McRAE INDUSTRIES, INC.
402 North Main Street
Mount Gilead, North Carolina 27306
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
To: The Shareholders of McRae Industries, Inc.
NOTICE IS HEREBY GIVEN that the Annual Meeting of Shareholders of McRae
Industries, Inc. (the "Company") will be held at 3:00 p.m. on the 21st day
of December, 1995, at the offices of the Company located at 402 North Main
Street, Mount Gilead, North Carolina, for the following purposes:
(1 ) To elect the Board of Directors consisting of seven persons, of
whom five are to be elected by the holders of the Class B Common Stock and
two are to be elected by the holders of the Class A Common Stock.
(2) To ratify the appointment of Gleiberman Spears Shepherd & Menaker
P.A. as independent certified public accountants for the current fiscal
year.
(3) To transact such other business as may properly come before the
Meeting or any adjournment or adjournments thereof.
The Board of Directors has fixed the close of business on October 27, 1995
as the record date for the shareholders entitled to notice of and to vote
at the meeting or any adjournment thereof and only holders of Class A and
Class B Common Stock of record at such date are entitled to notice of and
to vote at the Annual Meeting of Shareholders.
By Order of the Board of Directors
/s/James W. McRae
James W. McRae
Secretary
November 10, 1995
IMPORTANT
Whether you expect to attend the meeting or not, please vote, sign, date,
and return the enclosed proxy in the enclosed self-addressed envelope as
promptly as possible. If you attend the meeting, you may vote your shares
in person, even though you have previously signed and returned your proxy.
<PAGE>
McRAE INDUSTRIES, INC.
402 North Main Street
Mount Gilead, North Carolina 27306
PROXY STATEMENT
To: The Shareholders of McRae Industries, Inc.
This statement, first mailed on or about November 10, 1995, is furnished in
connection with the solicitation of proxies to be used at the Annual
Meeting of Shareholders of McRae Industries, Inc., a Delaware corporation
(the "Company"), to be held on December 21, 1995. The solicitation of
proxies in the enclosed form is made on behalf of the Board of Directors of
the Company.
The cost of preparing, assembling, and mailing the proxy material and of
reimbursing brokers, nominees, and fiduciaries for the out-of-pocket and
clerical expenses of transmitting copies of the proxy material to the
beneficial owners of shares held of record by such persons will be borne by
the Company. The Company does not intend to solicit proxies otherwise than
by use of the mail, but certain officers and regular employees of the
Company or its subsidiaries, without additional compensation, may use their
personal efforts, by telephone or otherwise, to obtain proxies. The
materials are being mailed to shareholders of record at the close of
business on October 27, 1995.
A shareholder signing and returning a proxy on the enclosed form has the
power to revoke it at any time before the shares subject to it are voted by
filing with the Secretary of the Company an instrument revoking it, by
filing a duly executed proxy bearing a later date with the Secretary of the
Company or by attending the meeting and voting in person. If a shareholder
specifies how the proxy is to be voted with respect to any of the proposals
for which a choice is provided, the proxy will be voted in accordance with
such specifications. If a shareholder fails to so specify with respect to
such proposals, the proxy will be voted FOR the proposals.
Only shareholders of the Class A and Class B Common Stock of record at the
close of business on October 27, 1995 are entitled to vote at the Meeting.
On that date, the Company had outstanding and entitled to vote a total of
1,779,197 shares of Class A and 952,013 shares of Class B Common Stock.
Each share of Class A is entitled to one-tenth vote and each share of Class
B is entitled to one full vote at meetings of shareholders.
SHAREHOLDER PROPOSALS FOR NEXT ANNUAL MEETING
Any shareholder proposal to be presented at the next annual meeting of the
Company must be received at the offices of the Company, Post Office Box
726, 402 North Main Street, Mount Gilead, North Carolina 27306, no later
than July 12, 1996 for inclusion in the Company's proxy statement and form
of proxy for that meeting.
<PAGE>
PRINCIPAL SHAREHOLDERS
Listed in the following table are the only beneficial owners as of October
27, 1995, of more than five percent of the Company's $1 par value Class A
and Class B Common Stock and the number of shares beneficially owned by
directors and executive officers as a group. Voting securities beneficially
owned by individual directors, director nominees and named executive
officers are disclosed under Election of Directors, below.
