SCHEDULE 14A
(RULE 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
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
[X] Definitive proxy statement
[ ] Definitive additional materials
[ ] Soliciting material pursuant to Rule 14a-11(c) or Rule 14a-12
[ ] Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
RAVEN INDUSTRIES, 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] No fee required
[ ] 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. (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:
<PAGE>
RAVEN INDUSTRIES, INC.
205 East 6th Street
Box 5107
Sioux Falls, South Dakota 57117-5107
------------------------------------------------------------------
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
MAY 20, 1998
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TO THE SHAREHOLDERS OF RAVEN INDUSTRIES, INC.
Please take notice that the Annual Meeting of Shareholders (the "Meeting") of
Raven Industries, Inc. (the "Company") will be held, pursuant to due call by the
Board of Directors of the Company, at the Ramkota Inn, Highway 38 and I-29,
Sioux Falls, South Dakota, on Wednesday, May 20, 1998 at 9:00 a.m. (C.D.T.) or
any adjournments or postponements thereof, for the following purposes:
1. To elect seven directors;
2. To transact such other business as may properly come before the
Meeting or any adjournments or postponements thereof.
Pursuant to due action of the Board of Directors, shareholders of
record on April 9, 1998 will be entitled to vote at the Meeting or any
adjournments or postponements thereof.
A PROXY FOR THE MEETING IS ENCLOSED HEREWITH. YOU ARE REQUESTED TO FILL
IN AND SIGN THE PROXY, WHICH IS SOLICITED BY THE BOARD OF DIRECTORS, AND MAIL IT
PROMPTLY IN THE ENCLOSED ENVELOPE.
By Order of the Board of Directors
Raven Industries, Inc.
Arnold J. Thue
Secretary
April 17, 1998
<PAGE>
PROXY STATEMENT
of
RAVEN INDUSTRIES, INC.
205 E. 6th Street
Box 5107
Sioux Falls, South Dakota 57117-5107
ANNUAL MEETING OF SHAREHOLDERS TO BE HELD
MAY 20, 1998
GENERAL
This Proxy Statement is furnished in connection with the solicitation
of proxies by the Board of Directors of Raven Industries, Inc. (the "Company")
to be used at the Annual Meeting (the "Meeting") of Shareholders of the Company,
which is to be held on Wednesday, May 20, 1998 at 9:00 a.m. (C.D.T.) at the
Ramkota Inn, Highway 38 and I-29, Sioux Falls, South Dakota, or at any
adjournments or postponements thereof. The approximate date on which this Proxy
Statement and accompanying proxy were first sent or given to shareholders was
April 17, 1998. Each shareholder who signs and returns a proxy in the form
enclosed with this Proxy Statement may revoke the same at any time prior to its
use by giving notice of such revocation to the Company in writing or in open
meeting or by such shareholder giving a valid proxy bearing a later date.
Presence at the meeting by a shareholder who has signed a proxy does not alone
revoke the proxy. Only shareholders of record at the close of business on April
9, 1998 will be entitled to vote at the Meeting or any adjournments or
postponements thereof.
VOTING SECURITIES AND PROXIES
The Company has outstanding only one class of voting securities, Common
Stock, $1.00 par value, of which 4,827,907 shares were outstanding as of the
close of business on the record date, April 9, 1998. Shareholders representing
at least 50 percent of the shares of Common Stock outstanding and entitled to
vote must be present in person or represented by proxy in order to constitute a
quorum to conduct business at the Meeting. Each shareholder has cumulative
voting rights in the election of directors and is, therefore, entitled to (i)
give one nominee a number of votes equal to the number of directors to be
elected (which is seven) multiplied by the number of votes to which such
shareholder is entitled, or (ii) distribute the same number of votes among as
many nominees as he deems advisable. Where cumulative voting is exercised, there
shall be deemed elected the candidates receiving the most votes for the places
to be filled by such election. If cumulative voting is exercised, shares of a
shareholder who either abstains, votes to withhold authority to vote for the
nominees named below or who does not otherwise vote in person or by proxy
(including broker-nominees) will not be counted for the election of directors.
If no shareholder exercises its right to cumulate votes, then directors will be
elected by the affirmative vote of a majority of shares of Common Stock
represented at the meeting and eligible to vote. For this purpose, a shareholder
who abstains with respect to the election of a director is considered to be
present and entitled to vote on the election of a director at the meeting, and
is in effect casting a negative vote, but a shareholder (including a broker) who
does not give authority to a proxy to vote, or withholds authority to vote, on
the election of a director shall not be considered present and entitled to vote
on the election of a director.
