<PAGE> 1
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES
EXCHANGE ACT OF 1934
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 Rule 14a-11(c) or Rule 14a-12
McRae Industries, Inc.
- --------------------------------------------------------------------------------
(Name of Registrant as Specified in Its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if Other Than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No 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:
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(2) Aggregate number of securities to which transaction applies:
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(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):
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(4) Proposed maximum aggregate value of transaction:
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(5) Total fee paid:
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[ ] 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:
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(4) Date Filed:
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<PAGE> 2
McRAE INDUSTRIES, INC.
400 North Main Street
Mount Gilead, North Carolina 27306
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD DECEMBER 16, 1999
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 16th day of
December, 1999, at the offices of the Company located at 400 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 November 1, 1999 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
James W. McRae
Secretary
November 15, 1999
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> 3
McRAE INDUSTRIES, INC.
400 North Main Street
Mount Gilead, North Carolina 27306
PROXY STATEMENT
GENERAL
This Proxy Statement is furnished in connection with the solicitation by the
Board of Directors of proxies to be used at the Annual Meeting of Shareholders
of McRae Industries, Inc., a Delaware corporation (the "Company"), to be held at
3:00 p.m., local time, on December 16, 1999 at its principal office, 400 North
Main Street, Mount Gilead, North Carolina. This Proxy Statement and accompanying
proxy are being sent to the shareholders of the Company on or about November 15,
1999.
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 first being
mailed to shareholders of record on or about November 15, 1999.
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 21, 1999 are entitled to vote at the meeting. On that
date, the Company had outstanding and entitled to vote a total of 1,857,974
shares of Class A Common Stock and 910,525 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 Company's 2000 annual meeting of
shareholders must be received at the offices of the Company, Post Office Box
1239, 400 North Main Street, Mount Gilead, North Carolina 27306, no later than
July 18, 2000 for inclusion in the Company's proxy statement and form of proxy
for that meeting. In addition, if the Company receives notice of shareholder
proposals after October 1, 1999, then the persons named as proxies in such proxy
statement and form of proxy will have discretionary authority to vote on such
shareholder proposals, without discussion of such matters in the proxy statement
and without such proposals appearing as a separate item on the proxy card.
PRINCIPAL SHAREHOLDERS AND HOLDINGS OF MANAGEMENT
Listed in the following table are the only beneficial owners, known to the
Company as of November 1, 1999, of more than five percent of the Company's $1
par value Class A and Class B Common Stock and the number of
<PAGE> 4
shares beneficially owned by directors and executive officers as a group. Voting
securities beneficially owned by individual directors, director nominees and
Named Executive Officers (as defined herein) are disclosed under Election of
Directors, below.
<TABLE>
<CAPTION>
Class A Class B
Common Stock Common Stock
Amount and Amount and
Nature of Percent Nature of Percent
Name and Address of Beneficial of Beneficial of
Beneficial Owner Ownership (1) Class A Ownership (1) Class B
- ------------------------------------- ---------------------------- ----------------------------
<S> <C> <C> <C> <C>
D. Gary McRae 426,212(2) 23% 552,079(3) 61%
P.O. Box 1239
Mount Gilead, NC 27306
James W. McRae 409,588(4) 22% 544,265(3) 60%
P.O. Box 1239
Mt. Gilead, NC 27306
Branch Banking & Trust Co. 330,511(5) 18% 101,677(5) 11%
P.O. Box 29542
Raleigh, NC 27626
All Directors and Executive Officers 494,835(6) 27% 573,555(7) 63%
as a group (8 persons)
</TABLE>
(1) All shares owned directly and with sole voting and investment power
except as otherwise noted.
(2) Includes 4,000 shares owned by Mr. D. Gary McRae's minor children,
1,111 shares owned by his wife and 361,925 shares held by the estate of
the late B. J. McRae (the "Estate") as to which he has shared voting
and investment power as co-executor with his brother, Mr. James W.
McRae. Does not include any interest in shares held by the Company's
Employee Stock Ownership Plan (the "ESOP").
(3) Includes 523,877 shares held by the Estate as to which Messrs. D. Gary
McRae and James W. McRae have shared voting and investment power as
co-executors of the Estate. Does not include any interest in shares
held by the ESOP.
