SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934
(Amendment No. )
( ) Filed by the Registrant
( ) Filed by a Party other than the Registrant
Check the appropriate box:
( ) Preliminary Proxy Statement
(xx) Definitive Proxy Statement
( ) Definitive Additional Materials
( ) Soliciting Material Pursuant to (section mark)240.14a-11(c) or
(section mark)240.14a-12
Interstate/Johnson Lane
(Name of Registrant as Specified In Its Charter)
(Name of Person(s) Filing Proxy Statement)
PAYMENT OF FILING FEE (Check the appropriate box):
(xx) $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), or 14a-6(i)(2).
( ) $500 per each party to the controversy pursuant to Exchange Act
Rule 14a-6(i)(3).
( ) Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
1) Title of each class of securities to which transaction applies:
2) Aggregate number of securities to which transaction applies:
3) Per unit price or other underlying value of transaction
computed pursuant to Exchange Act Rule 0-11: *
* Set forth the amount on which the filing fee is calculated and state how
it was determined.
( ) Check box if any part of the fee is offset as provided by Exchange
Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee
was paid previously. Identify the previous filing by registration
statement number, or the Form or Schedule and the date of its filing.
1) Amount Previously Paid: $
2) Form, Schedule or Registration Statement No.:
3) Filing Party:
4) Date Filed:
( ) Filing Fee of $ was previously paid on , 199 ,
the date the Preliminary Proxy Statement was filed.
<PAGE>
(Interstate/Johnson Lane logo appears here)
INTERSTATE/JOHNSON LANE, INC.
Notice of Annual Meeting of Shareholders
To be held January 24, 1995
To The Shareholders of
Interstate/Johnson Lane, Inc.
The annual meeting of the shareholders of Interstate/Johnson
Lane, Inc. (the "Company") will be held on Tuesday, January 24, 1995, at
3:00 P.M. at the Radisson Plaza Hotel, 101 South Tryon Street,
Charlotte, North Carolina, for the following purposes:
(1) To elect ten directors to serve until their
successors are elected and qualified.
(2) To ratify the appointment of Coopers & Lybrand
L.L.P. as the Company's independent certified
public accountants for the fiscal year ending September
30, 1995.
(3) To approve an Amendment to the Company's 1987
Stock Award Plan.
(4) To transact such other business as may properly
come before the meeting or any adjournment thereof.
The Board of Directors has fixed December 2, 1994, as the record
date for the determination of shareholders entitled to notice of and to vote
at the meeting.
Michael D. Hearn, Secretary
Dated: December 16, 1994
AFTER VOTING THE ENCLOSED PROXY, PLEASE SIGN, DATE AND MAIL IN THE
ENCLOSED ENVELOPE SO AS TO INSURE A QUORUM AT THE MEETING. THIS IS
IMPORTANT WHETHER YOU OWN FEW OR MANY SHARES. DELAY IN RETURNING YOUR
PROXY MAY SUBJECT THE COMPANY TO ADDITIONAL EXPENSE.
<PAGE>
INTERSTATE/JOHNSON LANE, INC.
Interstate Tower
Post Office Box 1012
Charlotte, North Carolina 28201-1012
Proxy Statement
This proxy statement is furnished in connection with the
solicitation of proxies by the Board of Directors of Interstate/Johnson
Lane, Inc. (the "Company") for use at the annual meeting of shareholders of
the Company to be held on Tuesday, January 24, 1995, and at any adjournment
thereof. Unless the context requires otherwise, all references in this proxy
statement to the Company refer to Interstate/Johnson Lane, Inc. and its
subsidiaries. This proxy statement and the accompanying proxy card are first
being mailed to shareholders on or about December 16, 1994.
Only shareholders of record at the close of business on December 2,
1994, are entitled to vote at the meeting. As of such date, the Company had
outstanding and entitled to vote 6,413,884 shares of common stock, par value
$.20 per share (the "Common Stock"), and approximately 1,133 shareholders of
record. Each outstanding share entitles the shareholder of record to one
vote.
All proxies which are properly executed and received prior to the
meeting will be voted at the meeting. If a shareholder specifies how the
proxy is to be voted on any of the business to come before the meeting, the
proxy will be voted in accordance with such specification. If no
specification is made, the proxy will be voted for the election of
directors, for the ratification of the appointment of Coopers & Lybrand
L.L.P. as the Company's independent certified public accountants for the
fiscal year ending September 30, 1995, and for approval of the Amendment to
the 1987 Stock Award Plan. A proxy may be revoked, to the extent it has not
been exercised, at any time prior to its exercise, by written notice to the
Secretary of the Company, by executing and delivering a proxy with a later
date or by voting in person at the meeting.
<PAGE>
Security Ownership of Certain Beneficial Owners and Management
The following table sets forth, as of November 30, 1994, the number
and percentage of outstanding shares beneficially owned by each person known
by the Company to own more than 5% of the Company's Common Stock, by each
director, nominee for director and named executive officer of the Company,
and by directors and executive officers of the Company as a group. Unless
otherwise indicated, each shareholder named has sole voting and dispositive
power with respect to such shareholder's shares.
<TABLE>
<CAPTION>
Number of Shares Percent
Name Beneficially Owned(1) of Class
<S> <C> <C>
Claude S. Abernethy, Jr. 282,577 (2) 4.4%
Edwin A. Dalrymple 18,970 (3) *
Parks H. Dalton 125,208 (4) 2.0%
John B. Ellis 2,000 *
W. Clay Hamner 2,000 *
Peter R. Kellogg 1,050,000 (5) 16.4%
George A. McElveen, III 68,379 (6) 1.1%
James H. Morgan 59,176 (7) *
NationsBank of North Carolina, Trustee
Interstate/Johnson Lane Corporation
Employee Stock Ownership and
PAYSOP Plan and Trust 454,857 (8) 7.1%
Dudley G. Pearson 8,749 (9) *
Richard S. Pechter 38,200 (10) *
Edward C. Ruff 120,211 (11) 1.9%
Grady G. Thomas, Jr. 80,337 (12) 1.2%
All directors and executive officers
as a group (17 persons) 1,934,854 (13) 29.8%
*Less than 1%
</TABLE>
(1) Does not include shares that might be deemed to be beneficially
owned by a director, nominee or executive officer serving on a
committee which may direct the investment of Common Stock in the
Company's Profit Sharing and Capital Accumulation Plan and Trust
("PSP/CAP") or Employee Stock Ownership and PAYSOP Plan and Trust
("ESOP/ PAYSOP").
(2) Mr. Abernethy's shares include 21,400 shares owned by his
wife; 32,800 shares owned by his children; 14,851 shares of
restricted stock; 7,067 shares issuable under currently exercisable
stock options; 43,268 shares issuable upon conversion of the
Company's 7 3/4% Convertible Subordinated Debentures due March 31,
2011 (the "Debentures"), which consist of 22,592 shares owned by his
wife and children, and 20,676 shares held by a trust of which Mr.
Abernethy is the Trustee; and 13,334 shares held in the
ESOP/PAYSOP and PSP/CAP plans.
(3) Mr. Dalrymple's shares include 2,667 shares of restricted stock
and 1,611 shares held in the ESOP/PAYSOP and PSP/CAP plans.
(4) Mr. Dalton's shares include 7,150 shares held in the ESOP/PAYSOP and
PSP/CAP plans.
(5) Mr. Kellogg's shares include 100,000 shares held by his wife;
100,000 shares held by a Trust, of which he is a trustee; and 499,500
shares held by IAT Reinsurance Syndicate Ltd., a Bermuda corporation,
of which he is the sole holder of the voting stock.
(6) Mr. McElveen's shares include 2,000 shares owned by his wife;
5,030 shares owned by his children; 8,934 shares of restricted stock;
and 69 of the 115 shares held in the ESOP/PAYSOP and
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PSP/CAP plans, in which he is 60% vested.
(7) Mr. Morgan's shares include 86 shares owned by his wife, 274 shares
owned by his children, 7,000 shares of restricted stock, and 205
shares held in the ESOP/PAYSOP and PSP/CAP plans.
(8) This shareholder has dispositive power with respect to these
shares, and voting power only as to shares not allocated to
participants' accounts. The address of this holder is: One NationsBank
Plaza, Charlotte, North Carolina 28255-0001.
(9) Mr. Pearson's shares include 1,502 shares of restricted stock and
147 shares held in the ESOP/PAYSOP and PSP/CAP plans.
(10) Mr. Pechter's shares include 10,000 shares issuable under
currently exercisable stock options.
(11) Mr. Ruff's shares include 2,334 shares of restricted stock;
18,500 shares issuable under currently exercisable stock options; 112
shares issuable upon conversion of the Company's Debentures, owned
by his mother; and 6,068 shares held in the ESOP/PAYSOP and PSP/CAP
plans.
(12) Mr. Thomas' shares include the following: 12,439 shares of
restricted stock; 15,000 shares issuable under currently exercisable
stock options; and 3,914 shares held in the ESOP/PAYSOP and PSP/CAP
plans.
(13) Shares of all directors, nominees for director and executive
officers as a group include 68,567 shares issuable under currently
exercisable stock options, 59,480 shares of restricted stock, and
26,443 shares held in the ESOP/PAYSOP and PSP/CAP plans.
Election of Directors
At the annual meeting, ten directors are to be elected to serve until the
next annual meeting and until their successors are elected and qualified. It
is the intention of the persons named in the proxy to vote for the persons
named as directors for the ensuing year. Should any nominee be unable to
serve (which is not anticipated), the proxy will be voted for the election
of such other person as shall be designated by the Board of Directors.
Information with respect to each current director and nominee, including
biographical data for at least the last five years, is set forth below:
Claude S. Abernethy, Jr.
Mr. Abernethy, age 67, was elected a director of the Company in June, 1985.
He was a director of Interstate/Johnson Lane Corporation, the Company's
wholly owned subsidiary, ("IJL Corporation") from 1953 to 1987 and has been
a Senior Vice President since 1963. He has been affiliated with IJL
Corporation since 1951. Mr. Abernethy is also a director of Air
Transportation Holding Company, an air freight company.
Parks H. Dalton
Mr. Dalton, age 65, was a director of IJL Corporation from 1985 until his
retirement in 1988. He also served as Chief Executive Officer of IJL
Corporation (then Interstate Securities Corporation) from 1968 to 1988,
President from 1968 to 1983, and Chairman from 1983 to 1988. In November,
1990, he was re-elected Chairman and Chief Executive Officer of IJL
Corporation. Mr. Dalton served as Chairman of the Company from 1985 until
his retirement in 1988, and as Chief Executive Officer from 1985 to 1986. He
was re-elected as a director of the Company in July, 1990 and as Chairman
and Chief Executive Officer of the Company in September, 1990. He served as
Chief Executive Officer from September, 1990, until October, 1994, and still
serves as Chairman. Mr. Dalton is also a director of ISC Realty Corporation,
which is managing general partner of The Carolinas Real Estate Fund,
Marketplace Income Properties,
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Atlantic Income Properties Limited Partnership, Interstate Land
Investors I Limited Partnership, and Interstate Land Investors II
Limited Partnership; all publicly held real estate investment
partnerships.