Discretionary authority to cumulate votes is being solicited by the
Board of Directors. Unless otherwise directed by a shareholder, the proxies
named in the accompanying proxy card may elect to cumulate votes cast
<PAGE>
pursuant to a proxy by casting all such votes for one nominee or by distributing
such votes among as many nominees as they deem desirable. If a shareholder
desires to restrict the proxies named in the accompanying proxy card in casting
votes for certain nominees, the shareholder should give such direction on the
proxy card. On all matters other than the election of directors, each share of
Common Stock is entitled to one vote.
OWNERSHIP OF COMMON STOCK
The following table sets forth as of April 9, 1998 certain information
with respect to the beneficial ownership of the Company's Common Stock by (i)
any person known by the Company to be the owner, of record or beneficially, of
more than 5% of the Company's outstanding Common Stock, (ii) each of the
executive officers, directors and nominees for election to the Company's Board
of Directors, and (iii) all executive officers and directors as a group.
NAME SHARES
OF BENEFICIAL BENEFICIALLY PERCENT OF
OWNER OWNED CLASS
- ----- ----- -----
Anthony W. Bour 2,000 *
David A. Christensen 212,708(1) 4.4
Gary L. Conradi 40,804(2) *
Ronald M. Moquist 100,855(3) 2.1
Arnold J. Thue 42,843(4) *
Thomas S. Everist 500 *
Mark E. Griffin 36,676(5) *
Conrad J. Hoigaard 74,043 1.5
Kevin T. Kirby 41,800 *
John C. Skoglund 24,141(6) *
Dimensional Fund Advisors Inc. 265,800(7) 5.5
1299 Ocean Avenue
Santa Monica, CA 90401
Fenimore Asset Management, Inc. 785,453(8) 16.3
118 N. Grand Street
Cobleskill, NY 12043
T. Rowe Price Associates, Inc. 451,000(9) 9.3
100 E. Pratt Street
Baltimore, MD 21202
All executive officers, directors &
nominees as a group (10 persons) 576,370(10) 11.8
- --------------------------------------
* Less than 1%
<PAGE>
(1)Includes options to purchase 22,500 shares exercisable within 60
days of the record date. Also includes 42,022 shares owned by his wife, as to
which he disclaims beneficial ownership. Does not include 167,409 shares held by
Smith Barney Corporate Trust, as a trustee for the Company's Employee Profit
Sharing Retirement Plan.
(2)Includes options to purchase 7,750 shares exercisable within 60 days
of record date. Also includes 100 shares held by spouse.
(3)Includes options to purchase 11,250 shares exercisable within 60
days of record date. Also includes 21,000 shares held by spouse.
(4)Includes options to purchase 7,500 shares exercisable within 60 days
of record date. Also includes 10,000 shares held by spouse.
(5)Includes 28,333 shares held by John E. Griffin Trust of which Mark
E. Griffin is co-trustee and 1,359 shares held as custodian for a minor child.
(6)Includes 5,409 shares owned by spouse, as to which he disclaims
beneficial ownership.
(7)Data obtained from shareholder's most recent Schedule 13G filing
with the S.E.C. The shareholder stated in the filing that: Dimensional Fund
Advisors Inc. ("Dimensional"), a registered investment advisor, is deemed to
have beneficial ownership of 265,800 shares of Raven Industries, Inc. stock as
of December 31, 1997, all of which shares are held in portfolios of DFA
Investment Dimensions Group Inc., a registered open-end investment company, or
in series of the DFA Investment Trust Company, a Delaware business trust, or the
DFA Group Trust and DFA Participation Group Trust, investment vehicles for
qualified employee benefit plans, all of which Dimensional Fund Advisors Inc.
serves as investment manager. Dimensional disclaims beneficial ownership of all
such shares.
(8)Data obtained from shareholder's most recent Schedule 13G filing
with the S.E.C.
