<PAGE> 1
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON MAY 17, 1996
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 / /
<TABLE>
<S> <C> <C> <C>
Check the appropriate box:
/ / Preliminary Proxy Statement / / Confidential, for Use of the
/X/ Definitive Proxy Statement Commission Only (as permitted
/ / Definitive Additional Materials by Rule 14a-6(e)(2))
/ / Soliciting Material Pursuant to
Rule 14a-11(c) or Rule 14a-12
</TABLE>
LECHTERS, INC.
- --------------------------------------------------------------------------------
(Name of Registrant as Specified in Its Charter)
LECHTERS, INC.
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
/X/ $125 per Exchange Act Rule 0-11(c)(1)(ii), 14a-6(i)(1), or 14a-6(i)(2)
or Item 22(a)(2) of Schedule 14A.
/ / $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 transactions applies:
- --------------------------------------------------------------------------------
(3) Per unit price or other underlying value of transaction computed pursuant to
Exchange Act Rule 0-11:1
- --------------------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
- --------------------------------------------------------------------------------
(5) Total fee paid:
- --------------------------------------------------------------------------------
/ / Fee paid previously with preliminary materials.
- --------------------------------------------------------------------------------
/ / Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was
paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
- --------------------------------------------------------------------------------
(2) Form, Schedule or Registration Statement No.:
- --------------------------------------------------------------------------------
(3) Filing Party:
- --------------------------------------------------------------------------------
(4) Date Filed:
- --------------------------------------------------------------------------------
(1) Set forth the amount on which the filing fee is calculated and state how
it was determined.
IT IS ANTICIPATED THAT THIS PROXY STATEMENT AND A RELATED FORM OF PROXY WILL
FIRST BE DELIVERED TO SECURITY
HOLDERS ON OR AROUND MAY 17, 1996
<PAGE> 2
LECHTERS, INC.
1 CAPE MAY STREET
HARRISON, NEW JERSEY 07029-9998
------------------------
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
------------------------
The Annual Meeting of Shareholders of Lechters, Inc. (the "Company") will
be held at the offices of LeBoeuf, Lamb, Greene & MacRae, L.L.P., 125 West 55th
Street, 19th Floor, New York, New York on Tuesday, June 18, 1996, at 9:00 a.m.,
for the following purposes:
(1) to elect four directors;
(2) to consider and act upon a proposal to ratify the appointment of Deloitte &
Touche LLP as the independent auditors of the Company for the fiscal year
ending February 1, 1997; and
(3) to transact such other business as may properly come before the meeting or
any adjournment or adjournments thereof.
The Board of Directors has fixed the close of business on May 3, 1996 as
the record date for determining shareholders entitled to notice of and to vote
at the meeting. The transfer books of the Company will not be closed.
By Order of the Board of Directors,
IRA S. ROSENBERG,
Secretary
Harrison, New Jersey
May 17, 1996
WHETHER OR NOT YOU EXPECT TO BE PRESENT AT THE MEETING, YOU ARE URGED TO SIGN,
DATE AND RETURN THE ENCLOSED PROXY IN THE ENCLOSED ENVELOPE.
<PAGE> 3
LECHTERS, INC.
1 CAPE MAY STREET
HARRISON, NEW JERSEY 07029-9998
PROXY STATEMENT
This Proxy Statement is furnished to the shareholders of Lechters, Inc., a
New Jersey corporation (the "Company"), in connection with the solicitation of
proxies by the Board of Directors for use at the Annual Meeting of Shareholders
of the Company to be held on Tuesday June 18, 1996 and any adjournment or
adjournments thereof. A copy of the notice of meeting accompanies this Proxy
Statement. It is anticipated that the mailing of this Proxy Statement will
commence on or about May 17, 1996.
Only shareholders of record at the close of business on May 3, 1996, the
record date for the meeting, will be entitled to notice of and to vote at the
meeting. On the record date the Company had outstanding 17,155,086 shares of
common stock, no par value (the "Common Stock"), 149,999 shares of Series A
Convertible Preferred Stock, $100 par value ("Series A Preferred Stock"), and
50,001 shares of Series B Convertible Preferred Stock, $100 par value ("Series B
Preferred Stock" and, together with the Series A Preferred Stock, the "Preferred
Stock").(1) The Preferred Stock was issued to Prudential Private Equity
Investors III, L.P. ("PPEI") on April 5, 1996.
On all matters submitted to the shareholders for a vote, holders of the
Common Stock are entitled to one vote per share, holders of the Series A
Preferred Stock are entitled to one vote for each share of Common Stock issuable
upon conversion of the Series A Preferred Stock as of the record date for such
vote, and holders of the Series B Preferred Stock have no voting rights. The
holders of the Series A Preferred Stock are entitled to vote 2,399,984 shares at
the 1996 Annual Meeting of Shareholders. PPEI was the sole holder of all of the
outstanding shares of Series A Preferred Stock as of the record date.
The holders of Series A Preferred Stock, voting separately as a single
series to the exclusion of all other series of the Company's capital stock, and
with each share of Series A Preferred Stock entitled to one vote, are entitled
to elect one Director to serve on the Company's Board of Directors until he is
removed from office or his successor is duly elected by the holders of the
Series A Preferred Stock. PPEI, as holder of the Series A Preferred Stock, has
designated Robert Knox, who has been serving as a Director of the Company since
1986, as the Director to serve on the Company's Board of Directors. His term
expires as of the 1997 Annual Meeting of Shareholders.
Shareholders who execute proxies may revoke them by giving written notice
to the Secretary of the Company at any time before such proxies are voted or by
executing a later-dated proxy. Attendance at the meeting will not have the
effect of revoking a proxy unless the shareholder so attending, in writing, so
notifies the Secretary of the meeting at any time prior to the voting of the
proxy.
The Board of Directors does not know of any matter that is expected to be
presented for consideration at the meeting, other than (i) the election of
directors and (ii) the proposal to ratify the appointment of the independent
auditors of the Company for the current fiscal year. However, if other matters
properly come before the meeting, the persons named in the accompanying proxy
intend to vote thereon in accordance with their judgment.
