<PAGE> 1
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A)
OF THE SECURITIES EXCHANGE ACT OF 1934
(AMENDMENT NO. )
Filed by the Registrant [ X ]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only (as permitted by
Rule 14a-6(e)(2)).
[ X ] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Section 240.14a-11(c) or
Section 240.14a-12.
SKYLINE CHILI, INC.
- --------------------------------------------------------------------------------
(Name of Registrant as Specified in its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement if other than
the Registrant)
Payment of Filing Fee (Check the appropriate box):
[ X ] $125 per Exchange Act Rules 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 transaction
applies:
______________________________________________
<PAGE> 2
3) Per unit price or other underlying value of
transaction computed pursuant to Exchange Act Rule
0-11: (Set forth the amount on which the filing fee is
calculated and state how it was determined):
______________________________________________
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:
______________________________________________
2
<PAGE> 3
NOTICE OF THE ANNUAL MEETING OF SHAREHOLDERS
OF SKYLINE CHILI, INC.
TO BE HELD ON MARCH 13, 1996
TO: THE SHAREHOLDERS OF SKYLINE CHILI, INC.
Notice is hereby given that the 1996 Annual Meeting of the Shareholders (the
"Meeting") of Skyline Chili, Inc. (the "Company"), an Ohio corporation, will be
held on Wednesday, March 13, 1996 at 2:30 p.m., E.S.T., at the Cincinnati
Marriott, 11320 Chester Road, Sharonville, Ohio 45246, for the following
purposes:
(1) To elect seven directors to hold office until the next Annual Meeting of
the Shareholders and until their successors shall have been duly elected and
qualified;
(2) To ratify the Board of Directors' selection of Ernst & Young LLP as the
Company's Independent Auditors for its fiscal year ending October 27, 1996; and
(3) To transact such other business as may properly be brought before the
Meeting, or any adjournment thereof.
The Company's Board of Directors has designated February 5, 1996 as the
record date for the determination of shareholders entitled to notice of and to
vote at the Meeting or any adjournment thereof. Only shareholders of record at
the close of business on February 5, 1996 will be entitled to vote at the
Meeting. The Company's shareholders are invited to attend the Meeting. Whether
or not you expect to attend, we urge you to sign, date and return the enclosed
proxy card in the enclosed, postage pre-paid envelope. If you attend the
Meeting, you may vote your shares in person, after revoking your proxy.
REGARDLESS OF HOW MANY SHARES YOU OWN, YOUR VOTE IS IMPORTANT. PLEASE SIGN,
DATE AND RETURN THE ENCLOSED PROXY CARD TODAY.
CINCINNATI, OHIO BY ORDER OF THE BOARD
FEBRUARY 13, 1996 OF DIRECTORS,
MARK J. ZUMMO
SECRETARY
<PAGE> 4
SKYLINE CHILI, INC.
1996 ANNUAL SHAREHOLDERS' MEETING
MARCH 13, 1996 - 2:30 P.M., E.S.T.
DIRECTIONS TO THE CINCINNATI MARRIOTT
To reach the Cincinnati Marriott from downtown Cincinnati:
Take I-75 North.
Exit off of I-75 at Exit 15, Sharon Road.
Turn left at the end of the exit ramp.
Travel west on Sharon Road until you reach the second traffic light.
Turn right at that traffic light onto Chester Road.
Travel north on Chester Road approximately 0.6 miles. The Cincinnati
Marriott will be on your right at 11320 Chester Road.
<PAGE> 5
PROXY STATEMENT
FOR
1996 ANNUAL MEETING OF SHAREHOLDERS
SKYLINE CHILI, INC.
Cincinnati, Ohio February 13, 1996
This Proxy Statement is furnished in connection with the solicitation by the
Board of Directors of Skyline Chili, Inc. (the "Company") of proxies to be
voted at the Company's 1996 Annual Meeting of Shareholders (the "Meeting").
The Meeting will be held on Wednesday, March 13, 1996 at 2:30 p.m. E.S.T., at
the Cincinnati Marriott, 11320 Chester Road, Sharonville, Ohio 45246, to act
upon the following:
(1) The election of seven directors to serve until the 1997 Annual Meeting
of Shareholders;
(2) The proposal to ratify the selection of Ernst & Young LLP as the
Company's Independent Auditors for its 1996 fiscal year; and
(3) Such other business as may properly come before the Meeting or any
adjournment thereof.
All shares of the Company's common stock represented by duly executed
proxies, in the form accompanying this Proxy Statement, received by the Board
of Directors prior to the Meeting will be voted at the Meeting. Where
shareholders specify in the proxy a choice with respect to any matter to be
acted upon, the shares represented by such proxy will be voted as specified. If
no choice is specified, the shares represented by the proxy will be voted "FOR"
the Board's nominees for director and "FOR" the proposal described in Part II
of this Proxy Statement. A shareholder who signs and returns a proxy in the
accompanying form may revoke it at any time before it is voted by giving notice
of such revocation to the Company in writing or at the Meeting, or by filing
with the Company a duly executed proxy bearing a later date. The mere presence
at the Meeting of the person appointing a proxy does not revoke the proxy.
The Company's Board of Directors has fixed the close of business on
February 5, 1996, as the record date for determining the shareholders who are
entitled to notice of, and who may vote at, the Meeting. As of the record
date, the Company had 3,386,023 shares of no par value common stock
outstanding. Each share of common stock is entitled to one vote.
The mailing address of the principal executive offices of the Company is 4180
Thunderbird Lane, Fairfield, Ohio 45014. The Company's telephone number at
that address is (513) 874-1188. This Proxy Statement and the accompanying form
of proxy will be mailed to the Company's shareholders on or about February 13,
1996. The Company's Annual Report to Shareholders for its fiscal year ended
October 29, 1995, including consolidated financial statements, is also enclosed
with this Proxy Statement.
<PAGE> 6
I. ELECTION OF DIRECTORS
(ITEM 1 ON PROXY CARD)
NOMINEES FOR ELECTION AS DIRECTORS
- ----------------------------------
Seven directors will be elected at the 1996 Annual Meeting of Shareholders to
hold office until the 1997 Annual Meeting, and until their successors are duly
elected and qualified. The Board of Directors has designated the seven
nominees described below as candidates for election as directors at the 1996
Annual Meeting. Each of the seven nominees is currently a director of the
Company and all were previously elected by the shareholders.
