SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934
Filed by the Registrant (X)
Filed by a Party other than the Registrant ( )
Check the appropriate box:
( ) Preliminary Proxy Statement
(X) Definitive Proxy Statement
(X) Definitive Additional Materials
( ) Soliciting Material Pursuant to Section 240.14a-11(c) or Section
240.14a-12
Stanley Furniture Company, Inc.
(Name of Registrant as Specified in its Charter)
Stanley Furniture Company, Inc.
(Name of Person(s) Filing Proxy Statement)
Payment of Filing Fee (Check the appropriate box):
(X) $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), or 14a-6(j)(2).
( ) $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3).
( ) Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
1) Title of each class of securities to which transaction applies:
2) Aggregate number of securities to which transaction applies:
3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11:
4) Proposed maximum aggregate value of transaction:
( ) 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.:
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4) Date Filed:
<PAGE>
Stanley Furniture Company, Inc.
Route 57
Stanleytown, Virginia 24168
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
To be held April 26, 1994
NOTICE IS HEREBY GIVEN that the Annual Meeting of Shareholders of
Stanley Furniture Company, Inc. (the "Company") will be held at the Company's
principal executive offices, Route 57, Stanleytown, Virginia on Tuesday,
April 26, 1994, at 11:00 A.M., for the following purposes:
(1) To elect directors to serve on the Company's Board of
Directors;
(2) To ratify the selection of Coopers & Lybrand as the
independent public accountants for the Company for 1994; and
(3) To transact such other business as may properly be brought
before the meeting or any adjournment thereof.
The shareholders of record of the Company's common stock at the close of
business on February 28, 1994 are entitled to notice of and to vote at this
Annual Meeting or any adjournment thereof.
Even if you plan to attend the meeting in person, we request that you
mark, date, sign and return your proxy in the enclosed self-addressed
envelope as soon as possible so that your shares may be certain of being
represented and voted at the meeting. Any proxy given by a shareholder may
be revoked by that shareholder at any time prior to the voting of the proxy.
By Order of the Board of Directors,
Douglas I. Payne
Secretary
March 7, 1994
<PAGE>
Stanley Furniture Company, Inc.
Route 57
Stanleytown, Virginia 24168
PROXY STATEMENT
ANNUAL MEETING OF SHAREHOLDERS
April 26, 1994
The enclosed proxy is solicited by and on behalf of the Board of
Directors of Stanley Furniture Company, Inc. (the "Company") for use at the
Annual Meeting of Shareholders to be held on Tuesday, April 26, 1994, at
11:00 A.M., at the Company's principal executive offices, Route 57,
Stanleytown, Virginia and any adjournment thereof. The matters to be
considered and acted upon at such meeting are described in the foregoing
notice of the meeting and this proxy statement. This proxy statement and the
related form of proxy are being mailed on or about March 7, 1994 to all
holders of record of the Company's common stock, $.02 par value (the "Common
Stock") on February 28, 1994. Shares of the Common Stock represented in
person or by proxy will be voted as hereinafter described or as otherwise
specified by the shareholder. Any proxy given by a shareholder may be
revoked by the shareholder at any time prior to the voting of the proxy by
delivering a written notice to the Secretary of the Company, by executing and
delivering a later-dated proxy or by attending the meeting and voting in
person.
The cost of preparing, assembling and mailing the proxy, this proxy
statement, and other material enclosed, and all clerical and other expenses
of solicitations will be borne by the Company. In addition to the
solicitation of proxies by use of the mails, directors, officers and
employees of the Company may solicit proxies by telephone, telegram or
personal interview. The Company also will request brokerage houses and other
custodians, nominees and fiduciaries to forward soliciting material to the
beneficial owners of Common Stock held of record by such parties and will
reimburse such parties for their expenses in forwarding soliciting material.
VOTING RIGHTS
The holders of record of 4,718,639 shares of Common Stock outstanding on
February 28, 1994 will be entitled to one vote for each share held on all
matters coming before the meeting. Voting rights of the Common Stock are
noncumulative, so that holders of a majority of the outstanding shares
represented at the meeting can elect all of the directors to be elected at
the meeting. The ML-Lee Acquisition Fund, L.P., a Delaware limited
partnership (the "Lee Fund") owns approximately 57% of the outstanding Common
Stock and can elect the entire Board of Directors without the vote of any
other shareholder. See "Security Ownership of Certain Beneficial Owners and
Management."
ELECTION OF DIRECTORS
The Board of Directors of the Company presently consists of five
directors whose term of office expire at the 1994 Annual Meeting. At the
1994 Annual Meeting, five directors are to be elected to serve on the
Company's Board of Directors for staggered terms expiring at the Annual
Meetings of Shareholders to be held in 1995, 1996 and 1997. The Company
proposes the reelection of Messrs. Harkins and Prillaman for three-year terms
expiring at the time of the 1997 Annual Meeting, the reelection of Messrs.
Boll and Webb for two-year terms expiring at the time of the 1996 Annual
Meeting and the reelection of Mr. Mack for a one-year term expiring at the
time of the 1995 Annual Meeting.
The shares represented by proxies will be voted as specified by the
shareholder. If the shareholder does not specify his choice, the shares will
be voted in favor of the election of the nominees listed on the proxy card,
except that in the event any nominee should not continue to be available for
election, such proxies will be voted for the election of such other persons
as the Board of Directors may recommend. As of the date of this Proxy
Statement, the Board of Directors has no reason to believe that any of the
nominees named below will be unable or unwilling to serve.
NOMINEES FOR ELECTION AT THE 1994 ANNUAL MEETING
Nominees for Election for Three-Year Terms Ending 1997
David V. Harkins, 53, has been a Director of the Company since September
1988. He is a Senior Managing Director of the Thomas H. Lee Company (the
"Lee Company"), a sole proprietorship engaged in acquiring or making
controlling investments in established operating companies. Mr. Harkins is
also Senior Vice President and a Trustee of Thomas H. Lee Advisors I, Inc.,
a Massachusetts business trust ("THL Advisors I") which is responsible for
the identification of investments made by the Lee Fund. Mr. Harkins is also
Senior Vice President of T. H. Lee Mezzanine II ("Mezzanine II"), which is
the general partner of Thomas H. Lee Advisors II, L.P., a Delaware limited
partnership ("THL Advisors II"), which is responsible for the identification
of investments made by the ML-Lee Acquisition Fund II, L.P. and the ML-Lee
Acquisition Fund II (Retirement Accounts), L.P., both Delaware limited
partnerships (together the "Lee Fund II"). THL Advisors I and THL Advisors
II also perform managerial functions for the Lee Fund and Lee Fund II,
respectively, of the type usually carried out by an investment advisor to a
business development company. Mr. Harkins is chairman of National Dentex
Corporation and also a director of Kevlin Microwave Corporation and
Equicredit Corporation.
