<PAGE>
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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. ___)
[x] Filed by the Registrant
[_] Filed by a Party other than the Registrant
Check the appropriate box:
[x] Preliminary Proxy Statement
[_] Definitive Proxy Statement
[_] Definitive Additional Materials
[_] Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
NATIONAL INTERGROUP, INC.
(Name of Registrant as Specified In Its Charter)
(Name of Person(s) Filing Proxy Statement)
PAYMENT OF FILING FEE (Check the appropriate box):
[_] $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), or 14a-
6(i)(2).
[_] $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: *
4) Proposed maximum aggregate value of transaction:
* Set forth the amount on which the filing fee is calculated and state how
it was determined.
[_] 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:
[_] Filing Fee of $__________________ was previously paid on ____________
__, 199_, the date the Preliminary Proxy Statement was filed.
<PAGE>
<PAGE>
NATIONAL INTERGROUP, INC.
1220 SENLAC DRIVE
CARROLLTON, TEXAS 75006
JULY __, 1994
To our Stockholders:
You are cordially invited to attend the Annual Meeting of
Stockholders of National Intergroup, Inc. to be held at the Four
Seasons Hotel, 4150 North MacArthur Blvd., Irving, Texas 75038, on
Wednesday, August 10, 1994, at 8:30 a.m., local time.
The accompanying Notice of Annual Meeting of Stockholders and
Proxy Statement describe the formal business to be transacted at the
Annual Meeting. Directors and officers of the Company will be present
at the Annual Meeting to respond to any questions that our
stockholders may have.
It is important that your shares be represented at the Annual
Meeting whether or not you personally attend. I urge you to sign,
date and return the enclosed proxy card at your earliest convenience.
Very truly yours,
ABBEY J. BUTLER MELVYN J. ESTRIN
Co-Chairman of the Board Co-Chairman of the Board
and Co-Chief Executive Officer and Co-Chief Executive Officer
<PAGE>
<PAGE>
NATIONAL INTERGROUP, INC.
_______________________
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
_______________________
The Annual Meeting of Stockholders of National Intergroup, Inc.,
a Delaware corporation (the "Company"), will be held at the Four
Seasons Hotel, 4150 North MacArthur Blvd., Irving, Texas 75038, on
Wednesday, August 10, 1994, at 8:30 a.m., Central Daylight Savings
Time, for the purpose of considering and acting upon the following
matters, which are described more fully in the accompanying Proxy
Statement:
(a) To elect one director for a term of three years;
(b) To approve an amendment to the Company's Restated
Certificate of Incorporation to increase the authorized
preferred stock; and
(c) To transact such other business as may properly come before
the meeting or any adjournment or postponement thereof.
A list of the stockholders entitled to vote at the Annual Meeting
will be made available for examination by any stockholder, for any
purpose germane to the Annual Meeting, during ordinary business hours,
at the offices of the Company at 1220 Senlac Drive, Carrollton, Texas
75006, commencing on July 29, 1994 and at the Annual Meeting.
The Board of Directors has fixed the close of business on June
30, 1994 as the record date for the purpose of determining the
stockholders who are entitled to receive notice of and to vote at the
Annual Meeting and any adjournment or postponement thereof.
<PAGE>
<PAGE>
Stockholders are requested to complete, date and sign the
enclosed Proxy Card and return it promptly in the enclosed envelope
which has been provided for your convenience and which requires no
postage if mailed in the United States. The prompt return of proxy
cards will ensure a quorum. Any stockholder present at the Annual
Meeting may vote personally on all matters brought before the Annual
Meeting and, in that event, his or her Proxy will not be used.
Elizabeth T. Ching
Assistant Secretary
Carrollton, Texas
July 1, 1994
<PAGE>
<PAGE>
NATIONAL INTERGROUP, INC.
1220 SENLAC DRIVE
CARROLLTON, TEXAS 75006
_________________________________
PROXY STATEMENT
_________________________________
INTRODUCTION
This Proxy Statement is furnished in connection with the
solicitation of proxies by the Board of Directors (the "Board of
Directors") of National Intergroup, Inc., a Delaware corporation (the
"Company"), for use at the Annual Meeting of Stockholders of the
Company (the "Annual Meeting") to be held on Wednesday, August 10,
1994, at 8:30 a.m., Central Daylight Savings Time, at the Four Seasons
Hotel, 4150 North MacArthur Blvd., Irving, Texas 75038, and at any and
all adjournments or postponements thereof, for the purposes set forth
in the accompanying Notice of Annual Meeting of Stockholders. It is
expected that the Notice of Annual Meeting of Stockholders, this Proxy
Statement and the enclosed proxy card will be mailed to each
stockholder who is entitled to vote at the Annual Meeting commencing
on or about July 1, 1994.
Stockholders can ensure that their shares are voted at the Annual
Meeting by signing and returning the enclosed proxy card in the
envelope provided. The submission of a signed proxy will not affect a
stockholder's right to attend the Annual Meeting and vote in person.
Stockholders who execute proxies retain the right to revoke them at
any time before they are voted by filing with the Secretary of the
Company a written revocation or a proxy bearing a later date or by
attending the Annual Meeting and voting in person. The presence at
the Annual Meeting of a stockholder who has signed a proxy does not
itself revoke that proxy.
<PAGE>
<PAGE>
VOTING OF PROXIES
Proxies will be voted as specified by the stockholders. Where
specific choices are not indicated, proxies will be voted FOR the
proposals submitted to the stockholders for approval. The proxy card
provides space for a stockholder to withhold voting for any or all
nominees to the Board of Directors or to abstain from voting for any
proposal if the stockholder chooses to do so. For purposes of
determining the number of votes cast with respect to any voting
matter, only those votes cast "for" or "against" are included.
Abstentions and broker non-votes are counted only for purposes of
determining whether a quorum is present at the Annual Meeting.
RECORD DATE AND VOTING SECURITIES
The Board of Directors has fixed the close of business on June
30, 1994 as the record date (the "Record Date") for the determination
of the stockholders of the Company who are entitled to receive notice
of and to vote at the Annual Meeting. At the close of business on the
Record Date, the Company had issued and outstanding __________ shares
of common stock, par value $5 per share (the "Common Stock"), which
number does not include __________ shares of Common Stock held in the
Company's treasury.
The presence at the Annual Meeting, in person or by proxy, of the
holders of forty percent (40%) of the issued and outstanding shares of
Common Stock is necessary to constitute a quorum. The holders of
Common Stock are entitled to one vote for each share held of record on
the Record Date.
PROPOSAL ONE: ELECTION OF DIRECTOR
Under the terms of the By-laws of the Company, the Board of
Directors is to be divided into three classes of directors, with the
total number of directors to be
<PAGE>
<PAGE>
allocated among the three classes as equally as possible. The Board
of Directors presently consists of six members. Three members,
Messrs. Abbey J. Butler, Melvyn J. Estrin and William G. Tull, were
elected at last year's annual meeting of stockholders to serve until
the annual meeting to be held in 1996 (the "1996 Class"). The terms
of the other three members of the Board, Messrs. Sheldon W. Fantle,
Paul M. Finfer and Alfred H. Kingon, expire at the Annual Meeting (the
"1994 Class"). There are no members of the Board presently remaining
in the class that had been elected to serve until the annual meeting
of stockholders in 1995 (the "1995 Class"). <F1>
Directors Elected to 1995 Class
The Company has no present intention to increase the size of the
Board of Directors. In order to divide the present six members of the
Board of Directors equally into three classes of equal size, the Board
has established that the 1995 Class shall have two directors. In
future years, the Board will take action as is necessary to adjust the
size of the other two classes of directors so that each class will, in
time, consist of two members.
The Board has elected Messrs. Paul M. Finfer and Alfred H. Kingon
(each of whose term would have expired at the Annual Meeting) to fill
the vacancies in the 1995 Class. Messrs. Finfer and Kingon will serve
on the Board until the annual meeting of stockholders to be held in
1995. The following table sets forth information concerning each of
them.
<F1>. At the annual meeting of stockholders held in 1992, the
following individuals were elected to the 1995 Class:
Mr. Robert J. Slater, who resigned from the Board in
September 1993; Mr. Robert L. King, who resigned from
the Board in May 1993; and Mr. Charles P. Abod, who
died in December 1992.
<PAGE>
<PAGE>
Terms Expiring in 1995:
PAUL M. FINFER (55) 1991 Mr. Finfer has served in
President and Chief his present position since
Executive Officer of October 1989. From May
Franklin Acceptance 1986 through February 1988,
Corporation, a consumer he served as the Chairman
finance company of the Board and Chief
Executive Officer of FBX
Corporation, a manufacturer
and distributor of
electronic fire and burglar
alarm signal processing
products. Mr. Finfer also
serves as a director of
FoxMeyer Corporation, a
subsidiary of the Company
engaged in the wholesale
drug distribution business
and in managed care
prescription drug claims
and benefit services, and
Kitchen Bazaar, Inc., a
specialty retailer.
ALFRED H. KINGON (63) 1991 Mr. Kingon has served in
Principal of Kingon his present position since
International, Inc., an September 1989. From April
international 1987 through June 1988, he
investment and served as the United States
consulting firm Ambassador to the European
Communities. Mr. Kingon
served as the Assistant to
the President of the United
States and Secretary of the
Cabinet from February 1985
through April 1987.
Mr. Kingon is a director of
Ben Franklin Retail Stores,
Inc., a subsidiary of the
Company engaged in the
franchising of general
variety stores and the
franchising and operation
of crafts stores and the
wholesale distribution of
products to such stores.
