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 (S) 240.14a-11(c) or (S) 240.14a-12
CARRINGTON LABORATORIES, 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):
No fee required.
Fee computed on table below per Exchange Act Rules 14a-6(i)(1) 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>
CARRINGTON LABORATORIES, INC.
2001 Walnut Hill Lane
Irving, Texas 75038
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
To Be Held On May 22, 1997
NOTICE is hereby given that the annual meeting of
shareholders of CARRINGTON LABORATORIES, INC. (the "Company") will be
held on May 22, 1997, at 9:00 a.m., local time, at the Las Colinas
Country Club, 4900 North O'Connor Boulevard, Irving, Texas 75062, for
the following purposes:
(1) To elect three persons to serve as directors of the
Company for terms expiring at the annual meeting of
shareholders in 2000;
(2) To approve the appointment of Ernst & Young LLP as
independent public accountants for the Company for the
fiscal year ending December 31, 1997; and
(3) To transact such other business as may properly come
before the meeting or any adjournment thereof.
Only shareholders of record at the close of business on
March 28, 1997 are entitled to notice of and to vote at the meeting or
any adjournment thereof. A record of the Company's activities during
1996 and financial statements for the fiscal year ended December 31,
1996 are contained in the accompanying 1996 Annual Report.
You are urged, whether or not you plan to attend the
meeting in person, to mark, sign and date the enclosed proxy and return
it promptly in the accompanying envelope. If you do attend the meeting
in person, you may withdraw your proxy and vote in person. The prompt
return of proxies will assure the representation of sufficient shares
to take the actions described above and save your Company the expense
of further solicitation.
By Order of the Board of Directors
George DeMott
Chairman of the Board
Irving, Texas
April 15, 1997
<PAGE>
CARRINGTON LABORATORIES, INC.
2001 Walnut Hill Lane
Irving, Texas 75038
(214) 518-1300
PROXY STATEMENT
For Annual Meeting of Shareholders
To Be Held On May 22, 1997
This Proxy Statement is furnished to shareholders of
Carrington Laboratories, Inc., a Texas corporation (the "Company"), in
connection with the solicitation of proxies by the Board of Directors
of the Company for use at the annual meeting of shareholders to be held
on May 22, 1997. Proxies in the form enclosed will be voted at the
meeting if properly executed, returned to the Company prior to the
meeting and not revoked. A proxy may be revoked at any time before it
is voted by giving written notice or a duly executed proxy bearing a
later date to the President of the Company, or by voting in person.
The approximate date on which this Proxy Statement and the
accompanying proxy are first being sent to shareholders is April 21,
1997.
OUTSTANDING CAPITAL STOCK
The record date for the determination of shareholders
entitled to notice of and to vote at the annual meeting is March 28,
1997 (the "Record Date"). At the close of business on the Record Date,
the Company had 8,873,634 shares of Common Stock, $.01 par value
("Common Stock"), issued and outstanding and entitled to vote at the
meeting.
ACTION TO BE TAKEN AT THE MEETING
Shares represented by a validly executed proxy in the
accompanying form, unless the shareholder otherwise specifies in the
proxy, will be voted (i) for the election of the three persons named as
nominees under the caption Election of Directors as directors of the
Company, (ii) for the approval of the appointment by the Company's
Board of Directors of Ernst & Young LLP as the Company's independent
public accountants for the fiscal year ending December 31, 1997, and
(iii) at the discretion of the proxy holders, on any other matter that
may properly come before the meeting or any adjournment thereof.
Where shareholders have appropriately specified how their
proxies are to be voted, they will be voted accordingly. If any other
matter or business is brought before the meeting, the proxy holders may
vote the proxies at their discretion. The directors do not know of any
such other matter or business to be presented for consideration.
QUORUM AND VOTING
The presence, in person or by proxy, of the holders of a
majority of the shares of Common Stock outstanding as of the Record
Date is necessary to constitute a quorum at the annual meeting. In
deciding all questions, a holder of Common Stock is entitled to one
vote, in person or by proxy, for each share held in such holder's name
on the Record Date.
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PRINCIPAL SHAREHOLDERS
The following table sets forth certain information as of
March 28, 1997, unless otherwise indicated, with respect to the
shareholders known by the Company to own beneficially more than five
percent of the outstanding shares of Common Stock of the Company, based
on the information available to the Company on such date. Except as
otherwise indicated, each shareholder named in the table has sole
voting and investment power with respect to all shares indicated as
being beneficially owned by such shareholder.
Shares of
Common Stock Percent
Beneficial Owner Beneficially Owned of Class
----------------- ------------------ --------
Thomas J. Marquez 803,690(1) 9.0%
c/o Carrington Laboratories, Inc.
2001 Walnut Hill Lane
Irving, Texas 75038
John C. Oxley 718,800(2)(3)(4) 8.1%
One West 3rd Street
Williams Center Tower I
Suite 1300
Tulsa, Oklahoma 74103
Thomas E. Oxley 699,800(3)(4)(5) 7.9%
One West 3rd Street
Williams Center Tower I
Suite 1305
Tulsa, Oklahoma 74103
Charles C. Killin 661,500(2)(6) 7.5%
15 East 5th Street
Suite 2400
Tulsa, Oklahoma 74103
_________________________
(1) Includes 39,300 shares held in a trust controlled by Mr.
Marquez and 16,350 shares that he has the right to acquire
pursuant to presently exercisable options.
(2) Based on a report on Schedule 13D dated February 20, 1997
filed by John C. Oxley with the Securities and Exchange
Commission. John C. Oxley may be deemed to have
beneficial ownership of 627,500 shares of the Company's
Common Stock held by him as a Co-Executor of the Estate of
John T. Oxley, 23,000 shares held by him as a Co-Trustee
of the Oxley Foundation, and 68,300 shares held of record
by Boca Polo, Inc., a Nevada corporation of which he owns
50% of the outstanding shares. With respect to the 23,000
shares held by him as a Co-Trustee of the Oxley
Foundation, John C. Oxley shares voting and dispositive
powers with Mary Jane Oxley Tritsch.
(footnoes continued on following page)
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(3) John C. Oxley, Thomas E. Oxley and Charles C. Killin share
voting and dispositive powers with respect to, and
disclaim beneficial ownership of, the 627,500 shares of
the Company's Common Stock held by them as Co-Executors of
the Estate of John T. Oxley.