Class A Class B
Amount and Amount and
Nature of Percent Nature of Percent
Beneficial of Beneficial of
Ownership (1) Class Ownership(1) Class
Name and Address of
Beneficial Owner
B. J. McRae 534,819(2) 30 542,699(2) 57
Post Office Box 726
Mount Gilead, nc 27306
McRae Industries, Inc. 288,771(3) 16 123,547(3) 13
Employee Stock
Ownership Plan and Trust
c/o NationBank of North Carolina, N.A.
One NationBank Plaza
Charlotte, N.C. 28255
All Directors and Executive
Officers as a group
(8 persons) 627,942(4) 35 592,368(5) 62
(1) All shares owned directly and with sole voting and investment power
except as otherwise noted.
(2) Includes 349 shares registered in the name of McRae Bros. Mfg. Company,
of which B. J. McRae is the sole shareholder, 16,443 shares owned by Mr.
McRae's wife, 2,391 shares owned jointly by Mr. McRae and his wife and
7,500 shares subject to options which are presently exercisable.
(3) NationsBank of North Carolina, N.A., the trustee of the Employee Stock
Ownership Plan and Trust, has sole voting and investment power.
(4) Includes 14,690 shares subject to option which are presently
exercisable.
(5) Includes 14,500 shares subject to option which are presently
exercisable.
<PAGE>
ELECTION OF DIRECTORS
The Bylaws of the Company provide for seven directors, two to be elected by
the holders of the Class A Common Stock and five to be elected by the
holders of the Class B Common Stock. Directors elected at the Meeting will
serve, subject to the provisions of the Bylaws, until the next Annual
Meeting of Shareholders and until their successors are duly elected and
qualified. If for any reason any nominee shall not become a candidate for
election as a director at the Meeting, an event not now anticipated, the
enclosed proxy will be voted for such substitute as shall be designated by
the Board of Directors.
It is the intention of the persons named in the accompanying Proxy to vote
all proxies solicited by the Board of Directors FOR the seven nominees
listed below unless authority to vote for the nominees is withheld by a
shareholder in such shareholder's proxy. Directors are elected by a
plurality of the votes of the applicable class of Common Stock cast by the
holders of shares of such class entitled to vote at a meeting at which a
quorum is present. The Company's Bylaws provide that a quorum consists of
the presence, in person or by proxy, of the holders of a majority of the
stock of the Company outstanding and entitled to vote at the Meeting (with
each share of Class A Common Stock being counted as one-tenth of a vote and
each share of Class B Common Stock being counted as one vote). Provided a
quorum is represented at the Meeting, abstentions and shares not voted are
not taken into account in determining a plurality with respect to the
directors elected by the holders of either class of Common Stock.
Cumulative voting for directors is not permitted.
Directors to be Elected by Holders of Class A Common Stock
Shares of Stock
First Beneficially Owned Percentage Of
Name and Became As Of Common Stock
Principal A October 27, 1995(1)(2) Outstanding
Occupation
or
Employement Age Director Class A Class B Class A Class B
D. Gary McRae 45 1979 39,202(3)(8) 35,202(3) 2 4
First Vice President
of the Company since
1980. Treasurer of the
Company since 1991.
Harold W. Smith 52 1985 4,510(4) - (5) (5)
Vice President- McRae
Graphics since 1993,
Vice-President-Finance
and Accounting of the
Company 1981 to 1993
<PAGE>
Directors to be Elected by Holders of Class B Common Stock
B. J. McRae 75 1959 534,819(6) 542,699(6) 30 57
President of the
Company since 1959.
Treasurer of the Company
from 1959 to 1991.
George M. Bruton 66 1982 588 588 (5) (5)
Owner of George M. Bruton
Insurance Agency, Inc., Mount
Gilead, North Carolina since 1950.
Hilton J. Cochran 65 1985 4,000 500 (5) (5)
President and Part-Owner of
Jeff Morris & Associates, Inc., Troy,
North Carolina since 1952.
Victor A. Karam 61 1972 24,494(7) - (1) (5)
Vice President - Footwear and
General Manager of the Footwear
Segment since 1969.
James W. McRae 43 1985 20,309(8) 13,379 - 1 1
Vice President of the
Company since 1986;
Secretary since 1991; plant
manager of the Company's
Footwear segment since 1985.
(1) All shares owned directly and with sole voting and investment power
except as otherwise noted.
(2) Does not include interest in shares held by the Company's Employee
Stock Ownership Plan and Trust.
