. Habig's job performance and
leadership in the planning and implementation of the Company's strategic
objectives which are both short and long term in nature. Consideration was also
given to the improvement in Economic Profit and return on Economic Capital in
the 1997 fiscal year. The Company's Chairman and Chief Executive Officer and
Vice Chairman establish the salaries and supplemental bonuses of the Company's
other Executive Officers.
As described elsewhere within this Proxy Statement, during your Company's
1997 fiscal year, the Stock Option Committee of the 1987 and 1996 Incentive
Stock Plans granted options under the 1987 plan to key executives and other key
employees. Because Mr. Douglas A. Habig is a member of the Stock Option
Committee, thus was not eligible to participate in the Stock Option Plan, the
Committee (with Mr. Habig not voting) unanimously awarded Mr. Habig 6,000 shares
in the form of stock ownership equivalents as described elsewhere in this Proxy
Statement. The Stock Ownership Equivalents Award issued to Mr. Habig was made in
coordination with stock options issued to other executives and key employees.
Options issued to the executives and other Company employees by the Stock Option
Committee were based on level of individual responsibility. Thus, taking into
consideration the cash bonus which can be earned under the Company's Profit
Sharing and Supplemental Bonus Plans and stock options or stock ownership
equivalents, over one-half of the total potential compensation of the CEO, as
well as the other four named Executive Officers, are tied directly into
performance related to profitability and your Company's stock price.
OTHER
The Committee has also considered the potential effect of the Revenue
Reconciliation Act of 1993 on executive compensation. The Committee believes
that in the foreseeable future, none of the Company's Officers covered under the
law will have annual compensation in excess of $1 million. Thus, all
compensation will be deductible for tax purposes. The Committee will continue to
monitor your Company's compensation program in relation to the Act.
At the June 1997 Board meeting, the Board of Directors approved a strategy
of a long term requirement regarding expectations of ownership of your Company
stock by its key decision makers, including members of the Board of Directors.
The Committee is also cognizant of the significant amount of shares of your
Company stock presently owned by the Chief Executive Officer and the other four
reporting Executive Officers. This policy regarding share ownership and the
present significant shareholdings of the Chief Executive Officer and other four
reporting Officers help assure a strong link with the common interest of Share
Owners in the Company's long term success.
12
<PAGE> 15
The Committee, in its June 1997 meeting, unanimously approved the economic
profit targets under the Company's 1998 fiscal year Profit Sharing Bonus Plan.
COMPENSATION COMMITTEE
<TABLE>
<S> <C>
Douglas A. Habig (Chairperson) James C. Thyen
Dr. Jack R. Wentworth Gary P. Critser
Christine M. (Tina) Vujovich
</TABLE>
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
Douglas A. Habig is Chairman of the Board and Chief Executive Officer and a
brother of Thomas L. Habig, Vice Chairman of the Board, and John B. Habig,
Senior Executive Vice President, Operations Officer, Electronics, of your
Company. James C. Thyen, President, is a brother of John T. Thyen and Ronald J.
Thyen, Senior Executive Vice Presidents of your Company. Gary P. Critser is a
Senior Executive Vice President, Secretary, Treasurer of your Company. Dr. Jack
R. Wentworth and Christine M. (Tina) Vujovich are Directors of your Company and
are not employees.
Certain Executive Officers and Directors of the Company, including Messrs.
Habig, Thyen and Critser, as a group, own beneficially (including shares held by
spouses and minor children of which beneficial ownership is disclaimed) 19.9% of
the outstanding shares of SVB&T Corp., the holding company of Springs Valley
Bank and Trust Co., French Lick and Jasper, Indiana ("the Bank"). In addition,
the Company's Retirement Trust owns beneficially 19.4% of the outstanding stock
of the holding company. The Bank is a principal depository of the Company. It
also serves and receives fees as trustee and administrator of various Company
employee benefit programs. Executive Management of your Company believes that
the terms of the above-described transactions with the Bank are as favorable as
available from other sources.
13
<PAGE> 16
PERFORMANCE GRAPH
The graph below compares the cumulative total return to Share Owners on the
Common Stock of your Company from June 30, 1992, through June 30, 1997, the last
business day in the respective fiscal years, to the cumulative total return of
the S&P Midcap 400 Index and the NASDAQ U.S. Composite Index for the same period
of time. Your Board of Directors does not believe that any other published
industry or line-of-business index adequately represents the current operations
of your Company or that it can identify a peer group that merits comparison. The
graph assumes $100 is invested in your Company stock and each of the two indexes
at the closing market quotations on June 30, 1992, and that dividends are
reinvested. The performances shown on the graph are not necessarily indicative
of future price performance.