<PAGE>
<PAGE>
Election of Director
The Board of Directors has nominated Mr. Sheldon W. Fantle, the
third director whose term expires at the Annual Meeting, for re-
election to the Board and to serve until the annual meeting of
stockholders to be held in 1997. The following sets forth information
concerning Mr. Fantle.
Term Expiring in 1997:
SHELDON W. FANTLE (71) 1991 Mr. Fantle has served in
Chairman and Chief his present position since
Executive Officer of 1990. From 1987 to 1990,
Fantle Enterprises, he served as the Chairman
Inc., a venture of the Board, President and
capital, consulting and Chief Executive Officer of
public relations firm Dart Drug Stores, Inc.,
which operated as Fantle's
Drugstores and which filed
a petition under Chapter 11
of the United States
Bankruptcy Code in 1989 and
was subsequently liquidated
thereunder. Prior thereto,
from 1975 through 1987, he
served as Chairman of the
Board, President and Chief
Executive Officer of
Peoples Drug Stores, Inc.
Mr. Fantle currently serves
as a director of FoxMeyer
Corporation, Ben Franklin
Retail Stores, Inc.,
Washington Gas Light
Company, a public utility
company, Medlantic
Healthcare Corporation, a
hospital management
company, and the National
Association of Chain Drug
Stores.
<PAGE>
<PAGE>
Vote Required
The affirmative vote of a plurality of the shares of Common Stock
represented in person or by proxy at the Annual Meeting is required
for the election of directors of the Company. All properly executed
proxies received in response to this solicitation will be voted.
Unless otherwise specified in the proxy, it is the intention of the
persons named in the proxies solicited by the Board of Directors to
vote FOR the re-election of Mr. Fantle to the Board to serve for a
three year term. If events not now known or anticipated makes him
unable to serve, the proxies will be voted, at the discretion of the
holders thereof, for another nominee supported by the Board of
Directors.
Directors Whose Terms of Office Continue
Those incumbent directors who are not standing for election this
year, but who will continue to serve until their terms expire in 1996,
are as follows:
<PAGE>
<PAGE>
Terms Expiring in 1996:
ABBEY J. BUTLER (57) 1990 Mr. Butler has served as
Co-Chairman of the Co-Chairman of the Board of
Board and Co-Chief the Company and FoxMeyer
Executive Officer of Corporation since March
the Company; Co- 1991. Mr. Butler was
Chairman of the Board appointed Co-Chief
and Co-Chief Executive Executive Officer of the
Officer of FoxMeyer Company in October 1991 and
Corporation; and Co- became Co-Chief Executive
Chairman of the Board Officer of FoxMeyer
of Ben Franklin Retail Corporation in May 1993.
Stores, Inc. Since November 1991, he has
also served as Co-Chairman
of the Board of Ben
Franklin Retail Stores,
Inc. Mr. Butler has also
been the President and a
director of C.B. Equities
Corp., a private investment
company, since 1982. Mr.
Butler presently serves as
a director of CST
Entertainment Imaging,
Inc., a company engaged in
digital color enhancement
of black and white films,
and a trustee of The
American University, a
director of the Starlight
Foundation, a charitable
organization, and is a
member of the advisory
boards of the Pediatric
AIDS Foundation and the
National Center for
Survivors of Child Abuse.
Mr. Butler was appointed by
President Bush to serve on
the President's Advisory
Committee on the Arts and
he now serves as a member
of the Executive Committee
of the National Committee
for the Performing Arts.
<PAGE>
<PAGE>
MELVYN J. ESTRIN (51) 1990 Mr. Estrin has served as
Co-Chairman of the Co-Chairman of the Board of
Board and Co-Chief the Company and FoxMeyer
Executive Officer of Corporation since March
the Company; Co- 1991. Mr. Estrin was
Chairman of the Board appointed Co-Chief
and Co-Chief Executive Executive Officer of the
Officer of FoxMeyer Company in October 1991 and
Corporation; and Co- became Co-Chief Executive
Chairman of the Board Officer of FoxMeyer
of Ben Franklin Retail Corporation in May 1993.
Stores, Inc. Since November 1991, he has
also served as the
Co-Chairman of the Board of
Ben Franklin Retail Stores,
Inc. From December 1983 to
the present, Mr. Estrin has
also served as the Chairman
of the Board and Chief
Executive Officer of Human
Service Group, Inc., a
private management and
investment firm. He has
been the President and a
director of HSG Acquisition
Co., a private management
and investment firm, from
July 1986 to the present.
Since 1979, he has also
served as Chairman of the
Board of Financial
Investors Corp., a private
investment and real estate
development company.
Mr. Estrin presently serves
as a director of Washington
Gas Light Company, a public
utility company, and as a
trustee of the University
of Pennsylvania. Mr.
Estrin serves as a
Commissioner on the
President's National
Capital Planning
Commission.
<PAGE>
<PAGE>
WILLIAM G. TULL (65) 1990 Mr. Tull served as the
Financial Consultant President and Chief
Operating Officer of
American Security Bank,
N.A., a commercial bank,
from April 1985 until
January 1990. Upon his
retirement in January 1990,
Mr. Tull became a
self-employed financial
consultant. Mr. Tull
serves as a director of
Ramtron International
Corporation, a company that
develops, manufactures and
sells non-volatile
semiconductor memory
products.
THE BOARD OF DIRECTORS
Committees of the Board of Directors
The Board of Directors has four committees. The principal
responsibilities and membership of each committee are described in the
following paragraphs.
Audit Committee. The Audit Committee reviews the work of the
Company's independent auditors, management and internal audit staff to
ensure that each is properly discharging its responsibilities in the
area of financial controls and reporting. This committee is presently
comprised of Mr. Kingon, who is the Chairman, and Messrs. Fantle and
Tull. This committee held three meetings during the fiscal year ended
March 31, 1994 ("Fiscal 1994").
Executive and Nominating Committee. The Executive and Nominating
Committee has the authority to exercise substantially all of the
powers of the Board of Directors in the management and business
affairs of the Company, except it does not have the authority to
declare dividends, authorize the issuance of Common Stock,
<PAGE>
<PAGE>
modify the Restated Certificate of Incorporation or By-laws of the
Company, adopt any agreement of merger or consolidation or recommend
to the stockholders the sale, lease or exchange of all or
substantially all of the Company's assets or the dissolution of the
Company. In addition, this committee recommends prospective nominees
for election to the Board of Directors. Regularly scheduled meetings
of the Board of Directors are held periodically each year and special
meetings are held from time to time. As a consequence, the occasions
on which this committee is required to take action are limited. The
members of this committee are Messrs. Butler and Estrin. The
committee did not meet in Fiscal 1994.
Finance and Pension Committee. The Finance and Pension Committee
reviews and monitors the financial planning and structure of the
Company and the performance of investments in the Company's pension
plans. This committee is presently comprised of Mr. Tull, who is the
Chairman, and Messrs. Butler, Estrin and Finfer. This committee held
one meeting in Fiscal 1994.
Personnel and Compensation Committee. The Personnel and
Compensation Committee reviews the performance of the management of
the Company, determines the compensation of management and makes
recommendations with respect to the establishment of management
compensation plans. This committee is presently comprised of Mr.
Fantle, who is the Chairman, and Messrs. Finfer and Kingon. This
committee held three meetings in Fiscal 1994.
Meetings of the Board of Directors
During Fiscal 1994, there were nine meetings of the Board of
Directors. Each director attended at least 75% of the meetings of the
Board of Directors and the committees of the Board of Directors of
which he was a member in Fiscal 1994.
Compensation of Directors
Directors who are not officers or employees of the Company or one
of its subsidiaries or members of the Executive and Nominating
Committee receive an annual fee of $15,000. They also receive $1,000
for each meeting of the Board of
<PAGE>
<PAGE>
Directors or of a committee of the Board of Directors (other than the
Executive and Nominating Committee) they attend. Chairmen of each of
the committees receive an additional $1,000 for each meeting of the
committee they attend. Directors are reimbursed for travel and lodging
expenses in connection with Board and committee meetings.
Under the terms of the Company's 1993 Stock Option and
Performance Award Plan (the "Plan"), directors who are not officers or
employees of the Company or one of its subsidiaries ("outside
directors") are automatically granted options to purchase 15,000
shares of Common Stock when first elected to serve on the Board of
Directors and, in each year they continue to serve as members of the
Board of Directors, options to purchase 1,000 shares of Common Stock
on the third trading date following the later of (i) the date on which
the annual meeting of the Company's stockholders, or any adjournment
thereof, is held each year or (ii) the date on which the Company's
earnings for the fiscal quarter immediately preceding the date of such
annual meeting are released to the public.
The Company has a Director's Retirement Plan which provides for
the payment of retirement benefits to directors (other than directors
who are, or at any time subsequent to December 31, 1975 have been,
officers of the Company or an affiliated corporation). Each qualifying
director is entitled, at the later of retirement or age 60, to receive
a monthly benefit for a period equal to his years of service or 15
years, whichever is less. Such monthly benefit is equal to one-twelfth
(1/12) of the highest annual fee in effect for directors during such
director's years of service on the Board of Directors.
The Company has agreed to pay Mr. Robert J. Slater, a former
director of the Company who resigned from the Board of Directors on
September 30, 1993, quarterly payments of $7,625 until July 31, 1995
in exchange for consulting services. The Company has also agreed to
credit Mr. Slater for service through July 31, 1995 for purposes of
the Director's Retirement Plan.