The shares represented by the accompanying form of proxy will be voted as
specified thereon, or if no instructions are given, "FOR" the Board's nominees.
If any nominee should become unavailable for any reason, it is intended that
the persons named as proxies in the accompanying form of proxy will vote for
the election of such other person as the Board of Directors may recommend in
place of such nominee. The Board of Directors is not aware of any
circumstances under which any of the nominees described below would decline or
become unavailable to serve. The candidates receiving the greatest number of
votes cast by shareholders present in person or by proxy at the Meeting, a
quorum being present, will be elected as directors. The Company's Amended
Articles of Incorporation do not permit cumulative voting in the election of
directors.
The name, age, principal occupation, business experience and period of
previous service as a director of the Company, of each of the nominees for
election to the Company's Board of Directors are set forth below. No
individual was selected as a director or nominee pursuant to any arrangement or
understanding with any other person, except that pursuant to the provisions of
certain consulting agreements entered into between the Company and Lambert,
Christie and William N. Lambrinides, the Company has agreed to nominate them
for election as directors at each Annual Meeting of Shareholders during the
consulting term. For a description of the consulting agreements, see,
"Executive Compensation - Employment Contracts and Termination of Employment
and Change-In-Control Arrangements."
2
<PAGE> 7
<TABLE>
<CAPTION>
YEAR FIRST
PRINCIPAL OCCUPATIONS, OTHER DIRECTORSHIPS AND ELECTED AS A
NAME OF NOMINEE AGE POSITIONS WITH THE COMPANY DIRECTOR
----------------------- --- ---------------------------- --------
<S> <C> <C> <C>
Lambert N. Lambrinides 72 Mr. Lambrinides has served as the Company's Chairman 1965
of the Board since October 1994 and is currently a
consultant to the Company. Mr. Lambrinides served as
the Company's Senior Chairman of the Board from
November 1992 to October 1994 and as its Chairman of
the Board from 1984 to November 1992. Prior to that
time, Mr. Lambrinides served as the Company's
President.
Kevin R. McDonnell 43 Mr. McDonnell has served as the Company's President 1992
and Chief Executive Officer since October 1994. Mr.
McDonnell served as the Company's President, Chief
Operating Officer and Chief Financial Officer from
November 1992 to October 1994 and served as its
Executive Vice President and Chief Financial Officer
from December 1991 to November 1992. Mr. McDonnell
joined the Company in January 1991 as its Director of
Finance and Chief Financial Officer. Prior to his
employment by the Company, Mr. McDonnell was the Vice
President - Finance and Chief Financial Officer of
Vortec Corporation and beginning in May 1989, the
Vice President - Treasurer of Chicago West Pullman
Corporation, Vortec's parent company. Vortec
Corporation manufactured and marketed specialized
cooling devices used in industrial applications.
Chicago West Pullman Corporation was a holding
company with investments in railroads, steel
processing, barge building and general manufacturing.
</TABLE>
3
<PAGE> 8
<TABLE>
<CAPTION>
YEAR FIRST
PRINCIPAL OCCUPATIONS, OTHER DIRECTORSHIPS AND ELECTED AS A
NAME OF NOMINEE AGE POSITIONS WITH THE COMPANY DIRECTOR
----------------------- --- ---------------------------- --------
<S> <C> <C> <C>
Christie N. Lambrinides 68 Mr. Lambrinides is currently a consultant to the 1965
Company. Mr. Lambrinides served as a Vice President
of the Company from 1965 to October 1994 and also
served as the Company's Secretary (1981 to October
1994).
William N. Lambrinides 68 Mr. Lambrinides is currently a consultant to the 1965
Company. Mr. Lambrinides served as a Vice President
of the Company from 1965 to October 1994 and also
served as the Company's Treasurer (1980 to October
1994) and Assistant Secretary (1985 to October 1994).
Lawrence R. Burtschy 59 Mr. Burtschy is currently the Chairman of L.R. 1985
Burtschy & Company, an investment management firm,
and has been so engaged since 1969. Mr. Burtschy is
also a director of Hillenbrand Industries, a
diversified manufacturing corporation in the health
care, casket and funeral services, and consumer
durables industries.
David A. Kohnen 58 Mr. Kohnen is currently a financial and business 1990
consultant and has been so engaged since September
1994. Prior to that time, Mr. Kohnen was a member of
the law firm of Kohnen & Patton, Cincinnati, Ohio.
</TABLE>
4
<PAGE> 9
<TABLE>
<CAPTION>
YEAR FIRST
PRINCIPAL OCCUPATIONS, OTHER DIRECTORSHIPS AND ELECTED AS A
NAME OF NOMINEE AGE POSITIONS WITH THE COMPANY DIRECTOR
----------------------- --- ---------------------------- --------
<S> <C> <C> <C>
Joseph E. Madigan 63 Mr. Madigan is currently the Chairman of the Board of 1990
Directors, the Executive Committee and the Audit
Committee of Cardinal Realty Services, Inc. Mr.
Madigan is also a corporate financial consultant and
has been so engaged since 1988. Prior to that time,
Mr. Madigan served as the Executive Vice President
and Chief Financial Officer of Wendy's International,
Inc. from 1980 to 1987, and as a director of Wendy's
International, Inc. from 1981 to 1987. Wendy's
International, Inc. is primarily engaged in the
business of operating, developing, and franchising a
system of distinctive quick-service restaurants. Mr.
Madigan is also a director of the Cooker Restaurant
Corp.
</TABLE>
OTHER INFORMATION CONCERNING BOARD AND BOARD COMMITTEES
- -------------------------------------------------------
During fiscal 1995, the Company's Board of Directors met five times. Each
incumbent director attended 75% or more of all of the meetings of the Board and
the Board Committees of which he was a member during fiscal 1995.
The standing committees of the Board of Directors are the Executive
Committee, the Audit Committee, the Compensation Committee, the Nominating
Committee, and the Committees administering the Company's 1986 Stock Option
Plan and 1990 Stock Option and Stock Incentive Plan.