(9)Data obtained from shareholder's most recent Schedule 13G filing
with the S.E.C. The shareholder stated in that filing that: These securities are
owned by various individual and institutional investors, including T. Rowe Price
Small Capital Value Fund, Inc. (which owns 380,000 shares, representing 7.9% of
the shares outstanding, which T. Rowe Price Associates, Inc. (Price Associates)
serves as investment adviser with power to direct investments and/or sole power
to vote the securities. For purposes of the reporting requirements of the
Securities Exchange Act of 1934, Price Associates is deemed to be a beneficial
owner of such securities; however, Price Associates expressly disclaims that it
is, in fact, the beneficial owner of such securities.
(10)Includes options to purchase 49,000 shares exercisable within 60
days of the record date. Also includes 78,431 shares held by spouses of officers
and directors, as to which beneficial ownership is disclaimed.
<PAGE>
ELECTION OF DIRECTORS
Seven directors are to be elected at the meeting, each director to hold
the office until the next Annual Meeting of Shareholders, or until his successor
is elected and qualified. All of the nominees listed below are now serving as
directors and all of the nominees have consented, if elected, to serve as
directors. The Board of Directors proposes for election the nominees listed
below:
<TABLE>
<CAPTION>
PRINCIPAL OCCUPATION, BUSINESS EXPERIENCE
NAME AND AGE PAST FIVE YEARS AND DIRECTORSHIPS DIRECTOR
OF NOMINEE IN PUBLIC COMPANIES SINCE
- --------------- ------------------------------------------------ -----
<S> <C> <C>
Anthony W. Bour (60) Commercial Real Estate, Hegg Companies, Sioux Falls, SD., 1995
Former President, Starmark, Inc., Sioux Falls, S.D.
Director, U.S. Bank of South Dakota.
David A. Christensen (63) President and Chief Executive Officer of the Company 1971
since April 1971. Director of Norwest Corporation,
Northern States Power Co., and Norwest Bank
South Dakota, N.A. until 12/31/97, the
latter of which provides borrowings to the
Company, the terms of which management
considers competitive with other sources
generally available to the Company. The
largest amount of such borrowings
outstanding during the year ended January
31, 1998 was $3,620,000 and $2,560,000
remained outstanding on January 31, 1998.
Thomas S. Everist (48) President & Chief Executive Officer of L.G. Everist, Inc., Sioux 1996
Falls, S.D., since 1987. Director of MDU Resources, Bismarck,
N.D., Director of Power Plant Aggregates, Inc., Sioux City, IA.,
Director of Standard Ready Mix, Inc., Sioux City, IA., Director of
Spencer Quarries, Inc., Spencer, S.D.
Mark E. Griffin (47) President and Chief Executive Officer of Lewis Drugs, Inc., Sioux 1987
Falls, S.D. since November 11, 1986, where he previously served
as Executive Vice President. President & CEO of Griffson Realty Company,
Fredin Assoc. & G.E.F. Assoc., Sioux Falls, SD. Director of Norwest Bank
South Dakota, N.A. until 12/31/97, which provides borrowings to the Company,
the terms of which management considers competitive with other sources
generally available to the Company. The largest amount of such borrowings
outstanding during the year ended January 31, 1998 was $3,620,000 and
$2,560,000 remained outstanding on January 31, 1998.
Conrad J. Hoigaard (61)(1) Chairman of the Board of the Company and President 1976
and Chairman of the Board of Hoigaard's Inc. (a retail
business), Minneapolis, MN.
Kevin T. Kirby (43) President of Kirby Investment Corp., Sioux Falls, S.D., since 1989
1992. Director of H.F. Financial Corp. & Home Federal Savings
Bank, Sioux Falls, SD. Executive V. P. and Treasurer of Western Surety
Company, 1979-1992.
John C. Skoglund (65)(1) Chairman of the Board of Skoglund Communications, Inc., 1978
Chairman of the Board of Minnesota Vikings, Inc., Minneapolis,
MN. since 1984.
</TABLE>
(1)Mr. Hoigaard & Mr. Skoglund are first cousins.
All shares represented by proxies will be voted FOR the election of the
foregoing nominees; provided, however, that if any such nominee should withdraw
or otherwise become unavailable for reasons not presently known, such shares may
be voted for another person in place of such nominee in accordance with the best
judgement of the persons named in the proxies.