<PAGE>
<PAGE>
EXECUTIVE OFFICERS
A brief biography of each executive officer of the Company (other
than the Co-Chairmen of the Board and Co-Chief Executive Officers
whose biographies are set forth above) who served during Fiscal 1994
is provided below. Executive officers are elected by the Board of
Directors at its annual meeting and hold office until the next annual
meeting of the Board of Directors or until their successors have been
duly elected and qualified.
Peter B. McKee, 56, has been Vice President and Chief Financial
Officer of the Company since February 1994. He has also served as
Senior Vice President and Chief Financial Officer of FoxMeyer
Corporation since January 1994. From October 1991 to December 1993,
he was Executive Vice President and Chief Financial Officer of
InterSolve Group, a managerial consulting firm. From March 1988 to
September 1991, he was Senior Vice President and Chief Financial
Officer of Metro Airlines, a regional airline that operated in the
Southwest and Eastern United States and in the Caribbean and which
filed a petition under Chapter 11 of the United States Bankruptcy Code
in April 1991 and was subsequently reorganized thereunder.
Edward L. Massman, 35, has been Controller of the Company since
July 1993. He has also served as Director of Accounting of FoxMeyer
since September 1990. Mr. Massman was employed by Deloitte & Touche
from January 1983 to September 1990, serving most recently as Senior
Audit Manager.
Former Executive Officer
Lawrence J. Pilon. Mr. Pilon, 45, was Vice President, Human
Resources of the Company from June 1986 to January 1994. He was
Secretary of the Company from August 1991 to January 1994. He also
served as Senior Vice President -- Administration of FoxMeyer
Corporation from September 1990 to January 1994.
<PAGE>
<PAGE>
OWNERSHIP OF COMMON STOCK OF CERTAIN
BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth certain information as of June 10,
1994 with respect to the beneficial ownership of Common Stock by (i)
persons known to the Company to be the beneficial owners of more than
5% of the outstanding shares of Common Stock, (ii) all directors and
nominees for election as directors of the Company, (iii) each of the
executive officers named in the Summary Compensation Table (which
appears on page 15 and (iv) all directors and executive officers of
the Company as a group.
The number of shares of Common Stock beneficially owned by each
individual set forth below is determined under rules of the Securities
and Exchange Commission (the "Commission") and the information is not
necessarily indicative of beneficial ownership for any other purpose.
Under such rules, beneficial ownership includes any shares as to which
an individual has sole or shared voting power or investment power and
any shares which an individual presently, or within 60 days of the
date of the Annual Meeting, has the right to acquire through the
exercise of any stock option or other right. Unless otherwise
indicated, each individual has sole voting and investment power (or
shares such powers with his spouse) with respect to the shares of
Common Stock set forth in the following table.
<TABLE>
<CAPTION>
Number of Shares
Name and Address (1) of Common Stock Percentage of
of Beneficial Owner Beneficially Owned Outstanding Shares
-------------------- ------------------ ------------------
<S> <C> <C>
The Centaur Group 3,777,000 (2) 29.4%
c/o Centaur Partners IV
17 Battery Place, Suite 709
New York, New York 10004
Directors and Nominees for Directors
(including those who are also
Executive Officers):
Abbey J. Butler 4,217,000 (2)(3) 31.8%
Melvyn J. Estrin 4,217,000 (2)(4) 31.8%
Sheldon W. Fantle 16,500 (5) (11)
Paul M. Finfer 16,500 (6) (11)
Alfred H. Kingon 16,500 (7) (11)
William G. Tull 19,500 (8) (11)
Executive Officers:
Lawrence J. Pilon 85,000 (9) (11)
(through January 1994)
Peter B. McKee -0- (10) ---
Edward L. Massman -0- ---
All Directors and Executive Officers 4,726,000 (12)(13) 34.3% (12)(13)
as a Group (9 persons)
_____________________________
<FN>
<PAGE>
<PAGE>
(1) The business address of each of the persons listed above is c/o
National Intergroup, Inc., 1220 Senlac Drive, Carrollton, Texas
75006.
(2) The Centaur Group is comprised of Messrs. Butler and Estrin,
Centaur Partners IV, a New York general partnership ("Centaur
IV"), Estrin Abod Equities Limited Partnership, a Maryland
limited partnership ("Estrin Abod"), and Butler Equities II,
L.P., a Delaware limited partnership ("Butler Equities"). The
general partners of Centaur IV are Estrin Abod and Butler
Equities.
Mr. Estrin owns 82.5% of the outstanding capital stock of Human
Service Group, Inc., a Delaware corporation ("Human Service").
Human Service owns all of the capital stock of HSG Acquisition
Co., a Delaware corporation ("HSG"). HSG and MJE, Inc., a
Virginia corporation controlled by Mr. Estrin, are the general
partners of Estrin Abod.
Mr. Butler owns all of the outstanding capital stock of AB
Acquisition Corp., a Delaware corporation ("AB Acquisition"). AB
Acquisition is the sole general partner of Butler Equities.
The Centaur Group in the aggregate holds 3,777,000 shares of
Common Stock. These shares are held directly by the persons and
entities described above as follows: Mr. Butler, none; Mr.
Estrin, 392,375; Centaur IV, 1,000 shares; Estrin Abod, 1,495,625
shares; and Butler Equities, 1,888,000 shares. Pursuant to the
terms of the Centaur IV partnership agreement, neither Estrin
Abod nor Butler Equities may acquire or dispose of shares of
Common Stock without the consent of Centaur IV. In addition,
pursuant to the Centaur IV partnership agreement, Estrin Abod and
Butler Equities must vote all shares of Common Stock owned by
each such entity as directed by Centaur IV. Accordingly, Centaur
IV, which directly holds 1,000 shares, may be deemed to share the
power to direct the voting and disposition of the 1,495,625 and
the 1,888,000 shares held by each of Estrin Abod and Butler
Equities, respectively.
Estrin Abod has designated Mr. Estrin and Butler Equities has
designated Mr. Butler to act as a "Coordinating Person" pursuant
to the Centaur IV partnership agreement.
<PAGE>
<PAGE>
Messrs. Estrin and Butler, acting together, manage the affairs of
Centaur IV and have the authority to make all decisions
concerning Centaur IV's interest in the Common Stock.
Estrin Abod disclaims beneficial ownership of the shares of
Common Stock owned by Butler Equities and Butler Equities
disclaims beneficial ownership of the shares of Common Stock
owned by Estrin Abod and Mr. Estrin individually.
(3) In addition to his beneficial ownership of Common Stock through
The Centaur Group, Mr. Butler also holds an option to purchase
440,000 shares of Common Stock which is presently exercisable.
This option expires on October 31, 1994. Mr. Butler also holds
86,948 shares of common stock of FoxMeyer Corporation ("FoxMeyer
Common Stock") directly, 2,140.7 shares of FoxMeyer Common Stock
through his participation in the FoxMeyer Employees' Savings and
Profit Sharing Program (the "FoxMeyer 401(k) Plan") and options
to purchase 135,000 shares of FoxMeyer Common Stock which are
presently exercisable or exercisable within 60 days of the Annual
Meeting, which shares and options represent less than 1% of the
outstanding FoxMeyer Common Stock. Mr. Butler also holds options
to purchase 50,000 shares of common stock of Ben Franklin Retail
Stores, Inc. ("Ben Franklin Common Stock") which are presently
exercisable or exercisable within 60 days of the Annual Meeting,
which options represent less than 1% of the outstanding Ben
Franklin Common Stock.
(4) In addition to his beneficial ownership of Common Stock through
The Centaur Group, Mr. Estrin also holds an option to purchase
440,000 shares of Common Stock which is presently exercisable.
This option expires on October 31, 1994. Mr. Estrin holds 421.4
shares of FoxMeyer Common Stock through his participation in the
FoxMeyer 401(k) Plan, he is a co-trustee for two trusts which
hold an aggregate of 20,000 shares of FoxMeyer Common Stock (the
beneficial ownership of which he disclaims) and he holds options
to purchase 135,000 shares of FoxMeyer Common Stock which are
presently exercisable or exercisable within 60 days of the Annual
Meeting, which shares and options represent less than 1% of the
outstanding FoxMeyer Common Stock. Mr. Estrin is also a
co-trustee for two trusts which hold an aggregate of 10,000
shares of Ben Franklin Common Stock (the beneficial ownership of
which he disclaims) and he holds options to purchase 50,000
shares of Ben Franklin Common
<PAGE>
<PAGE>
Stock which are presently exercisable or exercisable within 60
days of the Annual Meeting, which shares and options represent
less than 1% of the outstanding Ben Franklin Common Stock.
(5) Mr. Fantle holds options to purchase 16,500 shares of Common
Stock which are presently exercisable or exercisable within 60
days of the Annual Meeting. He also holds 1,000 shares of
FoxMeyer Common Stock and options to purchase 16,500 shares of
FoxMeyer Common Stock which are presently exercisable or
exercisable within 60 days of the Annual Meeting, which shares
and options represent less than 1% of the outstanding FoxMeyer
Common Stock.
(6) Mr. Finfer holds options to purchase 16,500 shares of Common
Stock which are presently exercisable or exercisable within 60
days of the Annual Meeting. He also holds 400 shares of FoxMeyer
Common Stock and options to purchase 16,500 shares of FoxMeyer
Common Stock which are presently exercisable or exercisable
within 60 days of the Annual Meeting, which shares and options
represent less than 1% of the outstanding FoxMeyer Common Stock.