(3) Includes 7,000 shares subject to options which are presently
exercisable.
(4) Includes 190 shares subject to options which are presently exercisable.
(5) Less than 1%.
(6) Includes 349 shares registered in the name of McRae Bros. Mfg. Company,
of which B. J. McRae is the sole shareholder, 16,443 shares owned by Mr.
McRae's wife, 2,391 shares owned jointly by Mr. McRae and his wife and
7,500 shares subject to options which are presently exercisable.
(7) Includes 2,800 shares owned by Mr. Karam's wife.
(8) Includes 4,000 shares owned by minor children.
<PAGE>
Directors' Fees And Meeting Attendance
Directors are paid $700 for each Board of Directors and Audit and Incentive
Stock Option Committee meeting attended ($350 in the case of directors who
are also officers or employees of the Company). The Board of Directors held
four meetings during the past year. Each director attended more than 75% of
the aggregate total number of meetings of the Board of Directors and the
total number of meetings of any Committee on which he served. The Board of
Directors has no nominating committee.
Executive Officer and Board of Director Affiliations
Messrs. B. J. McRae, D. Gary McRae, James W. McRae, Karam and Smith are
executive officers as well as directors. Mr. David K. Helms, Vice President
Finance and Accounting, 49 years old, joined the Company in April 1993.
From May 1991 to April 1993 he was an assistant director with the U.S.
General Accounting Office in Washington, D.C. Prior to that time he was
employed with Ernst & Whinney in Cleveland, Ohio and Richmond, Virginia.
The executive officers of the Company were appointed at the annual meeting
of the Board of Directors on December 15, 1994, and serve at the pleasure
of the Board of Directors.
Director B. J. McRae also serves as president and director of American
Mortgage Investment Company. See "Certain Transactions."
D. Gary McRae and James W. McRae are B. J. McRae's sons.
Committees of the Board of Directors
The Company's Audit and Incentive Stock Option Committee, composed of
George M. Bruton and Hilton J. Cochran, met one time during the fiscal
year. The Committee is responsible for recommending independent auditors
for the Company, reviewing the Company's financial statements, audit
report, internal financial controls and internal audit procedures and
approving services to be performed by the Company's independent auditors.
The Committee is also responsible for selecting key employees to whom stock
options and stock appreciation rights will be awarded under the 1985 McRae
Industries, Inc. Non-Qualified Stock Option Plan, for reviewing any
transactions or arrangements between the Company and any of its affiliates,
and along with the President of the Company, for recommending Executive
Compensation to the Board of Directors.
INTERLOCKS AND INSIDER PARTICIPATION
The Audit and Incentive Stock Option Committee of the Board of Directors of
the Company, along with the President of the Company, makes recommendations
to the Board of Directors concerning the Company's compensation
arrangements. The Company's Audit and Incentive Stock Option Committee is
also responsible for, among other things, selecting key employees to whom
stock options and stock appreciation rights will be awarded under the 1985
McRae industries, Inc. Non-Qualified Stock Option Plan. The Board of
Directors is currently composed of B.J. McRae, President of the Company,
George M. Bruton, Hilton J. Cochran, Victor A. Karam, Vice President -
Footwear of the Company, James W. McRae, Vice President and Secretary of
the Company, D. Gary McRae, First Vice President and Treasurer of the
Company, and Harold W. Smith, Vice President - McRae Graphics. Messrs.
Bruton and Cochran currently comprise the Company's Audit and Incentive
Stock Option Committee.
<PAGE>
Transactions Involving American Mortgage & Investment Company
Since 1970, the Company has owned a substantial equity interest in American
Mortgage & Investment Company ("AMIC"), a company engaged primarily in the
business of land development and sales in the coastal region of South
Carolina. B. J. McRae serves as a director and president of AMIC without
compensation.
The Company has an investment in the common stock of AMIC. In addition, the
Company owns all outstanding shares of AMlC's 20% Cumulative Convertible
Preferred Stock. Because of arrearage in dividends on preferred stock, each
share of preferred stock is currently entitled to one vote on any matter
submitted to a vote of AMIC shareholders. The Company presently has the
majority of the voting power of AMIC. B. J. McRae owns 1,996 shares of
AMlC's $20 par value Common Stock.