(4) John C. Oxley and Thomas E. Oxley share voting and
dispositive powers with respect to the 68,300 shares of
the Company's Common Stock owned by Boca Polo, Inc.
(5) Based on a report on Schedule 13D dated February 20, 1997
filed by Thomas E. Oxley with the Securities and Exchange
Commission. Thomas E. Oxley individually owns 4,000
shares of the Company's Common Stock and may be deemed to
have beneficial ownership of 627,500 shares held by him as
a Co-Executor of the Estate of John T. Oxley, and 68,300
shares held of record by Boca Polo, Inc., a Nevada
corporation of which he is a director and owns 50% of the
outstanding shares.
(6) Based on a report on Schedule 13D dated February 24, 1997
filed by Charles C. Killin with the Securities and
Exchange Commission. Mr. Killin may be deemed to have
beneficial ownership of 627,500 shares of the Company's
Common Stock held by him as a Co-Executor of the Estate of
John T. Oxley, 11,500 shares held by him as the Trustee of
the Mary Jane Tritsch Trust, and 22,500 shares held by him
as the Trustee of the Thomas E. Oxley Trust.
The Company knows of no arrangements the operation of
which may at a subsequent date result in a change of control of the
Company.
REQUIRED AFFIRMATIVE VOTE AND VOTING PROCEDURES
With regard to the election of directors, votes may be
cast in favor of or withheld from each nominee. The three nominees who
receive a plurality of the votes cast by shareholders present or
represented by proxy at the annual meeting, and entitled to vote on the
election of directors, will be elected as directors of the Company.
Thus, any abstentions, broker non-votes or other limited proxies will
have no effect on the election of directors, provided a quorum is
present at the meeting.
The Company's Bylaws provide that the vote required to
approve matters other than the election of directors is the affirmative
vote of the holders of a majority of the shares entitled to vote on the
matter and present or represented by proxy at the meeting. Abstentions
may be specified on all proposals except the election the directors and
will be counted as present for purposes of determining the existence of
a quorum regarding the item on which the abstention is noted.
Accordingly, abstentions with respect to the proposal to approve the
appointment of independent public accountants will effectively count as
votes against that proposal. Under applicable law and the Company's
Articles of Incorporation and Bylaws, shares represented by a broker
non-vote or other limited proxy will not be counted as present and
therefore will have no effect on the outcome of the proposal to approve
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the appointment of independent public accountants, provided a quorum is
present at the meeting.
ELECTION OF DIRECTORS
The Company's Bylaws provide that the Company's operations
will be governed by the Board of Directors, which is elected by the
shareholders. The Company's Board of Directors is divided into three
classes with staggered three-year terms. All directors of one class
hold their positions until the annual meeting of shareholders at which
the terms of the directors in such class expire and their respective
successors are elected and qualified, or until their earlier death,
resignation, disqualification or removal from office. The Company's
Bylaws provide that the number of directors shall not be less than five
nor greater than nine, and the exact number of directors that shall
constitute the Board of Directors shall be fixed from time to time by
resolution of the Board. The Board of Directors has determined that
the number of directors will be seven.
All duly submitted and unrevoked proxies will be voted for
the nominees selected by the Board of Directors, except where
authorization to so vote is withheld. If any nominee should become
unavailable for election for any presently unforeseen reason, the
persons designated as proxies will have full discretion to vote for
another person designated by the Board.
The Board of Directors has nominated George DeMott, Robert
A. Fildes, Ph.D., and Carlton E. Turner, Ph.D., D.Sc. for election at
the annual meeting as directors to serve three-year terms expiring in
2000. Mr. DeMott, Dr. Fildes and Dr. Turner are currently directors of
the Company, with terms expiring at the 1997 annual meeting, and each
has consented to serve as a director if elected. The four other
directors of the Company have been elected to terms that do not expire
at the 1997 annual meeting. Thomas J. Marquez and Selvi Vescovi are
currently serving terms expiring in 1998, and R. Dale Bowerman and
James T. O'Brien are currently serving terms expiring in 1999.
Information about all seven directors of the Company, including the
current nominees, is set forth in the following paragraphs.
R. DALE BOWERMAN, 57, has served as a director of the
Company since January 1991. Mr. Bowerman has been President and Chief
Executive Officer of Southwest Health Alliances, L.L.C., since May
1994. From 1973 to April 1994, he was Chief Financial Officer of High
Plains Baptist Health Systems, a nonprofit hospital system.
GEORGE DEMOTT, 64, has served as a director of the Company
since May 1990 and Chairman of the Board since April 1995. He has been
an independent business consultant since 1987. From 1963 to 1987, Mr.
DeMott held various positions with American Home Products Corporation,
a worldwide marketer of pharmaceuticals, over-the-counter drugs and
household products, serving as Group Vice President from 1978 to 1987.
From 1964 to 1978, Mr. DeMott was with the Whitehall Laboratories
Division of that corporation, and he served as President of that
division from 1974 until 1978.
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<PAGE>
ROBERT A. FILDES, Ph.D., 58, has served as a director of
the Company since March 1991. Since February 1993, he has been
Chairman of the Board and Chief Executive Officer of Scotgen
Biopharmaceuticals Inc., a biotechnology company. From August 1990 to
January 1993, he was an independent business consultant in the
pharmaceutical industry. Dr. Fildes was President and Chief Executive
Officer of Cetus Corporation, a biopharmaceutical company, from 1982 to
1990. From 1980 to 1982, he was President of Biogen, Inc., the United
States subsidiary of Biogen, N.V., Geneva, Switzerland. Prior to
joining Biogen, Dr. Fildes was Vice President of Operations for the
Industrial Division of Bristol-Myers Company. Dr. Fildes is also a
director of the following biopharmaceutical companies: La Jolla
Pharmaceutical Co., a publicly traded company; Scotgen
Biopharmaceuticals Inc., a private company; and Jenner Technologies
Inc., a private company.
THOMAS J. MARQUEZ, 59, has served as a director of the
Company since August 1987. In addition, from August 1987 until May
1990, Mr. Marquez was Chairman of the Board and Chief Executive Officer
of the Company. From 1965 to 1979, Mr. Marquez was an officer of
Electronic Data Systems, Inc., a computer services company, and he
served as a director of that corporation from 1965 to 1984. Since his
resignation as an officer of Electronic Data Systems, he has been
engaged primarily in personal investment activities and a number of
public service projects. Mr. Marquez is also a director of Aquinas
Funds, Inc.