(7) Mr. Kingon holds options to purchase 16,500 shares of Common
Stock which are presently exercisable or exercisable within 60
days of the Annual Meeting.
(8) Mr. Tull holds 3,000 shares of Common Stock and options to
purchase 16,500 shares of Common Stock which are presently
exercisable or exercisable within 60 days of the Annual Meeting.
Mr. Tull also holds 3,000 shares of FoxMeyer Common Stock, which
shares represent less than 1% of the outstanding FoxMeyer Common
Stock.
(9) Mr. Pilon held options to purchase 85,000 shares of Common Stock
which were all exercisable. After his resignation from the
Company, Mr. Pilon had the right to exercise his options for a
period of 30 days after his last date of employment. All of Mr.
Pilon's options have terminated.
(10) Mr. McKee shares beneficial ownership of 1,000 shares of FoxMeyer
Common Stock with a minor child, which shares represent less than
1% of the outstanding FoxMeyer Common Stock.
<PAGE>
<PAGE>
(11) Indicates less than 1%.
(12) Includes 946,000 shares of Common Stock subject to options which
are presently exercisable, or exercisable within 60 days of the
Annual Meeting, held by all directors and executive officers of
the Company (but excludes options formerly belonging to Mr. Pilon
which terminated upon his resignation from the Company) as a
group under the Company's 1987 Restated Stock Option and
Performance Award Plan and the options held by Mr. Butler and Mr.
Estrin.
(13) Includes the 3,777,000 shares of Common Stock held by members of
The Centaur Group, as described above.
</TABLE>
<PAGE>
<PAGE>
COMPENSATION OF EXECUTIVE OFFICERS
The following table sets forth the compensation for the three
fiscal years ended March 31, 1994 received by the Company's Co-Chief
Executive Officers and the three remaining most highly compensated
executive officers of the Company in Fiscal 1994.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
Annual Compensation Long-Term Compensation (A)
----------------------------------- --------------------------
Awards Payouts
------- --------
Other Securities
Annual Underlying All Other
Name and Principal Fiscal Compensa- Options/ LTIP Compensa-
Position Year Salary($) Bonus($) tion($)(B) SARs(#) Payouts($) tion($)(C)
------------------ -------- --------- --------- --------- ---------- ---------- --------
<S> <C> <C> <C> <C> <C> <C> <C>
Abbey J. Butler (D) 1994 709,000 319,300 53,974 28,000 -0- 5,372
Co-Chairman of the 1993 702,000 175,000 (H) 540,000 -0- 1,750
Board and Co-Chief 1992 556,255 139,000 (H) 110,000 -0- 1,750
Executive Officer
Melvyn J. Estrin (D) 1994 709,000 319,300 50,997 28,000 -0- 5,958
Co-Chairman of the 1993 702,000 175,000 (H) 540,000 -0- 1,167
Board and Co-Chief 1992 556,255 139,000 (H) 110,000 -0- 1,750
Executive Officer
Lawrence J. Pilon (E) 1994 174,042 -0- (H) -0- -0- 3,748
Vice President, 1993 197,937 28,000 (H) 17,000 62,500 4,456
Human Resources 1992 185,811 42,200 66,456 60,000 -0- 4,325
(through January 1994)
Edward L. Massman (F) 1994 94,338 24,379 (H) -0- -0- 3,115
Controller 1993 82,362 9,500 -0- -0- -0- 2,471
1992 75,775 12,200 -0- -0- -0- 1,263
Peter B. McKee (G) 1994 44,302 35,750 -0- 60,000 -0- -0-
Vice President and 1993 -0- -0- -0- -0- -0- -0-
Chief Financial Officer 1992 -0- -0- -0- -0- -0- -0-
(effective February 1994)
<FN>
________________________
<PAGE>
<PAGE>
(A) The Company made no awards of restricted stock during the three
fiscal years ended March 31, 1994 to any of the five executive
officers of the Company named in the Summary Compensation Table.
(B) For Fiscal Year 1994, the amount set forth under "Other Annual
Compensation" includes amounts paid by the Company or by FoxMeyer
to each executive officer under FoxMeyer's Supplemental Savings
Plan, which is a nonqualified plan for employees whose
contributions to the FoxMeyer 401(k) Plan are limited by the
Internal Revenue Code's limitations on elective contributions
thereto.
(C) Represents amounts contributed by the Company or by FoxMeyer to
each executive officer's account under FoxMeyer's 401(k) Plan.
(D) In Fiscal 1994, Mr. Butler and Mr. Estrin each received $350,000
from the Company for serving as Co-Chief Executive Officer of the
Company, $275,000 from FoxMeyer for serving as Co-Chairman of the
Board and Co-Chief Executive Officer of FoxMeyer and $84,000 from
Ben Franklin Retail Stores, Inc. ("Ben Franklin") for serving as
Co-Chairman of the Board of Ben Franklin. For Fiscal 1994, Mr.
Butler and Mr. Estrin each received a $175,000 bonus from the
Company and a $137,500 bonus from FoxMeyer. In Fiscal 1993, Mr.
Butler and Mr. Estrin each received $350,000 from the Company for
serving as Co-Chief Executive Officer of the Company, $275,000
from FoxMeyer for serving as Co-Chairman of the Board of FoxMeyer
and $77,000 from Ben Franklin for serving as Co-Chairman of the
Board of Ben Franklin. For Fiscal 1993, Mr. Butler and Mr.
Estrin each received a $65,000 bonus from the Company, an $85,000
bonus from FoxMeyer and a $25,000 bonus from Ben Franklin. In
Fiscal 1992, Mr. Butler and Mr. Estrin each received $350,000
from the Company for serving as Co-Chief Executive Officer of the
Company and $206,251 (which represents payments from July 1992
through March 1993) from FoxMeyer for serving as Co-Chairman of
the Board of FoxMeyer. The $139,000 bonus paid to each of Mr.
Butler and Mr. Estrin for Fiscal 1992 was paid by FoxMeyer.
In Fiscal 1994, Ben Franklin extended the expiration date (from
April 27, 1997 to April 27, 2001) of options for 10,000 shares of
Ben Franklin Common Stock held by each of Mr. Butler and Mr.
Estrin and granted each of them additional options for 18,000
shares of Ben Franklin Common Stock. In Fiscal 1993, Mr. Butler
and Mr. Estrin were each granted options for 440,000 shares of
Common Stock, options for 50,000 shares of FoxMeyer Common Stock
and options for 50,000 shares of Ben Franklin Common Stock. In
Fiscal 1992, Mr. Butler and Mr. Estrin were each granted options
for 110,000 shares of FoxMeyer Common Stock.
<PAGE>
<PAGE>
(E) Until January 1994, Mr. Pilon served as the Vice President, Human
Resources of the Company but did not receive compensation from
the Company in such capacity. Mr. Pilon was also the Senior Vice
President - Administration of FoxMeyer, which paid all of his
compensation for services rendered in Fiscal 1994, 1993 and 1992.
In Fiscal 1993, Mr. Pilon received a $62,500 payment from
FoxMeyer for 25,000 performance units granted by the Company in
April 1990 ("1990 Performance Units") under the Performance Units
Supplement to the Company's 1987 Restated Stock Option and
Performance Award Plan. The value of the 1990 Performance Units
were tied to the operating results of FoxMeyer Drug Company, a
wholly-owned subsidiary of FoxMeyer, and were based on operating
goals set by the Personnel and Compensation Committee of the
Board of Directors of the Company related to return on invested
capital of FoxMeyer Drug Company over the three-year period ended
March 31, 1993. For Fiscal 1992, $55,586 of the amount shown
under "Other Annual Compensation" represent payments made to Mr.
Pilon in connection with his relocation from Pittsburgh to
Dallas.
(F) Mr. Massman serves as the Controller of the Company but does not
receive compensation from the Company in such capacity. Mr.
Massman is the Director of Accounting of FoxMeyer, which paid all
of his compensation for services rendered in Fiscal 1994, 1993
and 1992 except for a $5,000 special bonus paid by the Company in
Fiscal 1994.
<PAGE>
<PAGE>
(G) Since February 1994, Mr. McKee has served as the Vice President
and Chief Financial Officer of the Company but does not receive
compensation from the Company in such capacity. Mr. McKee is the
Senior Vice President and Chief Financial Officer of FoxMeyer,
which paid all of his compensation for services rendered in
Fiscal 1994. In Fiscal 1994, Mr. McKee was granted options for
60,000 shares of FoxMeyer Common Stock.
(H) Other annual compensation to this executive officer, including
payment of club dues, personal use of corporate property
(including the use of the Company's airplane) and other personal
benefits, did not exceed the lesser of $50,000 or 10% of such
executive officers's total salary and bonus for such fiscal year.
</TABLE>
<PAGE>
<PAGE>
REPORT OF THE PERSONNEL AND COMPENSATION COMMITTEE
The Personnel and Compensation Committee of the Board of
Directors (the "Compensation Committee") is comprised of three
directors: Mr. Sheldon W. Fantle, who is the Chairman, and Messrs.
Paul M. Finfer and Alfred H. Kingon, all of whom are outside
directors.
