May 13, 1999
Dear Stockholder,
I am pleased to extend to you my personal invitation to attend the 1999
Annual Meeting of Stockholders of Lakeland Industries, Inc. (the "Company") on
Wednesday, June 16, 1999 at 10:00 a.m. at the Holiday Inn, 3845 Veterans
Memorial Highway, Ronkonkoma, NY 11779.
The accompanying Notice of Annual Meeting and Proxy Statement contain a
description of the formal business to be acted upon by the stockholders. At the
meeting, I intend to discuss the Company's performance for its fiscal year ended
January 31, 1999 and its plans for the current fiscal year. Certain members of
the Company's Board of Directors and officers of the Company, as well as a
representative of Grant Thornton LLP, the Company's independent auditors, will
be available to answer any questions you may have, or to make a statement if
they wish to.
While I am looking forward to seeing you at the meeting, it is very
important that those of you who cannot personally attend assure your shares are
represented. I urge you therefore to sign and date the enclosed form of proxy
and return it promptly in the accompanying envelope. If you attend the meeting,
you may, if you wish, withdraw any proxy previously given and vote your shares
in person.
Sincerely,
/s/ Raymond J. Smith
----------------
Raymond J. Smith
President and Chairman of the Board
<PAGE>
NOTICE OF
1999 ANNUAL MEETING OF STOCKHOLDERS
June 16, 1999
TO THE STOCKHOLDERS OF LAKELAND INDUSTRIES, INC.:
Notice is hereby given that the Annual Meeting of Stockholders of
Lakeland Industries, Inc., a Delaware corporation (the "Company"), will be held
on Wednesday, June 16, 1999 at 10:00 a.m. at the Holiday Inn, 3845 Veterans
Memorial Highway, Ronkonkoma, NY 11779 for the following purposes:
1. To elect one Class I members of the Board of Directors, and
2. To transact such other business as properly may come before the
meeting or any adjournment thereof.
Each share of the Company's Common Stock will be entitled to one vote
upon all matters described above. Stockholders of record at the close of
business on April 29, 1999 will be entitled to notice and to vote at the
meeting.
May 13, 1999
BY ORDER OF THE BOARD OF DIRECTORS
Christopher J. Ryan, Secretary
PLEASE DATE, VOTE AND SIGN THE ENCLOSED PROXY AND RETURN PROMPTLY. AN ENVELOPE,
WHICH REQUIRES NO POSTAGE IF MAILED IN THE UNITED STATES, IS ENCLOSED FOR THIS
PURPOSE.
1
<PAGE>
LAKELAND INDUSTRIES, INC.
711-2 Koehler Ave.
Ronkonkoma, New York 11779
PROXY STATEMENT
1999 Annual Meeting of Stockholders
June 16, 1999
GENERAL INFORMATION
-------------------------
This proxy statement is furnished in connection with the solicitation
by the Board of Directors of Lakeland Industries, Inc. (the "Company") of
proxies from the holders of the Company's $.01 par value Common Stock (the
"Common Stock") for use at the 1999 Annual Meeting of Stockholders to be held on
June 16, 1999, and at any adjournment thereof (the "Annual Meeting").
This proxy statement, the accompanying form of proxy and the Company's
1999 Form 10-K (which includes the Company's Annual Report to Stockholders) are
first being sent to the Company's stockholders on or about May 13, 1999.
The accompanying proxy may be revoked by the person giving it at any
time prior to its being voted; such revocation may be accomplished by a letter,
or by a properly signed proxy bearing a later date, filed with the Secretary of
the Company prior to the Annual Meeting. If the person giving the proxy is
present at the meeting and wishes to vote in person, he or she may withdraw his
or her proxy at that time.
The Company has borne all costs of solicitation of proxies. In addition
to solicitation by mail, there may be incidental personal solicitations made by
directors, officers and regular employees of the Company and its subsidiaries.
The cost of solicitation, including the payments to nominees who at the request
of the Company mail such material to their customers, will be borne by the
Company.
VOTING SECURITIES AND STOCK OWNERSHIP OF OFFICERS,
DIRECTORS AND PRINCIPAL STOCKHOLDERS
All holders of record of the Common Stock at the close of business on
April 29, 1999, are entitled to notice of and to vote at the Annual Meeting. At
the close of business on April 29, 1999, there were 2,660,500 shares of
outstanding Common Stock, each entitled to one vote per share on all matters to
be voted upon at the Annual Meeting. The Company's stockholders do not have
cumulative voting rights.