Albert L. Prillaman, 48, has been a Director of the Company since March
1986, President and Chief Executive Officer of the Company since December
1985 and Chairman of the Board of Directors since September 1988. Prior
thereto, Mr. Prillaman had served as a Vice President of the Company and
President of the Stanley Furniture division of the Company's predecessor
since 1983, and in various executive and other capacities with predecessors
of the Stanley Furniture division of the Company since 1969.
Nominees for Election for Two-Year Terms Ending 1996
C. Hunter Boll, 38, has been a Director of the Company since September
1988. Mr. Boll is a Managing Director of the Lee Company and a Vice
President of THL Advisors I and Mezzanine II. From 1984 to 1986, Mr. Boll
was a consultant with The Boston Consulting Group, which renders general
business consulting services. Mr. Boll is a director of Snapple Beverage
Corp.
Lawrence E. Webb, Jr., 46, has been a Director of the Company since June
1986 and Executive Vice President of the Company and its predecessor since
July 1983 and Chief Operating Officer since December 1990.
Nominee for Election for One-Year Term Ending 1995
Edward J. Mack, 78, has been a Director of the Company since January 17,
1989. From 1948 to 1981 Mr. Mack served in various capacities with
Burlington Industries, Inc., including director and Executive Vice President
with responsibility for Burlington's furniture operations. He has been an
independent consultant, primarily with Burlington Industries, Inc., and
President of Global Business Services, LTD, an international trading company
for more than five years.
MEETINGS OF THE BOARD OF DIRECTORS AND COMMITTEES
The Company has an Audit Committee, presently consisting of Messrs.
Harkins, Boll and Mack, which is charged with evaluating accounting and
control procedures and practices of the Company and reporting on such to the
Board of Directors. The Audit Committee also serves as direct liaison with
the Company's independent public accountants and recommends the selection or
discharge of such accountants. The Audit Committee met once in 1993.
The Company has a Compensation Committee, presently consisting of
Messrs. Harkins, Boll and Mack, which makes recommendations concerning
salaries and incentive compensation for officers and employees of the
Company. The Compensation Committee also administers the Company's 1992
Stock Option Plan and has authority to grant options under such plan to
officers and key employees, as designated by the Compensation Committee, and
to determine the terms of such options in accordance with such plans. The
Compensation Committee met once during 1993.
The full Board of Directors met five times during 1993. Each incumbent
director, other than Mr. Boll, attended or acted upon at least 75% of the
total 1993 board meetings and committee meetings held during periods that he
was a member of the Board or such committees.
Mr. Mack receives compensation for serving as a Director at the rate of
$15,000 per year. None of the other directors receive any separate
compensation for serving in that capacity.
NOMINATIONS FOR DIRECTOR
The Company's Bylaws provide that a shareholder entitled to vote in the
election of directors may nominate one or more persons for election as a
director only if advance written notice is given. Written notice of such
shareholders' intent to make such nomination must be received by the
Secretary of the Company or deposited in the U.S. mail, postage prepaid, to
the Secretary of the Company not later than 120 days in advance of the
anniversary date of the Company's proxy statement for the previous year's
Annual Meeting or, in the case of special meetings or the Company's 1994
Annual Meeting, at the close of business on the seventh day following the
date on which notice of such meeting is first given to shareholders. Any
shareholder wishing to nominate one or more persons as director must submit
the following information in writing: (1) the name and address of the
shareholder who intends to make the nomination; (ii) a representation that
the shareholder is entitled to vote at such meeting and intends to appear in
person or by proxy at the meeting to nominate the person or persons specified
in the notice; (iii) a description of all arrangements or understandings
between the shareholder and each nominee and any other person or persons
(naming such person or persons) pursuant to which any nomination is to be
made by the shareholder; (iv) such other information regarding each nominee
as would be required to be included in a proxy statement filed pursuant to
the proxy rules of the Securities and Exchange Commission, had the nominee
been nominated by the Board of Directors; and (v) the consent of each
proposed nominee to serve as a director of the Company if so elected. The
Chairman of the meeting may refuse to acknowledge the nomination of any
person not made in compliance with the foregoing procedure.
By requiring advance notice of shareholder nominations, this Bylaw
affords the Board of Directors the opportunity to consider the qualifications
of the proposed nominees and, to the extent deemed necessary or desirable by
the Board, to inform shareholders about such qualifications. The Bylaw does
not give the Board of Directors any power to approve or disapprove a
shareholder's nomination for election of directors. However, it may have the
effect of precluding a contest for the election if its procedures are not
followed, and therefore may discourage or deter a shareholder from conducting
a solicitation of proxies to elect his own slate of directors.
COMPLIANCE WITH EXCHANGE ACT FILING REQUIREMENTS
The Securities Exchange Act of 1934 requires the Company's executive
officers and directors, and any persons owning more than 10% of the Common
Stock, to file certain reports of ownership and changes in ownership with the
Securities and Exchange Commission. Based solely on its review of the copies
of the Forms 3, 4 and 5 received by it, and written representations from
certain reporting persons that no Forms 5 were required to be filed by those
persons, the Company believes that all executive officers, directors and 10%
shareholders complied with such filing requirements, except that Edward J.
Mack, a Company director, inadvertently failed to report his initial
beneficial ownership in January 1989, nine stock dividends received quarterly
from March 1989 to March 1991 and a purchase of 1,000 shares of Common Stock
in October 1993. Corrective filings have been made.
COMPENSATION OF EXECUTIVE OFFICERS
Summary Compensation Table
The following table sets forth, for the years ended December 31, 1993,
1992 and 1991, the annual and long-term compensation for services in all
capacities to the Company of those persons who at December 31, 1993 were the
Company's Chief Executive Officer and the other four executive officers of
the Company whose salary and bonus exceeded $100,000 for the year ended
December 31, 1993 (collectively, the "Named Executive Officers").