(4) Includes 4,000 shares owned by Mr. James W. McRae's children and
361,925 shares held by the Estate as to which he has shared voting and
investment power as co-executor with his brother, Mr. D. Gary McRae.
Does not include any interest in shares held by the ESOP.
(5) These shares represent shares held by Branch Banking & Trust Co.
("BB&T") and include all shares held by the ESOP for which BB&T serves
as trustee. BB&T has sole voting and investment power with respect to
such shares. Information with respect to BB&T is as of October 12, 1999
and was provided to the Company by BB&T in a telephone call on October
12, 1999.
(6) Includes 361,925 shares held by the Estate.
(7) Includes 523,877 shares held by the Estate.
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 Annual 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.
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<PAGE> 5
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, where a class vote is required, a quorum consists of the presence,
in person or by proxy, of the holders of a majority of the outstanding shares of
a particular class entitled to vote as a class at the meeting. 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.
The two nominees for election as Directors by the holders of Class A Common
Stock, both of whom are currently members of the Board of Directors, are listed
below. Each was elected to his respective term, which expires in 1999, at the
Annual Meeting of Shareholders held on December 17, 1998.
DIRECTORS TO BE ELECTED BY HOLDERS OF CLASS A COMMON STOCK
<TABLE>
<CAPTION>
Percentage of
Shares of Common Stock Common Stock
First Beneficially Owned(1) Outstanding
Name and Principal Became ---------------------- ----------------
Occupation or Employment Age Director Class A Class B Class A Class B
- ------------------------ --- -------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C> <C>
Brady W. Dickson 54 1997 9,960(2) -- (4) (4)
Consultant since 1995; President,
Standard Packaging, Mount Gilead,
North Carolina from 1972 to 1995.
Harold W. Smith 56 1985 4,700 -- (4) (4)
Vice President - McRae
Office Solutions since 1993;
Vice President - Finance
and Accounting 1981 to 1993.
</TABLE>
The five nominees for election as Directors by holders of Class B Common Stock,
all of whom are currently members of the Board of Directors, are listed below.
The five nominees were elected to their terms, which expire in 1999, at the
Annual Meeting of Shareholders held on December 17, 1998.
3
<PAGE> 6
DIRECTORS TO BE ELECTED BY HOLDERS OF CLASS B COMMON STOCK
<TABLE>
<CAPTION>
Percentage of
Shares of Common Stock Common Stock
First Beneficially Owned(1) Outstanding
Name and Principal Became ---------------------- ----------------
Occupation or Employment Age Director Class A Class B Class A Class B
- ------------------------ --- -------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C> <C>
George M. Bruton 70 1982 588 588 (4) (4)
Owner of George M. Bruton
Insurance Agency, Inc.,
Mount Gilead, North Carolina
since 1950.
Hilton J. Cochran 69 1985 400 500(3) (4) (4)
Part-Owner of
J. Morris & Associates, Inc.,
Troy, NC since 1952;
President 1952-1998.
Victor A. Karam 65 1972 5,312 -- (4) (4)
President - Footwear Division since
1998; General Manager, Footwear
Division since 1969 and Vice-President,
Footwear Division 1969-1998.
D. Gary McRae(5) 49 1979 426,212(6) 552,079(6) 23% 61%
President of the Company since
1997, Treasurer since 1991 and Vice
President 1980-1997.
James W. McRae(5) 47 1985 409,588(6) 544,265(6) 22% 60%
Vice President
since 1986; Secretary since 1991;
plant manager Footwear Division
since 1985.
</TABLE>
(1) All shares owned directly and with sole voting and investment power as
of November 1, 1999 except as otherwise noted. Does not include any
interest in shares held by the Company's ESOP.
(2) Includes 6,000 shares owned by his wife.
(3) Owned jointly with his wife.
(4) Less than 1%.
(5) D. Gary McRae and James W. McRae are brothers.
(6) Information as to beneficial ownership of these shares is provided in
the table of principal shareholders on page 2.
DIRECTOR COMPENSATION
Directors are paid $725 for attending meetings of the Board of Directors
(directors who are also officers or employees of the Company are paid $375 for
attending such meetings). This amount was increased from $700 to $725 ($350 to
$375 for officers and employees) in November 1998. In addition, effective
November 1998, directors are paid $100 for attending committee meetings.