The Executive Committee currently consists of Joseph E. Madigan, Chairman,
Kevin R. McDonnell, Lambert N. Lambrinides and David A. Kohnen. The Executive
Committee may exercise any of the powers and authority of the Board in the
interval between meetings of the full Board, except the authority to fill
vacancies on the Board or any Committees. The Executive Committee did not meet
during fiscal 1995.
5
<PAGE> 10
The Audit Committee is currently comprised of Mr. Madigan, Chairman, Mr.
Burtschy, Mr. Kohnen, Mr. Christie N. Lambrinides and Mr. William N.
Lambrinides. The Audit Committee met twice during fiscal 1995. The Audit
Committee reviews and approves the Company's annual financial statements, and
reviews external and internal auditing matters. The Audit Committee is also
responsible for the selection of the Company's independent auditors, subject to
the approval of the Board, and reviews with representatives of the independent
auditors the scope of their examination, their fees, the results of their
examination, and any conditions requiring attention identified by them
regarding internal controls.
The Compensation Committee is currently comprised of Mr. Burtschy, Chairman,
Mr. Madigan, Mr. Kohnen and Mr. Lambert N. Lambrinides. The Compensation
Committee met twice during fiscal 1995. The Compensation Committee determines
the compensation of the Company's executive officers, reviews the officers' and
key employees' compensation programs, and monitors the Company's stock option,
stock incentive, profit sharing, bonus, and other compensation plans.
The Nominating Committee is currently comprised of Mr. Burtschy, Mr. William
N. Lambrinides and Mr. Christie N. Lambrinides. The Nominating Committee did
not meet during fiscal 1995. The Nominating Committee develops criteria for
selecting and retaining Board members. The Nominating Committee will consider
shareholder recommendations for nominees for membership on the Board, provided
such recommendations, together with a description of the proposed nominee's
qualifications and other relevant biographical information and the written
consent of the proposed nominee to act as a director if nominated and elected,
are submitted to the Company's Secretary.
During fiscal 1995, the committees administering the Company's 1986 Stock
Option Plan and 1990 Stock Option and Stock Incentive Plan consisted of Mr.
Lambert N. Lambrinides, Mr. William N. Lambrinides and Mr. Christie N.
Lambrinides. These Committees determine those employees and officers who will
be granted options under the plans, the number of shares for which options will
be granted, the exercise price, the time of exercise, and the other material
terms of the options. The members of these Committees are not eligible to
receive options under the Company's two stock option plans.
Lambert N. Lambrinides, William N. Lambrinides and Christie N. Lambrinides
are brothers.
In April 1995, in connection with a dispute over certain legal billing
practices, Mr. Kohnen plead guilty to one count of mail fraud involving a total
of $3,600. Mr. Kohnen offered to resign from the Board. The directors
requested Mr. Kohnen to remain on the Board in recognition of the value of
his current and prior services as a director.
6
<PAGE> 11
EXECUTIVE OFFICERS OF THE COMPANY
- ---------------------------------
The following table lists the names and ages of all of the executive
officers of the Company, and indicates all positions and offices with the
Company held by such persons. No person other than those listed below has been
chosen to become an executive officer of the Company:
<TABLE>
<CAPTION>
NAME AGE POSITION WITH THE COMPANY
---- --- -------------------------
<S> <C> <C>
Lambert N. Lambrinides 72 Chairman of the Board and Director
Kevin R. McDonnell 43 President, Chief Executive Officer and Director
Jeffry W. Shelton 32 Vice President, Chief Financial
Officer and Treasurer
Thomas L. Allen 33 Corporate Vice President - Marketing
Victor L. Peeples 43 Corporate Vice President -
Restaurant Operations
</TABLE>
The Company's executive officers serve at the discretion of the Board of
Directors and are elected on an annual basis. Each of the Company's current
executive officers will serve until the first meeting of the Board of Directors
following the Meeting, and until his successor has been duly elected and
qualified. There is no understanding between any executive officer and the
Company or any other person pursuant to which any executive officer was or is
to be elected or appointed to such position.
The following is a brief summary of the business experience of Messrs.
Shelton, Allen and Peeples. For a description of the business experience of
Messrs. Lambert N. Lambrinides and McDonnell, see "Nominees for Election as
Directors" above.
Jeffry W. Shelton was elected the Company's Vice President, Chief Financial
Officer and Treasurer in December 1994. He served as the Company's Vice
President/Controller from December 1992 to December 1994. He joined the
Company in April 1989 and has served as its Controller since November 1990.
Prior to that time, Mr. Shelton was employed as an accountant with the
Cincinnati public accounting firm of Barnes, Dennig & Co. from January 1988 to
April 1989, where he worked both in the audit and tax areas. Mr. Shelton is a
certified public accountant.
Thomas L. Allen was elected the Company's Corporate Vice President -
Marketing in December 1991. Mr. Allen joined the Company as Director of
Marketing in January 1991. Prior to joining the Company, he was employed as an
account supervisor with Ads & Associates in Cincinnati, Ohio from May 1989 to
January 1991, and prior to that in various capacities in the areas of
advertising,
7
<PAGE> 12
sales and marketing for Sive/Young and Rubicam and the Procter & Gamble
Distributing Co.
Victor L. Peeples was elected the Company's Corporate Vice President -
Restaurant Operations in December 1991. Mr. Peeples joined the Company as
Director - Restaurant Operations in August 1991. Prior to joining the Company,
Mr. Peeples was employed as Director of Restaurant Operations by Wharfside
Restaurants in Jasper, Indiana from November 1987 to August 1991. Wharfside
Restaurants was a franchisee of Long John Silvers, Wendy's, Grandy's, Jerry's
and Day's Inn. Mr. Peeples has also served as Franchise Area Director for
Wendy's International and held positions of Manager Trainee, Restaurant
Manager, Area Training Supervisor, District Manager and Regional Projects
Manager for Taco Bell.