JAMES T. O'BRIEN, 58, has served as a director of the
Company since June 1992. Since September 1996, Mr. O'Brien has been
President and Chief Executive Officer of O'Brien Marketing and
Communications. In addition, Mr. O'Brien has been Chairman of the
Board of Access Corporation, a designer of human resources software,
since September 1991. Mr. O'Brien was President and Chief Operating
Officer of Elan Corporation, PLC, a pharmaceutical company, from 1989
to 1991. From 1986 to 1989, he was President and Chief Executive
Officer of O'Brien Pharmaceuticals, Inc. From 1980 to 1986, Mr.
O'Brien held various positions with Revlon Health Care Group, including
President of USV Laboratories and Armour Pharmaceutical Company. Mr.
O'Brien is also a director of Theratech, Inc., a publicly traded
company; of Palatin Technologies, Inc., a publicly traded company; and
of Cydex, Inc., a private drug development company.
CARLTON E. TURNER, Ph.D., D.Sc., 56, has served as a
director of the Company since May 1989 and as President and Chief
Executive Officer of the Company since April 1995. In addition, from
January 1994 to November 1994, Dr. Turner was Executive Vice President
of the Company and from November 1994 to April 1995 he was Chief
Operating Officer of the Company. He was President and Chief Executive
Officer of Princeton Diagnostic Laboratories of America, Inc., a
biomedical and pharmaceutical testing laboratory, from 1987 through May
1993. He also served as a director of that corporation from 1987 to
January 1994. From 1981 through 1987, he was Director of the Drug
Abuse Policy Office of the White House, President Reagan's principal
advisor on drug abuse policy. From 1970 to 1981, Dr. Turner was a
research professor and director of the Research Institute of
Pharmaceutical Sciences at the University of Mississippi School of
Pharmacy.
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<PAGE>
SELVI VESCOVI, 66, has served as a director of the Company
since May 1989. Mr. Vescovi served as Chairman of the Board from May
1990 to April 1995. In addition, Mr. Vescovi served as interim
President and Chief Executive Officer of the Company from March 1995 to
April 1995. He was employed by The Upjohn Company ( Upjohn ), a
manufacturer of human pharmaceuticals and pharmaceutical chemicals, in
various capacities from 1954 until his retirement in 1988 from his
positions as Corporate Vice President of Upjohn, a position he had held
since 1977, and President and General Manager of Upjohn International,
Inc., the subsidiary of Upjohn responsible for international
operations. He had held the latter position since 1985. Following his
retirement, Mr. Vescovi served as Adjunct Professor, International
Management, at Western Michigan University from 1988 to 1993 and as a
member of the Advisory Board of the College of Business Administration
of the University of South Carolina from 1988 to 1994. Mr. Vescovi is
also a director of Centaur Pharmaceutical, Inc., a private company.
The business and affairs of the Company are managed by the
Board of Directors, which exercises all corporate powers and
establishes corporate policies. The Board has established an Executive
Committee which may exercise all (except in certain cases) the
authority and powers of the Board of Directors in the business and
affairs of the Company when the Board of Directors is not in session.
The current members of the Executive Committee are Selvi Vescovi
(Chairman), George DeMott and Carlton E. Turner, Ph.D, D.Sc. The Board
has established an Audit Committee for the purposes of reviewing the
results and scope of, and the fees for, the annual audit, reviewing the
financial statements and any significant transactions or events and any
changes in accounting principles and practices with the independent
auditors, and reviewing the internal controls and audit procedures of
the Company. The current members of the Audit Committee are Robert A.
Fildes (Chairman), James T. O'Brien and R. Dale Bowerman. The Board
does not have a standing nominating committee. The Compensation and
Stock Option Committee (the "Compensation Committee") serves as a
compensation committee and makes recommendations to the Board with
respect to compensation of executive officers of the Company. The
current members of the Compensation Committee are James T. O'Brien
(Chairman), George DeMott and Robert A. Fildes, Ph.D. During fiscal
1996, the Board of Directors held ten meetings, the Executive Committee
held five meetings, the Audit Committee held two meetings and the
Compensation Committee held three meetings. All incumbent directors
attended at least 75% of the meetings held by the Board and the
committees on which they served during 1996.
EXECUTIVE OFFICERS
The executive officers of the Company are Carlton E.
Turner, Ph.D., D.Sc., David G. Shand, M.D., Ph.D., Christopher S.
Record, V. Kirkland Meares, Luiz F. Cerqueira and Sheri L. Pantermuehl.
Biographical information for Dr. Turner is set forth under "Election of
Directors" above.
Luiz F. Cerqueira, 49, has been employed by the Company
since August 1993, as Vice President, Manufacturing/Operations. From
1989 to 1993, Mr. Cerqueira was the Vice President, Pharmaceutical
Manufacturing, for Centocor, Inc., with assignment in the Netherlands.
From 1984 to 1989, Mr. Cerqueira was employed by Schering-Plough
Corporation in Manati, Puerto Rico, where he served as Operations
Director from 1988 to 1989, Materials Manager from 1986 to 1988, and
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Antibiotics Plant Manager from 1984 to 1986. From 1981 to 1984, Mr.
Cerqueira was employed by Schering-Plough in Rio De Janeiro, Brazil,
serving as Industrial Director from 1983 to 1984 and as Chemical &
Biochemical Plants Manager from 1981 to 1983. From 1975 to 1980, Mr.
Cerqueira was employed by American Cyanamid in Brazil, where he served
as Materials Manager from 1980 to 1981, Medical Products Plant Manager
from 1978 to 1980, Antibiotic Production Manager from 1976 to 1978 and
Antibiotic Production Assistant Manager in 1975. From 1973 to 1975,
Mr. Cerqueira was employed by Johnson & Johnson, Sao Paulo, Brazil, as
Sutures Production General Supervisor.
V. Kirkland Meares, 53, has been Vice President, Sales and
Marketing of the Company since April 1996. In addition, he has been an
independent manufacturer's representative for Carrington since 1984.
From 1967 to 1984, he was primarily a practicing pharmacist in Alabama.