EXECUTIVE OFFICERS
Messrs. D. Gary McRae, James W. McRae, Victor A. Karam and Harold W. Smith are
executive officers as well as directors. The executive officers of the Company
were appointed by the unanimous written consent of
4
<PAGE> 7
the Board of Directors on December 17, 1998 and serve at the pleasure of the
Board of Directors. Marvin Kiser, age 51, has served as Controller for the
Company since September, 1996. Previously, Mr. Kiser was treasurer of Robert W.
Chapman & Company from 1988 to 1996.
THE BOARD OF DIRECTORS AND ITS COMMITTEES
The Board of Directors held five 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.
The Audit and Incentive Stock Option Committee is composed of George M. Bruton,
Brady W. Dickson and Hilton J. Cochran and 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 administering and selecting key
employees to whom stock options and stock appreciation rights will be awarded
under the Company's 1998 Incentive Equity 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. The Committee met once during the fiscal year.
COMPENSATION COMMITTEE 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, administering the Company's 1998 Incentive Equity Plan. The
Board of Directors is currently composed of D. Gary McRae, President and
Treasurer of the Company, George M. Bruton, Hilton J. Cochran, Brady W. Dickson,
Victor A. Karam, President - Footwear, James W. McRae, Vice President and
Secretary, and Harold W. Smith, Vice President - McRae Office Solutions. Messrs.
Bruton, Dickson and Cochran currently comprise the Company's Audit and Incentive
Stock Option Committee.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
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.
D. Gary McRae serves as a director of AMIC and was appointed its president on
March 18, 1997. He serves without compensation.
The Company owns shares of the common stock of AMIC which represents about 13%
of its outstanding common stock. In addition, the Company owns all outstanding
shares of AMIC's 20% Cumulative Convertible Preferred Stock. Because of
arrearages in dividends on the 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. The Estate owns 1,996 shares of AMIC's common stock. Messrs. D. Gary McRae
and James W. McRae are co-executors of the Estate.
At the beginning of the Company's 1999 fiscal year, the Company had investments
in and advances to AMIC of approximately $693,000. During the 1999 fiscal year,
the Company advanced AMIC approximately $65,000 for working capital
requirements. The investment in AMIC's stock and amounts due from AMIC were
reduced to the extent that the recorded amounts exceed shareholder equity as
reported by AMIC. Because
5
<PAGE> 8
of AMIC'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 $729,000. AMIC has been
operating under Chapter X of the United States Bankruptcy Act since 1974 and the
court has imposed certain restrictions under a Plan of Reorganization.
Management believes that the Company's advances to and continued financial
support of AMIC are justified in light 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 AMIC'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 remaining
amounts due the Company from AMIC are ultimately recoverable.
Indebtedness of the Estate
The Company from time to time made loans to the late B. J. McRae prior to his
death. At July 31, 1999, the Estate owed the Company approximately $197,000,
under these loans. All of this indebtedness bears interest at the federal funds
rate plus 2%.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
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 August 1, 1998, all Section 16(a)
filing requirements applicable to its executive officers, directors and greater
than 10% beneficial owners were complied with.
6
<PAGE> 9
EXECUTIVE COMPENSATION
The table below shows the compensation paid or accrued by the Company, for the
three fiscal years ended July 31, 1999, to or for the account of D. Gary McRae,
the only person who has served as Chief Executive Officer during the fiscal year
and James W. McRae, Victor A. Karam and Harold W. Smith, the only other
executive officers of the Company whose total annual salary and bonus exceeded
$100,000 for the 1999 fiscal year (collectively, the "Named Executive
Officers"). At fiscal year-end, no Named Executive Officer held any unexercised
options.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------------------
Annual Compensation Long Term
Compensation
--------------------------------------- ------------------------
Awards
------------ -----------
Other Restricted
Name and Annual Stock Options/ All Other
Principal Fiscal Salary Bonus Compen- Award(s) SARs Compensation
Position Year ($) ($) sation ($) (#) ($)
($)(1)
- ---------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
D. Gary McRae 1999 162,954 29,700 -- 0 0 0
President and 1998 145,481 33,000 -- 0 0 0
Treasurer 1997 122,495 25,000 -- 0 0 0
Victor A. Karam 1999 142,585 24,300 -- 0 0 0
President-- 1998 136,750 27,000 -- 0 0 0
Footwear 1997 130,220 27,000 -- 0 0 0
Harold W. Smith 1999 111,923 20,000 -- 0 0 0
Vice President-- 1998 104,933 13,500 -- 0 0 0
McRae Office 1997 100,972 8,800 -- 0 0 0
Solutions
James W. McRae 1999 101,346 14,400 -- 0 0 0
Vice President and 1998 96,668 16,000 -- 0 0 0
Secretary 1997 87,854 15,000 -- 0 0 0
- ---------------------------------------------------------------------------------------------------------------------
</TABLE>
(1) No Named Executive Officer received personal benefits during the listed
years in excess of 10% of his respective annual salary and bonus.