Compensation for the Company's executive officers is comprised of
base salary, annual incentive payments and long-term incentive awards
in the form of stock option grants. The goal of the Company's
executive compensation policy is to reward its executive officers for
overseeing and managing the Company's operating subsidiaries, for
their contributions towards long-term strategic planning and for
improving long-term stockholder value. Decisions with respect to the
compensation of the Co-Chief Executive Officers of the Company are
made by the Compensation Committee. The Company generally does not pay
any compensation to the Company's other executive officers, whose
salaries and bonuses are paid solely by FoxMeyer and are determined by
the personnel and compensation committee of the board of directors of
FoxMeyer, which consists of Messrs. Fantle and Finfer and Messrs.
Abbey J. Butler, Melvyn J. Estrin and Daniel J. Callahan, III (the
"FoxMeyer Compensation Committee").
FoxMeyer provides an executive compensation program that aims to
reinforce FoxMeyer's overall business mission, strategies, values and
objectives. The goals of FoxMeyer's executive compensation program are
to motivate and reward its executive officers and other key employees
to improve long-term stockholder value and to attract and retain
high-quality executive talent. FoxMeyer's executive compensation
program consists of base salary, annual and long-term incentive
payments, stock options and employee benefits. FoxMeyer reviews its
compensation programs periodically and compares its pay practices with
other companies in the wholesale distribution business and with
companies staffed with similarly-skilled executives. FoxMeyer's
objective is to position total compensation at approximately the
median of market pay for executives in similar positions. Annual
incentive payments are based on the attainment of specific goals
established each year. Long-term
<PAGE>
<PAGE>
incentives, in the form of cash payments and stock option grants, are
designed to reward sustained corporate performance over a three to
five-year period.
During the first fiscal quarter of each year, the FoxMeyer
Compensation Committee meets to review salary increases for the
current year and incentive payments to be made in connection with the
previous year's performance. The FoxMeyer Compensation Committee also
reviews the current fiscal year's business plan and establishes
performance objectives for each FoxMeyer executive officer. Goals
relating to FoxMeyer's financial performance, based on such factors as
return on capital, pre-tax income or net income, are set as a primary
component of executive incentive compensation. Individual performance
objectives are also determined for officers and are weighted to
reflect their respective functions, significance and contribution to
FoxMeyer business goals. In making its decisions, the FoxMeyer
Compensation Committee receives recommendations from FoxMeyer's Co-
Chief Executive Officers on senior executives and then meets privately
(without the presence of management, including FoxMeyer's Co-Chief
Executive Officers in relation to their compensation) to determine
compensation for FoxMeyer's Co-Chief Executive Officers. The FoxMeyer
Compensation Committee's decisions are based on input from FoxMeyer's
human resources department, and periodically from outside advisors, to
maintain the desired level of competitiveness and congruence with
long-term company performance.
During the year, the Compensation Committee and the FoxMeyer
Compensation Committee receive periodic updates on FoxMeyer's
operating results and the progress made by FoxMeyer's executive
officers towards performance targets relevant to FoxMeyer's incentive
programs. Discussions of management contribution and performance are
held periodically.
Co-Chief Executive Officers
During Fiscal 1994, the Company paid each of Messrs. Butler and
Estrin, the Company's Co-Chief Executive Officers, a base salary of
$350,000. This base salary was approved by the Board of Directors in
October 1991, based upon the recommendation of the Compensation
Committee (which had consulted with an outside advisor). See
<PAGE>
<PAGE>
"EMPLOYMENT AGREEMENTS" below. No salary increase was granted to the
Co-Chief Executive Officers for Fiscal 1994. For Fiscal 1994, the
Board of Directors of the Company, based upon the recommendation of
the Compensation Committee, awarded each Co-Chief Executive Officer a
bonus of $175,000 for their management of the Company and their
involvement in a number of financing transactions by FoxMeyer and Ben
Franklin during Fiscal 1994 that provided enhanced liquidity to these
companies at lower cost; their work on the Company's exchange offer in
November 1993 in which the Company exchanged approximately 6.8 million
shares of Common Stock for a new series of $4.20 Cumulative
Exchangeable Series A Preferred Stock; and their work in obtaining a
$15 million three-year revolving loan facility for the Company.
In determining the amount of the Co-Chief Executive Officers'
bonuses for Fiscal 1994, the Compensation Committee took into
consideration the aggregate compensation payable to them by the
Company, FoxMeyer and Ben Franklin relative to their performance on
behalf of the Company's stockholders and the fact that no increase in
base salary had been authorized for either of them since Fiscal 1992.
In Fiscal 1994, each Co-Chief Executive Officer received $275,000
from FoxMeyer for his services as Co-Chairman of the Board and Co-
Chief Executive Officer of FoxMeyer. The board of directors of
FoxMeyer (the "FoxMeyer Board") consisted of eight members in Fiscal
1994, including Messrs. Butler, Estrin, Fantle and Finfer (who were
also directors of the Company). Although Messrs. Butler and Estrin
are members of the FoxMeyer Board and the FoxMeyer Compensation
Committee, they do not participate in the determination of their
annual compensation, bonuses and the grant of FoxMeyer options to
them. The $275,000 annual payment to each of Messrs. Butler and
Estrin was approved by the FoxMeyer Board (without the participation
of Messrs. Butler and Estrin) in June 1991 based upon the substantial,
but not full-time services they were expected to render to FoxMeyer as
Co-Chairmen of the Board, including financial and strategic planning
and supervisory and managerial services. When they assumed the
additional offices of Co-Chief Executive Officers of FoxMeyer in May
1993, there was no increase in the payments to Messrs. Butler and
Estrin from FoxMeyer. For Fiscal 1994, the FoxMeyer Board, based upon
the recommendation of the FoxMeyer Compensation Committee, awarded
each Co-Chief
<PAGE>
<PAGE>
Executive Officer a bonus of $137,500 for their contributions in the
rebuilding and restructuring of FoxMeyer's operating businesses and
financial structure, the completion of a number of FoxMeyer's
financing transactions in Fiscal 1994 that have provided FoxMeyer with
greater liquidity at lower cost, the improved profitability
experienced by FoxMeyer in Fiscal Year 1994 and the preparation of
FoxMeyer's three-year strategic plan.
The board of directors of Ben Franklin (the "Ben Franklin Board")
consisted of seven members in Fiscal 1993, including Messrs. Butler,
Estrin, Fantle and Kingon (who were also directors of the Company).
Although Messrs. Butler and Estrin are members of the Ben Franklin
Board, they do not participate in the determination of their annual
fees, bonuses and the grant of Ben Franklin options to them. In May
1992, the Ben Franklin Board approved (without the participation of
Messrs. Butler and Estrin) the payment of $84,000 per annum to each of
them for serving as Co-Chairman of the Board of Ben Franklin in which
capacity each of them would render substantially the same services as
those rendered to FoxMeyer.
SHELDON W. FANTLE (CHAIRMAN)
PAUL M. FINFER
ALFRED H. KINGON
The foregoing report is not incorporated by reference in any
prior or future filings of the Company under the Securities Act of
1933, as amended (the "1933 Act"), or under the Securities Exchange
Act of 1934, as amended (the "1934 Act"), directly or by reference to
the incorporation of proxy statements of the Company, unless the
Company specifically incorporates the report by reference, and the
report shall not otherwise be deemed filed under such Acts.
<PAGE>
<PAGE>
OPTION/SAR GRANTS IN LAST FISCAL YEAR
The Company did not grant options in Fiscal 1994 to any of the
executive officers of the Company named in the Summary Compensation
Table. The following table provides information regarding the options
granted by FoxMeyer and Ben Franklin to certain executive officers of
the Company.
<TABLE>
<CAPTION>
Individual Grants
-------------------------------------------------------------------
Percent of
Total
Options/
Number of SARs
Securities Granted Potential Realizable Value
Underlying to at Assumed Annual Rates
Options/ Employees Exercise or of Stock Price Appreciation
SARs in Fiscal Base Price Expiration for Option Term (A)
Name Granted(#)(B) Year ($/Sh) Date 5%($) 10%($)
------------------- -------------- --------- ----------- --------- ------- ----------
<S> <C> <C> <C> <C> <C> <C>
Grants by FoxMeyer:
Peter B. McKee (B) 60,000 37.5% 12.25 1/16/99 203,067 448,725
Grants by Ben Franklin:
Abbey J. Butler 10,000 (C) 5.0% 5.00 4/27/2001 13,814 30,526
18,000 16.5% 4.50 1/16/2003 22,379 49,451
Melvyn J. Estrin 10,000 (C) 5.0% 5.00 4/27/2001 13,814 30,526
18,000 16.5% 4.50 1/16/2003 22,279 49,451
<FN>
___________________________
<PAGE>
<PAGE>
(A) The potential realizable values set forth under these columns
result from calculations assuming 5% and 10% growth rates as set
by the Commission and are not intended to forecast future price
appreciation of either FoxMeyer Common Stock or Ben Franklin
Common Stock. The amounts reflect potential future value based
upon growth at these prescribed rates. The Company did not use an
alternative formula for a grant date valuation, an approach which
would state gains at present, and therefore lower, value. The
Company is not aware of any formula which will determine with
reasonable accuracy a present value based on future unknown or
volatile factors. Actual gains, if any, on stock option exercises
are dependent on the future performance of FoxMeyer Common Stock
and Ben Franklin Common Stock. There can be no assurance that
the amounts reflected in this table will be achieved.
(B) One-third (1/3) of these options will become exercisable on
January 17, 1995, another 1/3 will become exercisable on January
17, 1996 and the remaining 1/3 will become exercisable on January
17, 1997.