2
<PAGE>
The following table sets forth information as of April 29, 1999, with
respect to beneficial ownership of the Company's Common Stock by all persons
known by the Company to own beneficially more than 5% of the Common Stock, each
director and nominee for director of the Company and all directors and officers
of the Company as a group. All persons listed have sole voting and investment
power with respect to their shares of Common Stock.
<TABLE>
<CAPTION>
Name and Address Number of Common Percent of
Beneficial Owner Shares Beneficially Owned of Class
- ------------------- ------------------------ ----------
<S> <C> <C>
Raymond J. Smith 579,500 (1) 21.78%
711-2 Koehler Ave.
Ronkonkoma, NY 11779
Christopher J. Ryan 250,977 (2) (6) 9.43%
711-2 Koehler Ave.
Ronkonkoma, NY 11779
Joseph P. Gordon 134,500 5.06%
177-23 Union Tpke.,
Flushing, NY 11366
John J. Collins, Jr. 123,400 (3) 4.64%
Eric O. Hallman 47,500 (3) 1.79%
Walter J. Raleigh 7,000 (4) .26%
All officers and directors
as a group (7 persons) 1,052,827 (5) 39.57%
</TABLE>
- --------------------------
Included in the above are fully exercisable options to purchase the Company's
common stock, as follows:
(1) 9,000 shares granted on June 5, 1996;
(2) 4,050 shares granted on January 1, 1994;
(3) 1,000 shares granted on June 15, 1994 and 1,000 shares granted on
June 18, 1997 to each of Mr. Hallman and Mr. Collins;
(4) 3,000 shares granted on April 18, 1997 and 1,000 shares granted
June 17, 1998;
(5) 60,500 shares granted between January, 1, 1994 and June 17, 1998
(6) Mr. Ryan disclaims beneficial ownership of 15,000 shares owned by
his wife.
3
<PAGE>
Proposal 1 -
ELECTION OF DIRECTORS
The Company's Certificate of Incorporation provides for three classes
of directors with staggered terms of office and provides that upon the
expiration of the terms of office for a class of directors, nominees for each
class shall be elected for a term of three years to serve until the election and
qualification of their successors or until their earlier resignation, death or
removal from office. The Company currently has one Class I director, two Class
II directors and two Class III directors. At the 1999 Annual Meeting there is
one nominee for director in Class I. The incumbent Class II and Class III
directors have one year and two years, respectively, remaining on their terms of
office.
The Company has no reason to believe that either of the nominees will
be disqualified or unable to serve, or will refuse to serve if elected. However,
if a nominee is unable or unwilling to accept election, the proxies will be
voted for such substitute as the Board of Directors may select. It is intended
that the shares represented by proxies will be voted, in the absence of contrary
instructions, for the election as director of the nominee for Class I named in
the following table. The Board of Directors has nominated and Management
recommends the election of the person listed in the following table as Class I
director. The table also sets forth the names of the two directors in Class II
and the two directors in Class III whose terms of office have not expired, their
ages, their positions with the Company and the period each has served as a
director of the Company. There are no family relationships among the Board
members.
<PAGE>
<TABLE>
<CAPTION>
Position
With the Director
Name Age Company Since
- ---------------------------------------------------------------------------------------------------------
<S> <C> <C>
NOMINEE FOR DIRECTOR - CLASS I
(Nominee for three year Term Expiring in June, 2002)
---------------------------------------------------
Christopher J. Ryan 47 Executive Vice President - 1986
Finance, Secretary and Director
INCUMBENT DIRECTORS - CLASS II
(One Year remaining on Term Expiring in June, 2000)
--------------------------------------------------
John J. Collins, Jr. 56 Director 1986
Eric O. Hallman 55 Director 1982
INCUMBENT DIRECTORS - CLASS III
(Two years remaining on Term Expiring in June, 2001)
--------------------------------------------------
Raymond J. Smith 60 Chairman of the Board, 1982
President and Director
Walter J. Raleigh 71 Director 1991
</TABLE>
4
<PAGE>
The principal occupations and employment of the nominees for
director and for the directors continuing in office are set forth below:
Christopher J. Ryan has served as Executive Vice President-Finance
and director since May, 1986 and Secretary since April 1991. From October 1989
until February 1991 Mr. Ryan was employed by Sands Brothers and Rodman &
Renshaw, Inc., both investment banking firms. Prior to that, he was an
independent consultant with Laidlaw Holding Co., Inc., an investment banking
firm, from January 1989 until September 1989. From February, 1987 to January,
1989 he was employed as the Managing Director of Corporate Finance for Brean
Murray, Foster Securities, Inc. He was employed from June, 1985 to March, 1986
as a Senior Vice President with the investment banking firm of Laidlaw Adams
Peck, Inc., a predecessor firm to Laidlaw Holdings, Inc. Mr. Ryan has been a
director of Auerback, Pollack & Richardson and Lessing, Inc. since 1996.