BENEFICIAL OWNERSHIP OF COMMON STOCK
- ------------------------------------
The following table sets forth certain information with respect to the
beneficial ownership of the Company's common stock as of February 5, 1996, by:
(i) each person or entity known to the Company to be a beneficial owner of more
than 5% of the Company's common stock, (ii) each director, nominee for
director, and executive officer named in the Summary Compensation Table, and
(iii) all directors and officers of the Company as a group. Except as
otherwise indicated in the footnotes, the individual named has sole voting and
dispositive power over the shares, and the individual's business address is
4180 Thunderbird Lane, Fairfield, Ohio 45014.
<TABLE>
<CAPTION>
SHARES
BENEFICIALLY PERCENTAGE OF
NAME OF BENEFICIAL OWNER OWNED OWNERSHIP(1)
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Lambert N. Lambrinides(2)(3) 601,333 17.8%
Christie N. Lambrinides(2)(4) 628,033 18.6%
William N. Lambrinides(2)(5) 658,233 19.4%
Lawrence R. Burtschy(6)
14 Fulton Street
P.O. Box 933
Charleston, South Carolina 29402 261,311 7.7%
William G. Kagler(7)
18 Hampton Court
Cincinnati, Ohio 45208 413,055 11.7%
Kevin R. McDonnell(7) 72,500 2.1%
Thomas L. Allen (7) 22,500 **
Victor L. Peeples (7) 22,500 **
</TABLE>
8
<PAGE> 13
<TABLE>
<CAPTION>
<S> <C> <C>
David A. Kohnen (8)
1818 Carew Tower
Cincinnati, Ohio 45202 53,455 1.6%
Joseph E. Madigan (9)
9457 Avemore Court
Dublin, Ohio 43017 2,000 **
All Directors and Officers as a Group (11 Persons) 2,744,670 74.9%
(7)(10)
<FN>
NOTES:
**Less than One Percent (1)%
(1) Assumes 3,386,023 shares of common stock outstanding as of February 5,
1996, plus, with respect to each individual or group named, the number
of shares of common stock subject to options held by them which are or
will become exercisable on or before April 5, 1996.
(2) The Lambrinides brothers disclaim any beneficial ownership in each
other's shares.
(3) Includes 460,333 shares owned by Mr. L. Lambrinides in his name alone
and 141,000 shares owned by his spouse in her name alone. Nothing in
this Proxy Statement should be construed as an admission by Mr. L.
Lambrinides that he beneficially owns the shares owned by his spouse.
(4) Includes 502,333 shares owned by Mr. C. Lambrinides in his name alone,
120,000 shares owned by his spouse in her name alone, and 5,700 shares
owned by his spouse's Individual Retirement Account. Nothing in this
Proxy Statement should be construed as an admission by Mr. C.
Lambrinides that he beneficially owns the shares owned, directly or
indirectly, by his spouse.
(5) Includes 507,333 shares owned by Mr. W. Lambrinides in his name alone,
and 150,900 shares owned by his spouse in her name alone. Nothing in
this Proxy Statement should be construed as an admission by Mr. W.
Lambrinides that he beneficially owns the shares owned by his spouse.
(6) Includes: (a) 51,434 shares owned by Mr. Burtschy in his name alone
and 30,000 shares held in joint tenancy with his spouse, with whom he
shares voting and dispositive powers; (b) 59,550 shares owned by Mr.
Burtschy's spouse in her name alone; (c) 43,027 shares held by L.R.
Burtschy & Company, an Ohio corporation, of which Mr. Burtschy is the
Chairman; and (d) 77,300 shares owned by the George C. Hillenbrand
September 11, 1985 Trust, of which Mr. Burtschy is one of three
co-trustees, with shared voting and dispositive powers. Mr. Burtschy
</TABLE>
9
<PAGE> 14
disclaims any beneficial ownership in the Trust's shares, other than
the shared voting and dispositive powers. Nothing in this Proxy
Statement should be construed as an admission by Mr. Burtschy that he
beneficially owns the shares owned by his spouse.
(7) Includes shares subject to options which are or will become
exercisable on or before April 5, 1996 in the following amounts: Mr.
Kagler, 161,017; Mr. McDonnell, 65,000; Mr. Allen, 22,500; Mr.
Peeples, 22,500; and all directors and officers as a group, 280,767.
(8) Includes 45,455 shares owned by Mr. Kohnen in his name alone, 2,000
shares owned by his spouse in her name alone, and 6,000 shares owned
by his three children. Nothing in this Proxy Statement should be
construed as an admission by Mr. Kohnen that he beneficially owns the
shares owned by his spouse or children.
(9) Consists of 2,000 shares owned indirectly by Mr. Madigan's Keogh
Retirement Plan Trust.
(10) Includes Mr. Kagler since he is listed in the Summary Compensation
Table for fiscal 1995. Mr. Kagler resigned as a director and officer
of the Company at the end of fiscal 1995.
COMPLIANCE WITH SECTION 16(A) OF THE EXCHANGE ACT
- -------------------------------------------------
Based solely upon: (i) a review of Forms 3 and 4 and amendments
thereto furnished to the Company during its 1995 fiscal year and Forms 5 and
amendments thereto furnished to the Company with respect to its 1995 fiscal
year, and (ii) certain written representations received by the Company, to the
best of the Company's knowledge, there were no directors, officers or
beneficial owners of more than 10% of the Company's Common Stock that failed to
file on a timely basis reports required by Section 16(a) of the Exchange Act
during the Company's 1995 fiscal year, except for three late filings by
Lawrence R. Burtschy (reporting three transactions).
EXECUTIVE COMPENSATION
- ----------------------
Summary Compensation Table
--------------------------
The following Table summarizes all compensation earned by or granted to
the Company's Chief Executive Officer and certain other most highly compensated
executive officers for all services performed by them for the Company during
its last three completed fiscal years:
10
<PAGE> 15
<TABLE>
<CAPTION>
ANNUAL COMPENSATION LONG-TERM COMPENSATION
------------------- ----------------------
AWARDS PAYOUTS
---------------------- -------
OTHER REST- ALL
NAME AND PRINCIPAL ANNUAL RICTED OTHER
POSITION DURING FISCAL FISCAL COMPEN- STOCK LTIP COMPEN-
1995 YEAR SALARY(1) BONUS SATION AWARDS OPTIONS PAYOUTS(2) SATION(3)
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Kevin R. McDonnell, 1995 $130,000 $48,750 ---- ---- 20,000 ---- $ 5,796
President and Chief 1994 108,654 46,500 ---- ---- ---- $60,000 4,198
Executive Officer 1993 107,019 37,938 ---- ---- 22,000 ---- 4,105
Thomas L. Allen, 1995 73,846 27,500 ---- ---- 10,000 ---- 4,111
Corporate Vice 1994 70,000 34,664 ---- ---- ---- 60,000 2,610
President-Marketing 1993 57,473 20,925 ---- ---- 10,000 ---- 2,285
Victor L. Peeples, 1995 85,865 28,500 ---- ---- 10,000 ---- 4,472
Corporate Vice President 1994 80,961 34,840 ---- ---- ---- 60,000 3,101
-Restaurant Operations 1993 73,510 22,073 ---- ---- 10,000 ---- 2,606
William G. Kagler, 1995 125,000 37,700 $39,074(5) ---- ---- 9,499
Chairman of the 1994 155,000 150,000 21,041 ---- ---- 16,140
Executive Committee(4) 1993 157,981 98,905 45,294 (6) ---- ---- 12,778
<FN>
(1) Includes amounts deferred at the election of the named executive
officer pursuant to (i) the Skyline Chili, Inc. Non-Qualified Deferred
Compensation Plan (the "Non-Qualified Plan") during fiscal 1995 and
1994, and (ii) the Internal Revenue Code Section 401(k) feature of the
Skyline Chili, Inc. Profit Sharing Plan (the "401(k) Plan") during
fiscal 1993.