<TABLE>
<CAPTION>
MEASUREMENT PERIOD KIMBALL S&P MIDCAP 400 NASDAQ U.S.
(FISCAL YEAR COVERED) INTERNATIONAL, INC. INDEX COMPOSITE INDEX
<S> <C> <C> <C>
1992 100.0 100.0 100.0
1993 126.6 122.7 125.8
1994 103.6 122.6 127.0
1995 125.7 150.0 169.5
1996 131.9 182.4 217.6
1997 197.6 225.0 264.6
</TABLE>
14
<PAGE> 17
PROPOSAL TO APPROVE THE
RESTATEMENT OF ARTICLES OF INCORPORATION
The Board of Directors recommends that Share Owners approve a restatement
of your Company's Articles of Incorporation which would increase the Company's
authorized Class A and Class B Common Stock and effect a two-for-one stock split
for each class. If approved, the restatement would increase the number of
authorized shares of Class A Common Stock from 10,413,100 (as of August 15,
1997) to 50,000,000 and the number of authorized shares of Class B Common Stock
from 30,000,000 to 100,000,000. It would also change the par value of each class
of Common Stock from $.31 1/4 per share to $.05 per share. In addition, it would
increase the annual dividend preference on the Class B Common Stock from $.01 to
$.02 per share. It would convert each presently issued share of Class A Common
Stock and each presently issued share of Class B Common Stock into two shares of
Class A Common Stock and Class B Common Stock, respectively. Finally, it would
remove from the Articles of Incorporation the provisions regarding the name and
address of the Company's resident agent and the address of the Company's
principal office, change all references to the Indiana General Corporation Act
to references to the Indiana Business Corporation Law, the current applicable
Indiana statute, clarify that the dividend preference on the Class B Common
Stock only applies to cash dividends, and correct a typographical error. A copy
of the text of the proposed restatement is attached as Exhibit A to this Proxy
Statement. As of August 25, 1997, there were 7,216,296 shares of Class A Common
Stock outstanding and 13,514,582 shares of Class B Common Stock outstanding.
Each class of stock is entitled to vote separately on this proposed restatement.
Following the two-for-one stock split, a distribution of certificates
representing one share of Class A Common Stock, $.05 par value, would be made to
each holder of an issued share of Class A Common Stock on the record date for
the stock split, and a distribution of certificates representing one share of
Class B Common Stock, $.05 par value, would be made to each holder of an issued
share of Class B Common Stock on the record date for the stock split.
The Company's Articles of Incorporation presently provide that the holders
of Class B Common Stock are entitled to receive dividends in each fiscal year of
the Company in an amount which is $.01 per share greater than the amount of
dividends which are paid on the Class A Common Stock in such year (the
"differential"). Pursuant to the proposed restatement, this dividend
differential will be changed, effective on the record date for the stock split,
to $.02 per share. In 1976, the year your Company's Class B Common Stock became
a publicly traded stock, the Class B Common Stock dividend differential was $.04
per share. Two subsequent stock splits have reduced the differential to $.01 per
share a year. Without adjusting the differential, if this proposed stock split
is approved, the differential would become $.005 a year, or 1/8 cent a quarter.
Your Board of Directors feels the tradition of a meaningful dividend
differential for Class B Common Stock should be continued, as the differential
could aid in the marketability and liquidity of the Class B Common Stock on the
NASDAQ market, which would also have a positive effect on Class A Common Stock.
Thus, your Board is recommending the Class B Common Stock dividend differential
be restated to $.02 per share a year, effective on dividend payments after the
two-for-one stock split.
The two-for-one stock split has been proposed because in the judgment of
the Board of Directors, it would decrease the market price of the Class B Common
Stock to a level at which the Class B Common Stock would be more readily
tradeable and at which it would be more accessible to a broader base of
investors. The related reduction of par value would help to assure that the
Company's annual franchise taxes in states where the franchise tax is related to
par value would not increase as a result of the split. Holders of neither class
of Common Stock of the Company have presently, and each class will continue not
to have, any preemptive rights to subscribe to or purchase any of the authorized
shares of Class A Common Stock or Class B Common Stock.