The Company will bear the cost of the meeting and the cost of soliciting
proxies, including the cost of mailing the proxy material. In addition to
solicitation by mail, directors, officers and regular employees of the Company
(who will not be specifically compensated for such services) may solicit proxies
by telephone or otherwise. Arrangements will be made with brokerage houses and
other custodians, nominees and fiduciaries to forward proxies and proxy material
to their principals and the Company will reimburse them for their expenses.
- ---------------
(1)The Preferred Stock is convertible into a number of shares of Common
Stock that is computed by multiplying the number of shares of Preferred Stock by
$100 and dividing the result by the conversion price then in effect. The
conversion price presently in effect is $6.25.
<PAGE> 4
Directors will be elected by a plurality of the votes cast. All proxies
received pursuant to this solicitation will be voted except as to matters where
authority to vote is specifically withheld and, where a choice is specified as
to the proposal, they will be voted in accordance with such specification. If no
instructions are given, the persons named in the proxy solicited by the Board of
Directors of the Company intend to vote for the nominees for election as
directors of the Company listed herein. Abstentions and broker non-votes will
not be considered votes cast.
PRINCIPAL SHAREHOLDERS
The following table sets forth information regarding the beneficial
ownership of Common Stock by each person known by the Company to be the
beneficial owner of more than five percent of the outstanding Common Stock,
based upon total shares outstanding as of April 12, 1996:
<TABLE>
<CAPTION>
NUMBER OF
SHARES PERCENT
BENEFICIALLY OF
NAME AND ADDRESS OWNED CLASS
- -------------------------------------------------------------------- ----------- -----
<S> <C> <C>
Donald Jonas........................................................ 4,175,411(1) 24.3%
c/o Lechters, Inc.
1 Cape May Street
Harrison, New Jersey 07029
ICM Asset Management, Inc........................................... 1,770,601(2) 10.3%
601 W. Main Ave., Ste. 917
Spokane, WA 99201
FMR Corp............................................................ 2,024,625(3) 11.78%
82 Devonshire Street
Boston, MA 02109-3614
Fidelity Management & Research Company.............................. 1,940,585(4) 11.29%
82 Devonshire Street
Boston, MA 02109-3614
Neuberger & Berman L.P.............................................. 970,000(5) 5.65%
605 Third Ave.
NY, NY 10158-3698
</TABLE>
- ------------------------
(1) Includes 111,384 shares held by Mr. Jonas' wife, as to which shares Mr.
Jonas disclaims beneficial ownership.
(2) ICM Asset Management, Inc., has sole voting power with respect to 974,651
shares and sole dispositive power with respect to all the shares. Based on
information as of February 9, 1996, contained in a Schedule 13G filed with
the Securities and Exchange Commission.
(3) Includes: (i) 1,940,585 shares beneficially owned by Fidelity Management &
Research Company, a subsidiary of FMR Corp.; and (ii) 84,041 shares
beneficially owned by Fidelity Management Trust Company, a subsidiary of FMR
Corp. FMR Corp. has sole voting power with respect to 34,287 shares and sole
dispositive power with respect to all the shares. Based on information as of
February 14, 1996, contained in a Schedule 13G filed with the Securities and
Exchange Commission.
(4) Includes 26,885 shares issuable on conversion of convertible subordinated
debentures. Based on information as of February 14, 1996, contained in a
Schedule 13G filed with the Securities and Exchange Commission.
(5) Neuberger & Berman L.P. has shared voting power and shared dispositive power
with respect to all the shares. Based on information as of February 12,
1996, contained in a Schedule 13G filed with the Securities and Exchange
Commission.
2
<PAGE> 5
The following table sets forth information regarding the beneficial
ownership of Series A Preferred Stock by each person known by the Company to be
the beneficial owner of more than five percent of the outstanding Series A
Preferred Stock, based upon total shares outstanding as of April 12, 1996:
<TABLE>
<CAPTION>
NUMBER OF
SHARES PERCENT
BENEFICIALLY OF
NAME AND ADDRESS OWNED CLASS
- ------------------------------------------------------------------- ------------ -----
<S> <C> <C>
Prudential Private
Equity Investors III, L.P........................................ 149,999(1) 100%
717 Fifth Avenue
Suite 1100
New York, New York 10022
</TABLE>
(1) Robert Knox, a director of the Company and a limited partner in PPEI,
disclaims all beneficial ownership of the Preferred Stock.
The following table sets forth information regarding the beneficial
ownership of Series B Preferred Stock by each person known by the Company to be
the beneficial owner of more than five percent of the outstanding Series B
Preferred Stock, based upon total shares outstanding as of April 12, 1996:
<TABLE>
<CAPTION>
NUMBER OF
SHARES PERCENT
BENEFICIALLY OF
NAME AND ADDRESS OWNED CLASS
- ------------------------------------------------------------------ ------------ -----
<S> <C> <C>
Prudential Private
Equity Investors III, L.P....................................... 50,001(1) 100%
717 Fifth Avenue
Suite 1100
New York, New York 10022
</TABLE>
(1) Robert Knox, a director of the Company and a limited partner in PPEI,
disclaims all beneficial ownership of the Preferred Stock.
Except as noted in the footnotes in the three tables above, (i) none of
such shares are known by the Company to be shares with respect to which the
beneficial owner has the right to acquire beneficial ownership and (ii) the
Company believes the beneficial holders listed above have sole voting and
investment power regarding the shares shown as being beneficially owned by such
beneficial holders.
ELECTION OF DIRECTORS
The Board of Directors is divided into three classes with each class
holding office for a staggered three-year term. The terms of Messrs. Davis,
Fischman, Malkin and Matthews, the Class C Directors, will expire at the Annual
Meeting of Shareholders to be held on June 18, 1996, and such persons are
nominees for reelection as directors at such meeting. The terms of Messrs.
Jonas, Lechter and Pfeffer, as Class A Directors, will expire in 1998 and the
terms of Ms. Maneker and of Messrs. Begun, Knox and Wolff, the Class B
Directors, will expire in 1997.
At the meeting, Messrs. Davis, Fischman, Malkin and Matthews are to be
elected directors to hold office until the annual meeting in 1999 and until each
of their successors has been elected and qualified. If any nominee listed in the
table below should become unavailable for any reason, which management does not
now anticipate, the persons named in the proxy solicited by the Board of
Directors reserve the right to substitute another person of their choice in his
or her place. All nominees named in the table below are now directors of the
Company.