Sheri L. Pantermuehl, 41, has been Chief Financial Officer
and Treasurer of the Company since October 1995. From June 1994 to
October 1995, Ms. Pantermuehl was the Company's Controller. Ms.
Pantermuehl was the Chief Financial Officer for Toppan Printonics, Inc.
from 1990 to 1994. From 1980 to 1990, she was employed by Texas
Instruments, Incorporated. From 1987 to 1990, she served as a Project
Manager in Corporate Development, and prior to 1987, she served as a
Manager in Texas Instruments' Internal Audit Department.
Christopher S. Record, 46, has been Vice President,
Business Development and Strategic Planning, Secretary and General
Counsel of the Company since October 1995. From April 1994 to October
1995, Mr. Record served as Vice President, Finance and Administration,
Chief Financial Officer, Secretary, Treasurer, and General Counsel of
the Company. Mr. Record is an attorney with a master's degree in
business administration. From January 1990 to February 1994, he was
Chairman of Electronic Product Information Corporation. From 1985 to
1990, he was Vice President, Corporate and Business Development,
General Counsel and Secretary of Autodesk, Inc.
David G. Shand, M.D., Ph.D., 58, has been Executive Vice
President, Research & Development of the Company since January 1995.
From September 1993 to December 1994, Dr. Shand served as President of
Pharmanet Inc., a consulting company owned by him. From December 1992
to September 1993, he served as Chief Scientific Officer of Liposome
Co., and from April 1987 to August 1993, he was Executive Vice
President of Janssen Research Foundation. From April 1983 to March
1987, he served as Executive Vice President of Medical Affairs of
Ayerst Laboratories.
All executive officers of the Company are elected annually
by the Board of Directors to serve until their respective successors
are chosen and qualified or until their earlier death, resignation or
removal from office.
SECURITY OWNERSHIP OF MANAGEMENT
The following table sets forth, as of March 28, 1997, the
beneficial ownership of Common Stock of the Company by each director of
the Company, each named executive officer listed in the Summary
Compensation Table included elsewhere in this Proxy Statement and all
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directors and executive officers as a group. Except as otherwise
indicated, each person named in the table below has sole voting and
investment power with respect to all shares indicated as being
beneficially owned by him.
Common Stock
Beneficially Owned
------------------
Number Percent
Name of Shares of Class
----------------- --------- --------
Directors
R. Dale Bowerman 54,947(1) *
George DeMott 10,000(2) *
Robert A. Fildes, Ph.D. 18,500(3) *
Thomas J. Marquez 803,690(4) 9.0%
James T. O'Brien 12,000(5) *
Carlton E. Turner, Ph.D., D.Sc. 61,009(6) *
Selvi Vescovi 18,000(7) *
Named Executive Officers (excluding
any director named above) and Group
Luiz F. Cerqueira 17,336(8) *
V. Kirkland Meares 12,905(9) *
Christopher S. Record 17,334(10) *
David G. Shand, M.D., Ph.D. 17,175(11) *
All directors and executive
officers as a group (12 persons) 1,055,089(12) 11.7%
__________________
* Less than one percent.
(1) Includes 20,000 shares that Mr. Bowerman has the right to
acquire pursuant to presently exercisable options and
warrants.
(2) Includes 5,000 shares that Mr. DeMott has the right to
acquire pursuant to presently exercisable options.
(3) Includes 10,000 shares that Dr. Fildes has the right to
acquire pursuant to presently exercisable options.
(4) Includes 39,300 shares held in a trust controlled by Mr.
Marquez and 16,350 shares that he has the right to acquire
pursuant to presently exercisable options.
(5) Includes 9,000 shares that Mr. O'Brien has the right to
acquire pursuant to presently exercisable options.
(footnotes continued on following page)
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(6) Includes 35,750 shares that Dr. Turner has the right to
acquire pursuant to options that are presently exercisable
or exercisable within 60 days after March 28, 1997.
(7) Includes 10,000 shares that Mr. Vescovi has the right to
acquire pursuant to presently exercisable options.
(8) Includes 16,700 shares that Mr. Cerqueira has the right to
acquire pursuant to presently exercisable options.
(9) Includes 7,500 shares that Mr. Meares has the right to
acquire pursuant to options exercisable within 60 days of
March 28, 1997.
(10) Includes 13,750 shares that Mr. Record has the right to
acquire pursuant to options that are presently exercisable
or exercisable within 60 days after March 28, 1997.
(11) Includes 15,000 shares that Dr. Shand has the right to
acquire pursuant to presently exercisable options.
(12) Includes 170,275 shares that such directors and executive
officers have the right to acquire pursuant to options and
warrants that are presently exercisable or exercisable
within 60 days after March 28, 1997.
APPROVAL OF APPOINTMENT OF INDEPENDENT PUBLIC ACCOUNTANTS
Effective March 19, 1997, the Company's Board of Directors
appointed the accounting firm of Ernst & Young LLP as the Company's
independent public accountants for fiscal 1997 to replace Arthur
Andersen LLP, which resigned on that date. The appointment of Ernst &
Young LLP was made on the recommendation of the Board's Audit
Committee.
Shareholders will be asked to approve the appointment of
Ernst & Young LLP at the annual meeting. If the appointment is not
approved by the holders of a majority of the shares of Common Stock
present or represented and voting at the meeting, the Board will
reconsider its appointment of independent public accountants of the
Company.
Arthur Andersen LLP served as the Company's independent
public accountants for the fiscal year ended December 31, 1996.
Representatives of Arthur Andersen LLP and of Ernst & Young LLP are
expected to be present at the annual meeting and will be given an
opportunity to make a statement, if they so desire. They will also be
available to respond to appropriate questions addressed to them.
During the Company's two most recent fiscal years and from
January 1 through March 18, 1997, there were no disagreements between
the Company and Arthur Andersen LLP on any matter of accounting
principles or practices, financial statement disclosure or auditing
scope or procedure, and there were no reportable events as described in
Item 304(a)(1)(v) of Regulation S-K under the Securities Act of 1933
and the Securities Exchange Act of 1934 (the "Exchange Act"). The
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report of Arthur Andersen LLP on the Company's financial statements for
the two most recent fiscal years contained no adverse opinion or
disclaimer of opinion and was not qualified or modified as to
uncertainty, audit scope or accounting principles. A copy of a letter
from Arthur Andersen LLP to the Securities and Exchange Commission
confirming its agreement with the facts stated in the preceding portion
of this paragraph was filed as Exhibit 16.1 to the Form 10-K/A
amendment to the Company's Form 10-K Annual Report for the year ended
December 31, 1996, which amendment was filed with the Securities and
Exchange Commission on April 7, 1997.