Because of the reduction of par value effected by the restatement under
generally accepted accounting principles, if the split is effected, no transfer
to the Company's Common Stock account will be necessary. In the opinion of the
Company's tax counsel, the stock split will result in no gain or loss to Share
Owners for federal income tax purposes. The restatement and the stock split will
not change the powers, preferences or
15
<PAGE> 18
rights of the Class A Common Stock or the Class B Common Stock, except for the
dividend differential as described above.
The proposed increase in the number of authorized shares of Class A and
Class B Common Stock is greater than the number necessary to effect the proposed
split. This larger number of authorized shares will provide the Company some
flexibility by making available additional shares that can be issued for other
corporate purposes. The additional unissued shares of Class A Common Stock and
Class B Common Stock will be available for issuance in the future by the Board
of Directors without further authorization by vote of Share Owners other than as
required by applicable law. The Company has no present plans for the issuance of
additional shares of Class A or Class B Common Stock other than by reason of the
stock split.
If the restatement is adopted, it is anticipated that it would be made
effective on or about November 12, 1997. The date the restatement is effective
would become the record date for the stock split. It is expected that
certificates for the additional shares to which each Share Owner on the record
date will become entitled as a result of the stock split will be mailed on or
about December 8, 1997. All certificates outstanding on the record date will
continue to be valid and, after effectiveness of the restatement, will represent
the same number of shares of Class A Common Stock or Class B Common Stock as
they represented prior to the split, except that the par value of the shares
they represent will be reduced to $.05 per share.
The affirmative vote of the holders of the majority of the outstanding
shares of both "A" and "B" Share Owners, voting separately, is required for
approval of the proposed restatement to the Articles of Incorporation.
Abstentions and broker/nonvotes will count as votes against the proposal.
The Board of Directors recommends a vote FOR approval of the restatement of
the Articles of Incorporation of your Company and related two-for-one stock
split.
RELATIONSHIP WITH INDEPENDENT PUBLIC ACCOUNTANTS
Arthur Andersen LLP, independent certified public accountants, examined the
Company's financial statements for the year ended June 30, 1997, and also for
the prior seventeen fiscal years. Representatives of Arthur Andersen LLP will be
present at the Annual Meeting and will have the opportunity to make a statement
and will be available to respond to appropriate questions. Arthur Andersen LLP
has been selected as the Company's independent auditors for the 1998 fiscal
year.
By Order of the Board of Directors
GARY P. CRITSER, Secretary
September 15, 1997
16
<PAGE> 19
EXHIBIT A
[MARKED TO SHOW CHANGES]
AMENDED AND RESTATED
ARTICLES OF INCORPORATION
OF
KIMBALL INTERNATIONAL, INC.
Kimball International, Inc. (the "corporation"), a corporation existing
pursuant to the provisions of the Indiana Business Corporation Law, (the
"Corporation Law"), hereby amends and restates its Articles of Incorporation in
accordance with [IC] Indiana Code 23-1-38-7. These Amended and Restated
Articles of Incorporation shall be effective as of November 12, 1997 (the
"Effective Date"), and shall supersede and take the place of the existing
Restated Articles of Incorporation of Kimball International, Inc., which are
dated April 9, 1991, and all subsequent amendments thereto.
ARTICLE I
NAME
The name of the corporation is Kimball International, Inc.