3
<PAGE> 6
The following information is furnished with respect to each nominee for
director of the Company and each other member of the Board of Directors whose
term of office will continue after the Annual Meeting. All such information has
been furnished to the Company by such directors.
NOMINEES
CLASS C -- TERMS EXPIRING 1996
<TABLE>
<CAPTION>
CURRENT
POSITIONS
NAME AND AGE WITH THE COMPANY
- ----------------------------------------------------------------------------------------------
<S> <C>
Charles A. Davis (47)......................................................... Director
Bernard D. Fischman (81)...................................................... Director
Anthony E. Malkin (33)........................................................ Director
Norman Matthews (63).......................................................... Director
</TABLE>
DIRECTORS CONTINUING IN OFFICE
CLASS B -- TERMS EXPIRING 1997
<TABLE>
<CAPTION>
CURRENT
POSITIONS
NAME AND AGE WITH THE COMPANY
- ----------------------------------------------------------------------------------------------
<S> <C>
Martin S. Begun (63).......................................................... Director
Robert Knox (44).............................................................. Director
Roberta S. Maneker(58)........................................................ Director
John Wolff (43)............................................................... Director
</TABLE>
CLASS A -- TERMS EXPIRING 1998
<TABLE>
<CAPTION>
CURRENT POSITIONS
NAME AND AGE WITH THE COMPANY
- ------------------------------------------------------------- ---------------------------------
<S> <C>
Donald Jonas (66)............................................ Chairman of the Board, President
and Chief Executive Officer
Albert Lechter (67).......................................... Director
Leonard Pfeffer (69)......................................... Director
</TABLE>
Donald Jonas has been Chairman of the Board and a director of the Company
or its former parent since 1979. Mr. Jonas has been President and Chief
Executive Officer since January 16, 1996 following the term of Steen Kanter, and
Mr. Jonas previously served as Chief Executive Officer of the Company from
January 1984 to January 1994. He is also a director of Dress Barn, Inc.
Albert Lechter served as President and a director of the Company or its
former parent from 1975 to 1992. Mr. Lechter was Vice Chairman of the Board from
1992 until November 1993.
Leonard Pfeffer has been a director of the Company or its former parent
since 1979. He served as an Executive Vice President from 1979 to 1992. He was
also Chief Financial Officer of the Company from 1983 to 1991.
Anthony E. Malkin has been a director of the Company since December, 1994.
He has been President and Chief Operating Officer of W&M Properties, Inc. for
more than the last five years.
Charles A. Davis is a limited partner of Goldman, Sachs & Co., an
investment banking firm, and was a general partner of Goldman, Sachs & Co. from
1990 to December 1994. He is also a director of Media General, Inc., US Life
Corporation and Merchants Bancshares, Inc. He has been a director of the Company
since 1989.
4
<PAGE> 7
Bernard D. Fischman has been Of Counsel to the law firm of LeBoeuf, Lamb,
Greene & MacRae, L.L.P., which serves as counsel to the Company, since March of
1994. Prior to that time he was a partner in the law firm of Shea & Gould for
more than the previous five years. He has been a director of the Company since
1989.
Norman Matthews has been a retail consultant to the Company since 1989. He
served as the President of Federated Department Stores from 1987 to 1988 and was
Vice Chairman of the Board of Federated Department Stores from 1983 to 1988. He
is a director of Progressive Corp., Loehmann's, Inc., Eye Care Centers of
America, Toys R' Us and Finlay Jewelry. He previously served as a director of
Hills Stores Company. He has been a director of the Company since 1989.
Martin S. Begun has been associated with New York University since 1963 and
is currently Vice President for External Relations of the New York University
Medical Center and Associate Dean of its School of Medicine. He has been a
director of the Company since 1986.
Robert Knox has been Chairman and Chief Executive Officer of Prudential
Equity Investors, Inc. since 1994, and was President of that firm from 1984 to
1994. He is also a director of Health Management Associates, Inc. and several
private companies. He has been a director of the Company since 1986, and is the
designated director of the holder of the Series A Preferred Stock.
Roberta S. Maneker has been self-employed since November 1994. Prior to
that time she was Senior Vice President of Marketing and Corporate
Communications at Christie's, an auction house, since 1987. She has been a
director of the Company since 1992.
John Wolff has been a partner of CEW Partners, a New York-based investment
firm, since 1984. He has been a director of the Company since 1986, and has
served as a part-time consultant to the Company from time to time.
BENEFICIAL OWNERSHIP OF DIRECTORS AND MANAGEMENT
The table below sets forth the beneficial ownership of the Common Stock as
of April 12, 1996 by (i) each director and nominee for director, (ii) each of
the executive officers named in the "Summary Compensation Table," and (iii) all
directors and executive officers of the Company as a group.
<TABLE>
<CAPTION>
AMOUNT AND NATURE
OF BENEFICIAL
OWNERSHIP OF
COMMON STOCK AS OF PERCENT
NAME POSITION APRIL 12, 1996 OF CLASS
- -------------------------- --------------------------------- ------------------ --------
<S> <C> <C> <C>
Donald Jonas.............. Chairman of the Board, President 4,175,411(1) 24.3%
and Chief Executive Officer
Anthony E. Malkin......... Director 15,408(2) (11)
Albert Lechter............ Director 3,000 (11)
Leonard Pfeffer........... Director 29,120 (11)
Martin S. Begun........... Director 2,000(3) (11)
Robert Knox............... Director 19,888(3) (11)
Roberta S. Maneker........ Director 2,000(3) (11)
John Wolff................ Director 62,000(3)(4) (11)
Charles A. Davis.......... Director 400(3) (11)
Bernard D. Fischman....... Director 58,200(5) (11)
Norman Matthews........... Director 138,302(6) (11)
Frank O'Neill............. Senior Vice President-Director of 592(7) (11)
Real Estate and Construction
</TABLE>
5
<PAGE> 8
<TABLE>
<CAPTION>
AMOUNT AND NATURE
OF BENEFICIAL
OWNERSHIP OF
COMMON STOCK AS OF PERCENT
NAME POSITION APRIL 12, 1996 OF CLASS
- -------------------------- --------------------------------- ------------------ --------
<S> <C> <C> <C>
James A. Shea............. Senior Vice President- 2,000(8) (11)
General Merchandising Manager
John W. Smolak............ Senior Vice President and Chief 0(8) (11)
Financial Officer
Robert Harloe............. Senior Vice President- 0(8) (11)
Human Resources
Steen Kanter.............. Former Chief Executive Officer 0(9) (11)
and Vice Chairman of the Board
All directors and
executive officers of
the Company as a group
(18 persons)............