<TABLE>
SUMMARY COMPENSATION TABLE(1)
Annual Compensation
---------------------------------------------- Long Term
Compensation
Name and ------------
Principal Other Annual Options All Other
Position Year Salary Bonus Compensation Granted Compensation(2)
-------- ---- ------ ----- ------------ ------- ---------------
<S> <C> <C> <C> <C> <C> <C>
ALBERT L. PRILLAMAN
Chairman of the Board, 1993 $310,000 $217,000 $4,775 26,383 $21,316
President and Chief 1992 275,000 192,500 3,943 263,827 21,316
Executive Officer . . . . 1991 275,000 0
LAWRENCE E. WEBB, JR. 1993 $230,000 $138,000 $3,087 16,975 $17,797
Executive Vice President 1992 200,000 120,000 2,483 169,745 17,797
and Chief Operating Officer 1991 200,000 0
C. WILLIAM CUBBERLEY, JR. 1993 $195,000 $ 97,500 $2,519 2,998
Vice President-Sales and 1992 170,000 85,000 2,082 29,979
Marketing . . . . . . . . 1991 170,000 0
BOBBY I. HODGES 1993 $134,004 $ 50,000 $3,622 3,729
Vice President- 1992 124,480 50,000 1,298 37,294
Manufacturing . . . . . . 1991 121,980 0
DOUGLAS I. PAYNE 1993 $112,008 $ 30,000 $ 374 1,228
Vice President of Finance, 1992 91,200 35,000 366 12,287
Treasurer and Secretary . 1991 89,480 0
</TABLE>
____________
(1) In accordance with the transitional provisions applicable to the revised
rules on executive officer and director compensation disclosure adopted
by the Securities and Exchange Commission, amounts of Other Annual
Compensation and All Other Compensation are excluded from 1991.
(2) Amounts of All Other Compensation listed for Messrs. Prillaman and Webb
are amounts paid in premiums by the Company in connection with split-
dollar life insurance agreements maintained with these individuals.
Option Grant Table
The following table sets forth information concerning individual grants
of stock options made during the year ended December 31, 1993 to the Named
Executive Officers.
<TABLE>
OPTION GRANTS IN LAST FISCAL YEAR
Potential Realizable Value at
Assumed Annual Rates of
Stock Price Appreciation
Individual Grants For Option Term
------------------------------------------------------ --------------------
% of Total
Options Granted Exercise
Options to Employees in Price per Expiration
Name Granted(1) Fiscal Year Share Date 5%($) 10%($)
- ---- ---------- --------------- --------- ---------- ----- ------
<S> <C> <C> <C> <C> <C> <C>
Albert L. Prillaman 26,383 39.8% $8.50 12/08/02 $131,124 $327,149
Lawrence E. Webb Jr. 16,975 25.6% $8.50 12/08/02 $ 84,366 $210,490
C. William Cubberley, Jr. 2,998 4.5% $8.50 12/08/02 $ 14,900 $ 37,175
Bobby I. Hodges 3,729 5.6% $8.50 12/08/02 $ 18,533 $ 46,240
Douglas I. Payne 1,228 1.9% $8.50 12/08/02 $ 6,103 $ 15,227
</TABLE>
____________
(1) All grants vested and became exercisable upon closing of the Company's
public offering of Common Stock in July 1993.
Option Value Table
The following table sets forth information concerning the year-end
number and value of unexercised options for each of the Named Executive
Officers. All options are currently exercisable.
1993 YEAR END OPTION VALUES
Value of
Number of Unexercised
Unexercised In-the-Money
Options at Options
Fiscal Year at Fiscal Year
Name End (#) End ($)(1)
---- ----------- --------------
Albert L. Prillaman. . . . . . . . . . . . 290,210 $264,488
Lawrence E. Webb, Jr.. . . . . . . . . . . 186,720 $170,172
C. William Cubberley, Jr.. . . . . . . . . 32,977 $ 30,054
Bobby I. Hodges. . . . . . . . . . . . . . 41,023 $ 37,385
Douglas I. Payne . . . . . . . . . . . . . 13,515 $ 12,315
_____________
(1) In-the-Money Options are those where the 1993 year-end fair market value
of the underlying shares of Common Stock (as determined by the closing
price on the Nasdaq National Market) exceeds the exercise price of the
option.
Employment Agreements. Mr. Prillaman has an employment agreement with
the Company which provides that he has the duties of President, Chief
Executive Officer and Chairman of the Board of Directors of the Company at a
base salary of at least $275,000 per year, subject to annual upward
adjustment by the Board. Mr. Prillaman is also entitled to a graduated bonus
amount up to a maximum of 70% of his base salary in effect from time to time,
contingent upon the achievement of certain threshold profit objectives to be
determined by the Board at the beginning of each year. The agreement had an
initial term ending December 31, 1993, and is automatically extended for an
additional year thereafter at the end of each year unless either party to the
agreement gives notice on or before December 31 of any year that the
agreement will not be extended. In the event of such notice, employment
terminates as of December 31 of the year in which such notice is given and
Mr. Prillaman is entitled to severance pay during the two years following
termination in an amount equal to his base salary plus the average of bonuses
paid for the three years preceding the year in which notice of termination is
given. Mr. Prillaman is entitled to receive the total severance pay in a
single payment in the event a change in control (as defined in the agreement)
occurs. Upon termination of the employment agreement, the agreement provides
that Mr. Prillaman will not compete with the Company for the greater of two
years or the remainder of the contract term.
Mr. Webb also has an employment agreement with the Company which is on
the same terms as discussed above with respect to Mr. Prillaman, except that
Mr. Webb serves as Executive Vice President and Chief Operating Officer of
the Company. Mr. Webb's base salary is at least $200,000 and Mr. Webb is
entitled to a graduated bonus amount up to a maximum of 60% of his base
salary in effect from time to time.
In addition, the Company has entered into an employment agreement with
C. William Cubberley, Jr., Vice President-Sales and Marketing of the Company,
on similar terms as discussed above with respect to Messrs. Prillaman and
Webb, except that Mr. Cubberley serves as Vice President, his base salary is
at least $170,000 and he is entitled to receive a graduated bonus amount up
to a maximum of 50% of his base salary in effect from time to time.
In connection with the employment agreements with Messrs. Prillaman and
Webb, the Company has entered into split-dollar life insurance agreements
with each of these individuals under which the Company has agreed to pay
premiums with respect to a life insurance policy for such individual until
the cash surrender value of the policy and all paid up additions are
sufficient to repay the Company all premiums and other amounts paid by it and
to maintain the policy's death benefit at a level no less than the policy's
initial face amount without further premium payments. At such time, Messrs.