(2) For fiscal 1994, consists of the total cash payout to the named
executive officer under the Company's long-term incentive compensation
plan covering fiscal years 1992, 1993 and 1994. For a description of
the Company's current long-term incentive compensation plan, see the
discussion under the "Long Term Incentive Plan ("LTIP") Awards Table."
(3) Consists of: (i) the amount of the discretionary and matching
contributions made by the Company to the 401(k) Plan and Non-Qualified
Plan and allocated to the account of the named executive officer; and
(ii) the amount of premiums paid on certain life insurance policies
maintained by the Company for the benefit of certain of the named
executive officers. The following table identifies and quantifies the
payments made during the last three fiscal years:
</TABLE>
11
<PAGE> 16
<TABLE>
<CAPTION>
NAMED EXECUTIVE FISCAL 1995 FISCAL 1994 FISCAL 1993
OFFICER ----------- ----------- -----------
INSURANCE PLAN INSURANCE PLAN INSURANCE PLAN
PREMIUMS CONTRIBUTIONS PREMIUMS CONTRIBUTIONS PREMIUMS CONTRIBUTIONS
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Kevin R. McDonnell $5,796 $4,198 $4,105
Thomas L. Allen 4,111 2,610 2,285
Victor L. Peeples 4,472 3,101 2,606
William G. Kagler $3,853 5,646 $9,955 6,185 $7,475 5,303
<FN>
(4) Mr. Kagler resigned as a director, officer and employee of the Company
at the end of its 1995 fiscal year.
(5) For fiscal 1995, consists of: (i) tax reimbursement payments in the
amount of $20,351 for certain perquisites and fringe benefits included
in income; and (ii) perquisites in the amount of $18,723, including
tax preparation fees of $4,962, financial consulting fees of $5,671,
and medical reimbursement payments of $5,940. For fiscal 1994,
consists of tax reimbursement payments in the amount of $21,041 for
certain perquisites and fringe benefits included in income. For fiscal
1993, consists of: (i) tax reimbursement payments in the amount of
$19,636 for certain perquisites and fringe benefits included in
income; and (ii) perquisites in the amount of $25,658, including tax
preparation fees of $7,735 and club dues of $12,750.
(6) On June 7, 1990, the Company granted a Restricted Stock Award of
100,000 shares of its common stock (the "Restricted Shares") to
William G. Kagler. All of the Restricted Shares are now vested and
all restrictions on Mr. Kagler's right to sell or otherwise transfer
the Restricted Shares have lapsed. The dollar value of the Restricted
Shares on October 29, 1995 was $381,300, based on the average of the
closing bid and asked prices per share ($3.813) of the Company's
common stock on October 27, 1995 as reported on the Nasdaq Stock
Market.
</TABLE>
Stock Option Plans
-----------------
The Company's 1986 Stock Option Plan (the "1986 Plan") became
effective on September 18, 1986 and will terminate on September 18, 1996.
Under the 1986 Plan, the Company may grant non-qualified stock options to
purchase shares of its common stock to certain of its key employees and
officers. Subject to adjustment in the case of certain changes in the capital
structure of the Company, a maximum of 112,000 shares of the Company's common
stock are reserved for issuance pursuant to grants under the 1986 Plan. The
1986 Plan is administered by a Committee of the Board of Directors of the
Company, consisting of not less than three "disinterested" directors who,
during one year before and after the time of exercising
12
<PAGE> 17
discretion in administering the 1986 Plan, have not been eligible for selection
as a person to whom equity securities may be allocated or granted pursuant to
the 1986 Plan or any other plan maintained by the Company. Subject to the
limitations contained in the 1986 Plan, the Committee has complete authority to
select participants, to grant options, to determine the terms and conditions of
those options, to interpret the 1986 Plan and to take all other actions
necessary or advisable for the proper administration of the 1986 Plan. Only
persons who are officers or employees of the Company are eligible to
participate in and to receive awards under the 1986 Plan. Neither the members
of the Committee nor any member of the Company's Board of Directors who is not
also an officer or employee of the Company, may participate in the 1986 Plan.
The price per share payable by a participant on the exercise of each option
granted under the 1986 Plan is determined by the Committee; however, the
exercise price of each option cannot be less than 85% of the fair market value
of the Company's common stock on the date of the grant. The exercise price of
any option granted under the 1986 Plan may be paid in cash, or in the
discretion of the Committee in shares of common stock, or in any combination
thereof.
The Company's 1990 Stock Option and Stock Incentive Plan (the "1990
Plan") became effective on March 7, 1990 and will terminate on March 7, 2000.