The Company's Board of Directors recommends that
shareholders vote FOR the approval of the appointment of Ernst & Young
LLP as the Company's independent public accountants for fiscal 1997.
EXECUTIVE COMPENSATION
The report of the Compensation Committee of the Board of
Directors set forth below and the information under the heading
"Performance Graph" shall not be deemed to be soliciting material or
to be filed with the Securities and Exchange Commission (the "SEC")
or subject to the SEC's proxy rules, other than those rules requiring
disclosure herein, or to the liability of Section 18 of the Exchange
Act, and such information shall not be deemed to be incorporated by
reference into any filing made by the Company under the Securities Act
of 1933 or the Exchange Act.
REPORT OF THE COMPENSATION COMMITTEE
The Company's executive compensation program is
administered by the Compensation and Stock Option Committee of the
Board of Directors (the "Committee"). During 1996, the Committee was
composed of James T. O'Brien, Chairman, George DeMott and Robert A.
Fildes, Ph.D., all of whom are outside directors of the Company.
The following is a report submitted by the members of the
Committee, addressing the Company's compensation policy as it related
to the named executive officers, including the President and Chief
Executive Officer (the "CEO"), for fiscal 1996.
Compensation Philosophy
The Company's executive compensation program is designed
to align executive compensation with financial performance, business
strategies and Company values and objectives. The Committee has
developed and implemented an executive compensation program to achieve
these objectives which provides executives with compensation
opportunities that are competitive with companies of comparable size in
the pharmaceutical industry.
In applying this philosophy, the Committee has established
a program to accomplish the following objectives:
* attract and retain executives of outstanding abilities
who are critical to the long-term success of the
Company;
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* reward executives for achievement of internal Company
goals as well as for Company performance relative to
industry performance levels; and
* reward executives for long-term strategic management
and the enhancement of shareholder value by providing
equity ownership in the Company.
Through these objectives, the Company integrates its
executive compensation program with its annual and long-term strategic
planning.
Against the foregoing background, the Company's executive
compensation policies integrate annual base salary compensation with a
short-term and long-term bonus award system which is based upon both
corporate and individual performance levels.
Fiscal 1996 Compensation
For fiscal 1996, the Company's executive compensation
program consisted of (i) base salary, adjusted from the prior year,
(ii) bonus payable in cash and stock, and (iii) stock options. With
respect to base salary, the Company considers published executive
compensation data of comparable companies in the industry and utilizes
surveys to establish base salaries that are within the range of those
paid to persons holding comparably responsible positions at such
companies. In addition, the Committee considers evaluations by the CEO
of the individual performance of each executive, other than the CEO, in
setting such executive's salary for the year. The performance of the
CEO is evaluated by the Executive Committee of the Board of Directors
in collaboration with the Committee.
The Committee determined that current salary levels for
key Company executives are competitive within the industry and
basically rank in the average range.
Bonuses are granted to executives based upon criteria
established by the Company's 1995 Management Compensation Plan (the
"Compensation Plan") adopted by the Company's Board of Directors and
approved by its shareholders in 1995. Under the Compensation Plan,
executives of the Company are eligible to receive incentive
compensation in the form of annual bonuses payable 50% in cash and 50%
in Common Stock of the Company. An executive's bonus under the
Compensation Plan consists of a target bonus multiplied by a
performance component. The target bonus is a specified percentage of
the executive's base salary, with the percentage being dependent on the
executive's position grade. The maximum target bonus for the highest
position grade is currently 35% of the executive's base salary. The
performance component is a percentage rate measuring results achieved
in comparison to the Company's Annual Operating Budget. Performance is
judged on the basis of three scenarios: (i) sales at Annual Operation
Budget; (ii) profit at Annual Operating Budget; and (iii) achievement
of remaining bonus criteria and individual goals as established by the
Committee. These goals are designed to achieve the Company's short-
term and long-term objectives. Following determination by the
Committee of the amounts of bonus payable, if any, to executives, 50%
of the bonus is paid in cash and 50% is paid in shares of the Company's
Common Stock. The number of shares is determined by dividing 50% of
the total bonus by the fair market value of the Common Stock on the
date of certification of payment of the bonus by the Committee.
-12-
<PAGE>
Based on application of the Compensation Plan criteria set
forth above, no incentive bonuses were paid to executive officers for
fiscal 1996.
The Committee has discretion to grant stock options to
executive officers under the Company's 1995 Stock Option Plan. In
determining the time and date of grant and the number of shares subject
thereto, the Committee may take into account the nature of the services
rendered, the executive's potential contributions to the success of the
Company's business, and such other facts as the Committee in its
discretion deems appropriate. Each of the 1996 option awards reflected
in Table 2 under the heading Executive Compensation Tables below was
made in accordance with the Company's 1995 Stock Option Plan.
CEO Compensation
Carlton E. Turner, Ph.D., D.Sc., was promoted to President
and Chief Executive Officer of the Company as of April 12, 1995. Dr.
Turner's 1996 base pay was determined by the Committee on the basis of
its overall assessment of Dr. Turner's responsibilities, including
advancing clinical trials; his past performance with the Company; and
competitive market data on salary levels for pharmaceutical companies
of similar size.
On June 12, 1996, the Committee granted Dr. Turner an
incentive stock option and a nonqualified stock option to purchase
26,100 shares and 13,900 shares, respectively, of Common Stock pursuant
to the Company's 1995 Stock Option Plan. These awards were made based
on the Committee's evaluation of Dr. Turner's overall performance.
Dr. Turner was not paid a bonus for 1996.
Summary
The Committee believes that linking executive compensation
to corporate performance results in a better alignment of compensation
with corporate goals and shareholder interests. As performance goals
are met or exceeded, resulting in increased value to shareholders,
executives are awarded commensurately. The Committee believes that
compensation levels during fiscal 1996 adequately reflected the
Company's compensation goals and policies.
Dated: April 11, 1997
By the Members of the Committee:
James T. O'Brien, Chairman
George DeMott
Robert A. Fildes, Ph.D.