(C) These options were originally granted on April 28, 1992 and
became fully exercisable on April 28, 1994. On December 20,
1993, Ben Franklin extended the expiration date of all non-
incentive stock options granted on April 28, 1992 from April 27,
1997 to April 27, 2001, including those held by Messrs. Butler
and Estrin.
</TABLE>
None of the executive officers named in the Summary Compensation
Table exercised options during Fiscal 1994.
<PAGE>
<PAGE>
LONG-TERM INCENTIVE PLANS - AWARDS IN LAST FISCAL YEAR (A)
<TABLE>
<CAPTION>
Number Performance
of or Other Estimated Future Payouts Under Non-
Shares, Period Stock Price-Based Plans
Units or Until
Other Maturation
Name Rights or Payout Threshold ($)(B) Target ($)(C) Maximum ($)(D)
------ -------- ----------- ---------------- ------------- --------------
<S> <C> <C> <C> <C> <C>
Abbey J. Butler 8.0% 3/31/97 $0 $483,781 $1,342,861
Co-Chairman of the Board and
Co-Chief Executive Officer
Melvyn J. Estrin 8.0% 3/31/97 $0 $483,781 $1,342,861
Co-Chairman of the Board and
Co-Chief Executive Officer
Lawrence J. Pilon (E) 5.0% 3/31/97 --- --- ---
Vice President, Human Resources
(through January 1994)
Peter B. McKee 6.0% 3/31/97 $0 $362,836 $1,007,146
Vice President and
Chief Financial Officer
(effective February 1994)
<FN>
______________________
(A) In April 1993, FoxMeyer adopted a Long-Term Incentive Plan (the
"FoxMeyer LTIP") to motivate and reward sustained improvements in
FoxMeyer's financial performance over a long-term period. Under
the FoxMeyer LTIP, the FoxMeyer Compensation Committee is
authorized to create, from time to time, pools to be funded by
FoxMeyer ("performance pools") for the payment of incentive
payments to participants in the FoxMeyer LTIP upon the attainment
by FoxMeyer of certain
<PAGE>
<PAGE>
earnings and financial parameters. The FoxMeyer Compensation
Committee created the first performance pool in April 1993 (the
"1993 Performance Pool") and it will be funded by FoxMeyer based
on the attainment of sustained annual growth in its earnings
before taxes ("EBT") over a four-year period from Fiscal 1994
through Fiscal 1997. If another performance pool is created
under the FoxMeyer LTIP, amounts to be allocated to the 1993
Performance Pool subsequent thereto may be adjusted based upon
terms and conditions to be established at such time by the
FoxMeyer Compensation Committee.
Under the 1993 Performance Pool, FoxMeyer's EBT target for Fiscal
1994 was $46.1 million, which also served as the EBT starting
point. Because FoxMeyer has achieved its Fiscal 1994 EBT target,
2.5% of FoxMeyer's actual EBT (which was $46.8 million) for
Fiscal 1994 has been allocated to the 1993 Performance Pool.
Thereafter, if FoxMeyer's EBT increases from year to year by at
least 7.5%, a certain percentage of FoxMeyer's EBT (the
"Multiplier") of the just completed fiscal year will be allocated
to the 1993 Performance Pool. The Multiplier is 3% if growth in
FoxMeyer's EBT equals 7.5% but is less than 15%; 4% if growth in
EBT equals 15% but is less than 20%; 5% if growth in EBT equals
20% but is less than 25%; and 7% if growth in EBT is equal to or
greater than 25%. If FoxMeyer's EBT declines from year to year,
dollars will be deducted from the amount allocated to the 1993
Performance Pool based on the same scale, except that in
calculating the amount to be deducted the Multiplier will be
applied to the higher of FoxMeyer's EBT target that year or the
actual EBT.
Messrs. Butler and Estrin were each awarded an 8% share of the
1993 Performance Pool in their capacities as Co-Chairmen of the
Board and Co-Chief Executive Officers of FoxMeyer. Mr. McKee was
awarded 6% of the 1993 Performance Pool in his capacity as Senior
Vice President and Chief Financial Officer of FoxMeyer. Mr.
Massman is not a participant in the FoxMeyer LTIP. The first
payouts from the 1993 Performance Pool may be made after the end
of Fiscal 1995 (of up to 50% of the aggregate amount accumulated
therein) and the final payouts will be made after the end of
Fiscal 1997.
<PAGE>
<PAGE>
(B) If FoxMeyer's EBT after Fiscal 1994 declines each year,
deductions will be made from the 1993 Performance Pool and,
depending upon the magnitude of the decline in EBT each year, the
$1,170,250 allocated to the 1993 Performance Pool for Fiscal 1994
may be reduced to $0 by the end of Fiscal 1997. If this occurs,
the individuals who have been granted shares in the 1993
Performance Pool would receive no payments.
(C) These amounts are provided for illustrative purposes only and are
calculated based on each individual's share in the 1993
Performance Pool and assumes that, after Fiscal 1994, FoxMeyer's
EBT will grow by a factor of 7.5% each year. Based on an assumed
EBT growth rate of 7.5% each year, $1,509,622 would be allocated
by FoxMeyer to the 1993 Performance Pool for Fiscal 1995;
$1,622,844 for Fiscal 1996; and $1,744,557 for Fiscal 1997,
resulting in a hypothetical aggregate amount allocated to the
1993 Performance Pool by the end of Fiscal 1997 of $6,047,273.
There can be no assurances that the EBT growth reflected in the
amounts set forth in this table will be achieved by FoxMeyer.
(D) These amounts are provided for illustrative purposes only and are
calculated based on each individual's share in the 1993
Performance Pool and assumes that, after Fiscal 1994, FoxMeyer's
EBT will grow by a factor of 25% each year. Based on an assumed
EBT growth rate of 25% each year, $4,095,875 would be allocated
by FoxMeyer to the 1993 Performance Pool for Fiscal 1995;
$5,119,843 for Fiscal 1996; and $6,339,804 for Fiscal 1997,
resulting in a hypothetical aggregate amount allocated to the
1993 Performance Pool by the end of Fiscal 1997 of $16,785,772.
There can be no assurances that the EBT growth reflected in the
amounts set forth in this table will be achieved by FoxMeyer.
(E) Mr. Pilon had been awarded a 5% share of the 1993 Performance
Pool in his capacity as Senior Vice President - Administration of
FoxMeyer which he forfeited upon his resignation from FoxMeyer in
January 1994.
</TABLE>
<PAGE>
<PAGE>
PERFORMANCE GRAPH
The following performance graph compares the performance of the
Common Stock, the Standard & Poor's 500 Index and an index of peer
companies selected by the Company (the "Peer Group Index") for the
Company's last five fiscal years. The graph assumes that the value of
the investment in the Common Stock and in each index was $100 on April
1, 1989, and that all dividends were reinvested.
The Company has two operating subsidiaries: FoxMeyer Corporation
("FoxMeyer"), in which the Company owns approximately 80.5% of the
outstanding shares and which contributed approximately 94% of the
Company's net sales in Fiscal 1994, and Ben Franklin Retail Stores,
Inc. ("Ben Franklin"), in which the Company owns approximately 67% of
the outstanding shares and which contributed approximately 6% of the
Company's net sales in Fiscal 1994. The Peer Group Index shown on the
performance graph (which is weighted on the basis of market
capitalization) consists of the Company, FoxMeyer and Ben Franklin;
the following companies which are engaged primarily in the wholesale
drug distribution business: Bergen Brunswig Corporation, Bindley
Western Industries, Inc., Cardinal Distribution, Inc., D&K Wholesale
Drug, Inc., Krelitz Industries, Inc., McKesson Corporation, Moore
Medical Corporation and Owens & Minor, Inc.; and the following
companies which are engaged primarily in the sale of variety and
crafts merchandise: Ambers Stores, Inc. and Michaels Stores, Inc.
[PERFORMANCE GRAPH]
<PAGE>
<PAGE>
<TABLE>
<CAPTION>
FISCAL YEAR ENDED MARCH 31
4/1/89 1990 1991 1992 1993 1994
------ ----- ----- ------ ----- -----
<S> <C> <C> <C> <C> <C> <C>
The Company 100.00 94.93 89.13 77.54 75.63 93.08
S&P 500 Index 100.00 119.27 136.46 151.53 174.60 177.17
Peer Group Index 100.00 106.14 145.05 146.44 147.18 181.76
</TABLE>
The foregoing graph is not incorporated in any prior or future
filings of the Company under the 1933 Act or the 1934 Act, directly or
by reference to the incorporation of proxy statements of the Company,
unless the Company specifically incorporates the graph by reference,
and the graph shall not otherwise be deemed filed under such Acts.
COMPLIANCE WITH SECTION 16(A) OF
THE SECURITIES EXCHANGE ACT OF 1934
Section 16(a) of the 1934 Act ("Section 16(a)"), requires the
Company's directors, executive officers and persons who beneficially
own more than 10% of a registered class of the Company's equity
securities ("10% Owners") to file reports of beneficial ownership of
the Company's securities and changes in such beneficial ownership with
the Commission. Directors, executive officers and 10% Owners are also
required by rules promulgated by the Commission to furnish the Company
with copies of all forms they file pursuant to Section 16(a).
<PAGE>
<PAGE>
Based solely upon a review of the copies of the forms filed
pursuant to Section 16(a) furnished to the Company, or written
representations that no year-end Form 5 filings were required for
transactions occurring during Fiscal 1994, the Company believes that
its directors, executive officers and 10% Owners complied with Section
16(a) filing requirements applicable to them during Fiscal 1994.