At the beginning of the Company's 1995 fiscal year, the Company had
investments in and advances to AMlC of approximately $447,000. During the
1995 fiscal year, the Company made additional advances to AMIC totaling
approximately $168,000. AMIC repayed $40,000 of its indebtedness to the
Company during fiscal 1995. The investment in AMlC's stock and amounts due
from AMIC were reduced to the extent that the recorded amounts exceed
shareholder equity as reported by AMIC. Because of AMlC's financial
condition, the Company has not accrued any interest on the AMIC
obligations. At the end of the fiscal year, the Company had recorded
investments in and advances to AMIC of approximately $600,000.
Management believes that the Company's advances to and continued financial
support of AMIC are justified in terms of its investment to date in AMIC
and a lack of any other viable alternative. AMIC cannot continue operations
without the support of the Company and, in management's opinion, the
ultimate realizable market value of AMlC's real estate holdings is greater
than the value of such holdings were the Company to discontinue its
support, forcing AMIC to liquidate its holdings at substantially discounted
values. Management believes the Company's remaining amounts due from AMIC
are ultimately recoverable.
Transactions with Automobile Dealership
The Company rents facilities to an automobile dealership which is owned by
B. J. McRae, President of the Company. Rent paid during the past fiscal
year was $24,000. During fiscal 1995, the Company purchased vehicles from
the dealership for a total purchase price of approximately $297,000. During
fiscal 1995, the Company also provided financing of approximately $330,000
for vehicles purchased from the dealership by third parties.
At July 29, 1995 the dealership owed the Company approximately $1,071,000.
Such indebtness is composed of accounts receivable and notes that bear
interest at the federal funds rate plus 2% during 1995. Such indebtness is
composed of rent obligations, funds advanced to the dealership for working
capital, and interest on such amounts. The Company believes that the costs
of automobiles, from the dealership are comparable to or lower than the
cost of comparable automobiles from other dealerships. Amounts owed by the
dealership are guaranteed by B. J. McRae.
Indebtedness of B. J. McRae
The Company has from time to time made loans to B.J. McRae. At July 29,
1995, B. J. McRae owed the Company approximately $616,000, under these
loans, which was the maximum outstanding during the year. This indebtness
bears interest at the federal funds rate plus 2% during 1995.
<PAGE>
Insurance from J. Morris & Associates. Inc.
The Company has procured certain insurance policies from J. Morris 8
Associates, Inc. Hilton J. Cochran, a director of the Company, is a partial
owner of J. Morris & Associates, Inc. During fiscal 1995, the Company paid
or accrued for payment approximately $280,000 in premiums for insurance
procured from J. Morris & Associates, Inc. The Company believes that the
cost of insurance from J. Morris & Associates, Inc. is comparable to or
lower than the cost of insurance from other agencies. The Company also paid
premiums for certain life insurance policies on the life of B.J. McRae in
the amount of approximately $212,000 for which Mr. Hilton J. Cochran
arranged the purchase thereof.
EXECUTIVE COMPENSATION
The following table sets forth the compensation for the Company's Chief
Executive Officer and the Company's three highest-paid executive officers,
as well as the total compensation paid to each individual during the
Company's last three fiscal years:
Summary Compensation Table
Annual Compensation
Name and All Other
Principal Salary Bonus Compensation
Position Year ($) ($)
B. J. McRae 1995 $214,191 $50,000 $233,000(1)
President 1994 209,514 50,000 248,300(1)
and Director 1993 199,750 50,000 151,900(1)
Victor A. Karam 1995 $125,184 $17,500 $ 5,900(2)
Vice President 1994 118,460 16,000 6,000(2)
Footwear 1993 113,293 14,000 4,800(2)
D. Gary McRae
First Vice 1995 $112,348 $24,000 $ 5,600(2)
President 1994 105,914 20,000 5,500(2)
and Treasurer 1993 92,649 17,000 4,400(2)
Harold W. Smith 1995 $ 95,649 $11,000 $ 4,400(2)
Vice President 1994 92,133 11,000 4,500(2)
McRae Graphics 1993 85,000 10,000 $ 3,600(2)
(1) Represents $212,000-1995, $237,000-1994, and $143,000-1993,
respectively, in premiums paid for the purchase of split-dollar life
insurance on the life of Mr. McRae and $11,000-1995 and 1994, and
$8,900-1993, respectively, accrued under the ESOPT. Upon Mr. and Mrs.