Prillaman and Webb are obligated to repay such premiums to the Company. Each
of Messrs. Prillaman and Webb has executed a collateral assignment of his
policy in favor of the Company to secure repayment to the Company of the
premiums paid on such policies. The initial face amount of the policy for
Mr. Prillaman is $1 million and for Mr. Webb is $750,000. During the year
ended December 31, 1993 the Company paid $21,316 and $17,797, respectively,
in premiums for the policies of Messrs. Prillaman and Webb.
Defined Benefit Pension Plans. The Company maintains qualified defined
benefit pension plans for all its eligible employees, the Stanley Retirement
Plan (the "Stanley Furniture Plan"). The Company also maintains a
nonqualified, unfunded supplemental retirement plan (described below) for
certain of its employees.
The following table shows estimated annual benefits payable in the form
of a straight life annuity upon retirement to employees at the specified
remuneration and in various years of service classifications, assuming
retirement at age 65 on December 31, 1988 before reduction for social
security benefits. Internal Revenue Code Section 415 limits are not
considered.
<TABLE>
Years of Credited Service
(as defined)
------------
Average Annual
Compensation 10 15 20 25 30 35
------------ -- -- -- -- -- --
<S> <C> <C> <C> <C> <C> <C>
$125,000 $18,750 $ 28,125 $ 37,500 $ 46,875 $ 56,250 $ 65,625
150,000 22,500 33,750 45,000 56,250 67,500 78,750
175,000 26,250 39,375 52,500 65,625 78,750 91,875
200,000 30,000 45,000 60,000 75,000 90,000 105,000
250,000 37,500 56,250 75,000 93,750 112,500 131,250
300,000 45,000 65,300 90,000 112,500 135,000 157,500
350,000 52,500 78,750 105,000 131,250 157,500 183,750
400,000 60,000 90,000 120,000 150,000 180,000 210,000
450,000 67,500 101,250 135,000 168,750 202,500 236,250
500,000 75,000 112,500 150,000 187,500 225,000 262,500
600,000 90,000 135,000 180,000 225,000 270,000 315,000
</TABLE>
Through 1988, the annual retirement benefit is the larger of (a) 1-1/2%
of a participant's Final Average Earnings multiplied by the participant's
years of credited service (as defined) up to a maximum of 37 years, reduced
by 2% of the annual primary Social Security benefit multiplied by the years
of credited service and (b) $30 multiplied by the years of credited service
(the "Old Formula"). "Final Average Earnings" are the average earnings,
excluding gifts and credit awards except as otherwise determined by the
administrative committee, deferred compensation (other than amounts deferred
by the participant in a 401(k) Plan), and special payments authorized by the
Company Board, for the five highest-paid years during the preceding 10 years.
Such remuneration is generally equal to the salary and bonuses reported in
the compensation table.
Effective in 1989, the annual retirement benefit is the sum of (a)
75/100 of 1% of Average Earnings during each year of service multiplied by
years of credited service up to a maximum of 37 years and (b) 1/2 of 1% of
Average Earnings during each year of service in excess of Covered
Compensation multiplied by years of credited service up to a maximum of 35
years (the "New Formula"). Effective January 1, 1994, the maximum of 37
years was eliminated from part (a) of the formula. "Average Earnings" are
the average of the calendar years of compensation paid excluding gifts and
credit awards except as otherwise determined by the administrative committee,
deferred compensation (other than amounts deferred by the participant in a
401 (k) Plan), and special payments authorized by the Company Board, from
January 1, 1987 through actual retirement age, but not greater than the
average of the final five calendar years. Such remuneration is generally
equal to the salary and bonuses reported in the compensation table. "Covered
Compensation" is the average of the social security taxable wage bases for
each calendar year during the thirty-five year period ending with the last
day of the preceding calendar year in which a participant attains his social
security retirement age.
The following table shows estimated annual benefits payable in the form
of a straight life annuity upon retirement to employees at the specified
remuneration and in various years of service classifications, assuming
retirement at age 65 on December 31, 1993 using the New Formula. Internal
Revenue Code Section 415 limits are not considered.
<TABLE>
Years of Credited Service
(as defined)
------------
Average Annual
Compensation 10 15 20 25 30 35
------------ -- -- -- -- -- --
<S> <C> <C> <C> <C> <C> <C>
$125,000 $14,565 $21,848 $29,131 $36,414 $43,696 $50,979
150,000 17,690 26,536 35,381 44,226 53,071 61,916
175,000 20,815 31,223 41,631 52,039 62,446 72,854
200,000 23,940 35,911 47,881 59,851 71,821 83,791
250,000 30,190 45,286 60,381 75,476 90,571 105,666
300,000 36,440 54,661 72,881 91,101 109,321 127,541
350,000 42,690 64,036 85,381 106,726 128,071 149,416
400,000 48,940 73,411 97,881 122,351 146,821 171,291
450,000 55,190 82,786 110,381 137,976 165,571 193,166
500,000 61,440 92,161 122,881 153,601 184,321 215,041
600,000 73,940 110,911 147,881 184,851 221,821 258,791
</TABLE>
The Supplemental Retirement Plan of the Company (the "Supplemental
Plan") covers 26 employees and former employees of the Stanley Furniture
division. A participant who retires under any provision of the Stanley
Furniture Plan will receive a supplemental retirement allowance equal to the
excess, if any, of (a) the amount of benefit the participant would have
received under the Old Formula over (b) the amount the participant received
under the New Formula.
The following table shows the years of credited service and accrued
annual benefits (determined under the Old Formula and the New Formula) as of
December 31, 1993 under the Stanley Furniture Plan for the Named Executive
Officers (based upon 1993 salary). Under the provisions of the Stanley
Furniture Plan, the accrued benefit payable upon retirement is equal to the
greater of the amount calculated under the Old Formula as of December 31,
1988 (the "grandfathered amount") or the New Formula. The benefits the Named
Executive Officers may become entitled to receive under the Supplemental Plan
are shown as grandfathered amounts.
Accrued Benefit
---------------
Years of
Credited Old New Grandfathered
Officer Service Formula Formula Formula
------- ------- ------- ------- -------
Albert L. Prillaman 25 $150,416 $66,455 $45,709
Lawrence E. Webb, Jr. 14 57,508 35,223 14,926
C. William Cubberley, Jr. 8 21,517 16,165 3,942
Bobby I. Hodges 27 54,929 43,325 22,487
Douglas I. Payne 9 12,474 8,794 2,328
1992 STOCK OPTION PLAN
On October 21, 1992, the Board of Directors of the Company adopted the
1992 Stock Option Plan and it was submitted to and approved by shareholders
on November 6, 1992. Effective June 1, 1993, the Board of Directors adopted
an amendment of the 1992 Stock Option Plan (as amended, the "1992 Plan").