ARTICLE II
PURPOSES
The purposes for which the corporation is formed are:
(a) to transact any and all lawful businesses for which corporations may be
incorporated under the Corporation [Act] Law;
(b) to carry on the trade or business of manufacturing, purchasing, buying,
selling, handling, disposing of, merchandising and dealing in, either
at wholesale or at retail, manufactured products of metal, wood, or
other materials and/or the combinations thereof, of the various and
several kinds, and especially furniture of the various and several
kinds of construction, parts, and accessories, and in general, the
engagement in manufacturing and merchandising and as before said,
either at wholesale or at retail, and all or either, in whole or in
part, as the further interests and opportunities may suggest, and as
the subsequent conditions may indicate or require;
(c) to engage and conduct a business in the United States and
internationally for the manufacture of products of metal, wood or other
materials and/or the combinations thereof; to buy, sell, own,
manufacture, assemble, build, construct and otherwise handle and deal
in all kinds of machinery, equipment, supplies, parts or accessories,
and to manufacture, build and construct furniture of the various and
several kinds of construction, parts and accessories and to dispose and
deal in the same as manufacturers, jobbers, wholesalers and retailers;
(d) to acquire, hold, use, sell, assign, lease, grant licenses in respect
of, mortgage and otherwise deal in and dispose of Letters Patent of the
United States or any foreign country, patent rights, licenses and
privileges, inventions, improvements and processes, copyrights,
trademarks and trade names incident to or useful in connection with any
business of this corporation;
(e) to acquire the capital stock, bonds or other evidences of indebtedness,
secured or unsecured, of any other corporation and to acquire the good
will, rights, assets and property and to undertake and assume all or
any part of the obligations or liabilities of any other corporation,
firm, association or person;
A-1
<PAGE> 20
(f) to acquire by purchase, subscription or otherwise, and to receive,
hold, own, guarantee, sell, assign, exchange, transfer, mortgage,
pledge or otherwise dispose of or deal in and with any of the shares of
the capital stock, or any voting trust certificates in respect of the
shares of capital stock, scrip, warrants rights, bonds, debentures,
notes, trust receipts and other securities, obligations, choses in
action and evidences of indebtedness or interest issued or created by
any corporations, joint stock companies, syndicates, associations,
firms, trusts or persons, public or private, or by the government of
the United States of America, or by any foreign government, or by any
state, territory, province, municipality or other political subdivision
or by any governmental agency, and as owner thereof to possess and
exercise all the rights, powers and privileges of ownership, including
the right to execute consents and vote thereon, and to do any and all
acts and things necessary or advisable for the preservation,
protection, improvement and enhancement in value thereof;
(g) to buy, hold, own, improve, manage, operate, lease as lessee or as
lessor, sell, convey and/or mortgage either alone or in conjunction
with others, real estate of every kind, character and description
whatsoever and wheresoever situated, and any interest therein; and to
purchase, acquire, hold, mortgage, pledge, hypothecate, exchange, sell,
deal in and dispose of, alone or in syndicates, or otherwise in
conjunction with others, commodities and other personal property of
every kind, character and description whatsoever and wheresoever
situated, and any interest therein;
(h) to act as agent or representative of others for any lawful business
purposes;
(i) to make contracts; to make any guaranty respecting stocks, leases,
securities, indebtedness, interest, contracts, or other obligations; to
borrow money; to issue bonds, promissory notes, debentures and other
evidences of indebtedness; to secure such evidence of indebtedness by
pledge, mortgage and/or hypothecation of certain or all of the assets
of the corporation; to enter into indentures specifying the various
terms and incidents of such evidences of indebtedness; and to do any
and all other incidental acts and things necessary to borrow money on
the part of the corporation;
(j) to borrow or raise monies for any of the purposes of the corporation
and, from time to time without limit as to amount, to draw, make,
accept, endorse, execute and issue promissory notes, drafts, bills of
exchange, warrants, bonds, debentures and other negotiable or
nonnegotiable instruments and evidences of indebtedness, and to secure
the payment of any thereof and of the interest thereon by mortgage upon
or pledge, conveyance or assignment in trust of the whole or any part
of the property of the corporation, whether at the time owned or
thereafter acquired, and to sell, pledge or otherwise dispose of such
bonds or other obligations of the corporation for its corporate
purposes;
(k) to purchase, hold, sell and transfer the shares of its own capital
stock; provided it shall not use its funds or property for the purchase
of its own shares of capital stock when such use would cause any
impairment of its capital except as otherwise permitted by law, and
provided further that shares of its own capital stock belonging to it
shall not be voted upon directly or indirectly;
(l) to have one or more offices, to carry on all or any of its operations
and business and without restriction or limit as to amount, to purchase
or otherwise acquire, hold, own, amortize, sell, convey or otherwise
deal in or dispose of real and personal property of every class and
description in any of the states, districts, territories or colonies of
the United States, and in any and all foreign countries, subject to the
laws of such state, district, territory, colony or country;
(m) in general, to carry on any other businesses in connection with
the foregoing and to have and exercise all of the powers conferred by
the laws of the State of Indiana upon corporations by the Corporation
[Act] Law.
A-2
<PAGE> 21
ARTICLE III
PERIOD OF EXISTENCE
The period during which the corporation shall continue is perpetual.