<PAGE>
EXECUTIVE COMPENSATION
The following table ("Summary Compensation Table") sets forth the cash
and non-cash compensation earned for each of the last three fiscal years by the
President and Chief Executive Officer of the Company and each of the executive
officers of the Company:
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------------
LONG -TERM
COMPENSATION
------------
AWARDS
------
ANNUAL COMPENSATION SECURITIES ALL OTHER
------------------- UNDERLYING COMPENSATION(2)
NAME & PRINCIPAL YEAR SALARY($) BONUS ($) OTHER ANNUAL(1) OPTIONS/SARS(#) ($)
POSITION (a) (b) (c) (d) COMPENSATION($)(e) AWARDS (g) (i)
- ----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
David A. Christensen 1998 328,700 39,444 157,670 15,000 19,373
President & Chief 1997 316,000 99,569 142,172 15,000 26,133
Executive Officer 1996 306,800 30,680 47,146 15,000 21,698
Gary L. Conradi 1998 98,500 5,910 43,648 4,000 5,363
Vice President 1997 94,700 18,769 36,392 4,000 6,244
Corporate Services 1996 92,000 4,600 19,352 3,000 6,296
Ronald M. Moquist 1998 165,300 4,991 55,123 7,500 8,647
Executive Vice 1997 159,000 25,850 51,849 7,500 10,807
President 1996 154,400 12,862 15,894 7,500 9,925
Arnold J. Thue 1998 127,900 11,511 52,064 5,000 7,178
Vice President-Finance 1997 123,000 29,067 48,723 5,000 8,411
Secretary & Treasurer 1996 119,400 10,746 19,324 5,000 7,974
</TABLE>
<PAGE>
(1) Other Annual Compensation - column (e) ($)
1998 1997 1996
------- ------- -------
David A. Christensen
- --------------------
Tax reimbursement on stock option exercise 72,844 62,125 8,969
Life insurance premiums 21,642 21,642 12,950
Company provided auto 15,951 16,500 3,683
Other taxable fringe benefits 12,412 9,046 5,872
Tax reimbursement bonus on taxable fringe benefits 34,821 32,859 15,672
------- ------- -------
157,670 142,172 47,146
======= ======= ======
Gary L. Conradi
- --------------------
Tax reimbursement on stock option exercise 14,569 12,425 7,175
Life insurance premiums 8,200 8,200 4,772
Other taxable fringe benefits 9,974 7,990 2,845
Tax reimbursement bonus on taxable fringe benefits 10,905 7,777 4,560
------- ------- -------
43,648 36,392 19,352
======= ======= ======
Ronald M. Moquist
- --------------------
Tax reimbursement on stock option exercise 36,422 31,062 4,544
Life insurance premiums 6,995 6,995 5,428
Other taxable fringe benefits 4,029 5,259 1,671
Tax reimbursement bonus on taxable fringe benefits 7,667 8,533 4,251
------- ------- -------
55,123 51,849 15,894
======= ======= ======
Arnold J. Thue
- --------------------
Tax reimbursement on stock option exercise 24,281 21,744 1,674
Life insurance premiums 8,450 8,450 5,168
Other taxable fringe benefits 7,928 8,050 5,872
Tax reimbursement bonus on taxable fringe benefits 11,405 10,479 6,610
------- ------- -------
52,064 48,723 19,324
======= ======= ======
(2)Represents the Company's contribution to the individual's account in the
Company's Profit Sharing Plan.
<PAGE>
The following table sets forth information regarding the stock options
that were granted during fiscal 1998 to the executive officers named in the
Summary Compensation Table and the potential realizable value of such options if
the value of the Company's Common Stock appreciated during the term of such
options at assumed rates of growth:
STOCK OPTIONS GRANTED FISCAL YEAR ENDED 1/31/98
<TABLE>
<CAPTION>
POTENTIAL REALIZABLE VALUE
AT ASSUMED ANNUAL RATES OF
STOCK PRICE APPRECIATION FOR
OPTION TERM(2)
-------------------------
% OF TOTAL OPTIONS
OPTIONS GRANTED TO EMPLOYEES EXERCISE EXPIRATION
NAME GRANTED(#)(1) IN FY PRICE ($/SH) DATE 5%($) 10%($)
- -------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
David A. Christensen 15,000 21.8% 20.00 11-20-02 82,884 183,153
Gary L. Conradi 4,000 5.8% 20.00 11-20-02 22,103 48,841
Ronald M. Moquist 7,500 10.9% 20.00 11-20-02 41,442 91,576
Arnold J. Thue 5,000 7.3% 20.00 11-20-02 27,628 61,051
</TABLE>
(1)All options granted expire after five years and may be exercised at
the rate of 25% per year after one year from the date of grant. The option price
may be paid in cash or by delivery of shares of the Company's common stock
valued at the market price on the date of the option exercise. In connection
with the exercise of non-qualified stock options, the Company pays a
reimbursement bonus of 35% of the exercise price of the option to assist in
payment of income taxes payable by the employee as a result of the option
exercise. The plan also allows the payment of withholding taxes through the
surrender of shares of the Company's common stock at market value.