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<PAGE>
EXECUTIVE COMPENSATION TABLES
The following table sets forth certain summary information
regarding compensation awarded to, earned by or paid to the Chief
Executive Officer of the Company and each other executive officer of
the Company whose combined salary and bonus for the fiscal year ended
December 31, 1996 exceeded $100,000 (collectively, the "named executive
officers") for the years indicated.
<TABLE>
<CAPTION>
Table 1
Summary Compensation Table
--------------------------
Long-Term
Compensation
-------------
Annual Compensation Awards
Securities
Other Underlying All
Fiscal Annual Options Other
Name and Bonus Compen- (No.of Compen-
Principal Position Year Salary (1) sation Shares) sation
------------------ ------ -------- ------- -------- ------------ ---------
<S> <C> <C> <C> <C> <C> <C>
Carlton E. Turner, 1996 $225,000 - - 40,000 -
Ph.D., D.Sc., 1995 $216,692 $1,468 50,000 $29,341(3)
President and 1994 $184,250 $64,488 - 32,500 -
Chief Executive
Officer(2)
David G. Shand, 1996 $200,000 - - 15,000 $16,470(5)
M.D., Ph.D., 1995 $188,461 - - 50,000 $ 5,334(5)
Executive Vice 1994 - - - - -
Presient, Research
& Development (4)
Luiz F. Cerqueira, 1996 $154,500 - - - -
Vice President, 1995 $154,500 - - 30,000 -
Manufacturing/ 1994 $154,125 $46,350 - 2,800 -
Operations
Christopher S. 1996 $150,000 - - - -
Record, 1995 $150,000 - - 25,000 -
Vice President, 1994 $100,000 $25,000 - 30,000 $65,443(7)
Business Development
and Strategic Planning,
Secretary and General
Council (6)
V. Kirkland Meares, 1996 $106,154 - - 30,000 $372,907(9)
Vice President, Sales 1995 - - - - -
and Marketing (8) 1994 - - - - -
</TABLE>
-15-
<PAGE>
(1) No bonuses were paid for 1996 or 1995. Each bonus for
1994 was paid 50% in cash and 50% in shares of Common
Stock valued at $8.375 per share, the closing price per
share of the Common Stock on the American Stock Exchange
on the date the bonuses were approved by the Board of
Directors.
(2) Dr. Turner was promoted to President and Chief Executive
Officer of the Company in April 1995. Dr. Turner was
first elected as an executive officer of the Company in
January 1994.
(3) Represents relocation expenses reimbursed to Dr. Turner by
the Company.
(4) Dr. Shand was first elected as an executive officer of the
Company in January 1995.
(5) Represents relocation expenses reimbursed to Dr. Shand by
the Company.
(6) Mr. Record was first elected as an executive officer of
the Company in April 1994.
(7) Represents relocation expenses reimbursed to Mr. Record by
the Company.
(8) Mr. Meares was first elected as an executive officer of
the Company in April 1996.
(9) Consists of $6,000 of relocation expenses reimbursed to
Mr. Meares by the Company, plus $366,907 of commissions
paid by the Company to Meares Medical Sales Associates, a
business wholly owned by Mr. Meares that serves as an
independent manufacturer's representative for the Company.
See Certain Transactions.
-16-
<PAGE>
The following table sets forth certain information relating to
options granted under the Company's 1995 Stock Option Plan to the named
executive officers in fiscal year 1996.
<TABLE>
<CAPTION>
Table 2
Options Granted During Year Ended December 31, 1996
Potential
Realizable value at
Assumed Annual Rates
of Stock Price
Appreciation
Individual Grants for Option Term(3)
-------------------------------- ---------------------
Number of
Securities % of Total
Underlying Options Exercise
Options Granted to Price
Granted Employees in Per Expiration
Name (No. of Shares) Fiscal Year Share Date 5% 10%
------ --------------- ------------ --------- ----------- ------ -------
<S> <C> <C> <C> <C> <C> <C>
Carlton E. 26,100(1) 18.48% $28.75 6/12/06 $471,907 $1,280,486
Turner, Ph.D., 13,900(2) 9.84% $28.75 6/12/06 $251,322 $ 681,944
D.Sc.
David G. Shand, 1,100(1) 0.78% $28.75 6/12/06 $ 19,889 $ 53,967
M.D., P.h.D. 13,900(2) 9.84% $28.75 6/12/06 $251,322 $ 681,944
Luiz F. Cerqueira - - - - - -
Christopher S.
Record - - - - - -
V. Kirkland
Meares 30,000(2) 21.25% $24.50 4/08/06 $462,238 $1,254,249
==============================================================================================================
</TABLE>
(1) Incentive stock option with a term of 10 years and an exercise
price equal to the fair market value of the Company's Common
Stock on the date of grant. Option becomes exercisable with
respect to one-fourth of the shares covered thereby in each
year in the four-year period beginning one year after the date
of grant.
-17-
<PAGE>
(2) Nonqualified stock option with a term of 10 years and an
exercise price equal to the fair market value of the Company's
Common Stock on the date of grant. Option becomes exercisable
with respect to one-fourth of the shares covered thereby in
each year in the four-year period beginning one year after the
date of grant. The following table sets forth certain information
with respect to the exercise of options to purchase Common Stock
of the (3) The assumed five percent and ten percent rates of stock
price Company during the year ended December 31, 1996, and
outstanding appreciation are specified by the SEC's proxy rules and
do not options held at such date, by the named executive officers.
For reflect expected actual appreciation. The amounts shown
purposes of this table, the value of an outstanding option is the
represent the assumed values of the stock options (less the diff-
erence between the market price at December 31, 1996 of the shares
exercise prices) at the end of the ten-year periods beginning of
Common Stock underlying the option and the aggregate exercise
price on the dates of grant and ending on the option expiration of
such option. The unexercisable portions of such options have been
dates. valued as if such portions were exercisable in full on
December 31, 1996, in accordance with SEC rules. During fiscal
1996, no outstanding options held by any of the persons listed in
this table were repriced or otherwise amended by the Company.
<TABLE>
<CAPTION>
Table 3
Aggregated Option Exercises in Fiscal Year
Ended December 31, 1996 and Fiscal Year-End Option Values
Shares Number of Securities
Acquired Underlying Unexercised Value of Unexercised
on Options at 12/31/96 In-the-Money Options
Exercise (No. of Shares) at 12/31/96
---------------------- --------------------
(No. of Value
Name Shares) Realized Exercisable Unexercisable Exercisable Unexercisable
------------------ -------- -------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Carlton E. Turner, 10,000 $157,063 33,250 83,750 - -
Ph.D., D.Sc.