ARTICLE IV
SHARES
Section 1. Number. The total number of shares into which the
corporation's capital stock is to be divided is 150,000,000 shares, identified
by class and par value of shares as follows:
(a) 50,000,000 shares of Class A Common Stock of the par value
of $.05 per share; and
(b) 100,000,000 shares of Class B Common Stock of the par
value of $.05 per share.
Section 2. Share Split. On the Effective Date, and without any further
action on the part of the corporation or its shareholders, each share of Class
A Common Stock, $.31 1/4 par value, then issued (including shares held by the
corporation as treasury shares), shall be split into two fully paid and
nonassessable shares of Class A Common Stock, $.05 par value per share, and
each share of Class B Common Stock, $.31 1/4 par value, then issued (including
shares held by the corporation as treasury shares), shall be split into two
fully paid and nonassessable shares of Class B Common Stock, $.05 par value per
share. To reflect the share split provided above, each certificate representing
shares of Class A Common Stock, $.31 1/4 par value, theretofore issued and
outstanding or theretofore issued and held in the corporate treasury, and each
certificate representing shares of Class B Common Stock, $.31 1/4 par value,
theretofore issued and outstanding or theretofore issued and held in the
corporate treasury, shall continue to represent, after the Effective Date, the
same number of shares of Class A Common Stock and Class B Common Stock,
respectively, theretofore represented by such certificate, and each holder of
shares of Class A Common Stock or Class B Common Stock shall be entitled, as
soon as practicable after the Effective Date, to receive a new certificate
representing a number of shares of Class A Common Stock, $.05 par value, or
Class B Common Stock, $.05 par value, respectively, as authorized by the
foregoing provisions, equal to the number of shares theretofore held so that,
upon the Effective Date, each holder of record of a certificate theretofore
representing issued Class A Common Stock or Class B Common Stock will be
entitled to certificates representing in the aggregate two shares of Class A
Common Stock, $.05 par value, or Class B Common Stock, $.05 par value,
respectively, for each share of Class A Common Stock, $.31 1/4 par value, or
Class B Common Stock, $.31 1/4 par value, respectively
A-3
<PAGE> 22
Section 3. Terms. The relative rights, preferences, limitations and
restrictions of each class of shares of Common Stock are as follows:
(a) Dividends. The holders of Class A Common Stock and Class B Common Stock
shall be entitled to receive, when and as declared by the Board of
Directors, from funds lawfully available therefor, all dividends
payable in cash or other property of the corporation, and for this
purpose Class A Common Stock and Class B Common Stock shall be
considered as one class, and the holders thereof shall be entitled to
participate ratably, share for share, and without preference of either
class over the other, in all dividends so declared and paid.
Notwithstanding the foregoing, the holders of Class B Common Stock
shall be entitled to receive cash dividends in each fiscal year of the
corporation in an amount which is $.02 per share (the
"Differential") greater than the amount of cash dividends which are
paid on the Class A Common Stock in such year; provided, however, that
(i) if any such fiscal year shall consist of less than 360 days,
then the Differential for each quarterly dividend declared during
the resulting short fiscal year shall be equal to one-fourth of
the Differential applicable to a full fiscal year (taking into
account any adjustments that may be made to the Differential in
accordance with Section 3(a)(iii) below);
(ii) with respect to the first fiscal year ending after the
Effective Date, the Differential for each quarterly dividend
declared during the remainder of that fiscal year shall be equal
to one-fourth of the Differential applicable to a full fiscal
year (taking into account any adjustments that may be made to the
Differential in accordance with Section 3(a)(iii) below); and
(iii) in the event of a split or division of the outstanding shares
of Class B Common Stock into more shares of that class (excluding
the split effected pursuant to Article IV, Section 2 above), or a
combination of the outstanding shares of Class B Common Stock
into a lesser number of shares of that class, or the declaration
and payment of a stock dividend payable in shares of Class B
Common Stock on the outstanding shares of Class B Common Stock,
then, effective upon the effectiveness of such split, division or
combination, or upon the payment of such stock dividend, as the
case may be, the Differential shall be adjusted by multiplying
the Differential theretofore in effect by a fraction, the
numerator of which is the number of shares of Class B Common
Stock outstanding immediately prior to the effectiveness of such
split, division or combination, or the payment of such stock
dividend, as the case may be, and the denominator of which is the
number of shares of Class B Common Stock outstanding immediately
following such split, division or combination, or the payment of
such dividend, as the case may be. The Differential as so
adjusted shall be rounded to the nearest tenth of a cent.