COMPENSATION COMMITTEE REPORT
The Audit and Incentive Stock Option Committee, whose members are named above,
together with the Chairman of the Board, make recommendations to the Board of
Directors concerning the Company's compensation arrangements. In connection with
such arrangements, Messrs. D. Gary McRae, Bruton, Dickson 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;
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<PAGE> 10
- Reinforce strategic performance objectives through the use
of annual and long-term incentive compensation programs; and
- 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 1999 average base
salaries of the three Named Executive Officers other than the President
increased an average of 5 percent in 1999.
The Committee, consisting of three outside directors, along with the Chairman of
the Board of Directors, Mr. D. Gary 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 and team-building skills, are weighted equally.
Incentive Compensation - The Audit and Incentive Stock Option 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 Named Executive Officers other than the President was 16
percent of their base salaries compared to 17 percent in 1998.
Long-term incentives provide another key element of executive compensation.
Previously, the Company has granted non-qualified options from time to time
under the Company's 1985 Non-Qualified Stock Option Plan. To expand the
Company's flexibility to offer long-term incentives to its key employees, the
Shareholders and the Board of Directors have adopted the 1998 Incentive Equity
Plan, which replaced the Company's 1985 Non-Qualified Stock Option Plan. No
awards were made under the 1998 Incentive Equity Plan during 1999.
President Compensation - As indicated in the discussion above, the Company's
total compensation program is based upon market conditions and business
performance. A portion 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 than for the other officers. In
1999, Mr. D. Gary. McRae received a bonus equal to 18 percent of his base salary
(and his base salary was increased 12 percent over 1998).
Hilton J. Cochran George M. Bruton
Brady W. Dickson D. Gary McRae
8
<PAGE> 11
STOCK PERFORMANCE GRAPH
The accompanying graph and table set forth the cumulative total shareholder
return to the Company's shareholders during the five year period ended July 31,
1999, for each of the Company's Class A and Class B Common Stock, as well as an
overall stock market index (AMEX Index) and the Dow Jones Industry Group Index
for each of footwear, office equipment and industrial technology, the principal
industry segments in which the Company is actively involved.
<TABLE>
<CAPTION>
Equity/Index 1994 1995 1996 1997 1998 1999
- ------------ ---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C>
McRae Class A Common Stock 100 109 118 140 125 106
McRae Class B Common Stock 100 91 105 123 104 82
AMEX Index 100 118 127 152 167 186
Dow Jones Industrial Group Index - Office Equipment 100 117 156 245 327 338
Dow Jones Industrial Group Index - Industrial Technology 100 138 124 151 119 164
Dow Jones Industrial Group Index - Footwear 100 124 228 262 179 203
</TABLE>
9
<PAGE> 12
RATIFICATION OF APPOINTMENT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
The Board of Directors has appointed Gleiberman Spears Shepherd & Menaker, P.A.
as independent certified public accountants for the 2000 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. A representative of Gleiberman Spears
Shepherd & Menaker, P.A. is expected to attend the annual meeting with the
opportunity to make a statement if the representative desires to do so, and is
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 2000 fiscal year and proxies solicited by the Board of Directors will be so
voted unless shareholders specify otherwise.
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.
ANNUAL REPORT TO SECURITIES AND EXCHANGE COMMISSION
UPON WRITTEN REQUEST OF A SHAREHOLDER, THE COMPANY WILL FURNISH WITHOUT CHARGE A
COPY OF ITS ANNUAL REPORT ON FORM 10-K FOR THE FISCAL YEAR ENDED JULY 31, 1999
TO BE FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON OCTOBER 29, 1999.