McRae's death, while life insurance proceeds will be payable to their
children, death benefits under the policies not to exceed the greater of
(i) the cash surrender value of the policy or (ii) the cumulative premiums
paid have been assigned to the Company.
(2) Represents amounts accrued under the ESOPT.
<PAGE>
JULY 29,1995 OPTION VALUES
The following table presents the value of unexercised options that are
presently exercisable held by the named executives at fiscal year end. No
options have been granted during the past three fiscal years.
Number of Value of
Unexercised Unexercised
Options Options
at at
Fiscal Fiscal
Name Year-End Year-End(1)
Class A Class B Class A Class B
B.J. McRae 7,500 7,500 $54,000 $48,000
D. Gary McRae 7,000 7,000 51,000 45,000
Harold W. Smith 190 - 1,500 -
(1) Values are calculated by subtracting the exercise price from the fair
market value of the stock as of July 29,1995.
Pension Plan
The Company historically maintained a non-contributory, defined benefit
Pension Plan which covered its employees based on length of service from
date of employment. Effective September 30, 1992 the Company terminated the
Pension Plan, and no additional benefits will accrue for participants under
the Pension Plan. The Company is liquidating the Pension Plan by applying
its assets, in accordance with the provisions set forth in the Pension Plan
and applicable federal law, to provide the retirement benefits accrued by
the participants through September 30, 1992.
The Company anticipates that participants in the Pension Plan will either
receive a cash distribution or have an annuity contract purchased for them
in the near future. Messrs. B.J. McRae, Karam, D. Gary McRae, Smith and
James W. McRae were credited with 33, 23, 17, 12 and 15 years of service,
respectively under the Pension Plan. As of September 30, 1992, Messrs. B.J.
McRae, Karam, D. Gary McRae, Smith, and James W. McRae had accrued
retirement benefits under the Pension Plan of approximately $34,500,
$12,000, $3,600, $4,200 and $1,600 respectively.
REPORT REGARDING EXECUTIVE COMPENSATION
The Audit and Incentive Stock Option Committee, currently composed of
Messrs. Bruton and Cochran, together with B.J. McRae, President of the
Company make recommendations to the Board of Directors concerning the
Company's compensation arrangements. In connection with such arrangements,
Messrs. McRae, Bruton and Cochran have provided the following report:
The Company's overall compensation philosophy is as follows:
Attract and retain quality talent, which is critical to both the short-term
and long-term success of this Company;
Reinforce strategic performance objectives through the use of incentive
compensation programs; and
<PAGE>
Create a mutuality of interest between executive officers and shareholders
through compensation structures that share the rewards and risks of
strategic decision making.
Base Compensation - The Company's approach to base compensation is to offer
competitive salaries in comparison to market practices. The 1995 average
base salaries of the three executive officers other than the President (which
appear on the summary compensation table) increased an average of 5 percent
in 1995.
The Audit and Incentive Stock Option Committee, consisting of two outside
directors, Mr. George M. Bruton and Mr. Hilton J. Cochran, along with the
Chairman of the Board of Directors, Mr. B.J. McRae, annually examine market
compensation levels and trends observed in the labor market. For its
purposes, the Committee has defined the labor market as the pool of
executives who are currently employed in similar positions in companies
with similar sales and market capitalization. Market information is used as
a frame of reference for annual salary adjustments and starting salaries.
The Committee makes salary decisions in the annual review process with
input from the President. This annual review considers the decision-making
responsibilities of each position and the experience, work performance, and
team-building skills of position incumbents. The Committee views work
performance as the single most important measurement factor and places most
of the weight in this area. The remaining measurement factors,
decision-making responsibilities, work performance and team-building
skills, are weighted equally.
Incentive Compensation -The Audit and Incentive Stock Option Compensation
Committee, along with the Chairman of the Board of Directors, annually make
recommendations to the Board of Directors whether to pay and the amount of
cash incentive bonuses. For executive officers other than the President,
consideration is given to overall corporate performance of the specific
areas of the Company under a participant's direct control. This balance
supports the accomplishment of overall objectives and rewards individual
contributions by our executive officers. Individual annual bonus level
targets are consistent with market practices for positions with comparable
decision-making responsibilities. Target performance levels are based upon
historic patterns of Company performance and strategic objectives. All
annual bonus-level performance targets are set above normal expectations of
performance. Such performance measure threshold ensures that bonuses are
not paid for substandard accomplishments. The average bonus earned by the
three executive officers other than the President (which appear in the
Summary Compensation Table) was 16 percent of their base salaries compared
to 15 percent in 1994.