4,440,287(10) 25.9%
</TABLE>
- ---------------
(1) Information concerning Mr. Jonas' ownership of Common Stock is set forth
under "Principal Shareholders."
(2) Includes 12,508 shares held jointly with Mr. Malkin's wife and 2,900 shares
held by a trust for the benefit of Mr. Malkin's children of which Mr.
Malkin is trustee.
(3) Does not include 6,000 shares of Common Stock issuable pursuant to options
not exercisable within 60 days of April 12, 1996.
(4) Includes 60,000 shares of Common Stock held of record by CEW Partners, the
general partner of which is Basil Venture Partners of which Mr. Wolff is a
partner, although Mr. Wolff disclaims such beneficial ownership.
(5) Does not include 1,000 shares of Common Stock issuable pursuant to options
not exercisable within 60 days of April 12, 1996.
(6) Includes 128,302 shares of Common Stock issuable pursuant to options
exercisable either currently or within 60 days of April 12, 1996. Does not
include 21,000 shares of Common Stock issuable pursuant to options not
exercisable within 60 days of April 12, 1996.
(7) Does not include 101,000 shares of Common Stock issuable pursuant to the
exercise of options not exercisable within 60 days of April 12, 1996.
(8) Does not include 70,000 shares of Common Stock issuable pursuant to options
not exercisable within 60 days of April 12, 1996.
(9) Does not include any options granted because all options granted to Mr.
Kanter lapsed as a result of the termination of his employment.
(10) Includes 168,302 shares of Common Stock issuable pursuant to the exercise
of options exercisable within 60 days of April 12, 1996. Does not include
450,500 shares of Common Stock issuable pursuant to the exercise of options
not exercisable within 60 days of April 12, 1996.
(11) The percentage of shares beneficially owned does not exceed one percent of
the outstanding shares on April 12, 1996.
6
<PAGE> 9
The table below sets forth the beneficial ownership of the Preferred Stock
as of April 12, 1996 by (i) each director and nominee for director, (ii) each of
the executive officers named in the "Summary Compensation Table," and (iii) all
directors and executive officers of the Company as a group.
<TABLE>
<CAPTION>
AMOUNT AND
NATURE
OF BENEFICIAL
OWNERSHIP OF
PREFERRED STOCK PERCENT
AS OF OF
NAME POSITION APRIL 12, 1996 CLASS
------------------------------------ --------------- -------
<S> <C> <C> <C>
Donald Jonas.................. Chairman of the Board, President and
Chief Executive Officer 0 0
Anthony E. Malkin............. Director 0 0
Albert Lechter................ Director 0 0
Leonard Pfeffer............... Director 0 0
Martin S. Begun............... Director 0 0
Robert Knox................... Director 200,000(1) 100%
Roberta S. Maneker............ Director 0 0
John Wolff.................... Director 0 0
Charles A. Davis.............. Director 0 0
Bernard D. Fischman........... Director 0 0
Norman Matthews............... Director 0 0
Frank O'Neill................. Senior Vice President -- Director of
Real Estate and Construction 0 0
James A. Shea................. Senior Vice President -- General
Merchandising Manager 0 0
John W. Smolak................ Senior Vice President and Chief
Financial Officer 0 0
Robert Harloe................. Senior Vice President -- Human
Resources 0 0
Steen Kanter.................. Former Chief Executive Officer and
Vice Chairman of the Board 0 0
All directors and executive
officers of the Company as a
Group (18 persons).......... 200,000(1) 100%
</TABLE>
- ---------------
(1) Includes 149,999 shares of Series A Preferred Stock and 50,001 shares of
Series B Preferred Stock held of record by PPEI, of which Mr. Knox is a
limited partner but disclaims such beneficial ownership.
Except as noted in the footnotes above, (i) none of such shares is known by
the Company to be shares with respect to which such beneficial owner has the
right to acquire beneficial ownership and (ii) the Company believes the
beneficial holders listed above have sole voting and investment power regarding
the shares shown as being beneficially owned by them.
DIRECTOR COMPENSATION AND ATTENDANCE
Directors who are not officers of, consultants to or attorneys for the
Company receive directors' fees of $1,000 per meeting, plus an annual fee of
$10,000.
In January of 1996, pursuant to the Stock Option Plan, each of Ms. Maneker
and Messrs. Begun, Davis, Fischman, Knox, Matthews and Wolff received an option
to purchase 1,000 shares of Common Stock. The shares subject to these options
vest in five equal annual installments commencing on the first anniversary of
the date of grant, subject to such terms and provisions as determined by the
Stock Option Committee in the event of death, retirement or disability of a
director or the termination of a director's association with the Company. The
exercise price of such options was equal to the fair market value of the Common
Stock on the date of grant. The options expire no later than 10 years from the
date of grant. As of the date hereof, none of
7
<PAGE> 10
such options have been exercised. Mr. Matthews received an option with terms
identical to the above Stock Option Plan commencing as of August 1, 1994.
Pursuant to a consulting agreement between the Company and Norman Matthews,
Mr. Matthews received $50,000 in the fiscal year ended February 3, 1996 for
services provided to the Company.
Pursuant to a consulting agreement between the Company and Leonard Pfeffer,
Mr. Pfeffer received approximately $75,000 in the fiscal year ended February 3,
1996 for providing certain advisory services to the Company and refraining from
direct or indirect employment in substantial competition with the Company. Mr.