The 1992 Plan became effective October 1, 1992 and unless sooner
terminated by the Board of Directors, the Plan will terminate on September
30, 2002. No incentive awards may be made under the 1992 Plan after
termination.
The 1992 Plan was adopted to provide a means for selected key management
employees of the Company to increase their personal financial interest in the
Company, thereby stimulating their efforts on behalf of the Company and its
shareholders, and also to strengthen their desire to remain with the Company
(references to the "Company" in this section will include any parent and
subsidiary corporations).
As of February 28, 1994, options granted under the 1992 Plan were as
follows: Mr. Prillaman - 290,210; Mr. Webb - 186,720; Mr. Cubberley - 32,977;
Mr. Hodges - 41,023; Mr. Payne - 13,515; all Executive Officers as a group (6
persons) - 569,977; and all employees (other than executive officers) -
98,340. Non-employee directors are not eligible for, and have not been
granted, options under the 1992 Plan. The recipients of future grants under
the 1992 Plan are indeterminable at this time.
The closing price of the Company's Common Stock as reported on the
Nasdaq National Market System on March 2, 1994 was $13-1/2.
The principal features of the 1992 Plan are summarized below.
General. The 1992 Plan authorizes the reservation of 669,199 shares of
Common Stock for issuance pursuant to incentive awards. Such incentive
awards may be in the form of stock options or tax offset rights (as described
below).
If an incentive award is cancelled, terminates or lapses unexercised,
any unissued shares allocable to such incentive award may be subjected again
to an incentive award. An award under the 1992 Plan may be conditioned upon
the surrender for cancellation of an existing incentive award.
Adjustments will be made in the number of shares which may be issued
under the 1992 Plan in the event of a future stock dividend, stock split or
similar prorata change in the number of outstanding shares of Common Stock or
the future creation or issuance to shareholders generally of rights, options
or warrants for the purchase of Common Stock.
Eligibility. All present and future employees of the Company who hold
positions with management responsibilities are eligible to receive incentive
awards under the 1992 Plan. As of February 28, 1994, approximately 25
employees are eligible to participate in the 1992 Plan.
Programs. Incentive awards under the 1992 Plan may be made under three
programs: the Performance Program, the Value Program and the Vested Program.
Vesting of incentive awards under the Performance Program is subject to the
Company meeting certain performance goals or upon the employee's continued
employment until December 31, 2001. Vesting of incentive awards under the
Value Program is subject to the employee's continued employment. Incentive
awards under the Value Program are also vested upon a change of control of
the Company. Incentive awards under the Vested Program are vested on the
date of grant. Upon completion of the Company's public offering of Common
Stock in July 1993, all outstanding options under the 1992 Plan vested and
became exercisable.
Administration. The 1992 Plan provides for administration by a
committee (the "Committee") comprised of at least two directors of the
Company who are not eligible to participate in the 1992 Plan or any similar
plan of the Company. The Committee will be the Compensation Committee unless
another committee is appointed by the Board. The Committee has the power and
complete discretion to determine when to grant incentive awards, which
eligible employees will receive incentive awards, and the number of shares to
be allocated to each incentive award. The Committee may impose conditions on
the exercise of options received under the 1992 Plan, and may impose such
other restrictions and requirements as it may deem appropriate, including
reserving the right for the Company to reacquire shares issued pursuant to an
incentive award.
Stock Options. Options to purchase shares of Common Stock granted under
the 1992 Plan may only be nonstatutory stock options. Nonstatutory stock
options do not qualify for the favorable income tax treatment under Code
Section 422 that is provided to incentive stock options. The option price of
Common Stock covered by a stock option under the 1992 Plan may not be less
than 100% of the fair market value of the Common Stock on the date of the
option grant.
Options may only be exercised at such times as may be specified by the
Committee, provided, however, that stock options may not be exercised after
the first to occur of (i) ten years from the date on which the stock option
was granted, (ii) 90 days from the optionee's termination of employment with
the Company for reasons other than death or disability, or (iii) one year
from the optionee's termination of employment on account of death or
disability. The Committee may grant options with a provision that an option
not otherwise exercisable will become exercisable upon a "change of control"
(a term defined in the Plan).
If the option so provides, an optionee exercising an option may pay the
purchase price in cash; by delivering or causing to be withheld from the
option shares, shares of Common Stock; by delivering a promissory note; or by
delivering an exercise notice together with irrevocable instructions to a
broker to promptly deliver to the Company the amount of sale or loan proceeds
from the option shares to pay the exercise price.
Transferability of Incentive Awards. No options granted under the 1992
Plan may be sold, transferred, pledged, or otherwise disposed of, other than
by will or by the laws of descent and distribution. All rights granted to a
participant under the 1992 Plan shall be exercisable during his lifetime only
by such participant, or his guardians or legal representatives. Upon the
death of a participant, his personal representative or beneficiary may
exercise his rights under the 1992 Plan.
Amendment of the 1992 Plan and Incentive Awards. The Board of Directors
may amend the 1992 Plan in such respects as it deems advisable; provided that
the shareholders of the Company must approve any amendment that would (i)
materially increase the benefits accruing to participants under the 1992
Plan, (ii) materially increase the number of shares of Common Stock that may
be issued under the 1992 Plan, or (iii) materially modify the requirements of
eligibility for participation in the 1992 Plan. Incentive awards granted
under the 1992 Plan may be amended with the consent of the recipient so long
as the amended award is consistent with the terms of the 1992 Plan.
Federal Income Tax Consequences. An employee will not incur federal
income tax when he is granted a nonstatutory stock option. Upon exercise of
a nonstatutory stock option, an employee generally will recognize ordinary
income, which is subject to income tax withholding by the Company, equal to
the difference between the fair market value of the Common Stock on the date
of the exercise and the option price. The Committee has authority under the
1992 Plan to include provisions allowing the employee to elect to have a
portion of the shares he would otherwise acquire upon exercise of an option
withheld to cover his tax liabilities if permissible under Rule 16b-3
promulgated under the Securities Exchange Act of 1934, as amended. The
election will be effective only if approved by the Committee and made in
compliance with other requirements set forth in the 1992 Plan. The Committee
also has the authority to issue tax offset rights to an employee that enable
the employee to receive in cash from the Company an amount equal to or
approximating the withholding taxes due on the exercise of a stock option.