EMPLOYMENT AGREEMENTS
Effective October 24, 1991, the Company entered into employment
agreements with each of Messrs. Butler and Estrin pursuant to which
they each agreed to serve as Co-Chief Executive Officers of the
Company through October 31, 1994 at a minimum annual base salary of
$350,000, subject to periodic increases by the Board of Directors. The
Co-Chief Executive Officers are also entitled to participate in the
benefits generally available to senior executives of the Company and
to receive such other amounts as the FoxMeyer Board or any other
entity controlled by the Company may authorize. For additional
compensation received by Messrs. Butler and Estrin, see the Summary
Compensation Table on page 10 and Note D thereto.
In addition to base salary, Messrs. Butler and Estrin have each
been granted, as an incentive bonus under their employment agreements,
options to purchase 440,000 shares of Common Stock at an exercise
price of $15.00 per share (the average price per share of Common Stock
on the effective date of the employment agreements), which options
were approved by the Company's stockholders at the annual meeting in
1992 (the "Bonus Award Options").
All of the Bonus Award Options are presently exercisable and will
expire on October 31, 1994, unless the executive's employment is
terminated for just cause, in which event the right to exercise any
unexercised Bonus Award Options will terminate. The options contain
anti-dilution provisions to maintain the percentage ownership
represented by the shares issuable upon exercise thereof and are not
transferrable (other than by will or the laws of descent and
distribution). However, each Co-Chief Executive Officer has certain
rights to
<PAGE>
<PAGE>
have the Company register his or his transferee's shares of Common
Stock issuable upon exercise of Bonus Award Options and to pay the
expenses incurred in connection therewith.
If either executive is removed without his consent as Co-Chairman
of the Board or Co-Chief Executive Officer of the Company, or if
either executive dies or becomes permanently or totally disabled
during the term of the employment agreements, each executive (or his
estate, as the case may be) is entitled to exercise his Bonus Award
Options.
Mr. McKee, the Vice President and Chief Financial Officer of the
Company, has an employment agreement with FoxMeyer Corporation in his
capacity as Senior Vice President and Chief Financial Officer of
FoxMeyer which expires on January 14, 1997. Under the terms of the
agreement, Mr. McKee's minimum annual base salary may not be less than
his annual base salary as of January 15, 1994 (which was $200,000 per
annum). If Mr. McKee's employment with FoxMeyer is terminated for any
reason other than for cause, Mr. McKee will be entitled to receive
monthly severance payments equivalent to his monthly base salary in
effect at the time of termination for a period equal to the longer of
the remaining term of his employment agreement or one year.
CERTAIN TRANSACTIONS
Transactions with FoxMeyer
The Loan. In November 1992, the Company and FoxMeyer completed a
joint tender offer (the "Offer") for 3,300,000 shares (the "Shares")
of FoxMeyer Common Stock at $13.50 per share, net in cash to the
seller. Three million three hundred thousand Shares were purchased
pursuant to the Offer, with the Company and FoxMeyer each purchasing
1,650,000 Shares. As a result of the Offer, the Company presently owns
approximately 80.5% of the outstanding shares of FoxMeyer Common
Stock.
The funds to purchase the Shares were provided from borrowings
under FoxMeyer's existing bank credit facility, which was amended in
October 20, 1992 to permit the use of
<PAGE>
<PAGE>
such borrowings to pay for the Shares in the Offer. Among other
things, this amendment allowed FoxMeyer, pursuant to a Loan Agreement
dated as of November 25, 1992, to lend the Company up to $30,000,000
(the "Loan") to be used by the Company to purchase its portion of the
Shares pursuant to the Offer, to pay its portion of related fees and
expenses and to provide additional funds for general corporate
purposes and working capital requirements.
Under the terms of the Loan, the Company borrowed $22,300,000 to
finance the Company's portion of the Offer and to pay related fees and
expenses. Additionally, the Company may borrow up to an additional
$7,700,000 for general purposes, working capital requirements and
additional tender offer expenses. The entire principal amount of the
Loan is due on November 25, 1997. Effective as of July 1, 1993,
interest on the Loan will be 9.09% per annum (which is equal to 2.0%
over the interest rate that FoxMeyer pays on its Senior Notes due
April 15, 2005 (the "Senior Notes")). If the Senior Notes are no
longer outstanding, interest on the Loan will be adjusted each
calendar quarter to equal the sum of 2.0% plus the annual interest
rate in effect on the first day of each such calendar quarter under
the loan having the longest-term maturity date under FoxMeyer's then
existing credit facilities. The Loan is secured by a pledge by the
Company of 4,500,000 shares of FoxMeyer Common Stock.
Tax Sharing Agreement. Pursuant to the Offer, the Company
increased its ownership of FoxMeyer Common Stock to more than 80% of
the outstanding shares. As a result, FoxMeyer and the Company are
able to consolidate for federal income tax purposes. As members of the
Company's consolidated tax group (the "NII Consolidated Group"),
FoxMeyer and each of its subsidiaries file a consolidated federal
income tax return with the Company. As members of the NII Consolidated
Group, FoxMeyer and each of its subsidiaries are severally liable for
all federal income tax liabilities of every member of the NII
Consolidated Group for years during which FoxMeyer and its
subsidiaries are members of such group. The Company and FoxMeyer have
entered into a Tax Sharing Agreement, dated as of November 25, 1992
(the "Tax Sharing Agreement"), which relates to the payment of taxes
and certain related matters effective for periods following the
closing of the Offer. During the term of the Tax Sharing Agreement,
FoxMeyer will be obligated to pay to
<PAGE>
<PAGE>
the Company an amount equal to those federal income taxes FoxMeyer
would have incurred if, subject to the exceptions described below,
FoxMeyer (on behalf of itself and its subsidiaries) had filed a
separate federal income tax return. If a Potential Default or Event of
Default (as defined in FoxMeyer's bank credit facility or replacement
thereof) occurs or is reasonably likely to occur thereunder or if, in
general, net income of FoxMeyer and its subsidiaries was not positive
for the preceding year, the amount of the payments made by FoxMeyer
under the Tax Sharing Agreement may not exceed the amount of the
federal income taxes actually payable by the Company until such time
as such Potential Default or Event of Default is cured, or net income
is positive, at which time any amounts otherwise payable under the Tax
Sharing Agreement will be paid. Further, under the Tax Sharing
Agreement, the Company will compensate FoxMeyer to the extent a tax
attribute of FoxMeyer is used to reduce the amount of federal income
taxes that otherwise would have been paid by the Company. Any tax
attributes for which FoxMeyer is so compensated will not be available
to FoxMeyer to reduce amounts owing to the Company under the Tax
Sharing Agreement. The Tax Sharing Agreement provides for analogous
principles to be applied to any consolidated, combined or unitary
state or local taxes. In Fiscal 1994, FoxMeyer paid the Company
$7,700,000 pursuant to the Tax Sharing Agreement.
Management Agreement. The Company and FoxMeyer are parties to a
management agreement pursuant to which certain management and
administrative personnel of FoxMeyer perform certain functions for the
Company, including general management, financial, legal, computer,
public and investor relation and administrative services. Effective
January 1, 1992, the Company has paid a quarterly fee of $175,000 to
FoxMeyer for providing such services. The management fee is intended
to approximate the personnel and overhead costs to FoxMeyer of
providing such services and is subject to increase or decrease in the
event of a change of circumstances that materially affects the
quantity of services provided by FoxMeyer to the Company or the cost
to FoxMeyer of providing such services.
Other Transactions
National Intergroup Realty Corporation ("NIRC") and National
Intergroup Realty Development, Inc. ("NIRD") are wholly-owned
subsidiaries of the Company engaged in the
<PAGE>
<PAGE>
activity of buying, holding, operating and disposing of real estate
assets put up for bid by the Resolution Trust Corporation and other
financial institutions.
The business activities of NIRC and NIRD are typically conducted
through joint ventures (the "Joint Ventures") in which NIRC or NIRD
holds a 50% general partner's interest. In general, the terms of the
partnership agreements governing the Joint Ventures provide for either
NIRC or NIRD to receive a preferred return on its investment (ranging
from 12% to 18%) until its investment is returned in full and 50% of
all subsequent distributions. The managing general partner of each of
the Joint Ventures is an affiliate of The Bernstein Companies, a real
estate development firm based in Washington, D.C.
Mr. Estrin, who is a director and the Co-Chief Executive Officer
of the Company, is a director of NIRC and NIRD. Wilma E. Bernstein,
who is Mr. Estrin's sister, and Stuart A. Bernstein, who is Mr.
Estrin's brother-in-law, are owners of The Bernstein Companies.
In Fiscal 1994 and 1993, NIRC and NIRD invested an aggregate of
$8,566,777 in the Joint Ventures. As of March 31, 1994, NIRC and NIRD
had recouped $3,969,440 of their investment in the Joint Ventures.
In Fiscal 1994, NIRC purchased for $2,000,000 a $2,800,000 note
secured by real property from Chemical Bank. The borrower on the note
is RCHLP Limited Partnership, the sole general partner of which is Z
Investors, Inc. (formerly Bernstein Investments, Inc.), a corporation
which is owned solely by Stuart Bernstein. Mr. Bernstein is also a
guarantor of the note. Wilma Bernstein has purchased a $800,000
participation in the note from NIRC, thereby reducing NIRC's
investment in the note to $1,200,000.