Pfeffer will receive $75,000 annually until the expiration of the agreement in
2002. The Company maintains life insurance coverage for Mr. Pfeffer so that upon
the death of such executive the Company will receive from the insurance proceeds
a sum approximately sufficient to offset the aggregate benefits payable under
such consulting agreement. Pursuant to a June 15, 1995 amendment to the
consulting agreement, Mr. Pfeffer may participate in the Company's group life,
medical and dental insurance plans until 2002. In addition, the Company will
maintain a split dollar life insurance policy for the life of Mr. Pfeffer (under
the split dollar policy, the Company is entitled to receive from the cash
surrender value or death benefit a sum equal to the premium cost incurred by the
Company to maintain the policy, with the remainder going to a beneficiary chosen
by the executive insured).
Pursuant to a consulting agreement between the Company and Albert Lechter,
Mr. Lechter received approximately $100,000 in the fiscal year ended February 3,
1996, for providing certain advisory services to the Company and refraining from
direct or indirect employment in substantial competition with the Company. Mr.
Lechter will receive $100,000 annually until the expiration of the agreement in
2003. The Company maintains life insurance coverage for Mr. Lechter so that upon
the death of such executive the Company will receive from the insurance proceeds
a sum approximately sufficient to offset the aggregate benefits payable under
such consulting agreement. Pursuant to a June 15, 1995 amendment to the
consulting agreement, Mr. Lechter may participate in the Company's group life,
medical and dental insurance plans until 2003, and will receive a car allowance
and secretarial and office services for that period. In addition, the Company
will maintain a split dollar life insurance policy for the life of Mr. Lechter.
The Board of Directors held six meetings during the fiscal year ended
February 3, 1996. During such fiscal year, none of the directors attended fewer
than 75% of the aggregate of (i) the total number of meetings of the Board of
Directors and (ii) the total number of meetings held by all committees of the
Board on which such director served.
BOARD COMMITTEES AND MEMBERSHIP
The Company has an Executive Committee consisting of Charles A. Davis,
Donald Jonas, Albert Lechter and John Wolff, which is empowered to exercise all
powers of the Board of Directors in the management of the affairs of the Company
with certain exceptions. The Executive Committee held no meetings during the
fiscal year ended February 3, 1996.
The Company has an Audit Committee, consisting of Martin S. Begun, Robert
Knox and John Wolff, which reviews the scope and results of the independent
accountants' examination and related fees, the internal audit activity of the
Company and other pertinent auditing and internal control matters. The Audit
Committee held two meetings during the fiscal year ended February 3, 1996.
The Company has a Compensation Committee, consisting of Martin S. Begun,
Bernard D. Fischman and Roberta S. Maneker. The Compensation Committee has the
authority to review all matters relating to the personnel of the Company. The
Compensation Committee held two meetings during the fiscal year ended February
3, 1996.
The Company does not have a Nominating Committee.
8
<PAGE> 11
EXECUTIVE COMPENSATION
SUMMARY OF CASH AND CERTAIN OTHER COMPENSATION
The following table contains information about the compensation paid by the
Company for services rendered in all capacities during the three fiscal years
ended February 3, 1996 to the Chief Executive Officer of the Company and each of
the four most highly paid executive officers of the Company.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG TERM COMPENSATION
--------------------------------------------
PAYOUTS
ANNUAL OTHER AWARDS LONG ALL
COMPENSATION ANNUAL -------------------- TERM OTHER
--------------------- COMPEN- RESTRICTED INCENTIVE COMPEN-
YEAR SALARY BONUS SATION STOCK OPTIONS PLAN SATION
NAME AND PRINCIPAL POSITION ENDED ($) ($) ($) AWARDS (#) PAYOUT ($)
- ----------------------------- --------- --------- -------- ------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Donald Jonas................. 2/3/96 $ 60,000 $ -- $28,476(5) -- -- -- $140,413 6)(7)(9)
Chairman of the Board, 1/28/95 60,000 -- 40,709 -- -- -- 140,812
President and Chief 1/29/94 60,000 -- 41,697 -- -- -- 143,430
Executive Officer
Robert J. Harloe(1).......... 2/3/96 169,962 8,250 -- 25,000 45,000 -- 145,776(6)(8)
Senior Vice President -- 1/28/95 -- -- -- -- -- -- --
Human Resources 1/29/94 -- -- -- -- -- -- --
Frank O'Neill................ 2/3/96 264,885 25,000 -- 25,000 76,000 -- 2,087(6)(7)
Senior Vice President -- 1/28/95 250,000 20,000 -- -- 11,000 -- 4,005
Director of Real Estate 1/29/94 200,538 20,000 -- -- 20,000 -- 408
James A. Shea(2)............. 2/3/96 290,014 -- -- 25,000 45,000 -- 77,184(6)(8)
Senior Vice President -- 1/28/95 -- -- -- -- -- -- --
General Merchandising 1/29/94 -- -- -- -- -- -- --
Manager
John W. Smolak(3)............ 2/3/96 216,737 -- -- 25,000 45,000 -- 134,982(6)(8)
Senior Vice President and 1/28/95 -- -- -- -- -- -- --
Chief Financial Officer 1/29/94 -- -- -- -- -- -- --
Steen Kanter(4).............. 2/3/96 391,923 50,000 -- -- 20,000 -- 601,441(6)(7)
Former Vice Chairman and 1/28/95 350,002 -- -- 100,000 100,000 -- 882
Chief Executive Officer 1/29/94 -- -- -- -- -- -- --
</TABLE>
- ---------------
(1) Mr. Harloe became Vice President -- Human Resources on August 1, 1994 and
Senior Vice President -- Human Resources March 5, 1996.
(2) Mr. Shea has been Senior Vice President -- General Merchandising Manager
since November 14, 1994.
(3) Mr. Smolak became Vice President and Chief Financial Officer on February 20,
1995 and Senior Vice President on March 5, 1996.
(4) Mr. Kanter's term as Vice Chairman and Chief Executive Officer of the
Company terminated effective January 10, 1996 by mutual agreement pursuant
to which he received his salary through that date and an additional
$600,000. Mr. Kanter is named in this "Executive Compensation" section
pursuant to requirements of the Securities and Exchange Commission.
(5) Represents the cost of the Company of providing Mr. Jonas with a automobile
and a driver for the three fiscal years ended February 3, 1996, January 28,
1995 and January 29, 1994, respectively.