An employee may deliver shares of Common Stock instead of cash to
acquire shares under a nonstatutory stock option, without having to recognize
taxable gain on any appreciation in value of the shares delivered.
The Company usually will be entitled to a business expense deduction at
the time and in the amount that the recipient of an incentive award
recognizes ordinary compensation income in connection therewith. As stated
above, this occurs upon exercise of nonstatutory options. Generally, the
Company's deduction is contingent upon the Company's meeting withholding tax
requirements. In addition, for the Company's taxable year beginning October
1, 1994 and later years, the Company may not deduct annual compensation in
excess of $1 million paid to each of its chief executive officer and its
other four most highly paid officers. An exception is provided for certain
performance-based compensation if certain shareholder approval and outside
director requirements are satisfied. Based on proposed Internal Revenue
Service regulations, stock options granted under the 1992 Plan for 1994 and
earlier years should qualify for the performance-based compensation
exemption.
This summary of Federal income tax consequences of nonstatutory stock
options does not purport to be complete. There may also be state and local
income taxes applicable to these transactions. Holders of incentive awards
should consult their own advisors with respect to the application of the laws
to them and to understand other tax consequences of the awards including
possible income deferral for executive officers, alternative minimum tax
rules, taxes on parachute payments and the tax consequences of the sale of
shares acquired under the Plan.
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
The Compensation Committee of the Board of Directors has furnished the
following report on executive compensation:
Executive Compensation Philosophy. Under the supervision of the
Compensation Committee of the Board of Directors, the Corporation has
developed and implemented compensation policies, plans, and programs which
seek to enhance the profitability of the Company. The primary objective is
to align closely the financial interests of the Company's executives with
those of its shareholders. The Committee believes that equity ownership by
management is beneficial in aligning management and shareholder interests in
the enhancement of shareholder value.
The Committee's philosophy is to integrate management pay with the
achievement of both annual and long-term financial performance goals. The
compensation package for each officer is designed to recognize individual
initiative and achievement. The Committee incorporates a number of factors
in establishing compensation to promote both long and short-term performance
of the Company. These factors include earnings, market share growth, cost
control efforts, and balance sheet strength and organizational developments.
The compensation for individual executives is based on both corporate and
personal responsibility goals, with varying weight being given to individual
factors for particular executives. The Committee does not make compensation
comparisons with the companies that are used for the performance graph that
follows this report.
The Committee believes that the Company's overall executive compensation
package is important to allow the Company to obtain and retain the services
of top executives with significant and extensive responsibilities. The
Company operates with a small team of top executives. These executives are
responsible for both overall strategic policy of the Company and direct, day-
to-day activity in sales, customer communications, product development,
marketing, manufacturing and other similar activities. The compensation
package is intended to reflect these broad responsibilities.
The Company's compensation package for its executive officers consists
of base salary, annual performance-based incentive compensation, stock option
grants, supplemental retirement benefits and, for certain executive officers,
other benefits.
Base Salary. The Committee sets base salary at the minimum level
sufficient to attract and retain qualified executives. By restricting the
role of base salary in the compensation package, more of an executive's
compensation can be paid in the form of incentives which encourage and reward
performance. The base salaries of individual executives are set in light of
the responsibilities of the position held and the experience of the
individual, with a recognition of the Company's requirements for the top
executives to perform many varied tasks.
Annual Incentives. The Company's annual incentive compensation program
is the Executive Incentive Compensation Plan (the "Incentive Plan") for
corporate officers and key employees who can directly influence the Company's
financial results. The employees participating in the Incentive Plan are
selected by the Compensation Committee at the beginning of each fiscal year.
Awards under the Incentive Plan are based on the achievement of individual
performance and corporate objectives which are established annually in
conjunction with adoption of the Company's budget for the next fiscal year.
At that time, the Compensation Committee sets corporate objectives for the
coming fiscal year. The performance targets consist of two elements. The
first element is the Company's earnings before interest and taxes ("EBIT").
The EBIT performance of the Company is 60% of the total target. If the
Company reaches the EBIT target, 60% of the bonus is paid. No bonus is paid
if certain EBIT thresholds are not met. The second element representing 40%
of the bonus is a mixture of individual targets that reflect the
responsibilities of the individual employee. The targets are based on such
factors as sales growth, control of costs, quality performance measured by
returns and allowances, inventory management and organizational improvements.
If the objectives are not achieved, cash bonuses may be paid due to
individual achievements at the discretion of the Compensation Committee.
The performance targets for awards to participating employees under the
Incentive Plan are recommended by management of the Company subject to
approval by the Compensation Committee. An award is set at a percentage of
either an employee's base salary or his salary grade compensation midpoint
for the fiscal year prior to the year to which the award applies. For the
last fiscal year, the bonuses awarded for the named executive officers were
100% of the target amounts.
Long-Term Incentives. In 1992, the Company adopted a 1992 Stock Option
Plan to provide employees with options on the Common Stock. All options
under the 1992 Plan must be granted at an option exercise price of 100% of
the stock's fair market value on the date of grant. All prior grants made
under the 1992 Stock Option Plan became fully vested on the public offering
of Common Stock in 1993. A grant of stock options was made to officers
during 1993 in connection with the public offering. The total 1993 grants
represented 10% of the then outstanding options. The Committee felt that
this amount of additional options should be granted to put in place immediate
incentives for the officers after the public offering. The grants were made
to officers in proportion to their existing outstanding options at an
exercise price equal to the initial price of Company's common stock in the
public offering. All of the prior granted options had an exercise price
based upon the assumed equity valuation of the Company used to determine
exchange ratios in the Company's 1992 restructuring. This exercise price is
greater than the public offering price and the trading range of the Common
Stock before the public offering.
Other Compensation. The Company also has a Supplemental Retirement Plan
covering designated employees and former employees of the Company, including
some executive officers. See "Compensation of Executive Officers -- Defined
Benefit Pension Plans." In addition, the Company has entered split-dollar
insurance agreements with Messrs. Prillaman and Webb. See "Compensation of
Executive Officers -- Employment Agreements."
Chief Executive Officer Compensation. Mr. Prillaman has an employment
agreement with the Company which was primarily negotiated between Mr.