John B. Ellis
Mr. Ellis, age 70, retired in 1986 as Senior Vice President-Finance and
Treasurer from Genuine Parts Company, a national distributor of automotive
replacement parts, and continues to serve as a director of that firm. Mr.
Ellis is also a director of Flowers Industries, Inc., Hughes Supply Inc.,
Integrity Music, Inc., Intermet Corp., Oxford Industries, Inc. and UAP, Inc.
W. Clay Hamner
Mr. Hamner, age 49, has been Chairman and Chief Executive Officer of
Montrose Capital Corporation, a privately held investment corporation, since
1980. Mr. Hamner is a director of Vista Resources Inc., and Wendy's
International, Inc.
Peter R. Kellogg
Mr. Kellogg, age 52, was elected a director of the Company in October, 1989.
Mr. Kellogg is Senior Managing Director and Chief Executive Officer of the
investment firm of Spear, Leeds & Kellogg ("SLK"), having joined them in
1967. Mr. Kellogg is also the Chairman of IAT Reinsurance Syndicate Ltd.
Troster Singer Corp., a division of SLK, provides execution services to the
Company on certain transactions in over-the-counter securities.
James H. Morgan
Mr. Morgan, age 47, served as Vice President of the Company from 1987 to
1989, and was a director and Senior Vice President of IJL Corporation in
various research, equity marketing and investment policy roles from 1986 to
1989. From July 1989 to September 1990, Mr. Morgan was President of Morgan
Investments, Inc., a privately owned and operated investment advisory
business. Mr. Morgan was elected President and Chief Operating Officer of
both the Company and IJL Corporation in September, 1990, and as a director
of both in October, 1990. He served as Chief Operating Officer from
September, 1990 until October, 1994, when he was elected President and Chief
Executive Officer, positions in which he currently serves.
Dudley G. Pearson
Mr. Pearson, age 51, is a Senior Vice President, Regional Manager and Branch
Manager of IJL Corporation's Atlanta Monarch office, having joined IJL
Corporation in January, 1987. Prior to that time, Mr. Pearson was a
registered sales representative with Morgan Keegan & Company, Inc. from 1983
to 1986.
Richard S. Pechter
Mr. Pechter, age 49, was elected a director of the Company in June, 1985.
Since 1979, he has been a director of Donaldson, Lufkin & Jenrette, Inc.
("DLJ"), an independently operated investment firm owned by the Equitable
Life Assurance Society of the United States. From 1975 to 1984, Mr. Pechter
was Executive Vice President of DLJ. From 1984 to 1987, he was President &
Chief Operating Officer of the Financial Services Group of DLJ. Mr. Pechter
was elected Chairman of the Financial Services Group in 1987 and still
serves in such capacity. DLJ provides execution services to the Company on
certain options exchanges. Mr. Pechter is also a director of Depository
Trust Company.
Edward C. Ruff
Mr. Ruff, age 55, was elected a director of the Company in 1988 and has
served as its Chief Financial Officer since 1985. He has been a director,
Senior Vice President and Chief Financial Officer of IJL Corporation since
he joined that firm in 1976. Mr. Ruff is also a director of ISC Realty
Corporation, which is the managing general partner of The Carolinas Real
Estate Fund, Marketplace Income Properties, Atlantic Income Properties
Limited Partnership, Interstate Land Investors I Limited Partnership and
Interstate Land Investors II Limited Partnership, all publicly held real
estate investment partnerships.
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Grady G. Thomas, Jr.
Mr. Thomas, age 51, was elected a director of the Company in November, 1988.
He joined IJL Corporation in 1977, was elected Senior Vice President in 1978
and served as a director from 1987 to 1991. Mr. Thomas is responsible for
specialized institutional products and is Manager of The Interstate Group, a
division of IJL Corporation.
Meetings and Committees
Board of Directors
During the fiscal year ended September 30, 1994, there were four meetings of
the Company's Board of Directors.
Audit Committee
Messrs. Hamner, Kellogg and Pechter served as the members of the Audit
Committee during the fiscal year ended September 30, 1994. The principal
functions of this Committee are to review the Company's internal controls
and confer with the Company's independent public accountants concerning the
scope and results of their audit and any recommendations they may have, and
to consider such other matters relating to auditing and accounting as the
Committee may deem appropriate. During the fiscal year ended September 30,
1994, the Audit Committee held three meetings.
Compensation Committee
Messrs. Ellis, Kellogg and Pechter served as the members of the Compensation
Committee during the fiscal year ended September 30, 1994. The principal
function of this Committee is to review and approve the compensation of the
executive officers of the Company. During the fiscal year ended September
30, 1994, the Compensation Committee held two meetings.
Incentive Stock Option Plan Committee
Messrs. Abernethy, Kellogg and Pechter served as the administrative
committee for the Company's 1985 Incentive Stock Option Plan during the
fiscal year ended September 30, 1994. The principal function of this
Committee is to determine the employees of the Company who will receive
options and stock appreciation rights under the 1985 Incentive Stock Option
Plan. During the fiscal year ended September 30, 1994, the ISO Committee
held no meetings.
Non-Qualified Stock Option Plan
Messrs. Kellogg and Pechter served as the administrative committee for the
Company's 1985 Non-Qualified Stock Option Plan during the fiscal year ended
September 30, 1994. The principal function of this Committee is to determine
who will receive options and/or stock appreciation rights under the
Company's 1985 Non-Qualified Stock Option Plan. During the fiscal year ended
September 30, 1994, the NQSO Committee held no meetings.
Stock Award Plan Committee
Messrs. Kellogg and Pechter served as the administrative committee for the
Company's 1987 Stock Award Plan, as amended and restated, during the fiscal
year ended September 30, 1994. The principal function of this Committee is
to determine who will receive options, restricted stock, and/or stock
appreciation rights under the Company's 1987 Stock Award Plan. During the
fiscal year ended September 30, 1994, the Stock Award Committee held two
meetings.
Nominating Committee
Messrs. Dalton, Kellogg and Ellis served as the members of the Nominating
Committee during the fiscal year ended September 30, 1994. The principal
function of this Committee is to nominate directors
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for the Board of Directors of the Company. During the fiscal year ended
September 30, 1994, the Nominating Committee held no meetings.
Executive Compensation
The following table sets forth information concerning the compensation
during the last three fiscal years of the Company's Chief Executive Officer
at September 30, 1994, and each of its four other most highly compensated
executive officers (the "named executive officers"):
<TABLE>
<CAPTION>
Summary Compensation Table (7)
Annual Compensation
Yr.End Other Annual All Other
Executive Officer 9/30 Salary Bonus Compensation Compensation
Cash Stock Total (4) (5) (5) (6)
(2) (3)
$ $ $ $ $ $
<S> <C> <C> <C> <C> <C> <C> <C>
Parks H. Dalton 1994 150,000 50,000 0 50,000 0 3,528
Chairman and 1993 150,000 175,000 0 175,000 0 3,820
Chief Executive Officer 1992 75,000 125,000 0 125,000 -- --
James H. Morgan (1) 1994 200,000 297,500 52,500 350,000 0 3,528
President and 1993 200,000 540,000 135,000 675,000 9,608 3,820
Chief Operating Officer 1992 190,000 296,250 174,750 471,000 -- --
Edward C. Ruff 1994 150,000 157,500 17,505 175,005 0 3,528
Chief Financial Officer 1993 150,000 255,000 45,000 300,000 5,677 3,820
1992 140,000 170,000 0 170,000 -- --
Edwin A. Dalrymple 1994 135,000 180,000 20,003 200,003 0 3,528
Sr. VP - IJL Corporation 1993 135,000 255,000 45,000 300,000 10,690 3,820
Retail Division 1992 125,000 132,500 7,000 139,500 -- --
George A. McElveen, III 1994 180,000 113,000 7,005 120,005 0 3,528
Chmn. and CEO - Sovereign 1993 180,000 315,000 55,000 370,000 5,409 3,820
Capital Management, 1992 130,000 127,500 99,503 227,003 -- --
Inc.
Sr. VP - IJL Corporation
</TABLE>
(1) Mr. Morgan was elected Chief Executive Officer subsequent to the
close of the 1994 fiscal year.
(2) In fiscal 1994, 1993 and 1992, the named executive officers were
awarded 12,935 shares, 33,900 shares, and 39,578 shares,
respectively, of Company stock restricted for one year and bearing the
rights to dividends, if any. Also included in fiscal 1992 totals was an
award of 8,000 shares restricted for four years, also bearing the right
to dividends.
(3) Aggregate restricted shareholdings and their respective values at
September 30, 1994, for each of the named executive officers were as
follows: Mr. Dalton, 2,058 shares, $16,207; Mr. Morgan, 15,661
shares, $123,330; Mr. Ruff, 6,147 shares, $48,408; Mr. Dalrymple,
7,278 shares, $57,314; and Mr. McElveen, 14,838 shares, $116,849.
(4) Amounts reported herein reflect the price discount on stock deemed
purchased as of September 30, 1993, by the named executive
officers under the Company's 1992-1993 Employee Deferred Stock
Purchase Program, which shares will be issued on or about September 30,
1995.
(5) In accordance with the transitional provisions of the rules on
executive officer compensation adopted by the Securities and
Exchange Commission, amounts otherwise reportable in these columns are
excluded for the Company's 1992 fiscal year.
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(6) Amounts reported herein reflect allocations of contributions by the
Company to the defined contribution plans enumerated on pages 7 and 8
of this proxy statement.
(7) There were no awards or payoffs of long-term compensation as defined
in Item 402(b)(2)(iv) of Regulation S-K under the Securities Exchange
Act of 1934.
Stock Options
Option/SAR Grants in The Last Fiscal Year
No options or stock appreciation rights were granted to any of the named
executive officers during the fiscal year ended September 30, 1994.
<TABLE>
<CAPTION>
Aggregate Option/SAR Exercises During Fiscal Year 1994
and September 30, 1994 Options/SAR Values
Number of Unexercised *Value of Unexercised
Option Options/SARs at In-The-Money Options/
Exercises Fiscal Year- SARs at Fiscal Year-End
End
Shares Value
Acquired Realized Exercisable Unexercisable Exercisable Unexercisable
<S> <C> <C> <C> <C> <C> <C>
Executive Officer (#) ($) (#) (#) ($) ($)
Edward C. Ruff 0 0 18,500 0 $14,063 0
Edwin A. Dalrymple 1,681 $8,405 0 0 0 0
</TABLE>
*Based on the difference between the exercise price of the options and the
closing price of the Company's common stock on The New York Stock Exchange
at September 30, 1994.