John J. Collins, Jr. was Executive Vice President of Chapdelaine
GSI, a government securities firm from 1977 to January 1987. He was Senior Vice
President of Liberty Brokerage, a government securities firm between January
1987 and November 1998. Presently, Mr. Collins is self-employed, managing a
direct investment portfolio of small business enterprises for his own accounts.
Eric O. Hallman has been a director of the Company since its
incorporation. He was President of Naess Hallman Inc., a shipbrokering firm,
between 1984 and 1991. Mr. Hallman was also affiliated between 1991 and 1992
with Finanshuset (U.S.A.), Inc., a shipbrokering and international financial
services and consulting concern, and was an officer of Sylvan Lawrence, a real
estate development company, between 1992 and 1998. Mr. Hallman is presently
President of PREMCO, a real estate management company.
Raymond J. Smith, a co-founder of the Company, has been Chairman
of the Board of Directors and President since its incorporation in 1982.
Walter J. Raleigh is a director of CMI Industries, Inc., the
successor company to Clinton Mills, Inc. and was president of Clinton Mills
Sales, Co. Division, N.Y. from 1974 to 1995. Clinton Mills was a textile
manufacturer of woven fabrics. Mr. Raleigh retired from Clinton Mills in 1995
and now is a Senior Adviser to CMI Industries, Inc. Mr. Raleigh is a former
director of Kerry Petroleum Company, an oil and gas development company.
During the year ended January 31, 1999, the Board of Directors of
the Company met two times, and four of the five members of the Board of
Directors attended at least 75% of the aggregate of (1) the total number of
meetings of the Board of Directors held during the period when he was a
director, and (2) the total number of meetings held by all committees of the
Board of Directors on which he served (during the periods when he served).
Committees of the Board of Directors are as follows:
1- The Stock Option and Compensation Committee is responsible for
evaluating the performance of the Company's management, fixing or determining
the method of fixing compensation of the Company's salaried employees,
administering the Company's Stock Option and 401K/ESOP Plans, and reviewing
significant amendments to a subsidiary's employee pension benefit plan. The
Committee also, in conjunction with the Chief Executive Officer, considers the
qualifications of prospective Directors of the Company and, as vacancies occur,
recommends nominees to the Board of Directors. The Stock Option and Compensation
Committee (which also functions as a nominating committee for nominations to the
Board) will consider nominees to the Board recommended by stockholders. Such
recommendations must be in writing and sent to the Secretary of the Company no
later than January 31st of the year in which the Annual Meeting is to be held,
accompanied by a brief description of the proposed nominee's principal
occupation and his or her other qualifications which, in the stockholder's
opinion, make such person a suitable candidate for nomination to the Board. This
Committee met once during the year ended January 31, 1999.
The committee members are:
John J. Collins, Jr., Eric O. Hallman, and Walter J. Raleigh
<PAGE>
Compensation Committee Interlocks and Insider Participation
Members of the Stock Option and Compensation Committee are outside
directors who do not serve in any other capacity with respect to the Company or
any of its subsidiaries. Messrs. Collins and Hallman are partners of POMS
Holding Co. See "Certain Relationships and Related Transactions".
2- The Audit Committee was formed in September, 1987 and is
responsible for recommending to the Board of Directors the appointment of
independent auditors for the fiscal year, reviewing with the independent
auditors the scope of their proposed and completed audits, and reviewing with
the Company's financial management and its independent auditors other matters
relating to audits and to the adequacy of the Company's internal control
structure. This Committee met once during the year ended January 31, 1999.