Prillaman and the Company's majority shareholder. See "Compensation of
Executive Officers -- Employment Agreements." For 1993, Mr. Prillaman's base
salary was increased from $275,000 per year to $310,000 per year. This
increase was primarily based on the following factors. Mr. Prillaman had
received no salary increase in 1992 and the 1993 base salary will also be his
base salary for 1994. The increase also reflected Mr. Prillaman's
outstanding efforts during 1991 and 1992. Under Mr. Prillaman's guidance,
the Company implemented a new operating strategy in 1991 and completed a
financial restructuring in 1992. The Committee believes both of these are
crucial to the Company's long-term performance, and were responsible for the
Company's improvement in operating results and gains in market share.
A major portion of Mr. Prillaman's compensation is contingent on the
Company's performance. Under his employment contract, Mr. Prillaman is
entitled to a graduated bonus amount up to a maximum of 70% of his base
salary in effect from time to time, contingent upon the achievement of EBIT
targets determined by the Compensation Committee at the beginning of each
year. Mr. Prillaman's potential bonus for 1993 was increased by $24,500 due
to his 1993 base salary increase. For 1993, the Company's EBIT exceeded the
targets established by the Committee and Mr. Prillaman met the established
individual targets. Consequently, Mr. Prillaman received 100% of the
allowable bonus. In 1993, Mr. Prillaman received a grant of stock options on
26,383 shares under the 1992 Stock Option Plan. The Committee believes that
this grant was appropriate for the reasons outlined above under "Long-Term
Incentives" and because of the critical role that Mr. Prillaman played in
preparing and executing the public offering. Mr. Prillaman also
participates in the Supplemental Retirement Plan and has split-dollar
insurance pursuant to the terms of his employment contract.
The members of the Compensation Committee are:
David V. Harkins
C. Hunter Boll
Edward J. Mack
PERFORMANCE GRAPH
The following graph compares cumulative total shareholder return for the
Company with a broad performance indicator, the Nasdaq Non-Financial Stock
Index, and an industry index, the Wood Household Furniture Index, for the
period from November 10, 1992 to December 31, 1993. The Common Stock began
trading on the Nasdaq Small-Cap Market on November 10, 1992. In conjunction
with a public offering, the Common Stock began trading on the Nasdaq National
Market on July 1, 1993. In the graph below, the Company's data points for
November 10, 1992 and December 31, 1992 represent the average of the bid and
ask prices for such days. The Company's data point for June 30, 1993
reflects the public offering price of $8.50 per share. The Company's data
point for December 31, 1993 reflects that day's closing price of the Common
Stock on the Nasdaq National Market.
(PERFORMANCE GRAPH FILED SEPARATELY UNDER COVER OF FORM SE)
(1) The graph shows the cumulative total return on $100 invested on November
10, 1992 in Common Stock or specified index - including reinvestment of
dividends.
(2) SIC Code 2511 Wood household Furniture Index as prepared by Media
General Financial Services, Inc. At February 25, 1994, SIC Code 2511
consisted of: Ameriwood Industries International Corp., Bassett
Furniture Industries, Inc., Bush Industries Inc., Chromcraft Revington
Inc., DMI Furniture, Inc., Ethan Allen Inc., Interco Incorporated, Ladd
Furniture Inc., Masco Corp., Pulaski Furniture Corp., Stanley Furniture
Company, Inc. and Wellington Hall, Ltd.
(3) Nasdaq Non-Financial Stock Index prepared for the Nasdaq Stock Market by
the Center for Research in Securities Prices at the University of
Chicago.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
The Company is a party to a Management Agreement, pursuant to which the
Company's predecessors engaged the Lee Company for the purposes of providing
them with substantial consulting services and management advisory services.
These services have been and will be in the field of financial and strategic
corporate planning and such other management areas as the parties mutually
agree. These services have included advice concerning strategic corporate
planning, potential acquisitions and financial planning. The term of this
Agreement began on September 29, 1988 and will expire on September 30, 1998.
In consideration for the services provided by the Lee Company under the
Management Agreement, the Company pays the Lee Company $250,000 annually.
Management did not obtain bids from third parties for similar services before
the Company entered into the Management Agreement.
In connection with a comprehensive financial restructuring in 1992, the
Lee Fund became a participant with the Company's senior lender to the extent
of $2 million under the Company's senior bank credit facility (the "Senior
Credit Facility"), which provided that the Lee Fund's $2 million
participation would be purchased when the Company's senior lender obtained at
least one other participant in the Senior Credit Facility willing to
participate to the extent of at least $2 million. In April 1993, the
Company's senior lender obtained another participant in the Senior Credit
Facility, and the Lee Fund's $2 million participation was purchased.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth certain information with respect to the
beneficial ownership of the Company's Common Stock as of February 28, 1994,
by each shareholder known by the Company to be the beneficial owner of more
than 5% of its outstanding Common Stock, by each director, by each of the
Named Executive Officers and by all directors and executive officers as a
group:
Amount and Nature Percent of
Name of Beneficial Ownership Class
---- ----------------------- -----
ML-Lee Acquisition Fund, L.P.(a) 2,675,552(b) 56.7%
Albert L. Prillaman(c) 339,107(d) 6.8%
Lawrence E. Webb, Jr.(c) 209,086(e) 4.3%
Bobby I. Hodges(c) 49,784(f) 1.0%
C. William Cubberley, Jr.(c) 37,490(g) (h)
Douglas I. Payne(c) 14,380(i) (h)
David V. Harkins(j) 2,581(b)(k) (h)
C. Hunter Boll(i) 1,548(b)(l) (h)
Edward J. Mack(c) 1,162 (h)
All directors and executive officers
as a group (9 persons) 660,670(b)(m) 12.5%
________________________
(a) The business address for such beneficial owner is c/o Merrill Lynch
Investment Banking Group, World Financial Center, South Tower, New York,
New York 10080-6123.
(b) In addition, the Lee Fund II owns an aggregate of 41,616 shares (0.88%)
of the Common Stock. Each of THL Advisors I (with respect to the Lee
Fund), THL Advisors II (with respect to the Lee Fund II), Thomas H. Lee,
as Trustee of THL Advisors I and THL Advisors II and an individual
general partner of the Lee Fund and the Lee Fund II, David V. Harkins,
as Senior Vice President and Trustee of THL Advisors I and Senior Vice
President of Mezzanine II, and C. Hunter Boll, as Vice President of THL
Advisors I and Mezzanine II, may be deemed to be beneficial owners of
the 2,675,552 and 41,616 shares held by the Lee Fund and the Lee Fund
II, respectively. Each of THL Advisors I, THL Advisors II, Mr. Lee, Mr.
Harkins and Mr. Boll disclaim beneficial ownership of such shares.