Long-Term Incentive Plans - Awards in Last Fiscal Year
No long-term incentive awards were granted to any of the named executive
officers with respect to the fiscal year ended September 30, 1994.
Compensation of Directors
The Company has adopted a policy of paying directors who are not employees
of the Company an annual retainer of $10,000, plus $1,000 and reimbursement
of reasonable expenses for each directors' meeting attended, and $1,000,
plus expenses, for each committee meeting not held in conjunction with a
directors' meeting. Non-salaried employees receive $1,000 per meeting, plus
expenses. Assuming the Amendment to the Restated Plan is approved by the
shareholders at the annual meeting, the Company intends to pay the annual
retainer portion of these fees in Restricted Stock. The Company anticipates
that the Board of Directors will continue to meet quarterly.
Profit Sharing and Capital Accumulation Plan and Trust
The Company maintains the PSP/CAP, which provides for participant
contributions on a pretax compensation reduction basis (a 401(k)
arrangement). To participate, an employee must have at least 1,000 hours of
service per year. An employee meeting the standards of service required
under the plan may elect to defer receipt of a percentage of his annual
compensation not to exceed the maximum permitted under Section 402 of the
Internal Revenue Code of 1986, as amended, in a calendar year ($9,240 for
1994), and contribute that amount to the Capital Accumulation Plan. The
employee's deferrals are fully vested at all times.
The Company may, at its discretion, match employee contributions, up to
three percent of covered compensation. A participant's interest in the
Company's matching contributions vests over five years. This interest also
becomes fully vested upon retirement at age 65, early retirement (age 62
w i th ten years of service), death or total disability. Additional
discretionary contributions may be made annually by the Company and are
allocated among participating employees at the end of each fiscal year on
the
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basis of their relative eligible compensation.
Employee Stock Ownership (ESOP) and PAYSOP Plan and Trust
The Company maintains an ESOP/PAYSOP, to which it may make annual
contributions of cash, securities of the Company or other property for the
benefit of participating employees. The eligibility and vesting provisions
and administration responsibilities of the ESOP/PAYSOP are the same as those
which apply to the Profit Sharing and Capital Accumulation Plan and Trust.
Cash contributions to the ESOP/PAYSOP have been primarily invested in the
Company's Common Stock and are allocated among participating employees at
the end of each fiscal year on the basis of their relative eligible
compensation.
Related Transactions
From time to time, directors and executive officers of the Company may
borrow money from IJL Corporation through margin accounts. These loans are
made in the normal course of IJL Corporation's business as a broker-dealer,
are made on substantially the same terms and conditions, including interest
rates and collateral, as those prevailing at the time for comparable
transactions with other persons, and do not involve more than the normal
risks of credit or present other unfavorable features.
Compensation Committee Report
The Compensation Committee establishes base salaries for the Company's
executive officers at the beginning of the fiscal year upon the subjective
recommendation of the chief executive officer. Salary levels are intended
to reflect responsibilities in one or more of the Company's operating units
and to be competitive with positions of similar responsibility in other
comparable investment and financial services organizations, whether publicly
owned or privately held, some of which may be included in the Peer Group
Index. Compensation surveys by independent third parties, industry
associations and ad hoc conference groups, as well as published proxy data
for firms of comparable size and scope, all serve as resources to the chief
executive and to this Committee in its deliberations.
Annual bonuses for executive officers are discretionary, not contractual.
Messrs. Dalrymple and McElveen are compensated in part from the
contributions of the respective business units that they direct. They, the
other named executive officers, and certain additional senior management
personnel also participate in a corporate bonus pool which is based on the
Company's annual pretax return on beginning equity (ROBE), after giving
effect to such bonuses. The specifics of the corporate bonus pool formula
vary from year to year. For fiscal 1994 it provided for a bonus pool in an
amount equal to 3/4% of pretax profits (before giving effect to such
bonuses) at a 3% ROBE, up to a maximum 10% of pretax profits when a 36% or
greater ROBE was achieved. In fiscal 1994 the pretax ROBE was 22.0%, and
total funds available from the corporate pool were $855,000, of which
$645,000 was allocated in cash and stock among the named executive officers
on the basis of subjective recommendations to the Committee by the chief
executive officer.
The Company encourages ownership of its own stock by all employees,
especially its senior management group. To that end, upon recommendation of
the chief executive officer, portions of the other named executive officers'
discretionary annual bonuses, ranging from 6% to 15%, and totaling $97,000,
have been awarded in the Company's Common Stock that is restricted for one
year as enumerated in the Summary Compensation Table. Current ownership
levels, among other non-quantifiable factors, were taken into consideration
in stipulating the percentages for each individual.
In assessing total 1994 compensation for the named executive officers
relative to the Company's performance, the Committee considered the
following factors:
(bullet) Compensation paid to senior executives of other regional
full-service securities firms (including but not
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limited to some firms in the Peer Group Index), as disclosed in
proxy statements, relative to various financial characteristics of
those firms such as revenues, net income, and return on equity.
(bullet) Positive trends in Company performance during the four-year
tenure of the chief executive officer and chief operating officer
as evidenced by the supplemental graph provided herein in addition
to the required five-year performance graph.
(bullet) Operating results in all areas of the Company, except the
Fixed Income Division, compared favorably to the record performance of
fiscal 1993.
Mr. Dalton's compensation as chairman and chief executive officer has been
significantly less -- both as to base salary and discretionary bonus -- than
would be expected relative to his peers in other similarly situated firms
and relative to the other named individuals in the compensation table,
because he had delegated many of the functions normally associated with a
chief executive to Mr. Morgan, who had day-to-day operating responsibility
for all the major business elements of the Company, and was elected Chief
Executive Officer on October 25, 1994.
In 1993 the Internal Revenue Code was amended by Section 162(m) to limit
deductions for compensation in excess of $1 million paid to named executive
officers of public companies. The Committee has not yet determined whether
the corporate bonus pool or other compensation plans will be revised to
ensure deductibility of all compensation.
Compensation Committee:
John B. Ellis
Peter R. Kellogg
Richard S. Pechter
Compensation Committee Interlocks and Insider Participation
As indicated above, Messrs. Ellis, Kellogg and Pechter serve as members of
the Compensation Committee. Mr. Pechter is Chairman of the Financial
Services Group of DLJ, which provides execution services to the Company on
certain option exchanges. Mr. Kellogg is Senior Partner and Chief Executive
Officer of SLK, which, through its Troster Singer Division, provides
execution services to the Company on certain transactions in over-the-
counter securities.
Stock Performance Graphs
The following graphs compare the five-year and four-year cumulative total
returns on shares of the Company's Common Stock with the cumulative total
return of the S&P 500 Index and a Peer Group Index comprised of eleven
comparable regional securities firms. The five-year graph is mandated by
the SEC and assumes that $100 was invested on September 30, 1989, in the
Company's common stock and each of the other indexes, and that all dividends
were reinvested. The four-year graph assumes that $100 was invested on
September 30, 1990, under the same set of assumptions; the period included
in this graph closely approximates the tenure of the Company's two senior
executives.
The Peer Group Index, which is weighted by market values, includes the
following firms:
Advest Group, Inc. Piper Jaffray Companies, Inc.
First Albany Companies, Inc. Rodman & Renshaw Capital Group, Inc.
Inter-Regional Financial Group, Inc. Scott & Stringfellow Financial, Inc.
Legg Mason, Inc. Southwest Securities Group, Inc.
McDonald & Company Investments, Inc. Stifel Financial Corp.
Morgan Keegan, Inc.
9
<PAGE>
COMPARATIVE FIVE-YEAR TOTAL RETURNS
(Comparative Five-Year Total Returns graph appears here)
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
Interstate/Johnson Lane $100.00 $45.76 $52.54 $83.05 $135.59 $107.84
S&P 500 $100.00 $88.83 $116.59 $129.57 $146.63 $151.26
Peer Group $100.00 $68.28 $141.01 $160.92 $255.16 $200.59
</TABLE>
COMPARATIVE FOUR-YEAR* TOTAL RETURNS
(Comparative Four-Year Total Returns graph appears here)
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
Interstate/Johnson Lane $100.00 $114.82 $181.48 $296.30 $235.66
S&P 500 $100.00 $131.26 $146.07 $165.08 $170.28
Peer Group $100.00 $206.53 $235.68 $373.71 $293.78
</TABLE>
* Approximate tenure of the Company's two executives.
10
<PAGE>
AMENDMENT TO 1987 STOCK AWARD PLAN
The Board of Directors of the Company, subject to shareholder
approval, has approved certain amendments to the Interstate/Johnson Lane,
Inc. Restated Stock Award Plan, as adopted on October 19, 1987, and
thereafter amended and restated (the "Restated Plan"), (i) to increase the
number of shares of Common Stock that may be issued under the Restated Plan
by an additional 800,000, from 1,000,000 to 1,800,000, and (ii) to permit
directors of the Company who are not employees ("Outside Directors") to
elect to receive Restricted Shares (as defined below) under the Restated
Plan on terms described below in lieu of the annual retainer for services
rendered as members of the Board of Directors of the Company (collectively,
the "Amendment").
The purpose of the Restated Plan generally is to secure for the
Company and its shareholders the benefits of the incentive inherent in
Common Stock ownership by the employees of the Company and Outside Directors
who are largely responsible for the Company's future growth and financial
success, and to afford such persons the opportunity to obtain or increase a
proprietary interest in the Company on a favorable basis and, thereby, have
an opportunity to share in its success. A copy of the Restated Plan is
attached to this proxy statement as Exhibit A, and the following description
is qualified in its entirety by reference thereto.
The Restated Plan will be administered, with respect to grants and
awards to employees hereunder, by a committee of the Board of Directors (the
"Stock Award Committee"). The Stock Award Committee will consist of not
less than two persons who shall be members of the Board and who shall be
"disinterested persons" within the meaning of Rule 16b-3 promulgated under
the Securities Exchange Act of 1934, as amended (the "Act").
The Stock Award Committee shall select from among the approximately
1,100 officers and employees of the Company those persons to whom awards
shall be made. In making its selections, the Stock Award Committee shall
take into account the nature of services rendered by such persons,
commissions or other compensation earned, the capacity of such persons to
contribute to the success of the Company and other factors in the discretion
of the Stock Award Committee. The maximum number of shares of Common Stock
that may be issued under the Restated Plan and the number of shares reserved
for issuance thereunder is 1,800,000 (subject to adjustment in certain
events, including changes in capitalization). The shares may be authorized
and unissued shares or treasury shares.