PROPOSAL TWO: AMENDMENT OF RESTATED CERTIFICATE OF
INCORPORATION TO INCREASE THE AUTHORIZED PREFERRED STOCK
The Board of Directors has unanimously approved an amendment to
the Restated Certificate of Incorporation of the Company to increase
by 10,000,000 shares the number of
<PAGE>
<PAGE>
shares of Preferred Stock that the Company is authorized to issue.
The terms of any such Preferred Stock, including dividend rates,
conversion prices, voting rights, redemption prices and maturity
dates, would be determined by the Board of Directors at the time of
issuance, without the necessity for further action or authorization by
stockholders (unless required in a specific case by applicable law or
the rules of the New York Stock Exchange).
The Restated Certificate of Incorporation currently authorizes
the Company to issue 10,000,000 shares of Preferred Stock with such
voting rights, and with such designations, other rights, preferences
and limitations as may be established by the Board of Directors. If
the proposed amendment is approved, the Restated Certificate of
Incorporation would be amended to authorize the Company to issue a
total of 20,000,000 shares of Preferred Stock. The Board of Directors
has previously established three series of Preferred Stock, thus
utilizing virtually all the previously authorized shares of Preferred
Stock either through issuance of shares or by setting aside such
shares for future issuance.
The Board of Directors believes that the authorization of an
additional 10,000,000 shares of Preferred Stock is desirable because
of the flexibility afforded to the Company through its ability to
utilize preferred stock in connection with acquisition or financing
transactions. The Company does not presently have any specific plans
to issue additional shares of Preferred Stock.
All series of the Preferred Stock have preference over the Common
Stock with respect to dividends and other distributions and
liquidation of the Company and no shares of Common Stock may be
repurchased or redeemed while there is any arrearage in the payment of
dividend or sinking fund installments on any outstanding shares of
Preferred Stock.
The only voting rights required by the Restated Certificate of
Incorporation (or by Delaware law) are (i) the consent of holders of
at least a majority of all outstanding shares of Preferred Stock,
regardless of series, is required to increase or decrease the par
value of the Preferred Stock ($5 par value per share) and (ii) the
consent of at least a majority of the outstanding shares of any series
is required to alter or change the powers, preferences or special
rights of such series of Preferred Stock so as to adversely affect the
holders thereof.
<PAGE>
<PAGE>
Notwithstanding the foregoing, because the voting and other
rights of the authorized but unissued Preferred Stock would be fixed
by the Board of Directors at the time of issuance, the issuance of
such stock could create impediments to persons seeking to effect a
merger or otherwise to gain control of the Company. Certain existing
provisions of the Company's Restated Certificate of Incorporation and
By-laws contain provisions which could have the effect of delaying,
deferring or preventing a change in control of the Company in the
event of an extraordinary corporate transaction involving the Company.
These provisions are summarized below.
The By-laws and the Restated Certificate of Incorporation provide
that each director will serve for a three-year term and that
approximately one-third of the directors are to be elected annually.
Therefore, it would take two annual meetings of stockholders to change
the majority of the members of the Board of Directors. The
affirmative vote of the holders of at least 80% of the voting power of
the outstanding shares entitled to vote in an election of directors
(the "Voting Stock"), is required to amend, repeal or adopt any
provision inconsistent with the provisions relating to the staggered
Board of Directors.
The Restated Certificate of Incorporation contains provisions
(the "Fair Price Provisions"), which require the approval of holders
of at least 80% of the Voting Stock as a condition to certain
specified business combinations with, or proposed by, a stockholder
who is the beneficial owner of 10% or more of the outstanding Voting
Stock of the Company (an "Interested Stockholder"), except where the
transaction (i) has been approved by a majority of directors who are
not affiliated with the Interested Stockholder or (ii) meets certain
minimum price criteria and procedural conditions. The affirmative
vote of the holders of 80% or more of the Voting Stock is required to
amend, repeal or adopt any provisions which are inconsistent with the
Fair Price Provisions.
All other provisions of the Restated Certificate of Incorporation
may be amended by the affirmative vote of holders of at least two-
thirds of the Voting Stock at a stockholders' meeting called for that
purpose.
<PAGE>
<PAGE>
In addition, any sale, lease or exchange of all of the property
or assets of the Company (other than one proposed by, or with, an
Interested Stockholder) requires the affirmative vote of holders of at
least two-thirds of the Voting Stock.
The Board of Directors is not aware of any plans by others to
seek control of the Company and believes that a takeover attempt would
be unlikely under present circumstances.
Recommendation and Vote Required
The Board of Directors unanimously recommends a vote FOR Proposal
Two. Adoption of the proposed amendment to the Restated Certificate
of Incorporation to increase the number of authorized shares of
Preferred Stock requires the affirmative vote of the holders of two-
thirds of the outstanding shares of Common Stock. Abstentions and
broker non-votes will not be counted as an affirmative vote for this
proposal. If Proposal Two is adopted, the Company's Restated
Certificate of Incorporation will be amended accordingly.
STOCKHOLDER NOMINATIONS AND PROPOSALS FOR 1995
Stockholders intending to submit names of nominees for election
to the Board of Directors at any annual meeting must comply with
Section 12A of the Company's By-laws which requires, among other
things, notice to the Secretary of the Company 45 days in advance of
such meeting.
Any proposals intended to be presented to stockholders at the
Company's 1995 Annual Meeting of Stockholders must be received by the
Company for inclusion in the proxy statement for such annual meeting
by March 2, 1995.
<PAGE>
<PAGE>
GENERAL
As of the date of this Proxy Statement, management does not
intend to present at the Annual Meeting, and has no knowledge that
others will present, any matters other than the matters set forth in
the Notice of Annual Meeting of Stockholders. If any other matters
should properly come before the Annual Meeting, the persons named in
the accompanying proxy will vote on such matters in accordance with
their own judgment.
Deloitte & Touche served as independent auditors for the Company
for the fiscal year ended March 31, 1994 and will continue in that
capacity for the fiscal year ending March 31, 1995. Representatives of
Deloitte & Touche will be present at the Annual Meeting. It is not
expected that such representatives will make a statement at the Annual
Meeting, but they will have an opportunity to make a statement if they
so desire and will be available to respond to appropriate questions
from stockholders.
Proxies in the form enclosed are solicited by or on behalf of the
Board of Directors. The Company will bear the cost of preparing,
assembling and mailing material in connection with this solicitation
of proxies and may reimburse persons holding stock in their names or
those of their nominees for their expenses in sending solicitation
material to their principals.
<PAGE>
<PAGE>
IT IS IMPORTANT THAT PROXIES BE RETURNED PROMPTLY. THEREFORE,
STOCKHOLDERS ARE URGED TO SIGN, DATE AND RETURN THE ENCLOSED PROXY
CARD IN THE ACCOMPANYING STAMPED AND ADDRESSED ENVELOPE.
By Order of the Board of Directors,
Elizabeth T. Ching
Assistant Secretary
Carrollton, Texas
July 1, 1994
<PAGE>
<PAGE>
NATIONAL INTERGROUP, INC.
Proxy for Annual Meeting of Stockholders on August 10, 1994
The undersigned, revoking any proxy heretofore given, hereby
constitutes and appoints Messrs. Abbey J. Butler, Melvyn J. Estrin and
Peter B. McKee, and each of them, with full power of substitution, as
proxies to vote all of the shares of the Common Stock of the Company
registered in the name of the undersigned at the close of business on
June 30, 1994, at the Annual Meeting of Stockholders of the Company to
be held on Wednesday, August 10, 1994, at 8:30 a.m., Central Daylight
Savings Time (the "Annual Meeting"), at the Four Seasons Hotel, 4150
North MacArthur Blvd., Irving, Texas 75038, and at any adjournment or
postponement thereof, upon the matters described in the Notice of
Annual Meeting and Proxy Statement dated July __, 1994, receipt of
which is hereby acknowledged, and upon any other business that may
properly come before the Annual Meeting.
Unless a contrary direction is indicated, the shares represented
by this Proxy will be voted FOR all nominees listed for election as
directors and FOR Proposal Two, as more specifically set forth in the
Proxy Statement. If specific instructions are indicated, this Proxy
will be voted in accordance therewith.
At their discretion, the proxies are authorized to transact such
other business as may properly come before the Annual Meeting or any
adjournment or postponement thereof.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR ALL NOMINEES
FOR ELECTION AS DIRECTORS AND FOR PROPOSAL TWO.
<PAGE>
<PAGE>
1. ELECTION OF SHELDON W. FANTLE AS DIRECTOR TO SERVE UNTIL 1997
____ FOR ____ WITHHELD
2. PROPOSAL TWO: To approve an amendment to the Company's Restated
Certificate of Incorporation to increase the authorized Preferred
Stock.
____ FOR ____ AGAINST ____ WITHHELD
Please sign below exactly as name
or names appear on this Proxy. If
the shares are registered in the
names of joint tenants or trustees,
each should sign. Executors,
administrators, trustees,
guardians, attorneys-in-fact,
corporate officers, general
partners and other persons acting
in a representative capacity should
add their full titles.
PLEASE SIGN, DATE AND MAIL THIS DATED: __________________, 1994
PROXY IN THE ENVELOPE PROVIDED;
POSTAGE IS NOT NECESSARY IF
MAILED IN THE UNITED STATES. ____________________________________
____________________________________
Signature(s) of Stockholder(s)