David G. Shand, 10,000 $153,370 8,750 46,250 - -
M.D., Ph.D.
Luiz F. Cerqueira 4,450 $ 66,156 12,250 32,450 - -
Christopher S. Record 10,000 $190,938 3,750 33,750 - -
V. Kirkland Meares - - - 30,000 - -
=======================================================================================================================
</TABLE>
[THE REMAINDER OF THIS PAGE IS INTENTIONALLY BLANK]
-18-
<PAGE>
PERFORMANCE GRAPH
The following graph sets forth the cumulative total
shareholder return for the Company's Common Stock, the Nasdaq Stock
Market US Index and a Company-constructed peer group for the years
indicated as required by SEC rules. The information reflected in the
peer group index was provided to the Company by Research Holdings, Ltd.
of San Francisco, California, and such index comprises 39 companies
that conduct business in the pharmaceutical industry and whose stock is
traded on a stock exchange or on the Nasdaq National Market.
COMPARISON OF FIVE YEAR CUMULATIVE TOTAL RETURN (1)
AMONG CARRINGTON LABORATORIES, INC.,
THE NASDAQ STOCK MARKET -- US INDEX (2) AND A PEER GROUP (3)
[LINE GRAPH APPEARS HERE]
--------------------------------------------------------------------
CARRINGTON LABORATORIES, INC. PEER GROUP
NASDAQ
STOCK MARKET -- US
--------------------------------------------------------------------
<TABLE>
<CAPTION>
Cumulative Total Return
--------------------------------------------------
11/91 11/92 11/93 11/94 12/95 12/96
--------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Carrington 100 118 102 73 261 65
Laboratories, Inc.
Peer Group 100 101 91 103 163 203
Nasdaq Stock Market US 100 131 150 147 207 255
</TABLE>
(1) Total return assuming reinvestment of dividends. Assumes $100
invested on November 30, 1991 in the Company's Common Stock,
the Nasdaq Stock Market US Index and a Company-constructed
peer group. During 1995, the Company changed its fiscal year
end from November 30 to December 31. Thus, the total return
for fiscal year 1995 includes the thirteen-month period from
December 1, 1994 through December 31, 1995.
(footnotes continued on following page)
-19-
<PAGE>
(2) The peer group index comprises the following companies: the
Company, Ivax Corporation, Alza Corporation, Abbott
Laboratories, Carter-Wallace, Inc., Pfizer Inc., Schering-
Plough Corporation, American Home Products Corp., Eli Lilly
and Company, Warner-Lambert Company, Johnson & Johnson, Merck
& Co. Inc., Elan Corporation, PLC, Bristol-Myers Squibb
Company, Rhone-Poulenc Rorer Inc., Forest Laboratories, Inc.,
Alpharma Inc., Mylan Laboratories Inc., Glaxo Wellcome PLC,
Natural Alternatives International, Polydex Pharmaceuticals
Ltd., United Guardian Inc., R.P. Scherer Corporation, Medeva
PLC, Foxmeyer Health Corporation, Allou Health & Beauty Care,
Inc., Novo Nordisk A/S, Pharmaceutical Resources Incorporated,
Barr Laboratories Inc., Bergen Brunswig Corporation,
Escagenetics Corporation, McKesson Corporation, Allergan,
Inc., Genentech, Inc., Columbia Laboratories Inc., Moore
Medical Corp., Medco Research Inc., KV Pharmaceutical Company
and ICN Pharmaceuticals, Inc. Two companies that were
included in the 1995 peer group index are not included in the
1996 peer group index, in one case because the company was
acquired and its stock ceased to be publicly traded, and in
the other case because there was no reported public trading of
the company's stock during 1996.
Compensation of Directors
The Company pays each outside director $500 for each Board
meeting that he attends, unless the meeting lasts more than one day, in
which case the Company pays each outside director $1,000 for each
additional day of attendance. The Company also pays $500 and
reasonable travel expenses to each outside director who does not live
in the Dallas, Texas area for each Board meeting that he attends in
person. Each outside director who is a member of the Executive
Committee or the Audit Committee receives $500 for each meeting of such
committee that he attends. If the committee meeting is not held on the
same day as a Board meeting, the Company also pays $500 and reasonable
travel expenses to each outside director/committee member who does not
live in the Dallas, Texas area for each committee meeting that he
attends in person. Members of the Compensation and Stock Option
Committee receive no compensation for attending meetings of that
committee.
Pursuant to the Company's 1995 Stock Option Plan, a
nonqualified option to purchase 10,000 shares of Common Stock is to be
granted automatically to each outside director who is "newly elected"
to the Company's Board (i.e., who was not serving as a director of the
Company immediately prior to his election). In addition, a
nonqualified option to purchase 2,500 shares of Common Stock is granted
automatically, on the date of each annual meeting of shareholders of
the Company, to each outside director who has served in that capacity
for the past six months and continues to serve following such meeting.
Each option granted to an outside director has a term of four years, is
exercisable in whole or in part at any time during its entire term and
remains effective during its entire term regardless of whether the
optionee continues to serve as a director. The purchase price per
share of Common Stock covered by each such option is the fair market
value per share of Common Stock on the date of grant. Any outside
-20-
<PAGE>
director may decline to accept any option granted to him. At March 28,
1997, there were six outside directors of the Company who were eligible
to be granted options under the 1995 Stock Option Plan.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
During the fiscal year ended December 31, 1996, V. Kirkland
Meares filed one late report on Form 3 relating to his ownership of
Common Stock of the Company at the time he became an executive officer
of the Company in April 1996; Luiz Cerqueira filed one late report on
Form 4 relating to four transactions that occurred in March 1996; Dr.
David G. Shand filed one late report on Form 4 relating to four
transactions that occurred in February 1996; and Selvi Vescovi filed
one late report on Form 5 relating to one transaction that occurred in
April 1994.