SUCH REQUEST SHOULD BE SUBMITTED TO OFFICE OF THE SECRETARY, MCRAE INDUSTRIES,
INC., P.O. BOX 1239, MOUNT GILEAD, NORTH CAROLINA 27306.
10
<PAGE> 13
APPENDIX A
FOR USE BY CLASS A SHAREHOLDERS
McRAE INDUSTRIES, INC.
PROXY SOLICITED BY THE BOARD OF DIRECTORS
FOR ANNUAL MEETING OF SHAREHOLDER TO BE HELD
DECEMBER 16, 1999
The undersigned hereby appoints D. Gary McRae and James W. McRae and each or
either of them, with full power of substitution, with all the powers which the
undersigned would possess if personally present, to vote as designated below,
all shares of the $1 par value Class A Common Stock of the undersigned in McRae
Industries, Inc. at the Annual Meeting of Shareholders to be held at 3:00 p.m.
on the 16th day of December, 1999, and at any adjournment thereof.
UNLESS SPECIFIED, THIS PROXY WILL BE VOTED FOR ITEMS 1, 2 AND 3 SHOWN BELOW:
The Board of Directors recommends voting for all items.
1. Election of Directors: Nominees are Brady W. Dickson and Harold W. Smith.
[ ] For all listed nominees (except do not vote for nominee(s) whose
name(s) I have written below)
---------------------------------------------------------------------------
[ ] WITHHOLD AUTHORITY to vote for all listed nominees
2. Ratification of appointment of Gleiberman Spears Shepherd and Menaker, P.A.
as accountants.
FOR AGAINST ABSTAIN
[ ] [ ] [ ]
(Please sign on reverse side)
3. In their discretion, the proxies are authorized to vote upon such other
business as may properly come before the meeting.
Receipt of Notice of Annual Meeting and accompanying Proxy Statement is
hereby acknowledged.
Please date, sign exactly as printed below and return promptly in the
enclosed postage-paid envelope.
Date: , 1999
--------------------------------
-------------------------------------------
-------------------------------------------
(When signing as attorney, executor,
administrator, trustee, guardian, etc. give
title as such. If a joint account, each
joint owner should sign personally.)
<PAGE> 14
APPENDIX B
FOR USE BY CLASS B SHAREHOLDERS
McRAE INDUSTRIES, INC.
PROXY SOLICITED BY THE BOARD OF DIRECTORS
FOR ANNUAL MEETING OF SHAREHOLDER TO BE HELD
DECEMBER 16, 1999
The undersigned hereby appoints D. Gary McRae and James W. McRae and each or
either of them, with full power of substitution, with all the powers which the
undersigned would possess if personally present, to vote as designated below,
all shares of the $1 par value Class B Common Stock of the undersigned in McRae
Industries, Inc. at the Annual Meeting of Shareholders to be held at 3:00 p.m.
on the 16th day of December, 1999, and at any adjournment thereof.
UNLESS SPECIFIED, THIS PROXY WILL BE VOTED FOR ITEMS 1, 2 AND 3 SHOWN BELOW:
The Board of Directors recommends voting for all items.
1. Election of Directors: Nominees are George M. Bruton, Hilton J. Cochran,
Victor A. Karam, D. Gary McRae and James W. McRae.
[ ] FOR all listed nominees (except do not vote for nominee(s) whose
name(s) I have written below)
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[ ] WITHHOLD AUTHORITY to vote for all listed nominees
2. Ratification of appointment of Gleiberman Spears Shepherd and Menaker, P.A.
as accountants.
FOR AGAINST ABSTAIN
[ ] [ ] [ ]
(Please sign on reverse side)
3. In their discretion, the proxies are authorized to vote upon such other
business as may properly come before the meeting.
Receipt of Notice of Annual Meeting and accompanying Proxy Statement is
hereby acknowledged.
Please date, sign exactly as printed below and return promptly in the
enclosed postage-paid envelope.
Date: , 1999
--------------------------------
-------------------------------------------
-------------------------------------------
(When signing as attorney, executor,
administrator, trustee, guardian, etc. give
title as such. If a joint account, each
joint owner should sign personally.)