All cash dividend payments to a holder of Class B Common Stock
on any payment date with respect to all shares of Class B Common Stock
held by such holder shall be rounded to the nearest whole cent.
No stock dividend may be declared or paid on the outstanding shares of
any class of Common Stock unless payable in shares of that class, and no
stock dividend may be declared or paid on the outstanding shares of any
class of Common Stock unless, at the same time, a stock dividend, at the
same rate, is declared and paid on the outstanding shares of each class
of Common Stock, payable in
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<PAGE> 23
shares of that class. The outstanding shares of any class of Common
Stock shall not be split or divided into more shares of that class, or
combined into a lesser number of shares of that class, unless, at the
same time, the outstanding shares of each class of Common Stock are
similarly split, divided or combined.
(b) Voting. Except as otherwise provided in this Article VIV and except as
otherwise required by law, the voting power of the corporation shall
vest in the holders of Class A Common Stock, the holder of each issued
and outstanding share of Class A Common Stock being entitled to one
vote in person or by proxy for each such share, on all matters
requiring the vote of shareholders, and the holders of Class B Common
Stock shall not be entitled by reason of their holdings thereof to any
voice or vote in the management or affairs of the corporation.
Notwithstanding the foregoing, the holders of Class B Common Stock at
any time issued and outstanding shall be entitled, as a class, (i) to
elect, at each meeting of shareholders at which directors are elected,
one member of the Board of Directors of the corporation but shall not
be entitled to vote upon the election of the remaining members of the
Board of Directors of the corporation, and (ii) to full voting powers
at any meeting of the shareholders of the corporation with respect to
any proposed amendment to this Article IV or with respect to any
consolidation, merger, sale, lease, exchange, mortgage, pledge or other
disposition of all or substantially all of its fixed assets, or the
dissolution of the corporation. In addition to the foregoing, the
express terms and provisions of any class of Common Stock shall not be
changed without the affirmative vote of the holders of at least a
majority of the issued and outstanding shares of such class of Common
Stock.
(c) Conversion. Any record holder of shares of Class A Common Stock shall
be entitled, at any time or from time to time, to convert any or all of
such shares held by such holder into the same number of shares of Class
B Common Stock. A record holder desiring to effect the conversion of
shares of Class A Common Stock into shares of Class B Common stock
shall furnish the corporation with (i) a signed written notice of the
intended conversion, stating that such record holder desires to convert
such shares of Class A Common Stock into the same number of shares of
Class B Common Stock and requesting that the corporation issue all of
such shares of Class B Common Stock to such holder, and (ii) the
certificate or certificates representing the shares of Class A Common
Stock to be converted, in proper form for transfer. All Class A Common
Stock surrendered for conversion hereunder shall be cancelled and
retired permanently and shall not be reissued.
(d) Dissolution. The Class A Common Stock and Class B Common Stock shall
participate equally per share in all distributions of assets of the
corporation upon voluntary or involuntary dissolution.
(e) Elimination of the Foregoing Provisions. If, at any time, the number of
issued and outstanding shares of Class A Common Stock shall constitute
less than 15% of the aggregate number of shares of Class A Common Stock
and Class B Common Stock then issued and outstanding or the corporation
shall not have paid any dividends on the Class B Common Stock for a
period of thirty-six consecutive calendar months, then thereupon, all
of the rights, preferences, limitations and restrictions set forth in
this Section 3 relating to Class B Common Stock shall become the same
as the rights, preferences, limitations and restrictions of the Class A
Common Stock provided for herein, without any further action on the
part of the corporation or its shareholders, and all distinctions
between Class A Common Stock and Class B Common Stock shall thereupon
and thereby be eliminated, so that all shares of Class B Common Stock
shall be equal to shares of Class A Common Stock with respect to all
matters, including without limitation, dividend payments and voting
rights and all holders of shares of Class A Common Stock and Class B
Common Stock shall vote as a single class (except as otherwise required
by applicable law) on all matters submitted to a vote of the
shareholders of the corporation; provided, however, the right and power
to convert any shares of Class A Common Stock into shares of Class B
Common Stock shall continue and, upon written request from the
corporation to all holders of Class A Common Stock, such holders shall
promptly take such steps as shall be necessary to convert the shares of
Class A Common Stock held by such holders into shares of Class B Common
Stock.