The committee members are:
John J. Collins, Jr., Eric O. Hallman, and Christopher J. Ryan
COMPENSATION OF EXECUTIVE OFFICERS
--------------------------------------
The table below sets forth all salary, bonus and all other compensation
paid to the Company's chief executive officer and each of the Company's other
executive officers (who earned more than $100,000 per year in salary and bonus)
for the years ended January 31, 1999, 1998 and 1997:
<TABLE>
<CAPTION>
Name and All Other
Principal Position Year Salary Bonus Compensation
- ------------------ ---- ------ ----- ------------
<S> <C> <C> <C> <C>
Raymond J. Smith, 1999 $262,500 $25,000 $5,899
Chairman, President and CEO 1998 225,000 3,089
1997 225,000
Christopher J. Ryan, 1999 $175,000 $20,000 $3,724
Executive V.P.-Finance 1998 169,003 7,750 1,262
and Secretary 1997 115,000 23,250
Harvey Pride, Jr. 1999 $135,000 $3,465
Vice President- 1998 115,000 $23,000 910
Manufacturing 1997 115,000 19,136
James M. McCormick 1999 $115,000 $13,500 $4,214
VP - Treasurer 1998 115,000 8,450 2,138
1997 89,000 16,350
</TABLE>
There are four executive officers with salary and bonus individually
exceeding $100,000. There were no pension or retirement plans or other benefits,
payable or accrued, for such persons during fiscal year 1999. The Company has
entered into employment contracts with certain executive officers providing for
annual compensation of $262,500 for Mr. Smith and $175,000 for Mr. Ryan and
$135,000 for Mr. Pride. Messrs. Smith and Pride each have a three year contract
which expires on January 31, 2001, Mr. Ryan has a three year contract which
expires on February 13, 2000. All contracts are automatically renewable for one
or two year terms, unless in various instances 30 to 120 days notice is given by
either party. The above named executives participate in the Company's 401-K Plan
which commenced on January 1, 1995. The Company has made a contribution to this
plan totaling $55,332, during the plan year ended December 31, 1998.
6
<PAGE>
These employment contracts are similar in nature and include disability
benefits, vacation time, non-compete and confidentiality clauses. There are no
provisions for retirement. Messrs. Smith, Ryan and Pride's contracts have an
additional provision for annual bonus based on the Company's performance and
based upon earnings per share formulas determined by the Stock Option and
Compensation Committee of the Board of Directors of the Company. Accordingly,
the annual bonus accrued at January 31, 1999 (for payment in May 1999) for
Messrs. Smith, Ryan and Pride were $92,500, $16,000 and $12,800, respectively.
All contracts provide for lump sum payments of contracted salaries pursuant to
various formulas should there be a change in control of the Company.
STOCK OPTION AND COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
Policies: The compensation policy of the Company is to provide its executive
officers and management with a level of pay and benefits that will assure the
Company's competitiveness and continued growth, and allow the Company to retain
key executives critical to this long-term success and attract and retain
qualified personnel. The Company competes for talented executives in a market
segment where successful entrepreneurial executives are highly compensated. It
also competes for executives with a background in manufacturing and selling
protective safety garments. As a result, to obtain and retain highly qualified
and motivated executives, the Compensation Committee has deemed it desirable to
structure employment arrangements which compensate highly for high profitability
and performance and to enter into written employment agreements with its senior
executive officers.
The Compensation Committee's responsibilities include overseeing the
Company's compensation policies, supervising compensation for management and
employee benefits and administering the Company's stock option and other
employee benefit plans.
The Compensation Committee also develops and negotiates employment
agreements with key executive officers. These employment agreements include base
salaries and incentive compensation arrangements designed to reward management
for achieving certain production or performance levels. The Compensation
Committee is also responsible for developing or reviewing incentive compensation
arrangements which the Company enters into with executive officers and key
individuals, other than those senior executives who have written employment
agreements. See "Compensation of Executive Officers".
In order to determine appropriate levels of executive compensation, the
Compensation Committee reviews various factors, including individual
performance, and evaluates the progress of the Company towards attaining its
long-term profit and return on equity goals. Compensation packages for senior
executive officers have been structured to attempt to compensate them to a
substantial extent based on both the profitability of the Company as a whole and
the productivity of their individual departments.
<PAGE>
Particulars: Messrs. Eric O. Hallman, John J. Collins, Jr. and Walter J. Raleigh
were members of the Company's Stock Option and Compensation Committee when it
ratified Mr. Smith's and Mr. Pride's employment contracts in January 1998, and
Mr. Ryan's which was ratified on February 14, 1997. Mr. Walter J. Raleigh joined
the Board of Directors on April 18, 1991, as a third outside director and with
Messrs. Hallman and Collins, these three outside directors presently make up the
Stock Option and Compensation Committee.
Messrs. Smith, Pride and Ryan were awarded base compensations of
$262,500, $175,000 and $135,000, for fiscal 1999, respectively. In addition, the
Committee reviewed what was normally paid the President and Chairman in Mr.