Thomas H. Lee is also the sole beneficiary of the 1989 Thomas H. Lee
Nominee Trust (the "Trust") which holds 30,409 (0.64%) shares of the
Common Stock.
(c) The business address for such persons is c/o Stanley Furniture Company,
Inc., Route 57, Stanleytown, Virginia 24168.
(d) Includes 290,210 shares which could be acquired through exercise of
stock options.
(e) Includes 186,720 shares which could be acquired through exercise of
stock options.
(f) Includes 41,023 shares which could be acquired through exercise of stock
options.
(g) Includes 32,977 shares which could be acquired through exercise of stock
options.
(h) Less than 1%.
(i) Includes 13,515 shares which could be acquired through exercise of stock
options.
(j) The business address for such persons is c/o Thomas H. Lee Company, 75
State Street, Boston, Massachusetts 02109.
(k) Includes 1,290 shares Mr. Harkins may receive in respect of shares of
Common Stock he presently has a right to purchase from the Trust.
(l) Includes 774 shares Mr. Boll may receive in respect of shares of Common
Stock he presently has a right to purchase from the Trust.
(m) Includes 569,977 shares which could be acquired through exercise of
stock options.
RATIFICATION OF SELECTION OF
INDEPENDENT PUBLIC ACCOUNTANTS
The Board of Directors, upon the recommendation of the Audit Committee,
selected the firm of Coopers & Lybrand as independent public accountants for
the Company for 1994, subject to ratification by the shareholders. Action by
shareholders is not required by law in the selection of independent public
accountants, but their selection is submitted by the Board in order to give
the shareholders an opportunity to ratify the Board's selection. If the
shareholders do not ratify the selection of Coopers & Lybrand, the Board of
Directors will reconsider the selection of independent public accountants.
Unless otherwise specified, shares represented by proxies will be voted for
the ratification of the selection of Coopers & Lybrand as independent public
accountants for 1994.
Representatives of Coopers & Lybrand are expected to be present at the
Annual Meeting. Such representatives will have the opportunity to make a
statement if they desire to do so and are expected to be available to respond
to appropriate questions.
OTHER BUSINESS
Management knows of no other business which will be presented for
consideration at the Annual Meeting, but should any other matters be brought
before the meeting, it is intended that the persons named in the accompanying
proxy will vote such proxy at their discretion.
ADDITIONAL INFORMATION
Voting Procedures. Votes will be tabulated by one or more Inspectors of
Elections. Except for the election of directors, approval of the matters to
be considered at the meeting will require the affirmative vote of the holders
of at least a majority of the shares of outstanding Common Stock represented
at the meeting, unless otherwise indicated. If a shareholder, present in
person or by proxy, abstains on any matter, the shareholder's shares will not
be voted on such matter. Thus an abstention from voting on a matter has the
same legal effect as a vote "against" the matter, even though the shareholder
may interpret such action differently. With respect to the election of
directors, the two nominees in each class (one nominee in the case of the
class whose term ends in 1995) receiving the greatest number of votes cast
for the election of directors will be elected.
A majority of the shares entitled to vote, represented in person or by
proxy, will constitute a quorum for the transaction of business at the
meeting. Shares for which the holder has elected to abstain or to withhold
the proxies' authority to vote on a matter will count toward a quorum.
"Broker non-votes" will not count toward a quorum and will not be voted on
any matter to be considered at the meeting.
Shareholder Proposals for 1995 Annual Meeting. Any shareholder desiring
to present a proposal to the shareholders at the 1995 Annual Meeting and who
desires that such proposal be included in the Company's proxy statement and
proxy card relating to that meeting, must transmit such to the Secretary of
the Company so that it is received at the Company's principal executive
offices on or before November 7, 1994. All such proposals should be in
compliance with applicable Securities and Exchange Commission regulations.
By Order of the Board of Directors,
Douglas I. Payne
Secretary
March 7, 1994
<PAGE>
REVOCABLE PROXY
STANLEY FURNITURE COMPANY, INC.
Annual Meeting of Shareholders - April 26, 1994
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby appoints Douglas I. Payne and David W. Robertson
and either of them, proxies of the undersigned, with full power of
substitution, to vote all the shares of Common Stock of Stanley Furniture
Company, Inc. (the "Company") held of record by the undersigned on February
28, 1994, at the Annual Meeting of Shareholders to be held April 26, 1994,
and at any adjournment thereof.
(1) ELECTION OF DIRECTORS
( ) FOR all nominees listed ( ) WITHHOLD AUTHORITY to vote
below (except as indicated for all nominees listed below
otherwise below)
NOMINEES: David V. Harkins, Albert L. Prillaman, C. Hunter Boll,
Lawrence E. Webb, Jr. and Edward J. Mack
INSTRUCTIONS: To withhold authority to vote for any individual nominee,
write such nominee's name in the space provided below.
___________________________________________________________________________
(2) Ratification of the selection of Coopers & Lybrand as independent public
accountants of the Company for 1994.
( ) FOR ( ) AGAINST ( ) ABSTAIN
(3) In their discretion the proxies are authorized to vote upon such other
matters as may come before the meeting or any adjournment thereof.
All as more particularly described in the Company's Proxy Statement for
the Annual Meeting of Shareholders to be held on April 26, 1994, receipt of
which is hereby acknowledged.
(Continued and to be dated and signed on reverse side)
<PAGE>
(continued from reverse side)
THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED AS SPECIFIED BY THE
UNDERSIGNED SHAREHOLDER. IF NO CHOICE IS SPECIFIED BY THE SHAREHOLDER, THIS
PROXY WILL BE VOTED "FOR" ALL PORTIONS OF ITEMS (1) AND (2), AND IN THE
PROXIES' DISCRETION ON ANY OTHER MATTERS COMING BEFORE THE MEETING.
The undersigned hereby revokes any proxy or proxies heretofore given to vote
upon or act with respect to such stock and hereby ratifies and confirm all
that said proxies, their substitutes or any of them may lawfully do by virtue
hereof.
Please date this Proxy Card and sign
your name exactly as it appears hereon.
Where there is more than one owner,
each should sign. When signing as an
attorney, administrator, executor,
guardian or trustee, please add your
title as such. If executed by a
corporation, this Proxy Card should be
signed by a duly authorized officer.
If executed by a partnership, please
sign in partnership name by authorized
persons.
Dated ___________________________, 1994
___________________________________
___________________________________
Please promptly mark, sign, and mail
this Proxy Card in the enclosed
envelope. No postage is required.