President's Compensation - As indicated in the discussion above, the
Company's total compensation program is based upon market conditions and
business performance. An increasing amount of an executive's yearly
compensation is dependent upon the Company's performance for the fiscal
year based upon the executive's level of responsibility and authority.
Therefore, the President's bonus is generally a larger percentage of his
total compensation . In 1995 his bonus was 23 percent of his base salary.
The base salary for Mr. B.J. McRae increased by 2 percent over 1994.
Hilton J. Cochran George M. Bruton B.J. McRae
<PAGE>
STOCK PERFORMANCE GRAPH
The tabular form below sets forth the cumulative total shareholder return
to the Company's shareholders during the five year period ended July 29,
1995, as well as an overall stock market index (AMEX Index) and a composite
rate combining the AMEX sub-indices for technology and consumer goods,
industry segments in which the Company is actively involved.
YEAR ENDING JULY 31,
1990 1991 1992 1993 1994 1995
McRae Industries, Inc. Common Stock
Class A $100 $98 $102 $150 $156 $171
Class B 100 105 102 117 136 124
AMEX Index 100 103 105 120 117 138
Composite Index 100 138 113 153 144 179
The above chart assumes $100 invested on July 31, 1990 in the Company's
Class A and B stocks, AMEX Index, and a Composite Index, and the
reinvestment of all dividends.
The above composite rate index has been weighted by the proportion of the
Company's segment revenue to total revenues of the Company.
1991 1992 1993 1994 1995
TECHNOLOGY .23 .32 .35 .33 .43
CONSUMER GOODS .77 .68 .65 .67 .57
1.00 1.00 1.00 1.00 1.00
Appendix: A graphic depectition of the tabular information above is presented
in the paper format of the Notice of Annual Meeting of Shareholders.
<PAGE>
RATIFICATION OF APPOINTMENT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
The Board of Directors has appointed the firm of Gleiberman Spears Shepherd &
Menaker, P.A. to serve as its independent certified public accountants for the
1996 fiscal year and recommends to shareholders that they vote for ratification
of that appointment.
The Board of Directors will reconsider the selection of independent certified
public accountants if the shareholders do not ratify the appointment of
Gleiberman Spears Shepherd & Menaker, P.A.
Representatives of Gleiberman Spears Shepherd & Menaker, P.A. are expected to
attend the Meeting with an opportunity to make a statement if they desire to do
so and are expected to be available to respond to appropriate questions.
The Board of Directors recommends a vote FOR ratification of the appointment of
Gleiberman Spears Shepherd & Menaker, P.A. as its independent certified public
accountants to audit the consolidated financial statements of the Company for
the 1996 fiscal year and proxies solicited by the Board of Directors will be so
voted unless shareholders specify otherwise. The affirmative vote of a majority
of the shares of both classes of Common Stock (with each share of Class B
Common Stock being entitled to one vote per share and each share of Class A
Common Stock being entitled to one-tenth vote per share) present at the
Meeting, in person or by proxy, is required to ratify the appointment of the
accountants. Abstentions and shares (not otherwise present at the meeting) not
voted will have the effect of negative votes on the ratification of
accountants.
COMPLIANCE WITH SECTION 16(a) OF SECURITIES EXCHANGE ACT OF 1934
Section 16(a) of the Securities Exchange Act of 1934 requires the Company's
directors and executive officers and persons who own more than 10% of the
Company's Class A Common Stock and Class B Common Stock to file with the
Securities and Exchange Commission initial reports of ownership and reports of
changes in ownership of such Class A and Class B Common Stock. Executive
officers, directors and greater than 10% stockholders are required to furnish
the Company with copies of all such reports they file. To the Company's
knowledge, based solely on a review of the copies of such reports furnished to
the Company, during the fiscal year ended July 29, 1995, all Section 16(a)
filing requirements applicable to its executive officers, directors and greater
than 10% beneficial owners were complied with.
OTHER MATTERS
The Board of Directors is not aware of any other matters which may be presented
for action at the Meeting, but if other matters do properly come before the
Meeting, it is intended that shares represented by proxies in the accompanying
form will be voted in accordance with the best judgment of the person or
persons voting the proxy.
By Order of the Board of Directors
/s/ B. J. McRae
President
November 10, 1995
<PAGE>