Smith's case and Executive Vice President Finance and In-House Counsel in Mr.
Ryan's case and the Chief Manufacturing Executive in Mr. Pride's case, in public
companies of Lakeland's size and concluded that the compensation package
represented close to the median of what other officers were being compensated in
like public companies of comparable size after reviewing Growth Resources
Officer Compensation Report Eleventh Edition - Panel Publications.
These contracts also provide for bonuses in addition to salary based
upon the Company's increase in earnings. (See Directors and Principal
Stockholders.) The Stock Option and Compensation Committee believes that the
contracts covering Messrs. Smith, Pride and Ryan are appropriately tied to their
respective levels of expertise, were constructed at or below industry norms, and
any increases in compensation were and will be tied to increases in the
Company's earnings. The Stock Option and Compensation Committee also took into
consideration that since the inception of the Company 15 years ago there have
been no executive pension plans, deferred compensation plans, or other
compensation or benefit plans for executives of the Company other than the
Company's Stock Option Plan and the 401-K/ESOP Plan, the latter of which went
into effect January 1, 1995.
7
<PAGE>
The Board Compensation Committee Report on Executive Compensation shall
not be deemed incorporated by reference by any general statement incorporating
by reference this proxy statement into any filing under the Securities Act of
1933 or the Securities Exchange Act of 1934, except to the extent that the
Company specifically incorporates this information by reference, and shall not
otherwise be deemed filed under such Acts.
Performance Graph
The Corporate Performance Graph, appearing on the following page,
obtained from Media General Financial Services of Virginia, compares the five
year cumulative total return of the Company's common stock with that of a broad
equity market index, including dividend reinvestment and with that of a peer
group:
Option/SAR Grants in Last Fiscal Year - No stock options were granted to any
employee in fiscal 1999 and no SAR grants have been made since inception of the
Stock Option Plan. See "Directors' Compensation".
Stock Option Plan
Messrs. Smith, Ryan, Pride and McCormick participate in the Company's Incentive
Stock Option Plan (common stock). The outstanding incentive stock options as of
January 31, 1999 are as follows:
<TABLE>
<CAPTION>
No. of Date(s) Grant
Name of Shares Option of Expiration Date
Executive Granted Price Grant Date(s) Value
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Mr. Smith 9,000 $ 3.50 6/5/96 6/4/06 $31,500
Mr. Ryan 4,050 $2.25 1/1/94 1/1/04 $9,113
Mr. Pride 29,600 $2.25 - 3.50 6/5/96 & 1/1/94 6/4/06 & 1/1/04 $91,600
Mr. McCormick 9,850 $2.25 - 3.50 6/5/96 & 1/1/94 6/4/06 & 1/1/04 $28,413
</TABLE>
There are currently 250,000 option shares available for future grant
under this plan. During the year ended January 31, 1999, no stock options were
granted and the following options were exercised:
<TABLE>
<CAPTION>
No. of
Name of Shares Exercise Date of Per Share Exercise
Executive Exercised Price Exercise Date Value
- -----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Mr. Smith 34,045 $2.48 5/11/98 $10.625
6,255 $2.48 9/8/98 $7.50
4,200 $2.48 10/10/98 $6.125
</TABLE>
8
[ Grapic ommitted depicting of:
Compare 5 Year Cumulative
Total Return ]
9
<PAGE>
DIRECTORS' COMPENSATION
-----------------------------
Members of the Board of Directors, in their capacity as directors, are
reimbursed for all travel expenses to and from meetings of the Board. Outside
Directors received $750 for each meeting as compensation for serving on the
Board. There are no charitable award or director legacy programs. Messrs.
Collins, Hallman and Raleigh participate in the Company's Non-employee
Directors' Option Plan as follows:
<TABLE>
<CAPTION>
# of Option Date of Expiration
Director Shares Price Grant Date
-------- ------ ----- ----- ----
<S> <C> <C> <C> <C> <C> <C>
Mr. Collins 1,000 5.125 6/18/97 6/18/2003
Mr. Collins 1,000 3.88 6/15/94 6/15/2000
Mr. Hallman 1,000 5.125 6/18/97 6/18/2003
Mr. Hallman 1,000 3.88 6/15/94 6/15/2000
Mr. Raleigh 3,000 3.25 4/18/97 4/18/2003
During the year ended January 31, 1999, the following options were granted.
Mr. Raleigh 1,000 10.75 6/17/98 6/17/2004
There are currently 40,000 option shares available for future grant under this plan.