Three types of benefits may be granted under the plan:
nonstatutory stock options ("SAP Options"), stock appreciation rights
("SARs") and restricted shares ("Restricted Shares"). SAP Options may not
be granted at an exercise price which is less than fair market value on the
date of grant. The Stock Award Committee, subject to the provisions of the
Restated Plan, determines which employees will receive SAP Options, SARs and
Restricted Shares and the terms and conditions of such awards.
Nonstatutory Stock Options
A nonstatutory stock option granted under the Restated Plan
entitles the participant to purchase shares of Common Stock at an exercise
price determined by the Stock Award Committee (but not less than the fair
market value of the shares on the date of grant). As of November 30, 1994,
the closing price for the Company's Common Stock on the New York Stock
Exchange was $8.00 per share.
Each SAP Option will be evidenced by an SAP Option agreement
containing such terms and conditions consistent with the Restated Plan as
are approved by the Stock Award Committee. SAP Option agreements may
provide for the exercise of SAP Options in whole or in part from time to
time during the term of the SAP Option or in such installments and at such
times as the Stock Award Committee may determine. The SAP Options are not
designed or intended to be "incentive stock options" under Section 422 of
the Code. The maximum term of each SAP Option will not exceed ten
11
<PAGE>
years and one month from the date of grant.
An SAP Option shall terminate and may not be exercised if the
participant to whom it is granted ceases to be employed by the Company or
its subsidiary, except that the SAP Option agreement may, at the discretion
of the Stock Award Committee, provide for exercisability for up to one year
following termination in certain cases, such as disability or death. Each
SAP Option agreement may also provide for acceleration of exercisability in
the event of retirement, death or disability or in the event of an
extraordinary corporate event, such as a change in control of the Company or
the commencement of a tender offer to acquire all or part of the Company's
outstanding Common Stock.
Any SAP Options granted under the Restated Plan are nontransferable
and nonassignable by the optionee other than by will or the laws of descent
and distribution and are exercisable during his lifetime only by him. No
SAP Option may be exercised after the expiration of its term. The SAP
Option exercise price is payable in full upon exercise of an SAP Option and,
subject to the terms of the SAP Option agreement, may be paid in cash or by
tendering shares of the Company's Common Stock already owned by the
optionee. Any proceeds received by the Company from the sale of Common
Stock on the exercise of SAP Options shall be used for general corporate
purposes.
The number of shares of Common Stock covered by each outstanding
SAP Option, the number of shares of Common Stock to which each SAR relates,
and the per share exercise price under each outstanding SAP Option shall be
adjusted upon the occurrence of certain events involving a recapitalization
or reorganization of the Company.
Stock Appreciation Rights
The Stock Award Committee may grant SARs to any participant granted
SAP Options under the Restated Plan. Each SAR will be evidenced by an SAR
agreement containing such terms and conditions consistent with the Restated
Plan as are approved by the Stock Award Committee. The Stock Award
Committee will grant SARs based on consideration of the circumstances of the
participant and generally will grant SARs only in those instances where
failure to do so might, in the sole discretion of the Stock Award Committee,
make exercise of an SAP Option significantly burdensome to the participant.
An SAR may be satisfied in cash or in shares of Common Stock as determined
by the Stock Award Committee. The SAR agreement may limit the maximum
amount of appreciation taken into account under an SAR. An SAR may be
exercised only to the extent that a related SAP Option is exercisable. The
exercise of an SAR shall result in the termination of the related SAP Option
with respect to the number of shares covered by the exercise. If an SAR is
exercised, the number of shares that may be issued under the Restated Plan
will be reduced by the number of shares covered by the related SAP Option or
portion thereof that is terminated by the exercise of the SAR.
The SAR agreement shall also provide, among other things, that no
SAR shall be exercisable during the first six months after the date of grant
and that no SAR may be exercised on a date on which the fair market value of
the Common Stock is less than or equal to the exercise price per share of
the related SAP Option.
Restricted Shares
The Stock Award Committee may also award Restricted Shares of
Common Stock to any employee participant in the Restated Plan. Each
employee awarded Restricted Shares must enter into a restricted stock
agreement containing such terms and conditions as are permitted by the
Restated Plan and as may be approved by the Stock Award Committee. Such
conditions may include the deferral of a percentage of the employee's annual
cash compensation, not including dividends payable on Restricted Shares, if
any, to be applied toward the purchase of Restricted Shares upon such terms
and conditions, including discounts, as may be set forth in the restricted
stock agreement. Restricted Shares awarded to a participant may not be
transferred or encumbered during a restriction period beginning on the date
of
12
<PAGE>
the award and ending on such later date as may be designated by the Stock
Award Committee at the time of the award.
Each employee who is awarded Restricted Shares may, but need not,
be issued a stock certificate for the Restricted Shares upon expiration of
the restriction period. In no event will the restriction period end prior
to the payment by the employee to the Company of the amount of any federal,
state or local income or employment tax withholding that may be required
with respect to the Restricted Shares. During the restriction period, the
participant will otherwise have all the rights and privileges of a
shareholder, including the right to receive dividends and the right to vote
the Restricted Shares.
Upon termination of a participant's employment with the Company or
its subsidiary before the end of the applicable restriction period, all of
the Restricted Shares will be forfeited and all of the participant's rights
to the Restricted Shares or any related compensation deferral will
terminate, except that the restricted stock agreement may, at the discretion
of the Stock Award Committee, provide that the participant's Restricted
Shares or any related compensation deferral will not be forfeited in whole
or in part: (i) if such participant's employment is terminated for any
reason other than conduct that involves dishonesty or action detrimental to
the Company; (ii) if the participant's employment is terminated by reason of
total and permanent disability; or (iii) if the participant dies while
employed by the Company. Upon the forfeiture (in whole or in part) of
Restricted Shares, provided that the forfeiting employee shall have received
no dividends or other benefits of ownership from the forfeited shares, the
shares of Common Stock forfeited shall be available again for grant under
the plan. For purposes of the preceding sentence, voting rights shall not
be deemed a benefit of ownership.
If any change is made in the Common Stock by reason of any merger,
consolidation, reorganization, recapitalization, stock dividend, split up,
combination of shares, exchange of shares, change in corporate structure, or
otherwise, any shares received by a participant with respect to Restricted
Shares shall be subject to the same restrictions applicable to such
Restricted Shares and the certificates representing such shares shall be
deposited with the Company until the end of the restriction period.
Restricted Shares in Lieu of Directors' Annual Retainer. Under the
Amendment as proposed, each Outside Director shall receive Restricted Shares
under the Restated Plan in lieu of the annual cash retainer that would
otherwise be payable to such Outside Director in consideration of the
services rendered in his capacity as a member of the Board of Directors of
the Company. On the date on which such annual retainer would have been
payable, the director shall receive Restricted Shares equal in number to the
amount of such annual retainer divided by the closing price of the Common
Stock on such date. Such Restricted Shares shall not be sold, transferred,
pledged, assigned or in any manner disposed of for or during the six month
period following the date such Restricted Shares are awarded and any
director who is awarded Restricted Shares shall not be entitled to delivery
of stock certificates representing such Restricted Shares until the
expiration of such restriction period. Such Restricted Shares shall also be
subject to the terms and conditions generally applicable to Restricted
Shares as outlined above, except that there shall be no forfeiture of shares
in the event of termination of an Outside Director's service as a member of
the Board. Currently there are four Outside Directors eligible to receive
Restricted Shares pursuant to the proposed Amendment.
Amendment; Termination
The Board of Directors of the Company may amend the Restated Plan
at any time, except that the Board may not, without the approval of the
shareholders, increase the maximum number of shares which may be issued
under the Restated Plan, and (ii) the Board may not amend more than once
every six months (other than to comply with changes in certain regulations)
any of the provisions of the Restated Plan relating to the automatic grant
of Restricted Shares to Outside Directors in lieu of their annual retainer.
In addition, the Board may not alter or impair any benefit previously
granted under the
13
<PAGE>
Restated Plan without the consent of the person to whom the benefit was
granted.
The Board of Directors may terminate or suspend the Restated Plan
at any time.
As of November 30, 1994, 158,592 SAP Options, and 653,539
Restricted Shares had been granted over the life of the Restated Plan, of
which 20,445 and 465,669, respectively, are currently outstanding. Without
regard to the Amendment, but taking into account prior exercises, deliveries
and other dispositions, 72,400 shares are available for future awards. No
SARs have been granted under the Restated Plan. Set forth below, except as
otherwise indicated, is information with respect to Restricted Shares
granted during the current fiscal year ending September 30, 1995, to the
officers named in the Summary Compensation Table and other specified groups
under the Restated Plan. No SAP Options or SARs have been granted to date
in the current fiscal year ending September 30, 1995, under the Restated
Plan.
New Plan Benefits
Interstate/Johnson Lane, Inc. Restated Stock Award Plan
<TABLE>
<CAPTION>
Name and Position Dollar Value ($) No. of Units
<S> <C> <C>
Parks H. Dalton 0 0
Chairman & Chief Executive Officer
James H. Morgan $52,500 (1) 7,000
President & Chief Operating Officer
Edward C. Ruff $17,505 (1) 2,334
Chief Financial Officer
Edwin A. Dalrymple $20,003 (1) 2,667
Sr. VP - IJL Corporation Retail Division
George A. McElveen, III $7,005 (1) 934
Chmn. & CEO - Sovereign Capital Mgt., Inc.
Sr. VP - IJL Corporation
All current executive officers as a group $112,499 (1) 15,628
All current non-officer directors as a group $40,000 (2) 5,000 (2)
All current non-executive officer employees
as a group $823,034 (1)(3) 111,313 (3)
</TABLE>
(1) Based on the closing price of $7.50 per share as of the October
26, 1994, grant date for the Restricted Shares granted under
the Restated Plan, as indicated in the applicable restricted
stock agreement. At November 30, 1994, the closing price of
the Common Stock on the composite tape of the New York Stock
Exchange ("NYSE") was $8.00 per share.
(2) No Restricted Shares were granted to non-officer directors under
the Restated Plan in fiscal year 1994. The information provided in
the foregoing table, therefore, reflects the maximum number of
Restricted Shares that could have been granted to the Outside
Directors as a group had the Restated Plan, as proposed to be
amended, been in effect in fiscal year 1994. The dollar value for
such Restricted Shares is an assumed value based as the closing
price for the Common Stock on the composite tape of the NYSE at
November 30, 1994 of $8.00 per share.
(3) Such amount includes 4,641 shares granted to directors of the
Company in the current fiscal year ending September 30, 1995, who
are employed by the Company or a subsidiary thereof, but who are
not executive officers.