(6) Includes insurance premiums paid by the Company with respect to term life
insurance for each of the named executive officers.
(7) Includes matching contributions under the Company's 401(k) plan of $615 for
Mr. Jonas, $1,583 for Mr. O'Neill and $937 for Mr. Kanter.
(8) Includes the cost of the Company for the relocation of Mr. Harloe, $145,272;
Mr. Shea, $76,680; and Mr. Smolak $134,478.
9
<PAGE> 12
(9) Includes insurance premiums in the amount of $138,294 paid by the Company
with respect to split-dollar life insurance policies for the benefit of Mr.
Jonas on the lives of Mr. Jonas and his wife. Mr. Jonas' designee is the
owner of the policies and the owner has the right to designate the
beneficiary thereunder. In the event of the death of Mr. Jonas and his wife,
the beneficiary receives the death benefit and in the event of the policy
cancellation, the owner receives the cash surrender value. However, both the
death benefit and the cash surrender value are subject to the right of the
Company to receive a sum equal to the aggregate premium cost incurred by the
Company for the maintenance of the policies.
EMPLOYMENT AND CONSULTING AGREEMENTS
Steen Kanter served as Chief Executive Officer and Vice Chairman of the
Board of the Company until his terms ended by mutual agreement effective January
10, 1996. He had been employed pursuant to an employment agreement which
provided for a five year term commencing January 31, 1994 at a base annual
salary of $350,000, which was increased to $400,000 on February 1, 1995. The
employment agreement was terminated pursuant to an agreement under which Mr.
Kanter received $600,000.
The Company's consulting agreements with Messrs. Lechter and Pfeffer are
discussed under "Director Compensation and Attendance." The Company's consulting
agreement with Mr. Jonas is discussed under "Board Report on Executive
Compensation."
STOCK OPTIONS
The following table contains information concerning the grant of options
under the Stock Option Plan and outside of the Stock Option Plan to each of the
executive officers named in the Summary Compensation Table during the fiscal
year ended February 3, 1996. The Stock Option Plan does not permit the issuance
of stock appreciation rights.
OPTION GRANTS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
POTENTIAL REALIZABLE
INDIVIDUAL GRANTS VALUE AS ASSUMED
------------------------------ ANNUAL RATES OF
PERCENT OF STOCK PRICE
TOTAL APPRECIATION FOR
OPTIONS GRANTED EXERCISE OPTION TERM(2)
OPTIONS TO EMPLOYEES IN PRICE EXPIRATION ---------------------
NAME GRANTED(#)(1) FISCAL YEAR ($/SHARE) DATE 5%($) 10%($)
- --------------------------------- ------------- ---------------- ---------- ---------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
Donald Jonas..................... -- -- $ -- -- $ -- $ --
Robert J. Harloe................. 20,000 3.3% 5.00 1/17/06 75,106 178,828
50,000(3) 8.3% 5.0625 1/23/06 184,640 443,945
Frank O'Neill.................... 51,000 8.4% 5.00 1/17/06 191,520 456,011
50,000(3) 8.3% 5.0625 1/23/06 184,640 443,945
James A. Shea.................... 20,000 3.3% 5.00 1/17/06 75,106 178,828
50,000(3) 8.3% 5.0625 1/23/06 184,640 443,945
John W. Smolak................... 20,000 3.3% 5.00 1/17/06 75,106 178,828
50,000(3) 8.3% 5.0625 1/23/06 184,640 443,945
Steen Kanter(4).................. -- -- -- -- -- --
</TABLE>
- ---------------
(1) Options are granted pursuant to the Stock Option Plan and generally become
exercisable annually, in increments of 20% of the total grant, beginning on
the first anniversary of the date of grant. The exercisability of such
options is dependent on continued employment with the Company. Options were
granted at fair market value of the Common Stock on the date of grant and
expire 10 years from the date of grant. The option exercise price may be
paid in shares of Common Stock owned by the executive officer, in cash, or
in any combination thereof. In the event of change in control of the
Company, these options may vest automatically and be exercisable immediately
in full, under certain circumstances. The table does not reflect options
granted during the fiscal year prior to December 22, 1995 to the named
officers and cancelled as part of a repricing on December 22, 1995, because
the repriced options are included in this table and detailed in the
"Ten-Year Option Repricings" table.
10
<PAGE> 13
(2) The potential realizable value represents the estimated future gain in the
value of the options over their exercise price which may exist immediately
prior to the scheduled expiration date of the options. The calculation
assumes the specified compounded rates of appreciation in the per share
price of the Common Stock starting on the date of grant and further assumes
that the options will be exercised on the expiration date. The actual value,
if any, which may be realized will depend upon the market price of the
Common Stock on the date the option is exercised. There is no assurance that
the actual value, if any, which may be realized at, or near, the value
estimated by the calculations above. The market price of the Common Stock at
February 3, 1996 was $5.375 per share.
(3) Includes options to purchase 25,000 shares of Common Stock subject to the
satisfaction of an earnings test established annually.
(4) Options granted to Mr. Kanter in the last fiscal year lapsed as a result of
the termination of his employment.
The following table sets forth information for each of the executive
officers named in the Summary Compensation Table with respect to the value of
options exercised during the fiscal year ended February 3, 1996 and the value of
outstanding and unexercised options held as of February 3, 1996, based upon the
market value of the Common Stock of $5.375 per share on that date. There were no
options exercised by the executive officers named below during the fiscal year
ended February 3, 1996.
AGGREGATE OPTION EXERCISES IN LAST FISCAL YEAR
AND FISCAL YEAR-END OPTION VALUES
<TABLE>
<CAPTION>
NUMBER OF UNEXERCISED VALUE OF UNEXERCISED
OPTIONS AT FISCAL IN-THE-MONEY OPTIONS AT
SHARES YEAR-END(#) FISCAL YEAR-END($)(1)
ACQUIRED ON VALUE ---------------------------- ----------------------------
NAME EXERCISE(#) REALIZED($) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- ---------------------------------- ----------- ----------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Donald Jonas...................... -- -$- -- -- -$- $ --
Robert J. Harloe.................. -- -- -- 20,000 -- 7,500
-- 50,000 -- 15,625
Frank O'Neill..................... -- -- -- 51,000 -- 19,125
-- 50,000 -- 15,625
James A. Shea..................... -- -- -- 20,000 -- 7,500
-- 50,000 -- 15,625
John W. Smolak.................... -- -- -- 20,000 -- 7,500
-- 50,000 -- 15,625
Steen Kanter...................... -- -- 20,000 (2) -- -- --
</TABLE>
- ---------------
(1) Represents the difference between the closing market price of the Common
Stock at February 3, 1996 of $5.375 per share and the exercise price per
share of in-the-money options multiplied by the number of shares underlying
the in-the-money options.