The following kinds or types of awards may be granted under the 1990 Plan: (i)
incentive stock options, (ii) non-qualified stock options, (iii) stock
appreciation rights, (iv) restricted stock, (v) performance units, and (vi)
other stock unit awards or bonuses. Subject to adjustment in the case of
certain changes in the capital structure of the Company, a maximum of 475,000
shares of the Company's common stock are reserved for issuance pursuant to
awards granted under the 1990 Plan. The 1990 Plan is administered by a
committee of the Board of Directors of the Company, consisting of not less than
three "disinterested" directors. Subject to the limitations contained in the
1990 Plan, the Committee has the sole and complete authority to select
participants, to grant awards, to determine the terms and conditions of the
awards, to interpret the 1990 Plan, and to take all other actions necessary or
advisable for the proper administration of the 1990 Plan. Only persons who are
officers or full-time employees of the Company are eligible to participate in
and receive awards under the 1990 Plan. Neither the members of the Committee
nor any member of the Company's Board of Directors who is not also an officer
or full-time employee may participate in the 1990 Plan. The purchase price per
share, payable by a participant upon the exercise of each option granted under
the 1990 Plan is determined by the Committee. However, the exercise price of
each non-qualified stock option cannot be less than 85% of the fair market
value of the Company's common stock on the date of the grant, and the exercise
price of each incentive stock option cannot be less than 100% of such fair
market value. The exercise price of any option granted under the 1990 Plan may
be paid in cash, or in the discretion of the Committee in shares of common
stock, or in any combination thereof.
13
<PAGE> 18
Option Grants Table
-------------------
The following table summarizes certain information concerning options
to purchase shares of common stock granted during fiscal 1995 to each of the
named executive officers.
<TABLE>
<CAPTION>
OPTION GRANTS IN
FISCAL 1995
INDIVIDUAL GRANTS
NUMBER OF SECURI- PERCENT OF TOTAL
TIES UNDERLYING OPTIONS GRANTED TO
OPTIONS GRANTED (1) EMPLOYEES IN FISCAL EXERCISE OR BASE PRICE
NAME YEAR (2) ($/SHARE) EXPIRATION DATE
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Kevin R. McDonnell 20,000 15.3% $3.125 October 31, 2004
Thomas L. Allen 10,000 7.6% $3.125 December 12, 2004
Victor L. Peeples 10,000 7.6% $3.125 December 12, 2004
<FN>
(1) The options described in the table vest at the rate of 25% per year
beginning October 31, 1995 for Mr. McDonnell's options and December
12, 1995 for Messrs. Allen's and Peeples' options. The options will
also vest immediately in the event of a change-in-control of the
Company.
(2) The Company granted stock options for a total of 131,000 shares to all
employees during fiscal 1995.
</TABLE>
Aggregated Option Exercises in Fiscal 1995 and Fiscal Year-End Option Values
----------------------------------------------------------------------------
The following table summarizes certain information concerning the
number and the fiscal 1995 year-end value of unexercised options held by the
named executive officers. The named executive officers did not exercise any
options during fiscal 1995.
<TABLE>
<CAPTION>
FISCAL 1995 YEAR-END OPTION VALUES
NUMBER OF VALUE OF UNEXERCISED
SECURITIES IN-THE-MONEY OPTIONS
UNDERLYING AT FISCAL YEAR-
UNEXERCISED END(1)
OPTIONS AT FISCAL
YEAR-END
- ------------------------------------------------------------------------------------------------------------------------------------
NAME EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Kevin R. McDonnell 52,000 38,000 $66,836 $39,414
Thomas L. Allen 17,500 17,500 21,103 16,103
Victor L. Peeples 17,500 17,500 22,703 16,103
William G. Kagler 202,000 0 86,170 0
</TABLE>
14
<PAGE> 19
(1) The average of the closing bid and asked prices per share of the
common stock on October 27, 1995, the last business day of the
Company's 1995 fiscal year, was $3.813 as reported on the Nasdaq Stock
Market.
Long Term Incentive Plan ("LTIP") Awards Table
----------------------------------------------
The following table summarizes certain information regarding each
award made to a named executive officer during fiscal 1995 under any LTIP.
<TABLE>
<CAPTION>
LONG-TERM INCENTIVE PLANS - AWARDS IN FISCAL 1995(1)
ESTIMATED FUTURE
PAYOUTS UNDER
NON-STOCK PRICE-
BASED PLANS
----------------------------------------------------
PERFORMANCE OR OTHER
PERIOD UNTIL MATURATION OR THRESHOLD TARGET MAXIMUM
NAME PAYOUT ($ OR #) ($ OR #) ($ OR #)
- -----------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Kevin R. McDonnell 3 year period ending $20,000
October 26, 1997
Thomas L. Allen 3 year period ending 20,000
October 26, 1997
Victor L. Peeples 3 year period ending 20,000
October 26, 1977
<FN>
(1) The Company has adopted a separate long-term incentive compensation
plan that could result in cash bonuses being paid to the plan's
participants at the end of the Company's 1997 fiscal year. Bonuses
will be paid under this plan only if the Company exceeds certain
earnings and financial position targets and meets minimum stock price
and new franchised unit targets (the "Target Amount"). The total
amount of bonuses to be paid, if any, will be equal to a varying
percentage of any actual amounts in excess of the Target Amount. The
plan's current participants are the following four executive officers:
the President and Chief Executive Officer; the Chief Financial
Officer; the Corporate Vice President - Marketing; and the Corporate
Vice President - Restaurant Operations. The Company has accrued
$80,000 under this plan based on fiscal 1995 results, to be divided
equally between the four participants. The accrued amount could be
increased or decreased based on fiscal 1996 and fiscal 1997 results.
There is no maximum limit on amounts that could be paid under this
plan.
</TABLE>
15
<PAGE> 20
EMPLOYMENT CONTRACTS AND TERMINATION OF EMPLOYMENT AND CHANGE-IN-CONTROL
- ------------------------------------------------------------------------
ARRANGEMENTS
- ------------
Agreements with Executive Officers
----------------------------------
During fiscal 1995, the Company entered into "Employment Agreements"
with Kevin R. McDonnell, its President and Chief Executive Officer, Thomas L.
Allen, its Corporate Vice President - Marketing, and Victor L. Peeples, its
Corporate Vice President - Restaurant Operations. These Employment Agreements
provide that if the officer's employment with the Company is terminated by the
Company without cause, including in connection with a change-in-control of the
Company, the officer will become entitled to certain severance benefits,
including: (i) the continuation of his salary and medical benefits for a period
of one year, (ii) a pro-rata share of his annual and long-term bonus, and (iii)
the continuation of the term of his stock options for a period of one year. The
officer's receipt of these severance benefits is conditioned upon the officer
providing the Company with a written general release and reaffirming or
entering into certain confidentiality and non-compete covenants. These
Employment Agreements expire in June 1997.