14
<PAGE>
Federal Income Tax Consequences
SAP Options. No federal taxable income will be recognized by the
employee upon the grant of an SAP Option. The employee will, however,
recognize ordinary income in the year in which the SAP Option is exercised
in the amount by which the fair market value of the purchased shares on the
date of exercise exceeds the SAP Option exercise price. Employees who are
officers, directors or otherwise deemed to be affiliates of the Company and
are thereby subject to liability under the insider trading rules of Section
16(b) of the Act ("16(b) Optionees"), are not deemed to realize the ordinary
income attributable to exercise until the occurrence of both an exercise and
the expiration of six months after the date of grant of the SAP Option (the
"Realization Date"). The amount of ordinary income to be recognized by
16(b) Optionees will equal the excess of the fair market value at the
Realization Date of the Company's shares so purchased over the SAP Option
exercise price, unless the 16(b) Optionee files a written election with the
IRS and the Company pursuant to Section 83(b) of the Code within thirty days
after exercise to have the ordinary income attributable to exercise realized
as of the exercise date.
The fair market value of the shares on the date of exercise (or, in
the case of 16(b) Optionees who do not make an 83(b) election, on the
Realization Date) will constitute the tax basis thereof for computing gain
or loss on any subsequent sale. The Company will be entitled to a business
expense deduction for the Company's taxable year during which the SAP Option
is exercised equal to the amount of ordinary income recognized by the
participant. In the case of 16(b) Optionees, the Company's deduction will
be for the Company's taxable year that includes the last day of the
employee's taxable year in which the employee recognizes income as a result
of the exercise of the SAP Option. The income recognized by the optionee
will be treated as compensation income and will be subject to federal and
state income and employment tax withholding by the Company. Treasury
regulations condition the Company's deduction on the Company's fulfilling
the employee withholding requirements with respect to the recognition of
income by the employee. The optionee must recognize ordinary income at the
time of exercise (or, in the case of 16(b) Optionees who do not make an
83(b) election, on the Realization Date), even if the optionee continues to
hold the shares until a later date. Additional gain or loss shall be
recognized by the optionee upon the subsequent disposition of the shares.
If the SAP Option price under any SAP Option is paid in the form of
shares of Common Stock previously acquired either upon the exercise of SAP
Options or through open-market purchases, then the optionee will not
recognize any taxable income to the extent that the shares of Common Stock
received upon the exercise of the SAP Option equal the number of shares of
Common Stock delivered in payment of the SAP Option price. For federal
income tax purposes, these newly-acquired shares will have the same basis
and holding period as the delivered shares. Any additional shares of Common
Stock received upon the exercise of the SAP Option will, in general, have to
be reported as ordinary income for the year of exercise in an amount equal
to the fair market value of such shares at the date of exercise. These
additional shares will have a tax basis equal to such fair market value, and
their holding period will, in general, be measured from their date of
transfer to the optionee.
Stock Appreciation Rights. An employee will not recognize income
for federal income tax purposes at the time of the grant to him of a stock
appreciation right. Upon exercise of a stock appreciation right, an amount
equal to the cash received by the employee is taxable to the employee as
ordinary income in the year of receipt. If an employee receives property
other than cash upon the exercise of a stock appreciation right, an amount
equal to the value of the property is taxable to him at the time that the
property is not subject to a substantial risk of forfeiture, or is
transferable. The Company is entitled to a deduction for federal income tax
purposes in the amount income is includible in the gross income of the
employee. In most cases, the Company's deduction will be for its taxable
year that includes the date the participant recognizes income. The Company
shall withhold federal, state, and local income and employment taxes from
amounts paid upon the exercise of a stock appreciation right. Treasury
regulations condition the Company's deduction on the Company's fulfilling
the employee withholding requirements with respect to the recognition of
income by the employee.
15
<PAGE>
Restricted Shares. An employee generally will recognize no income
for federal income tax purposes at the time Restricted Shares are awarded to
him and will not recognize income during the restriction period. An amount
equal to the fair market value of Restricted Shares, at the time the
restrictions lapse, generally is includible in gross income of the employee
for federal and state income and employment tax purposes for the year in
which the restrictions lapse. Gain or loss will be realized by the employee
upon disposition of Restricted Shares after the restrictions lapse. The
employee's holding period for the Restricted Shares will begin at the time
just after the restrictions lapse, or just after the stock is transferred to
the employee, whichever event results in inclusion of income. The
employee's basis in the Restricted Shares is equal to the amount includible
in the gross income of the employee.
If the employee makes a special election under Section 83(b) of the
Code, an award of Restricted Shares will result in taxable income to the
employee upon the award of the Restricted Shares. Specifically, an employee
may elect within 30 days of an award of Restricted Shares, by filing a
statement with the IRS and the Company, to include in gross income the fair
market value of the Restricted Shares on the date of the award. The fair
market value for this purpose is determined without regard to the
restrictions that will lapse after the end of any restriction period. If
such an election is made and the employee subsequently forfeits the
Restricted Shares, no loss will be recognized by the employee on account of
the forfeiture of the Restricted Shares.
The Company is entitled to a deduction in an amount equal to the
income included in the gross income of the employee. The deduction is
allowed for the taxable year of the Company that includes the last day of
the employee's taxable year in which the employee recognizes income. The
deduction is conditioned upon the Company's fulfilling its withholding
responsibilities.
Dividends received by the employee on the Restricted Shares prior
to the lapse of the restrictions are taxed to the employee as compensation
and are deductible by the Company. If, however, by virtue of the special
Section 83(b) election the value of the Restricted Shares is includible in
the gross income of the employee before the restrictions lapse, dividends on
such shares after the taxable event will be dividend income to the employee
and will not be deductible by the Company. If an employee forfeits
previously taxed Restricted Shares, the Company is required to include in
income any deductions that it claimed with respect to the forfeited
Restricted Shares.
An Outside Director who receives Restricted Shares in lieu of the
annual retainer generally will have income tax consequences comparable to
those discussed above with respect to employees, except that withholding
does not apply to such income. The Company's tax treatment also is
comparable to that discussed above with respect to employees, except that
withholding does not apply to such income.
Miscellaneous
Except as stated above, the Restated Plan does not provide for any
maximum number of shares which may be granted or optioned to any one
participant. In view of the discretionary authority vested in the Stock
Award Committee and the fact that there is no termination date for the plan,
it is impossible to estimate the number of shares that will be granted or
optioned to any individual or group of individuals over the life of the
Restated Plan.
Approval by Shareholders
Approval of the Amendment to the Restated Plan by the shareholders
requires the affirmative vote of a majority of the outstanding shares
entitled to vote. The Board of Directors believes that the Amendment will
enhance the overall performance of the Company's employees and directors
and, therefore, recommends that shareholders vote FOR approval of the
Amendment.
16
<PAGE>
Ratification of Appointment of Independent Auditors
The Board of Directors has selected Coopers & Lybrand L.L.P. as independent
certified public accountants to examine the Company's financial statements
for the fiscal year ending September 30, 1995. A representative of such firm
is expected to attend the meeting, to respond to appropriate questions from
shareholders present at the meeting and, if such representative desires, to
make a statement.
The Board of Directors recommends that shareholders vote FOR ratification of
the appointment of Coopers & Lybrand L.L.P. as the Company's independent
accountants for the 1995 fiscal year.
Other Matters
Matters to Be Presented
The Board of Directors of the Company knows of no matters which will be
presented for consideration at the meeting other than those set forth in
this proxy statement. However, if any other matters are properly presented
for action, it is the intention of the persons named in the proxy to vote on
them in accordance with their best judgment.
A quorum being present, directors will be elected by a plurality of the
votes of the shares and all other matters will be decided by the affirmative
vote of the majority of shares present in person or represented by proxy at
the meeting and entitled to vote thereon. Abstentions will not be taken
into account in the election of directors, but will effectively be counted
as a vote against any other proposal. Broker non-votes will not be taken
into account in either case.
Shareholder Proposals
Shareholder proposals relating to the Company's 1995 annual meeting of
shareholders must be received by the Company no later than Friday, August
18, 1995. Shareholders should send their proposals to the attention of the
Company's Secretary at its principal offices, P. O. Box 1012, Interstate
Tower, Charlotte, North Carolina 28201-1012.
Solicitation
The expense of preparing, printing and mailing the proxy statement
to shareholders will be borne by the Company. In addition to soliciting
proxies by mail, the Company may make requests for proxies by telephone or
by personal solicitation by employees of the Company at nominal cost to the
Company. W. F. Doring & Co. has been retained by the Company on behalf of
the Board of Directors to assist in the solicitation of proxies from brokers
and nominees for a fee of approximately $3,500 plus reimbursement of
reasonable out-of-pocket expenses. The Company will also reimburse brokers,
dealers, banks and other custodians, nominees and fiduciaries for their
reasonable expenses in forwarding proxy solicitation materials to beneficial
owners of the Company's Common Stock.
The Board of Directors
INTERSTATE/JOHNSON LANE, INC.
December 16, 1994
17
<PAGE>
[This page left blank intentionally]
<PAGE>
Exhibit A
INTERSTATE/JOHNSON LANE, INC.
RESTATED STOCK AWARD PLAN
OCTOBER 25, 1994
ARTICLE I
PURPOSE; EFFECTIVE DATE; DEFINITIONS
1.1 Purpose. The Interstate/Johnson Lane, Inc. Restated Stock
Award Plan ("Restated Plan"), is intended to secure for Interstate/Johnson
Lane, Inc. and its shareholders the benefits of the incentive inherent in
common stock ownership by the employees and outside directors of the Company
who are largely responsible for the Company's future growth and continued
financial success and to afford such persons the opportunity to obtain or
increase a proprietary interest in the Company on a favorable basis and,
thereby, to have an opportunity to share in its success.
1.2 Effective Date. Subject to the approval of the Board, and
of the Company's shareholders as provided in Section 7.9 below, this
Restated Plan shall be effective on October 25, 1994. The original
effective date of this Restated Plan was October 19, 1987; it was first
amended on October 1, 1991; and it was subsequently restated as of October
27, 1992.
1.3 Definitions. Throughout this Restated Plan, the following
terms shall have the meanings respectively indicated:
(a) "Act" shall mean the Securities Exchange Act of
1934, as amended;
(b) "Benefits" shall mean any one or more of the
following three awards that may be offered by the Committee to Employees
under this Restated Plan:
(i) Options,
(ii) Stock Appreciation Rights, or
(iii) Restricted Stock.
(c) "Board" shall mean the Board of Directors of
Interstate/Johnson Lane, Inc.;
(d) "Code" shall mean the Internal Revenue Code of
1986, as amended, and any successor revenue laws of the United States.