(2) Subsequently lapsed as a result of the termination of Mr. Kanter's
employment.
On December 22, 1995, the Company offered to all optionees under the Stock
Option Plan the right to cancel any or all outstanding options and to receive
new options replacing the cancelled options at market price on January 17, 1996.
The new options vest at a rate of 20% of the fixed number of shares per year
from the date of the grant of new options.
11
<PAGE> 14
The following table contains information concerning the repricing of the
options to each of the executive officers named in the Summary Compensation
Table during the fiscal year ended February 3, 1996. The Stock Option Plan does
not permit the issuance of stock appreciation rights.
TEN-YEAR OPTION/SAR REPRICINGS
TEN-YEAR OPTION/SAR REPRICINGS
<TABLE>
<CAPTION>
MARKET
NUMBER OF PRICE OF EXERCISE LENGTH OF
SECURITIES STOCK AT PRICE AT ORIGINAL OPTION
UNDERLYING TIME OF TIME OF TERM REMAINING
OPTIONS/SARS REPRICING REPRICING NEW AT DATE OF
REPRICED OR OR OR EXERCISE REPRICING OR
NAME DATE AMENDED AMENDMENT AMENDMENT PRICE AMENDMENT
- ---------------------------- ------- ------------ --------- --------- -------- ---------------
<S> <C> <C> <C> <C> <C> <C>
Donald Jonas................ -- -- $-- $ -- $-- --
Robert J. Harloe............ 1/17/96 20,000 5.00 13.75 5.00 8 1/2 Years
Frank O'Neill............... 1/17/96 20,000 5.00 14.5625 5.00 5 Years
1/17/96 20,000 5.00 14.50 5.00 7 1/2 Years
1/17/96 11,000 5.00 13.75 5.00 8 1/2 Years
James A. Shea............... 1/17/96 20,000 5.00 17.75 5.00 9 Years
John W. Smolak.............. 1/17/96 20,000 5.00 17.00 5.00 9 Years
Steen Kanter................ -- -- -- -- -- --
</TABLE>
BOARD REPORT ON EXECUTIVE COMPENSATION
The principal objectives of the Company's compensation program are to
attract and retain qualified executives and to provide incentives for such
executives to enhance the profitability and growth of the Company and thus
enhance shareholder value.
During the fiscal year ended February 3, 1996, the Company's executive
compensation program was administered by the Board of Directors. The executive
compensation program consists principally of base salaries and long-term
incentives.
The following describes components of the Company's executive compensation
program and the related factors considered by the Board in determining
compensation:
Base Salaries. Base salaries are determined after evaluating a number of
factors, including local market conditions, job performance and amounts paid to
executives with comparable experience, qualifications and responsibilities at
other retailers. The Company defers the compensation payable to certain
employees (as described below), lowering the base salaries currently payable to
such employees.
Other Compensation. In order to lower the base salaries currently payable
to certain employees, thereby conserving the Company's working capital, the
Company has entered into deferred compensation agreements with certain employees
whereby compensation is deferred until termination of employment with the
Company. The deferred compensation agreements provide, in part, that if the
employee has attained the age of 56 or older on the date of his termination of
employment, the Company will pay to the employee certain compensation for a
period of 10 years. The annual amount payable by the Company increases 10% for
each year of service after age 56 with the maximum amount payable if the
employee retires at age 65 or older. Certain of the deferred compensation
agreements require that the individual provide advisory services to the Company
and to refrain from substantial competition with the Company during this 10 year
period after retirement. The Company believes that deferred compensation
agreements such as these encourage employees of the Company to remain employed
by or associated with the Company. The Company maintains life insurance coverage
for each eligible executive so that upon the death of such executive the Company
will recover from the insurance proceeds a sum approximately sufficient to
offset the aggregate benefits payable under each agreement.
12
<PAGE> 15
Long-Term Incentive Compensation. The Company's long-term incentive
compensation program consists principally of stock options which generally vest
over a number of years. The number of shares of Common Stock subject to an
executive's stock option grant is determined with reference to the
responsibility and experience of the executive and competitive conditions. By
aligning the financial interests of the Company's executives with those of the
Company's shareholders, these equity awards are intended to be directly related
to the creation of value for shareholders of the Company. The deferred vesting
provisions are designed to create an incentive for the individual executive to
remain with the Company.
Benefits. The Company offers basic benefits, such as medical, life and
disability insurance comparable to those provided by other similar companies.
Chief Executive Officer. The relatively low compensation paid to Donald
Jonas, the Chief Executive Officer of the Company during the fiscal year ended
February 3, 1996, in comparison to compensation paid to chief executive officers
of other comparable retailers, results from such officer's request that he not
receive higher compensation. Mr. Jonas and the Board of Directors believe that,
since Mr. Jonas is the largest single shareholder of the Company, his interests
and those of the other shareholders are aligned, and therefore Mr. Jonas has
sufficient incentive to want to maximize shareholder value. In addition, Mr.
Jonas is a party to a consulting agreement with the Company which provides that,
upon retirement at age 65 or older, Mr. Jonas will, for a period of 10 years, be
annually paid up to $100,000 and be provided with (or be paid the cash
equivalent of) certain services including a secretary, office, driver and car,
in return for his providing certain advisory services to the Company and
refraining from direct or indirect employment in substantial competition with
the Company. The annual amount to be paid to Mr. Jonas under this consulting
agreement will be reduced by 10% for each one year decrease in Mr. Jonas'
retirement age below age 65. During the fiscal year ended February 3, 1996, no
payment was made under such consulting agreement. The Company maintains life
insurance coverage for Mr. Jonas to fund the aggregate benefits payable under
such consulting agreement. Pursuant to a June 15, 1995 amendment to the
consulting agreement, Mr. Jonas may participate in the Company's group life,
medical and dental insurance plans, and will receive a car allowance, a driver
and secretarial services. In addition, the Company will maintain split-dollar
life insurance policies for the lives of Mr. Jonas and his wife.