CERTAIN TRANSACTIONS
V. Kirkland Meares has been Vice President, Sales and
Marketing of the Company since April 1996. Prior to his employment by
the Company, he had been an independent manufacturer's representative
for the Company since 1984, and he has continued to own and operate
that business, a sole proprietorship known as Meares Medical Sales
Associates ("MMSA"), since joining the Company. Most of the selling
activities of MMSA are now performed by other individuals. The
relationship between the Company and MMSA is governed by an Independent
Sales Representative Agreement dated October 1, 1996, which designates
the states of Alabama and Georgia and portions of Northern Florida and
Tennessee as the areas for which MMSA is responsible. The term of the
agreement expires two years after January 1, 1997, unless earlier
terminated. The Company pays MMSA a commission equal to 20% of the
sales it generates, which is the standard commission that the Company
pays to other manufacturer's representatives. During 1996, the Company
paid MMSA commissions totaling approximately $366,907, of which
approximately $267,650 was paid during that portion of the year in
which Mr. Meares was an officer and employee of the Company.
SHAREHOLDER PROPOSALS
The 1998 annual meeting of the shareholders of the Company is
tentatively scheduled to be held on May 21, 1998. The Bylaws of the
Company provide that to be considered for inclusion in the proxy
material for an annual meeting, shareholder proposals nominating
persons for election to the Board of Directors of the Company must be
received at the Company's principal executive office not later than 90
days prior to the annual meeting; and all other shareholder proposals
must be received not later than 60 days in advance of the annual
meeting if the meeting is to be held within 30 days preceding the
anniversary of the previous year's annual meeting, or 90 days in
advance of the meeting if it is to be held on or after the anniversary
of the previous year's meeting.
ANNUAL REPORT
The Company has provided without charge to each person whose
proxy is solicited hereby a copy of the Company's 1996 Annual Report.
-21-
<PAGE>
Additional copies of the 1996 Annual Report may be obtained without
charge upon written request to Christopher S. Record, Vice President,
Secretary and General Counsel, Carrington Laboratories, Inc., 2001
Walnut Hill Lane, Irving, Texas 75038.
MISCELLANEOUS
The accompanying proxy is being solicited on behalf of the
Board of Directors of the Company. The expense of preparing, printing
and mailing the form of proxy and the material used in the solicitation
thereof will be borne by the Company. In addition to the use of the
mails, proxies may be solicited by personal interview, telephone,
telefacsimile and telegram by directors, officers, and employees of the
Company, who will receive no additional compensation for such
activities. Additionally, the Company has retained Beacon Hill
Partners, Inc. to assist in the solicitation of proxies, at a cost not
to exceed $2,500 plus reasonable out-of-pocket expenses. Arrangements
may also be made with brokerage houses and other custodians, nominees
and fiduciaries for the forwarding of solicitation material to the
beneficial owners of stock held of record by such persons, and the
Company may reimburse them for reasonable out-of-pocket expenses
incurred by them in connection therewith.
By order of the Board of
Directors
George DeMott
Chairman of the Board
Irving, Texas
April 15, 1997
A copy of the Company's Form 10-K Annual Report for the fiscal
year ended December 31, 1996, as filed with the Securities and Exchange
Commission, is available without charge to each person whose proxy is
solicited hereby upon written request directed to Christopher S.
Record, Vice President, Secretary and General Counsel, Carrington
Laboratories, Inc., 2001 Walnut Hill Lane, Irving, Texas 75038.
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<PAGE>
CARRINGTON LABORATORIES, INC.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS FOR
THE ANNUAL MEETING OF SHAREHOLDERS TO BE HELD ON MAY 22, 1997
The undersigned hereby appoints Carlton E. Turner, Ph.D., D.Sc.
and Christopher S. Record as proxies, each with the power to appoint his
substitute, and hereby authorizes them to represent and to vote, as
designated on the reverse hereof, all the shares of common stock of
Carrington Laboratories, Inc. (the "Company") held of record by the
undersigned on March 28, 1997, at the Annual Meeting of Shareholders of
the Company to be held on May 22, 1997, at 9:00 a.m. local time, at the
Las Colinas Country Club, 4900 North O'Connor Boulevard, Irving, Texas
75062, and at any adjournment(s) thereof. Receipt of the Notice of
Annual Meeting of Shareholders and the Proxy Statement in connection
therewith and of the Company's 1996 Annual Report to Shareholders is
hereby acknowledged.
(Continued and to be Signed on Reverse Side)
1. ELECTION OF DIRECTORS: George DeMott, Robert A. Fildes, Ph.D. and
Carlton E. Turner, Ph.D., D.Sc.
[ ] FOR all nominees listed above [ ] WITHHOLD AUTHORITY to vote
(except as indicated below) for all nominees listed above
[To withhold authority to vote for any individual nominee, write
that nominee's name on the line below.]
2. APPROVAL OF APPOINTMENT OF INDEPENDENT PUBLIC ACCOUNTANTS
[ ] FOR [ ] AGAINST [ ] ABSTAIN
Approval of the appointment of Ernst & Young LLP as
independent public accountants for the Company for the fiscal year ending
December 31, 1997.
3. In their discretion, the proxies are authorized to vote with
respect to any other matter which may properly come before the meeting or
any adjournment(s) thereof.
-1-
<PAGE>
THIS PROXY WILL BE VOTED IN ACCORDANCE WITH THE
SPECIFICATIONS HEREON. IN THE ABSENCE OF SUCH SPECIFICATIONS, THIS
PROXY WILL BE VOTED FOR THE ELECTION TO THE BOARD OF DIRECTORS OF THE
NOMINEES LISTED IN THIS PROXY, APPROVAL OF THE APPOINTMENT OF ERNST &
YOUNG LLP AS INDEPENDENT PUBLIC ACCOUNTANTS AND IN THE DISCRETION OF THE
PROXIES ON ANY OTHER BUSINESS.
PLEASE COMPLETE, DATE AND SIGN THIS PROXY AND RETURN IT IN
THE ENCLOSED ENVELOPE.
The undersigned hereby revokes any proxy or proxies
heretofore given to represent or vote such common stock and hereby
ratifies and confirms all actions that the proxies named herein, their
substitutes, or any of them, may lawfully take in accordance with the
terms hereof.
Dated: , 1997
---------------------------
---------------------
---------------------
---------------------
Signature(s)*
* NOTE: When signing on behalf of a corporation, partnership, estate,
trust or in any representative capacity, please sign name and title. To
vote shares held jointly, each joint owner must sign.
-2-
<PAGE>