(2)Amounts for the executives shown in these columns have been derived
by multiplying the exercise price by the annual appreciation rate shown
(compounded for the term of the options), multiplying the result by the number
of shares covered by the options, and subtracting the aggregate exercise price
of the options. The dollar amounts set forth under this heading are the result
of calculations at the 5% and 10% rates set by the SEC and therefore are not
intended to forecast possible future appreciation, if any, of the Company's
stock price.
The following table shows the stock options that were exercised during
fiscal 1998 by the executive officers named in the Summary Compensation Table,
the value realized by them as a result of exercising options, the number of
unexercised options at the end of fiscal 1998 and the value of unexercised
in-the-money options at the end of fiscal 1998:
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR AND FY-END OPTION VALUE
<TABLE>
<CAPTION>
NUMBER OF VALUE OF UNEXERCISED
UNEXERCISED OPTIONS IN-THE-MONEY OPTIONS
AT FY END AT FY END
SHARES -------------------------- --------------------------
ACQUIRED ON VALUE
NAME EXERCISE (#) REALIZED ($) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- ----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
David A. Christensen 15,000 159,375 37,500 37,500 130,313 109,687
Gary L. Conradi 3,000 31,875 7,750 9,250 26,469 25,781
Ronald M. Moquist 7,500 79,688 18,750 18,750 65,157 54,843
Arnold J. Thue 5,000 53,125 12,500 12,500 43,437 36,563
</TABLE>
<PAGE>
The graph below compares the cumulative total shareholder return on the
Company's Common Stock over the last five years with the total return of the S&P
500 and the S&P group of diversified manufacturers.
Total Return on $100 Investment Assuming Reinvestment of Dividends
INDEXED TOTAL RETURN - BASE 100
SOURCE: S&P COMPUSTAT BASE YEAR = 100: 1/29/93
COMPANY NAME JAN-93 JAN-94 JAN-95 JAN-96 JAN-97 JAN-98
- ------------ ------ ------ ------ ------ ------ ------
RAVEN INDUSTRIES INC. 100.00 102.96 98.42 103.46 123.95 127.66
S&P 500 COMP-LTD 100.00 112.83 113.42 157.21 198.51 251.91
MANUFACTURING (DIVERS)-500 100.00 123.82 123.78 181.43 240.16 281.89
BOARD COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
Decisions on compensation of the Company's executives since October 21,
1992 have been made by the Compensation Committee of the Board of Directors.
Each member of the Compensation Committee is a non-employee director. All
decisions by this Committee relating to the compensation of the Company's
executive officers are reviewed by the full Board. Pursuant to recently adopted
rules designed to enhance disclosure of companies' policies toward executive
compensation, set forth below is a report prepared by the Compensation Committee
addressing the Company's, and its subsidiaries', compensation policies for the
fiscal year ended January 31, 1998, as they affected the Company's executive
officers.
The Compensation Committee's executive compensation policies are
designed to provide competitive levels of compensation that integrate pay with
the Company's annual goals, reward above average corporate performance,
recognize individual initiative and achievements, and assist the Company in
attracting and retaining qualified executives. The Committee has retained the
services of an independent compensation consultant for the purpose of reviewing
compensation policies and making recommendations to the Committee.
The Committee compared the entire compensation program with companies
of comparable size in similar industries. Although the Company's program fell
within the low to medium range for each individual executive, the committee
believes that the Company's compensation program is sufficiently competitive to
retain competent personnel. Comparisons were made with companies which are not
necessarily included in the performance graph above. The above graph is based on
broad industry averages while the compensation program was compared to a
relatively limited number of specific companies to which the Company relates in
size or industry type.
There are three elements in the Company's executive compensation
program, all determined by individual and corporate performance.