A-5
<PAGE> 24
ARTICLE V
DIRECTORS
Section 1. Number of Directors. The number of directors of the corporation
shall be not less than seven (7) nor more than fifteen (15), as may from time to
time be specified in the By-Laws, and there shall be thirteen (13) Directors
whenever the By-Laws do not contain such authorized provision.
Section 2. Qualifications of Directors. Directors need not be shareholders
of the corporation. A majority of the Directors at any time shall be citizens of
the United States.
ARTICLE VI
PROVISIONS FOR REGULATION OF BUSINESS
AND CONDUCT OF AFFAIRS OF CORPORATION
The business and conduct of the affairs of the corporation shall be
regulated as follows:
(a) The corporate seal of this corporation shall be circular in form and
shall have around the circumference in raised letters and words
"Kimball International, Inc.," and in other respects shall be in such
form and device as the Board of Directors may determine. The directors
may change the form, device and inscription of the seal at pleasure.
(b) The shares of this corporation may be issued by the corporation for
such amount of consideration as may be fixed from time to time by the
Board of Directors.
(c) Meetings of the shareholders of the corporation shall be held at such
place, within or without the State of Indiana, as may be specified in
the respective notices, or waivers of notice, thereof.
(d) Meetings of the directors of the corporation shall be held at such
place, within or without the State of Indiana, as may be specified in
the respective notices, or waivers of notice, thereof.
(e) The Board of Directors of the corporation shall have power, without the
assent or vote of the shareholders, to make, alter, amend or repeal the
Code of By-Laws of the corporation, but the affirmative vote of a
majority of the members of the Board of Directors for the time being
shall be necessary to effect any alteration, amendment or repeal.
(f) The corporation reserves the right to amend, alter, change or
repeal any provisions contained in these Articles of Incorporation in
the manner now or hereafter prescribed by the provisions of the
Corporation Law, or any other pertinent enactment of the General
Assembly of the State of Indiana; and all rights and powers conferred
hereby on shareholders, directors and/or officers are subject to this
reserved power.
(g) No contract or other transaction between this corporation and any one
or more members of the Board of Directors, or between this corporation
and another corporation, firm, partnership, joint venture, trust or
other enterprise of which any one or more such interested members are
directors, officers, shareholders, partners, members, employees or
agents or in which any one or more such interested members are
financially interested, shall be void or voidable because of such
relationship or interest or because such interested member or members
are present at the meeting of the Board of Directors at which such
contract or transaction is authorized or approved or because such
interested member's or members' votes are counted for such purposes, if
(1) the fact of such relationship or interest is disclosed or known to
the disinterested members of the Board of Directors who authorize,
approve or ratify such contract or transaction by a vote or consent
sufficient for the purpose without counting the votes of such
interested member or members of the Board of Directors, or (2) the fact
of such relationship or interest is disclosed or known to the holders
of shares of this corporation and such holders authorize, approve or
ratify such contract or transaction by a vote or consent sufficient for
the purpose, or (3) such contract or transaction is fair and reasonable
insofar as this corporation is concerned. Such interested member or
members of the Board of Directors may be counted in
A-6
<PAGE> 25
determining the presence of a quorum at a meeting of the Board of
Directors at which such contract or transaction is authorized, approved
or ratified. This paragraph (g) shall not be construed to invalidate
any contract or other transaction which would otherwise be valid under
applicable common and statutory law.
(h) It is intended that this corporation may acquire and own wasting assets
or property having a limited life. The depletion of such assets by
sale, lapse of time or otherwise need not be deducted in the
computation of surplus available for dividends.
(i) Any action required or permitted to be taken at any meeting of the
Board of Directors or of any committee thereof may be taken without a
meeting, if prior to such action the written consent thereto is signed
by all members of the Board or of such committee, as the case may be,
and such written consent is filed with the minutes of the proceedings
of the Board or committee.
A-7
<PAGE> 26
KIMBALL INTERNATIONAL, INC.
PROXY
(FOR CLASS B STOCK)
SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
I appoint Thomas L. Habig, James C. Thyen, and Douglas A. Habig, or any one or
more of them, each with full power of substitution, as Proxies to vote all
shares of CLASS B COMMON STOCK of Kimball International, Inc., standing in my
name on its books at the close of business on August 25, 1997, at the annual
meeting of its share owners to be held at the principal offices of the Company
located at 1600 Royal Street, Jasper, Indiana, at 9:30A.M., Eastern Standard
Time, on Tuesday, October 28, 1997, and at any adjournments thereof, with
respect to the following matters:
(Please date and sign on reverse side)
- --------------------------------------------------------------------------------
This Proxy when properly executed will be voted in the manner directed by the
undersigned share owner.