(e) "Committee" shall mean any committee of directors
of the Company designated by the Board to administer this Restated Plan;
(f) "Common Stock" shall mean the common stock of
Interstate/Johnson Lane, Inc. par value $.20 per share;
(g) "Company" shall mean Interstate/Johnson Lane, Inc.
and any of its Subsidiaries;
(h) "Employee" shall mean any person engaged or
proposed to be engaged as an officer or employee of the Company;
(i) "Option" shall mean an option to purchase shares
of Common Stock granted by the Committee to an Employee pursuant to this
Restated Plan;
(j) "Option Agreement" shall mean an agreement between
the Company and an Employee whereby an Option is granted;
A-1
<PAGE>
(k) "Option Shares" shall mean the shares of Common
Stock purchased upon the exercise of an Option.
(l) "Restated Plan" shall mean this Interstate/Johnson
Lane, Inc. Restated Stock Award Plan, and any amendments hereto;
(m) "Restricted Stock" shall mean Common Stock (i)
granted to Employees under Section 6.1 of this Restated Plan, subject to
such restrictions as the Committee may determine, and (ii) issued to Outside
Directors under Section 6.2 of this Restated Plan in each case as evidenced
in a Restricted Stock Agreement.
(n) "Restricted Stock Agreement" shall mean an
agreement between the Company and an Employee or Outside Director pursuant
to which Restricted Stock is issued to the Employee or Outside Director
pursuant to this Restated Plan.
(o) "Restriction Period" shall mean the time period
during which the Restricted Stock is subject to the restrictions set forth
in the Restricted Stock Agreement.
(p) "SAR Agreement" shall mean an agreement between
the Company and an Employee pursuant to which a Stock Appreciation Right is
issued to the Employee pursuant to this Restated Plan.
(q) "Stock Appreciation Rights" shall mean the right
to receive cash or Common Stock, granted pursuant to Article V of this
Restated Plan and a SAR Agreement.
(r) "Subsidiary" shall mean a subsidiary corporation
of Interstate/Johnson Lane, Inc., as defined in Sections 424(f) and 424(g)
of the Code.
ARTICLE II
ADMINISTRATION
2.1 Committee Administration. This Restated Plan, with respect
to grants and awards to Employees hereunder, shall be administered by the
Committee, which shall be appointed by the Board from time to time.
2.2 Committee Composition and Powers. The Committee shall
consist of not less than two persons who shall be members of the Board and
shall be subject to such terms and conditions as the Board shall prescribe.
Each Committee member shall be a "disinterested person" within the meaning
of Rule 16b-3 promulgated under the Act. Once designated, the Committee
shall continue to serve until otherwise directed by the Board. From time to
time, the Board may increase the size of the Committee and appoint
additional members thereof, remove members (with or without cause) and
appoint new members in substitution therefor, fill vacancies however caused,
and remove all members of the Committee.
A majority of the entire Committee shall constitute a quorum and
the action of a majority of the members present at any meeting at which a
quorum is present shall be deemed the action of the Committee. In addition,
any decision or determination reduced to writing and signed by all of the
members of the Committee shall be fully as effective as if it had been made
by a majority vote at a meeting duly called and held. Subject to the
provisions of this Restated Plan, to the provisions of the Company's bylaws,
and to any terms and conditions prescribed by the Board, the Committee may
make such rules and regulations for the conduct of its business as it shall
deem advisable. The Committee shall hold meetings at such times and places
as it may determine.
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The interpretation and construction by the Committee of any
provisions of this Restated Plan, with respect to grants and awards to
Employees hereunder, or of any Benefit granted under it shall be final
unless otherwise determined by the Board.
2.3 Limitation on Receipt of Benefits by Committee Members. No
person while a member of the Committee shall be eligible to receive Benefits
under this Restated Plan, provided, however, that (i) to the extent
applicable, a Committee member may receive shares of Restricted Stock in
lieu of cash compensation pursuant to the formula provisions of Section 6.2
hereof; and (ii) a member of the Committee may exercise Options (but not
Stock Appreciation Rights) granted prior to his becoming a member of the
Committee.
2.4 Good Faith Determinations. No member of the Board, the
board of directors of any subsidiary or the Committee shall be liable for
any action or determination made in good faith with respect to this Restated
Plan or any Benefit granted under it.
ARTICLE III
ELIGIBILITY; TYPES OF BENEFITS; SHARES SUBJECT TO RESTATED PLAN
3.1 Eligibility. The Committee shall from time to time
determine and designate the Employees of the Company to receive Benefits
under this Restated Plan and the number of Options, Stock Appreciation
Rights and shares of Restricted Stock to be awarded to each such Employee,
or the formula or other basis on which such Benefits shall be awarded to
Employees. In making any such award, the Committee may take into account
the nature of services rendered by an Employee, commissions or other
compensation earned by the Employee, the capacity of the Employee to
contribute to the success of the Company, and other factors that the
Committee may consider relevant.
3.2 Types of Benefits. Benefits under this Restated Plan may
be granted in any one or any combination of (a) Options; (b) Stock
Appreciation Rights; and (c) Restricted Stock, as described in this Restated
Plan.
The Committee may: (a) give Employees a choice between two
Benefits or combinations of Benefits; (b) award Benefits in the alternative
so that acceptance of or exercise of one Benefit cancels the right of an
Employee to another; and (c) award Benefits in any combination or
combinations and subject to any condition or conditions consistent with the
terms of this Restated Plan that the Committee in its sole discretion may
determine.
3.3 Shares Subject to this Restated Plan. Subject to the
provisions of Section 4.1(e) (relating to adjustment for changes in Common
Stock), the maximum number of shares that may be issued under this Restated
Plan shall not exceed in the aggregate 1,800,000 shares of Common Stock.
Such shares may be authorized and unissued shares, or authorized and issued
shares that have been reacquired by the Company as treasury stock. If any
Options granted under this Restated Plan shall for any reason terminate or
expire or be surrendered without having been exercised in full, the shares
not purchased under such Options shall be available again for grant under
this Restated Plan. Upon the forfeiture (in whole or in part) of Restricted
Stock, the shares of Common Stock forfeited shall be available again for
grant under this Restated Plan.
ARTICLE IV
NONSTATUTORY STOCK OPTIONS
4.1 Grant; Terms and Conditions. The Committee from time to
time may grant nonstatutory stock options under this Restated Plan to the
Employees, which grant shall be evidenced by Option Agreements, which Option
Agreements shall be in such form and contain such provisions as the
Committee shall from time to time approve consistent with this Restated
Plan. The Option Agreements need not be identical, but each Option
Agreement by appropriate language shall include the substance of all of the
following terms and conditions:
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(a) Number of Shares. Each Option Agreement shall
state the number of shares to which it pertains.
(b) Option Price. Each Option Agreement shall state
the Option exercise price, which shall not be less than 100% of the fair
market value of the shares of Common Stock subject to the Option on the date
of granting the Option.
(c) Medium and Time of Payment. Upon the exercise of
the Option, the Option price shall be payable in United States dollars, in
cash (including by check), or (unless the Committee otherwise prescribes)
with shares of Common Stock owned by the optionee or a combination of cash
and Common Stock (but not with Restricted Stock prior to the expiration of
the Restriction Period). If all or any portion of the Option exercise price
is paid in Common Stock owned by the optionee, that stock shall be valued at
its fair market value as of the date the Option is exercised.
(d) Term and Exercise of Options. The term of each
Option shall be determined by the Committee. Not less than one hundred
(100) shares may be purchased at any one time unless the number purchased is
the total number at the time purchasable under the Option. During the
lifetime of the optionee, the Option shall be exercisable only by him and
shall not be assignable or transferable by him and no person shall acquire
any rights therein. An option may be transferred (unless the Committee
otherwise prescribes) by will or the laws of descent or distribution.
(e) Recapitalization; Reorganization. Subject to any
required action by the shareholders of the Company, the maximum number of
shares of Common Stock that may be issued under this Restated Plan pursuant
to Section 3.3 above, the number of shares of Common Stock covered by each
outstanding Option, the number of shares of Common Stock to which each Stock
Appreciation Right relates, and the per share exercise price under each
outstanding Option, shall be proportionately adjusted for any increase or
decrease in the number of issued shares of Common Stock resulting from a
subdivision or consolidation of shares or the payment of a stock dividend
(but only on the Common Stock) or any other increase or decrease in the
number of such shares effected without receipt of consideration by the
Company.
Subject to any required action by the shareholders, if the
Company is the surviving corporation in any merger, each outstanding Option
shall pertain to and apply to the securities or other consideration that a
holder of the number of shares of Common Stock subject to the Option would
have been entitled to receive in the merger. A dissolution, liquidation or
consolidation of the Company or a merger in which the Company is not the
surviving corporation, other than a merger effected for the purpose of
changing the Company's domicile, shall cause each outstanding Option to
terminate, provided that each optionee shall, in such event, have the right
immediately prior to such dissolution, liquidation, merger or consolidation,
to exercise his Option in whole or in part without regard to any installment
provision contained in his Option Agreement but subject, however, to the
restriction that if a Stock Appreciation Right has been granted in
connection with an option neither the Option nor the Stock Appreciation
Right shall be exercisable within six (6) months after their grant except in
the event of death or disability of the optionee. In the case of a merger
effected for the purpose of changing the Company's domicile, each
outstanding Option shall continue in effect in accordance with its terms and
shall apply to the same number of shares of common stock of such surviving
corporation as the number of shares of Common Stock to which it applied
immediately prior to such merger, adjusted for any increase or decrease in
the number of outstanding shares of common stock of the surviving
corporation effected without receipt of consideration.
In the event of a change in the Common Stock as presently
constituted, which change is limited to a change of all of the authorized
shares with par value into the same number of shares with a different par
value or without par value, the shares resulting from any such change shall
be deemed to be the Common Stock within the meaning of this Restated Plan.
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The foregoing adjustments shall be made by the Committee,
whose determination shall be final, binding and conclusive.
Except as expressly provided in this subsection, the
optionee shall have no rights by reason of (i) any subdivision or
consolidation of shares of any class; (ii) any stock dividend; (iii) any
other increase or decrease in the number of shares of stock of any class;
(iv) any dissolution, liquidation, merger, or consolidation or spin-off,
split-off or split-up of assets of the Company or stock of another
corporation; or (v) any issuance by the Company of shares of stock of any
class, or securities convertible into shares of stock of any class.
Moreover, except as expressly provided in this subsection, the occurrence of
one or more of the above-listed events shall not affect, and no adjustment
by reason thereof shall be made with respect to, the number or price of
shares of Common Stock subject to the option (or the number of shares with
respect to a related Stock Appreciation Right).
The grant of an Option pursuant to this Restated Plan shall
not affect in any way the right or power of the Company to make adjustments,
reclassifications, reorganizations or changes of its capital or business
structure or to merge or to consolidate or to dissolve, liquidate or sell,
or transfer all or any part of its business or assets.