Consulting Agreements with Lambrinides Brothers.
------------------------------------------------
Lambert N. Lambrinides, Christie N. Lambrinides and William N.
Lambrinides (the "Lambrinides Brothers") retired as full-time employees of the
Company, effective October 30, 1994. The Company and the Lambrinides Brothers
have entered into consulting agreements dated August 31, 1994, pursuant to
which each of the Lambrinides Brothers will provide consulting and related
services to the Company in consideration for an annual consulting fee of
$125,000. As part of these consulting services, the Lambrinides Brothers have
agreed to assist the Company in maintaining the high quality of the Company's
food products, in developing new food products, and in training designated
employees of the Company in the preparation of the Company's secret recipe
chili. The initial term of the consulting agreements will be for two years
beginning October 30, 1994. The consulting agreements may be renewed annually
thereafter by mutual agreement of the parties. It is anticipated that the
consulting agreements will be renewed for fiscal 1997. The consulting
agreements will terminate if there is a change-in-control of the Company.
During the term of the consulting agreements, the Company will provide the
Lambrinides Brothers with reasonable expense reimbursements and certain
insurance and other fringe benefits. During fiscal 1995, the Company paid or
reimbursed the Lambrinides Brothers for such items in the following amounts:
Lambert Lambrinides - $9,570; Christie Lambrinides - $4,166; and William
Lambrinides - $4,166. The Lambrinides Brothers and their spouses may continue
to participate in the Company's health care plan in their capacity as
directors. If one of the Lambrinides Brothers dies during the term of the
consulting agreement, his annual consulting fee will be continued for a period
of six months.
16
<PAGE> 21
The consulting agreements contain confidentiality and non-compete provisions.
The Lambrinides Brothers intend to continue their services as directors of the
Company.
Stock Option Agreements
-----------------------
All of the Company's stock option agreements with its officers and
employees provide that the options will become 100% vested and exercisable in
the event of a change-in-control of the Company.
DIRECTORS COMPENSATION
- ----------------------
During fiscal 1995, each member of the Company's Board of Directors
who was not also an employee of the Company received an annual fee of $10,000
for serving as a director. In addition, such directors received a fee of $850
for attendance at each Board meeting, and a fee of $750 for attendance at each
Board Committee meeting. Directors who were also employees of the Company did
not receive any separate fees for serving on the Company's Board or for
attending Board or Committee meetings.
RELATED PARTY TRANSACTIONS
- --------------------------
During all or part of the Company's 1994 and 1995 fiscal years, five
of the Company's franchised restaurants were owned and operated by corporations
or other business entities which are or were owned or partially owned by
directors, executive officers, or more than 5% shareholders of the Company, or
by members of their immediate families. The Company acquired one of those
franchised restaurants in a merger transaction during fiscal 1994 as described
below.
LCW Skyline Co. ("LCW") owned and operated one franchised Skyline
Chili Restaurant located in Cincinnati, Ohio, pursuant to the terms and
conditions of one of the Company's standard Individual Restaurant Franchise
Agreements. LCW is an Ohio corporation, which during most of fiscal 1994 was
owned equally by Lambert N. Lambrinides, Christie N. Lambrinides and William N.
Lambrinides (the "Shareholders"), each of whom was an executive officer and is
a director of the Company, and each of whom beneficially owns more than 5% of
the Company's outstanding common stock. On September 20, 1994, the Company and
a newly formed, wholly-owned subsidiary of the Company ("Acquisition Co.")
entered into an Agreement and Plan of Merger (the "Merger Agreement") with LCW
and the Shareholders. The Merger Agreement provided for the acquisition by the
Company of 100% of the shares of stock of LCW in exchange for the issuance by
the Company to the Shareholders of 231,999 shares of the Company's common stock
having an aggregate value of $725,000 (the "Shares"). The Company's
acquisition of LCW was accomplished by the reverse merger of Acquisition Co.
into LCW, with LCW being the surviving corporation. The merger was completed
on October 7, 1994. The shares were valued on that date at $3.125 per share.
The value of the merger consideration was determined by negotiations between
the
17
<PAGE> 22
Company's Board of Directors and the Shareholders. The shares acquired by each
of the Shareholders were as follows: Lambert N. Lambrinides - 77,333 shares;
Christie N. Lambrinides - 77,333 shares; and William N. Lambrinides - 77,333
shares.
Charis, Inc. owns and operates one franchised Skyline Chili Restaurant
located in Cincinnati, pursuant to the terms and conditions of one of the
Company's standard Individual Restaurant Franchise Agreements. Charis, Inc. is
an Ohio corporation owned by John Lambrinides, who is a son of Lambert N.
Lambrinides.
JoJonco, Inc. owns and operates one franchised Skyline Chili
Restaurant located in Cincinnati, pursuant to the terms and conditions of one
of the Company's standard Individual Restaurant Franchise Agreements. JoJonco,
Inc. is an Ohio corporation owned by Joseph Lambrinides, who is a son of
Lambert N. Lambrinides.
Kajac, Inc. owns and operates one franchised Skyline Chili Restaurant
located in Cincinnati, pursuant to the terms and conditions of one of the
Company's standard Individual Restaurant Franchise Agreements. Kajac, Inc. is
an Ohio corporation owned by Joseph Lambrinides.
Ronjo Joint Venture owns and operates one franchised Skyline Chili
Restaurant located in Cincinnati, pursuant to the terms and conditions of one
of the Company's standard Individual Restaurant Franchise Agreements. Ronjo is
an Ohio partnership owned in part by an entity owned by Joseph Lambrinides.
The Company and Joseph Lambrinides are parties to a Skyline Chili
Restaurants Development Option Agreement (the "Option agreement") dated July
30, 1991. The option agreement provides Joseph Lambrinides with the exclusive
right to develop up to three Skyline Chili Restaurants as franchises in three
locations in and around the greater Cincinnati, Ohio area or to exercise a
right of first refusal to develop as a franchise any location that the Company
intends to develop as a Skyline Chili Restaurant within the area in and around
Cincinnati, Ohio, lying west of interstate 75 and within the interstate 275
beltway. The right of first refusal is for one location only and must be taken
in lieu of one of the three identified locations, so that Joseph Lambrinides
may develop a maximum of three franchises under the terms of the Option
Agreement. The Option Agreement contains a development schedule for the three
franchise locations. If Joseph Lambrinides fails to meet the development
schedule, his rights under the Option Agreement will terminate. In order to
exercise his right to develop a location under the Option Agreement, Joseph
Lambrinides is required to enter into one of the Company's standard Individual
Restaurant Franchise Agreements for that location. Joseph Lambrinides has
exercised his right to develop two locations under the Option Agreement.