IF NO DIRECTION IS MADE, THIS PROXY WILL BE VOTED FOR PROPOSALS 1 AND 2.
PLEASE MARK BOX / / OR /X/
1. ELECTION OF DIRECTOR
/ / FOR the nominee listed DR. JACK R. WENTWORTH
/ / WITHHOLD AUTHORITY
to vote for the nominee listed
2. Approval of proposed Restatement to the Articles of Incorporation of
the Company increasing the number of authorized shares of Class A Common
Stock to 50,000,000 shares, increasing the number of authorized shares of
Class B Common Stock to 100,000,000 shares, reducing the par value of both
Classes of Stock to $.05, increasing the dividend preference on the Class
B Common Stock to $.02 per share, making certain technical amendments and
effecting a two-for-one stock split.
/ / For / / Against / / Abstain
3. In their discretion, the Proxies are authorized to vote upon such
other business as may properly come before the meeting.
THE UNDERSIGNED HEREBY REVOKES ANY
PROXY HERETOFORE GIVEN AND ACKNOWLEDGES
RECEIPT OF THE NOTICE AND PROXY
STATEMENT FOR THE ANNUAL MEETING.
Date: , 1997
--------------------------
-------------------------------------
(Signature)
-------------------------------------
(Signature)
(If the stock is registered in the name
of more than one person, the Proxy
should be signed by all named owners.
If signing as attorney, executor,
administrator, trustee, guardian,
corporate official, etc., please give
full title as such.)
<PAGE> 27
SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS PROXY
(For Class A Stock)
KIMBALL INTERNATIONAL, INC.
I appoint Thomas L. Habig, James C. Thyen, and Douglas A. Habig, and each of
them, each with full power of substitution, as Proxies to vote all shares of
CLASS A COMMON STOCK of Kimball International, Inc. standing in my name on its
books at the close of business on August 25, 1997, at the annual meeting of its
share owners to be held at the principal offices of the Company located at 1600
Royal Street, Jasper, Indiana, at 9:30 A.M., Eastern Standard Time, on Tuesday,
October 28, 1997, and at any adjournments thereof, with respect to the
following matters:
This Proxy when properly executed will be voted in the manner directed by the
undersigned share owner.
IF NO DIRECTION IS MADE, THIS PROXY WILL BE VOTED FOR PROPOSALS 1 AND 2.
PLEASE MARK BOX / / OR /X/
<TABLE>
<S><C>
1. ELECTION OF DIRECTORS / / FOR all nominees listed / / WITHHOLD AUTHORITY
below (except as marked to vote for all the
to the contrary below) nominees listed below
Thomas L. Habig, Douglas A. Habig, James C. Thyen, John B. Habig, Ronald J. Thyen,
Christine M. "Tina" Vujovich, Brian K. Habig, John T. Thyen, Alan B. Graf, Jr.,
Gary P. Critser
(INSTRUCTION: To withhold authority to vote for any individual nominee, write that nominee's
name on the space provided below.)
---------------------------------------------------
2. Approval of proposed Restatement to the Articles of Incorporation of
the Company increasing the number of authorized shares of Class A Common
Stock to 50,000,000 shares, increasing the number of authorized shares of
Class B Common Stock to 100,000,000 shares, reducing the par value of both
Classes of Stock to $.05, increasing the dividend preference on the Class
B Common Stock to $.02 per share, making certain technical amendments and
effecting a two-for-one stock split.
/ / For / / Against / / Abstain
3. In their discretion, the Proxies are authorized to vote upon such other
business as may properly come before the meeting.
(PLEASE DATE AND SIGN BELOW.)
THE UNDERSIGNED HEREBY REVOKES ANY PROXY HERETOFORE GIVEN AND ACKNOWLEDGES
RECEIPT OF THE NOTICE AND PROXY STATEMENT FOR THE ANNUAL MEETING.
Date: , 1997
--------------------------------
----------------------------------------------
(Signature)
----------------------------------------------
(Signature)
(If stock is registered in the name of more than one person,
the Proxy should be signed by all named owners. If signing
as attorney, executor, administrator, trustee, guardian,
corporate official, etc., please give full title as such.)
</TABLE>