(f) Rights as a Shareholder. Subject to Section 7.10
of this Restated Plan, an optionee or a transferee of an Option shall have
no rights as a shareholder with respect to any shares covered by his Option
until the date of the issuance of a stock certificate to him for those
shares upon payment of the exercise price. No adjustments shall be made for
dividends (ordinary or extraordinary, whether in cash, securities or other
property) or distributions or other rights for which the record date is
prior to the date such stock certificate is issued, except as provided in
subsection 4.1(e).
(g) Modification, Extension and Renewal of Options.
Subject to the terms and conditions and within the limitations of this
Restated Plan, the Committee may modify, extend or renew outstanding Options
granted under this Restated Plan, or accept the surrender of outstanding
Options (to the extent not theretofore exercised) and authorize the granting
of new Options in substitution therefor (to the extent not theretofore
exercised). No modification of an Option shall, without the consent of the
optionee, alter or impair any rights or obligations under any Option
theretofore granted under this Restated Plan.
(h) Exercisability and Term of Options. Options
granted pursuant to this Restated Plan are not intended to constitute
"incentive stock options" under Section 422 of the Code. Every Option
Agreement shall provide that unless an Option has earlier terminated,
Options granted pursuant to this Restated Plan shall be exercisable at any
time on or after the date of exercise set forth in the Option Agreement and
before the date that is ten (10) years and one (1) month after the date of
grant; provided, however, an Option shall terminate and may not be exercised
if the Employee to whom it is granted ceases to be employed by the Company
except that the Option Agreement may, at the discretion of the Committee,
provide: (1) that if such Employee's employment terminates for any reason
other than conduct that in the judgment of the Committee involves dishonesty
or action by the Employee that is detrimental to the best interest of the
Company, the Employee may at any time within three months after termination
of his employment exercise his Option but only to the extent the Option was
exercisable by him on the date of termination of his employment; (2) that if
such Employee's employment terminates on account of total and permanent
disability, the Employee may at any time within one year after termination
of his employment exercise his Option but only to the extent the Option was
exercisable on the date of his termination of employment; or (3) that if
such Employee dies while in the employ of the Company, or within the three
or twelve month period following termination of his employment as described
in (1) or (2) above, his Option may be exercised at any time within twelve
months following his death by the person or persons to whom his rights under
the Option shall pass by will or by the laws of descent and distribution,
but only to the extent that such Option was exercisable by him on the date
of his termination of employment. Each Option Agreement may provide for
acceleration of exercisability in the event of retirement, death or
disability. Notwithstanding anything to the contrary in this subsection, an
Option may not be exercised by anyone after the expiration of its term.
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4.2 Other Provisions. The Option Agreements authorized under
this Restated Plan shall contain such other provisions, including, without
limitation, restrictions upon the exercise of the Option and the
consideration to be received by the Company as payment for the Common Stock,
as the Committee shall deem advisable. (For example, the Committee could
provide as to any Option for a vesting schedule whereunder the optionee
would be able to exercise his Option as to (for example) one-third of his
Option Shares after a period of (for example) one year from the date of
grant of the Option, another one-third after two years, and so on.)
ARTICLE V
STOCK APPRECIATION RIGHTS
5.1 Grant of Stock Appreciation Rights. the Committee may, in
its discretion, from time to time grant Stock Appreciation Rights to
Employees who are granted Options under this Restated Plan. Such Stock
Appreciation Rights shall relate to and be granted only in conjunction with
specific Options and, if granted, shall be granted at the time of the grant
of the related Option. Stock Appreciation Rights may be granted with
respect to all or a specified portion of the shares covered by the related
Option. It is contemplated that the Committee, in determining whether or
not to grant Stock Appreciation Rights relating to an Option, will give
consideration to the circumstances of the Employee and generally will grant
Stock Appreciation Rights in connection with Options only in those instances
where the failure to grant Stock Appreciation Rights might make exercise of
an Option significantly burdensome to the Employee.
5.2 Exercise. Stock Appreciation Rights shall entitle the
holder of the related Option, upon exercise in whole or in part of the Stock
Appreciation Rights, to receive payment in the amount and form determined
pursuant to subsection 5.3(d). Stock Appreciation Rights may be exercised
only at times and to the extent the related Option is then exercisable. The
exercise of Stock Appreciation Rights shall result in a termination of the
Stock Appreciation Rights with respect to the number of shares covered by
the exercise and shall further result in a termination of the related Option
with respect to the number of shares covered by the exercise.
5.3 Terms and Conditions. The Committee may from time to time
grant Stock Appreciation Rights under this Restated Plan to the Employees
which grants shall be evidenced by SAR Agreements, which SAR Agreements
shall be in such form and contain such provisions as the Committee shall
from time to time approve consistent with this Restated Plan. The SAR
Agreements need not be identical, but each SAR Agreement by appropriate
language shall include the substance of all of the following additional
terms and conditions:
(a) No Stock Appreciation Right shall be exercisable
before September 30, 1988.
(b) Stock Appreciation Rights shall be exercisable at
such time or times and to the extent, but only to the extent, that the
Option to which they relate is then exercisable.
(c) Stock Appreciation Rights shall not be exercisable
during the first six months after their date of grant. Such rights shall
not be transferable other than by will or by the laws of descent and
distribution and shall be exercisable during the optionee's lifetime only by
the optionee.
(d) Upon exercise of Stock Appreciation Rights, the
optionee shall be entitled to receive therefor payment, in the sole
discretion of the Committee, in the form of shares of Common Stock (rounded
down to the next whole number so that no fractional shares are issued), cash
or any combination thereof. The amount of such payment shall be equal in
value to the difference between the Option exercise price per share of the
related Option and the fair market value per share of the shares of Common
Stock on the date the Stock Appreciation Right is exercised multiplied by
the number of shares with respect to which the Stock Appreciation Right
shall have been exercised.
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(e) No Stock Appreciation Right may be exercised on a
date on which the fair market value (as determined above) of the Common
Stock is less than or equal to the exercise price per share of the related
Option.
(f) Stock Appreciation Rights granted under this
Restated Plan will expire or terminate no later than the expiration or
termination date of the related Option.
(g) Any exercise by an officer or director of the
Company of a Stock Appreciation Right may be made only during the ten-day
period beginning on the third business day following the release for
publication of any quarterly or annual statement of sales and earnings by
the Company and ending on the 12th business day following the date of such
release, or such other period of time as may be provided under Rule 16b-3 of
the Securities and Exchange Commission or successor rule or reg-ulation.
"Officer" for the purposes of this subsection shall mean only officers who
are subject to the Act.
5.4 Effect on Related Stock Option. The number of shares with
respect to which Stock Appreciation Rights are exercised (rather than the
number of shares issued by the Company upon such exercise) shall be deemed
for the purpose of Section 3.3 to have been issued under an Option granted
pursuant to this Restated Plan and shall not thereafter be available for the
granting of further Options under this Restated Plan.
ARTICLE VI
RESTRICTED STOCK
6.1 Grants to Employees. The Committee from time to time may
award Restricted Stock to any Employee eligible to receive Benefits under
this Restated Plan. Each Employee who is awarded Restricted Stock shall
enter into a Restricted Stock Agreement with the Company in a form specified
by the Committee agreeing to the terms and conditions of the award and such
other matters consistent with this Restated Plan as the Committee in its
sole discretion shall determine. Such conditions may include, but shall not
be limited to, the deferral of a percentage of the Employee's annual cash
compensation, not including dividends paid on Restricted Stock, if any, to
be applied toward the purchase of Restricted Stock upon such terms and
conditions, including such discounts, as may be set forth in the Restricted
Stock Agreement.
Restricted Stock awarded to Employees may not be sold, transferred,
pledged or otherwise encumbered during a Restriction Period commencing on
the date of the award and ending at such later date or dates as the
Committee may designate at the time of the award. The Employee shall have
the entire beneficial ownership and most of the rights and privileges of a
shareholder with respect to Restricted Stock awarded to him, including the
right to receive dividends and the right to vote such Restricted Stock.
If an Employee ceases to be employed by the Company prior to the
expiration of the Restriction Period, he shall forfeit all of his Restricted
Stock with respect to which the Restriction Period has not yet expired;
provided, however, the Restricted Stock Agreements, at the discretion of the
Committee and pursuant to such terms and conditions as it may impose, may
provide: (1) that if such Employee's employment terminates for any reason
other than conduct that in the judgment of the Committee involves dishonesty
or action by the Employee that is detrimental to the best interests of the
Company, the Restricted Stock or any related compensation deferral or a
portion thereof shall not be forfeited; (2) that if such Employee's
employment terminates on account of total and permanent disability, the
Employee shall not forfeit his Restricted Stock or any related compensation
deferral or a portion thereof; or (3) that if such Employee dies while
employed by the Company, his Restricted Stock or any related compensation
deferral or a portion thereof is not forfeited.
Subject to Section 7.10 of this Restated Plan, each Employee who is
awarded Restricted Stock may, but need not, be issued a stock certificate in
respect of such shares of Restricted Stock. Each certificate registered in
the name of an Employee, if any, shall bear an appropriate legend referring
to
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the terms, conditions, and restrictions applicable to such award as
specifically set forth in the Restricted Stock Agreement.
The Committee shall require that any stock certificate issued in
the name of an Employee evidencing shares of Restricted Stock be held in the
custody of the Company until the expiration of the Restriction Period
applicable to such Restricted Stock and that, as a condition of such
issuance of a certificate for Restricted Stock, the Employee shall have
delivered a stock power, endorsed in blank, relating to the shares covered
by such certificate. In no event shall the Restriction Period end prior to
the payment by the Employee to the Company of the amount of any federal,
state or local income or employment tax withholding that may be required
with respect to the Restricted Stock.
If any change is made in the Common Stock by reason of any merger,
consolidation, reorganization, recapitalization, stock dividend, split up,
combination of shares, exchange of shares, change in corporate structure, or
otherwise, any shares received by an Employee with respect to Restricted
Stock shall be subject to the same restrictions applicable to such
Restricted Stock and the certificates representing such shares shall be
deposited with the Company.
6.2 Issuance to Outside Directors. During the term of the
Restated Plan, and subject to the availability of shares of Common Stock
pursuant to Section 3.3 hereof, each member of the Board of Directors of
Interstate/Johnson Lane, Inc. who is not an employee of the Company (an
"Outside Director") shall receive shares of Restricted Stock under the
Restated Plan in lieu of the annual cash retainer that would otherwise be
payable to such Outside Director in consideration of his service as a
director of Interstate/Johnson Lane, Inc. On the date on which any such
retainer would have been payable, the director shall receive shares of
Restricted Stock equal in number to the amount of such retainer divided by
the closing price of the Common Stock on such date. Such shares of
Restricted Stock shall not be sold, transferred, pledged, assigned or in any
manner disposed of for or during the six month period following the date
such shares of Restricted Stock are issued and any director who is issued
shares of Restricted Stock shall not be entitled to delivery of stock
certificates representing such shares until the expiration of such six month
Restriction Period. Such shares of Restricted Stock shall also be subject
to the terms and conditions generally applicable to Restricted Stock as
outlined in Section 6.1 above, except that there shall be no forfeiture of
shares in the event of termination of an Outside Director's service as a
member of the Board. Each Outside Director who is issued Restricted Stock
pursuant to this Section 6.2 shall enter into a Restricted Stock Agreement
with the Company confirming the terms and conditions of such issuance as
stated herein.