SUBMITTED BY THE BOARD OF DIRECTORS:
<TABLE>
<S> <C>
Donald Jonas Robert Knox
Albert Lechter Roberta S. Maneker
Anthony E. Malkin John Wolff
Leonard Pfeffer Charles A. Davis
Martin S. Begun Bernard D. Fischman
Norman Matthews
</TABLE>
13
<PAGE> 16
PERFORMANCE GRAPH
The following graph illustrates, for the period from January 26, 1991
through February 3, 1996, the cumulative total shareholder return (including
reinvestment of dividends) of $100 invested in (i) the Common Stock, (ii) the
Total Return Index for the NASDAQ Stock Market (U.S. companies) and (iii) the
Total Return Industry Index for NASDAQ Retail Trade Stocks.
COMPARISON OF FIVE YEAR CUMULATIVE TOTAL RETURN
FOR THE YEAR ENDED FEBRUARY 3, 1996
<TABLE>
<CAPTION>
THE NASDAQ
MEASUREMENT PERIOD LECHTERS, STOCK MARKET NASDAQ RETAIL
(FISCAL YEAR COVERED) INC. (US) TRADE STOCKS
<S> <C> <C> <C>
1991 100.0000 100.0000 100.0000
1992 266.1417 152.9767 174.6058
1993 255.1181 172.9917 157.5199
1994 185.8268 198.9469 169.3822
1995 216.5354 189.7995 149.3229
1996 67.7165 268.3547 168.9813
</TABLE>
CERTAIN TRANSACTIONS
A subsidiary of the Company operates two stores in buildings in which
Donald Jonas has an interest. A subsidiary of the Company operates four stores
in buildings which are managed by a company with whom Mr. Malkin is affiliated
and in which Mr. Malkin's father has an interest. The Company believes that the
terms of these leases are comparable to other similar leases to which the
Company is a party.
COMPLIANCE WITH OWNERSHIP REPORTING REQUIREMENTS
Section 16(a) of the Securities Exchange Act of 1934 requires the Company's
directors and officers, and persons who own more than ten percent of a
registered class of the Company's equity securities, to file reports of
ownership and changes in ownership with the SEC. Officers, directors and greater
than ten-percent
14
<PAGE> 17
shareholders are required by SEC regulations to furnish the Company with copies
of all Section 16(a) forms they file. Based upon a review of such forms
furnished to the Company, the Company believes that during the fiscal year ended
February 3, 1996, all Section 16(a) filing requirements applicable to its
officers, directors and greater than ten-percent beneficial owners were complied
with.
RATIFICATION OF APPOINTMENT OF AUDITORS
The firm of Deloitte & Touche LLP, independent auditors, has audited the
books and records of the Company since 1975 and the Board of Directors desires
to continue the services of this firm for the current fiscal year. Accordingly,
the Board of Directors recommends that the shareholders ratify the appointment
by the Board of Directors of the firm of Deloitte & Touche LLP to audit the
books and accounts of the Company for the current fiscal year.
Representatives of Deloitte & Touche LLP are expected to be available at
the Annual Meeting of Shareholders to respond to appropriate questions and will
be given the opportunity to make a statement if they desire to do so.
SUBMISSION OF SHAREHOLDER PROPOSALS
Shareholders of the Company wishing to include proposals in the proxy
material in relation to the annual meeting of the Company to be held in 1997
must submit the same in writing so as to be received at the executive office of
the Company on or before January 12, 1997. Such proposals must also meet the
other requirements of the rules of the Securities and Exchange Commission
relating to shareholders' proposals.
THE COMPANY WILL PROVIDE ANY SHAREHOLDER OF RECORD AT THE CLOSE OF BUSINESS
ON MAY 3, 1996, WITHOUT CHARGE, UPON WRITTEN REQUEST TO ITS SECRETARY AT 1 CAPE
MAY STREET, HARRISON, NEW JERSEY 07029, A COPY OF THE COMPANY'S ANNUAL REPORT ON
FORM 10-K FOR THE FISCAL YEAR ENDED FEBRUARY 3, 1996.
By Order of the Board of Directors,
IRA S. ROSENBERG,
Secretary
May 17, 1996
15
<PAGE> 18
Lechters, Inc.
1 Cape May Street
Harrison, New Jersey 07029-9998
Annual Meeting of Stockholders -- June 18, 1996
This Proxy is Solicited on Behalf of the Board of Directors
The undersigned hereby appoints Donald Jonas and Ira S. Rosenberg and
either of them proxies of the undersigned with full power of substitution, to
vote all the shares of Common Stock, without par value, and Series A Preferred
Stock, $100 par value, of Lechters, Inc. (the "Company") held of record by the
undersigned on May 3, 1996, at the Annual Meeting of Shareholders to be held
June 18, 1996, and at any adjournment thereof.
<PAGE> 19
Lechters, Inc.
PLEASE MARK VOTE IN OVAL IN THE FOLLOWING MANNER USING DARK INK ONLY.
1. Election of Directors --
Nominees: Charles A. Davis, Bernard D. Fischman, Anthony E. Malkin and Norman
Matthews.
For All
For Withheld Except
/ / / / / /
- --------------------------------------
(Except nominee(s) written above)
2. Ratification of selection of Deloitte & Touche LLP as Independent Public
Accountants of the Company for the fiscal year ending February 1, 1997.
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 other adjournment thereof.
For Against Abstain
/ / / / / /
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" ITEMS (1), (2) AND (3), 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 confirms all that said attorneys, agents, proxies,
their substitutes or any of them may lawfully do by virtue hereof.
________________________________________________________________________________
________________________________________________________________________________
Dated:___________________________________________________________________, 199__
Please date this Proxy 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 should be signed by a duly authorized
officer. If a partnership, please sign in partnership name by authorized person.
Please date, sign and return this Proxy Card in the enclosed envelope. No
postage is required if mailed in the United States.