18
<PAGE> 23
In January 1996, GaBi Enterprises, Ltd., an Ohio limited liability
company, owned and managed in part by William G. Kagler, a more than 5%
shareholder and former executive officer and director of the Company, purchased
one parcel of unimproved real estate (approximately .66 acres) from the Company
for a total purchase price of $197,000, its approximate appraised value. The
Company and GaBi Enterprises, Ltd. have also entered into one of the Company's
standard Individual Restaurant Franchise Agreements, pursuant to which GaBi
will construct and operate a franchised Skyline Chili Restaurant on the site
purchased from the Company. The Company had purchased the site in May 1995 for
$186,000 and had incurred certain additional development costs in the amount of
approximately $11,000.
II. RATIFICATION OF SELECTION OF INDEPENDENT AUDITOR
(ITEM 2 ON PROXY CARD)
The Audit Committee of the Company's Board of Directors has selected
the firm of Ernst & Young LLP as the Company's independent auditor for fiscal
1996. The Company's Board of Directors has ratified this selection. Ernst &
Young LLP has been the Company's independent auditor since fiscal 1984, and the
Board believes it desirable and in the best interest of the Company to continue
the employment of that firm. Although not required by law, the Board is
seeking shareholder ratification of this selection. A representative of Ernst &
Young LLP will be present at the 1996 Annual Shareholders Meeting, will be
available to answer appropriate questions, and will be given an opportunity to
make a statement if he or she desires.
Authorization by a majority of the votes cast at the Meeting will be
required for ratification of this appointment. The Board of Directors
recommends a vote "FOR" this proposal.
III. SHAREHOLDER PROPOSALS FOR 1997 ANNUAL MEETING
In order for proposals of shareholders to be considered for inclusion
in the Company's Proxy Statement and Proxy Form for the 1997 Annual Meeting of
Shareholders, such proposals must be received by the Secretary of the Company
by October 16, 1996.
IV. OTHER MATTERS
THE ACCOMPANYING FORM OF PROXY IS BEING SOLICITED ON BEHALF OF THE
BOARD OF DIRECTORS OF THE COMPANY.
The expenses of the solicitation of the proxies for the 1996 Annual
Meeting of Shareholders, including the cost of preparing, assembling and
mailing the Notice, Proxy, Proxy Statement and return envelopes; the handling
and tabulation of proxies received, and charges of brokerage houses and other
institutions, nominees or fiduciaries for forwarding such documents to
beneficial owners, will be paid by the Company. In addition to the mailing of
the proxy material, solicitation may be made in person or by telephone by
officers, directors or regular employees of the Company.
19
<PAGE> 24
The Board of Directors is not aware of any other matters which may
properly be presented for action at the meeting. If, however, other matters
are properly presented, the accompanying Proxy will be voted in accordance with
the best judgment of the Proxy-holders with respect to such matters.
Cincinnati, Ohio By Order of the Board of
February 13, 1996 Directors,
Kevin R. McDonnell,
President and
Chief Executive Officer
20
<PAGE> 25
SKYLINE CHILI, INC.
4180 THUNDERBIRD LANE
FAIRFIELD, OHIO 45014
The undersigned hereby appoints KEVIN R. MCDONNELL and LAMBERT N.
LAMBRINIDES, and each of them with power of substitution, the proxies of the
undersigned to represent and to vote as indicated below, all of the Common
Shares of Skyline Chili, Inc. held of record by the undersigned on February 5,
1996, at the Annual Meeting of Shareholders of Skyline Chili, Inc., to be held
on March 13, 1996, and at any adjournments thereof, for the following purposes:
(1) The election of the following seven nominees to serve as directors of the
Company until the next Annual Meeting of Shareholders: LAMBERT N.
LAMBRINIDES, CHRISTIE N. LAMBRINIDES, WILLIAM N. LAMBRINIDES, LAWRENCE R.
BURTSCHY, DAVID A. KOHNEN, JOSEPH E. MADIGAN, KEVIN R. MCDONNELL.
[ ] FOR all nominees listed (ex- [ ] WITHHOLD authority to
cept as marked to the con- vote for all nominees
trary to the right). listed.
(INSTRUCTIONS:To withhold authority to vote for any individual nominee,
write that nominee's name in the space provided below.)
______________________________________________________________________
(2) Proposal to ratify the appointment of Ernst & Young LLP as the Company's
independent auditors for fiscal 1996.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
(3) In their discretion, the proxies are authorized to vote on all other
matters (none known at the time of the solicitation of this Proxy) which
may properly come before the Annual Meeting, or any adjournments thereof.
Either of said proxies, or substitutes, who shall be present and shall act at
the Annual Meeting, shall have and may exercise all the powers of said proxies
hereunder.
Please mark your proxy, sign it and date it,
and return it promptly in the envelope provided.
<PAGE> 26
THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED IN THE MANNER INDICATED BY THE
UNDERSIGNED SHAREHOLDER. UNLESS OTHERWISE INDICATED IN THE SPACES PROVIDED, THE
SHARES REPRESENTED BY THIS PROXY WILL BE VOTED "FOR" THE ELECTION OF ALL
PERSONS NAMED AS NOMINEES IN ITEM (1), AND WILL BE VOTED "FOR" THE PROPOSAL
DESCRIBED IN ITEM (2). The undersigned hereby acknowledges receipt of the
notice of the Annual Meeting of Shareholders dated February 13, 1996, the Proxy
Statement furnished herewith, and the Company's 1995 Annual Report to
Shareholders. Any proxy heretofore given to vote said shares is hereby revoked.
NUMBER OF SHARES
. . . . . . . . . . . . . . . . .
SIGNATURE
. . . . . . . . . . . . . . . . .
DATE
THIS PROXY IS SOLICITED ON BEHALF OF THE
COMPANY'S BOARD OF DIRECTORS.
NUMBER OF SHARES
NUMBER OF SHARES