ARTICLE VII
MISCELLANEOUS
7.1 Withholding Taxes. An Employee granted an Option,
Restricted Stock or Stock Appreciation Rights under this Restated Plan shall
be conclusively deemed to have authorized the Company to withhold from the
salary, commissions or other compensation of such Employee funds in amounts
equal to the federal, state and local income, employment or other
withholding taxes applicable to the income recognized by such Employee and
attributable to the Options, Option Shares, Restricted Stock or Stock
Appreciation Rights acquired pursuant to this Restated Plan at the time as
may be required by law; provided, however, that in lieu of the withholding
of federal, state and local taxes as herein provided, the Company may
require that the Employee (or other person exercising such Option or Stock
Appreciation Rights, or holding such Restricted Stock) pay the Company an
amount equal to the federal, state and local withholding taxes on such
income at the time such withholding is required or such other time as shall
be satisfactory to the Company.
7.2 Amendment, Modification, Suspension or Discontinuance of
Restated Plan. The Board may from time to time alter, amend, suspend or
discontinue this Restated Plan or revise it in any respect whatsoever for
the purpose of maintaining or improving the effectiveness of this Restated
Plan as an incentive device, or conforming this Restated Plan to applicable
governmental regulations or to any change in applicable law or regulations,
or for any other purpose permitted by law; provided, however,
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that no such action by the Board shall adversely affect any Benefit
theretofore granted under this Restated Plan without the consent of the
holder so affected; and provided further that the Board may not increase
the number of shares of Common Stock authorized under Section 3.3 of
this Restated Plan without the approval of the shareholders of
Interstate/Johnson Lane, Inc. Anything herein to the contrary
notwithstanding, the provisions of Section 6.2 hereof shall not,
directly or indirectly, be amended more than once every six months other
than to comport with changes in the Code, the Employee Retirement Income
Security Act of 1974, as amended from time to time, or the rules
thereunder.
7.3 Governing Law. This Restated Plan and all rights and
obligations hereunder shall be construed in accordance with and governed by
the laws of the State of North Carolina.
7.4 Designation. This Restated Plan may be referred to in
other documents and instruments as the "Interstate/Johnson Lane, Inc.
Restated Stock Award Plan."
7.5 Indemnification of Committee. In addition to such other
rights of indemnification as they may have as directors or as members of the
Committee, the members of the Committee shall be indemnified by the Company
against the reasonable expenses, including attorneys' fees actually and
necessarily incurred in connection with the defense of any action, suit or
proceeding, or in connection with any appeal therein, to which they or any
of them may be a party by reason of any action taken or failure to act under
or in connection with this Restated Plan or any Benefit granted thereunder,
and against all amounts paid by them in settlement thereof (provided such
settlement is approved by independent legal counsel selected by the Company)
or paid by them in satisfaction of a judgment in any such action, suit or
proceeding, except in relation to matters as to which it shall be adjudged
in such action, suit or proceeding that such Committee member is liable for
negligence or misconduct in the performance of his duties, provided that
within 60 days after institution of any such action, suit or proceeding, a
Committee member shall in writing offer the Company the opportunity, at its
own expense, to handle and defend the same.
7.6 Reservation of Shares. The Company during the term of this
Restated Plan, shall at all times reserve and keep available, and will seek
or obtain from any regulatory body having jurisdiction any requisite
authority in order to issue such number of shares of its Common Stock as
shall be sufficient to satisfy the requirements of this Restated Plan.
Inability of the Company to obtain from any regulatory body having
jurisdiction, the authority deemed by the Company's counsel to be necessary
to the lawful issuance of any shares of its Common Stock hereunder shall
relieve the Company of any liability in respect of the nonissuance or sale
of such stock as to which such requisite authority shall not have been
obtained.
7.7 Application of Funds. The proceeds received by the Company
from the sale of Common Stock pursuant to Options will be used for general
corporate purposes.
7.8 No Obligation to Exercise. The granting of an Option shall
impose no obligation upon the optionee to exercise that Option.
7.9 Approval of Shareholders. No Benefit shall be granted
pursuant to this Restated Plan unless and until this Restated Plan has been
approved by the shareholders of the Company.
7.10 Uncertificated Shares. Each Employee who exercises an
Option to acquire Common Stock or any person who is awarded Restricted Stock
may, but need not, be issued a stock certificate in respect of the Common
Stock so acquired. A "book entry" (i.e., a computerized or manual entry)
shall be made in the records of the Company to evidence the issuance of
shares of Common Stock where no physical certificate is issued. Such
Company records, absent manifest error, shall be binding on all parties. In
all instances where the date of issuance of shares may be deemed significant
but no certificate is issued in accordance with this Section 7.10, the date
of the book entry shall be the relevant date for such purposes.
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PROXY INTERSTATE/JOHNSON LANE, INC.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby appoints Parks H. Dalton, James H.
Morgan and Michael D. Hearn, and each of them, with full power of
substitution, attorneys and proxies to appear and vote, as indicated
below, all of the shares of Common Stock of Interstate/Johnson Lane,
Inc. that the undersigned would be entitled to vote at the annual
meeting of shareholders of Interstate/Johnson Lane, Inc. to be
held on January 24, 1995 and at any and all adjournments thereof. The
Board of Directors recommends a vote FOR the following items:
1. ELECTION OF DIRECTORS
[ ] FOR all nominees except as marked to the contrary
[ ] WITHHOLD AUTHORITY to vote for all nominees
NOMINEES: ClaudeS. Abernethy, Jr., Parks H. Dalton, John B. Ellis,
W. Clay Hamner, Peter R. Kellogg, James H. Morgan,
Dudley G. Pearson, Richard S. Pechter, Edward C. Ruff and
Grady G. Thomas, Jr.
(INSTRUCTION: To withhold authority to vote for any individual nominee,
write that nominee's name in the space below.)
2. RATIFICATION OF THE SELECTION OF COOPERS & LYBRAND AS THE COMPANY'S
INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS FOR THE FISCAL YEAR ENDING
SEPTEMBER 30, 1995.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
3. APPROVE AMENDMENT TO THE COMPANY'S 1987 STOCK AWARD PLAN.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
In their discretion, the proxies are authorized to vote upon such other
business as may properly come before the meeting or any adjournment
thereof.
<PAGE>
THIS PROXY, WHEN PROPERLY EXECUTED, WILL BE VOTED IN THE MANNER DIRECTED
HEREIN BY THE UNDERSIGNED SHAREHOLDER. IF NO DIRECTION IS MADE, THIS
PROXY WILL BE VOTED "FOR" THE NOMINEES FOR DIRECTOR AND "FOR" PROPOSALS
2 AND 3.
Dated
Signature
Please sign exactly as your name appears hereon. If
holder is a corporation, partnership or other
association, please sign its name and add your name and
title. When signing as attorney, executor, administrator,
trustee or guardian, please also give your full title.
If shares are held jointly, EACH holder should sign.
PLEASE MARK, DATE AND SIGN THIS PROXY AND RETURN IT PROMPTLY TO INSURE A
QUORUM AT THE MEETING. THIS IS IMPORTANT WHETHER YOU OWN FEW OR MANY
SHARES. DELAY IN RETURNING YOUR PROXY MAY SUBJECT THE COMPANY TO
ADDITIONAL EXPENSE.
<PAGE>
PLEASE MARK, DATE AND SIGN THIS DIRECTION TO TRUSTEE AND RETURN IT
PROMPTLY TO INSURE A QUORUM AT THE MEETING.
ANNUAL MEETING OF SHAREHOLDERS OF INTERSTATE/JOHNSON LANE, INC.
Voting Direction to NationsBank of North Carolina as Trustee for the
Interstate/Johnson Lane Corporation
Employee Stock Ownership and PAYSOP Plan and Trust ("ESOP/PAYSOP"), and
Profit Sharing and Capital Accumulation Plan and Trust ("PSP/CAP")
The undersigned hereby appoints NationsBank (the "Trustee") to vote
as indicated below, the shares of Common Stock of Interstate/Johnson
Lane, Inc. (the "Company") allocated to the account of the
undersigned in the ESOP/PAYSOP and PSP/CAP Plans of Interstate/Johnson
Lane Corporation at the annual meeting of shareholders of the Company to
be held on January 24, 1995 and at any and all adjournments thereof. The
Board of Directors recommends a vote FOR the following items:
1. ELECTION OF DIRECTORS
[ ] FOR all nominees except as marked to the contrary
[ ] WITHHOLD AUTHORITY to vote for all nominees
NOMINEES: Claude S. Abernethy, Jr., Parks H. Dalton, John B. Ellis,
W. Clay Hamner, Peter R. Kellogg, James H. Morgan,
Dudley G. Pearson, Richard S. Pechter, Edward C. Ruff and
Grady G. Thomas, Jr.
(INSTRUCTION: To withhold authority to vote for any individual nominee,
write that nominee's name in the space below.)
2. RATIFICATION OF THE SELECTION OF COOPERS & LYBRAND AS THE COMPANY'S
INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS FOR THE FISCAL YEAR ENDING
SEPTEMBER 30, 1995.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
3. APPROVE AMENDMENT TO THE COMPANY'S 1987 STOCK AWARD PLAN.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
In their discretion, the proxies are authorized to vote upon such other
business as may properly come before the meeting or any adjournment
thereof.
<PAGE>
THIS PROXY, WHEN PROPERLY EXECUTED, WILL BE VOTED IN THE MANNER
DIRECTED HEREIN BY THE UNDERSIGNED SHAREHOLDER. IF NO DIRECTION IS MADE,
THIS PROXY WILL BE VOTED "FOR" THE NOMINEES FOR DIRECTOR AND "FOR"
PROPOSALS 2 AND 3.
Dated
Signature
Please sign exactly as your name
appears hereon.
****************************************************************************
APPENDIX
On the Shareholders Letter the Interstate/Johnson Lane logo appears
where indicated.
On Page 10 the Comparative Five-Year Total Returns graph appears
where indicated. The plot points for the graph are listed in the table
below that point.
On Page 10 the Comparative Four-Year Total Returns graph appears
where indicated. The plot points for the graph are listed in the table
below that point.