During the year ended January 31, 1999, the following options were exercised:
</TABLE>
<TABLE>
<CAPTION>
# of Exercise Date Per Share Exercise
Director Shares Price of Exercise Date Value
-------- ------ ----- ----------- ----------
<S> <C> <C> <C> <C> <C>
Mr. Raleigh 2,000 $3.25 5/19/98 $10.375
1,000 $4.25 5/19/98 $10.375
</TABLE>
<PAGE>
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
--------------------------------------------------
POMS Holding Co. ("POMS", a partnership consisting of Raymond J. Smith,
Eric O. Hallman, John J. Collins, Jr., Joseph P. Gordon, Harvey Pride, Jr. and
certain other stockholders of the Company) leases to the Company a 90,308 square
foot disposable garment manufacturing facility in Decatur, Alabama. Under leases
effective January 1 and March 1, 1995 and expiring on August 31, 1999, the
Company pays an annual rent of $364,900 and is the sole occupant of the
facility.
During September 1992 Highland, a former wholly-owned subsidiary of the
Company, relocated to Somerville, Alabama from the above mentioned Decatur
facility. Highland entered into a $1,500 month to month lease agreement for
12,000 sq. ft. of manufacturing space, sharing this same Somerville location
with Chemland, another former wholly-owned subsidiary of the Company. Chemland
currently has a $1,600 month to month lease agreement for 12,000 sq. ft. This
Somerville facility is owned by Harvey Pride, Jr., an officer of the Company.
The Company believes that all rents paid to POMS and Harvey Pride, Jr.
by the Company, Highland and Chemland Divisions are comparable to what would be
charged by an unrelated third party. The net rent paid to POMS by the Company
for the year ended January 31, 1999, amounted to $364,900 and the total rent
paid to Harvey Pride, Jr. by the Company for use by its Highland and Chemland
divisions, for the year ended January 31, 1999, amounted to $37,200.
An Qiu Holding Co., ("An Qiu" a partnership consisting of all the
Directors of the Company, one officer and four employees) entered into a month
to month lease with its then Chinese division for 38,820 square fee at an annual
rental fee of $39,020. On January 1, 1999, the rent was increased by $6,960, as
7,100 additional square feet was added to the building in fiscal 1999. A formal
long term lease is expected upon completion of the building in fiscal 2000 at an
annual rental of $45,980. The Company's subsidiary is the sole occupant of the
facility.
During the year ended January 31, 1999 the Company made payments
totaling $180 to Madison Mobile Storage, Inc. for trailer rentals, and $510,183
for expenses incurred by Madison Mobile Storage, Inc. in running the Company's
Missouri facility. Such expenses included employee payroll, insurance, auto and
other miscellaneous expenses. The principal shareholder of Madison Mobile
Storage, Inc. is Mr. Harvey Pride, Jr. who is also an officer of the Company.
The Agreement between the Company and Madison Mobile Storage, Inc. was
terminated as of February 1, 1999.
10
<PAGE>
The Company paid or accrued legal fees of $5,415 for the fiscal year
ended January 31, 1999 to the Law Offices of Thomas J. Smith, the Company's
General Counsel. Mr. Thomas J. Smith, is the brother of Raymond J. Smith.
OTHER MATTERS
------------------
The Board of Directors knows of no matters other than those described
above that may come before the Annual Meeting. As to other matters, if any, that
properly may come before the Annual Meeting, the Board of Directors intends that
proxies in the accompanying form will be voted in respect thereof in accordance
with the judgment of the person or persons voting the proxies.
STOCKHOLDER PROPOSALS FOR 2000 ANNUAL MEETING
---------------------------------------------
Stockholder proposals for inclusion in the Company's Proxy Statement
for the 2000 Annual Meeting of Stockholders must be received by the Company not
later than January 31, 2000. The person submitting the proposal must have been a
record or beneficial owner of the Company's Common Stock for at least one year
and must continue to own such securities through the date on which the meeting
is held, and the securities so held must have a market value of at least $1,000.
Any such proposal will be included in the Proxy Statement for such Annual
Meeting if the rules of the Securities and Exchange Commission are complied with
as to the timing and form of such proposal, and the content of such
stockholder's proposal is determined by the Company to be appropriate under
rules promulgated by the Commission.
By the Order of the Board of Directors
/s/ Christopher J. Ryan,
------------------------
Christopher J. Ryan,
Secretary
May 13, 1999
11