* Base salary compensation * Annual incentive compensation
* Stock options
Base salary compensation, while largely subjective, is determined by
the potential impact the individual has on the Company, the skills and
experience required by the job, and the performance and potential of the
incumbent in the job.
Annual incentive compensation for executives of the Company is based
primarily on corporate operating earnings. For the fiscal year ended January 31,
1998, operating earnings were targeted at a minimum level of $7.7 million and
maximized at $8.9 million after providing for all incentive payments. Mr.
Christensen had the potential
<PAGE>
of earning up to 48% of his base salary as incentive compensation based on the
company achieving operating earnings of $8.9 million. The incentive based on
operating earnings begins at $7.7 million, with no incentive paid until this
level has been reached. The incentive payment based on earnings is calculated in
proportion to the ratio of earnings exceeding the minimum target level to the
total range used for the calculations. For example, if earnings totaled $8.3
million, 50% of the incentive payment based on earnings would have been paid
under the plan. Based on expense control targets established by the Compensation
Committee, Mr. Christensen could also earn up to 12% of his base salary.
Other executives under the plan could have earned from 34% of base
salary up to 40% of base salary based on the same criteria as Mr. Christensen
for operating earnings. They also had other specific incentives for achieving
individual goals set by the Committee which allowed incentive payments ranging
from 6% to 10% of base salary.
No incentive compensation is awarded unless the minimum levels of
performance are met. The Committee has not made any adjustment to predetermined
formulas nor has it made any provision for discretionary adjustment or awards of
compensation. The criteria and basis for incentive compensation described above
is similar to that used in each of the three years for which executive
compensation is disclosed.
Awards of stock options under the Stock Option Plan are designed to
promote the identity of long-term interests between the Company's executives and
its shareholders and assist in the retention of executives. The Stock Option
Plan also permits the Committee to grant stock options to key personnel. Options
become exercisable based upon criteria established by the Compensation
Committee. Awards of options are generally granted on the same criteria as base
salaries are determined without regard to prior year awards.
Based on recommendations of the Compensation Committee, the Board of
Directors in fiscal 1998 granted stock options to officers and key employees.
While the value realizable from exercisable options is dependent upon the extent
to which the Company's performance is reflected in the market price of the
Company's common stock at any particular point in time, the decision as to
whether such value will be realized in any particular year is primarily
determined by each individual executive and not by the Compensation Committee.
The fiscal 1998 base cash compensation of Mr. Christensen was $328,700
which represented a 4.0% increase from his fiscal 1997 annual salary. Annual
incentive payments for each year are based on achieving earnings targets as
described above (80% of the maximum incentive payment), and maintaining
corporate administrative costs at a certain ratio of total sales. The maximum
total annual incentive payment is 60% of base compensation. No subjective
factors are used in determining annual incentive payments for Mr. Christensen or
the other executives.
Submitted by the Compensation Committee of the Company's Board of
Directors:
Mark E. Griffin Conrad J. Hoigaard John C. Skoglund
PROPOSALS OF SHAREHOLDERS
It is contemplated that the 1999 Annual Meeting will be held in May
1999. Accordingly, all proposals of shareholders intended to be presented at the
1999 Annual meeting of Shareholders of the Company must be received by the
Company at its executive offices on or before December 18, 1998.
OTHER MATTERS
BOARD OF DIRECTORS AND COMMITTEES. The Board of Directors held four
meetings during the last fiscal year. The Company has an Audit Committee and
Compensation Committee, in addition to its Executive Committee. Directors who
are not full-time employees of the Company are paid an annual retainer fee of
$6,600, a fee of $1,200 per meeting (other than telephonic meetings) and $600
per telephonic meeting. Committee members will receive $600 per meeting
attended. The Chairman of the Board receives compensation at the rate of $1,000
per month in addition to the annual retainer fee of $6,600.
<PAGE>
The Company's Audit Committee, which consisted of Messrs. Kirby,
Everist and Bour, had two meetings during the fiscal year ended January 31,
1998. The Audit Committee recommended to the full Board the engagement of
independent accountants, reviewed the audit plan and results of the audit
engagement, reviewed the independence of the auditors, and reviewed the adequacy
of the Company's system of internal accounting controls.
The Compensation Committee, which consists of Messrs. Hoigaard,
Skoglund and Griffin, had three meetings during the fiscal year ended January
31, 1998. The Compensation Committee reviewed the Company's remuneration
policies and practices, and made recommendations to the Board in connection with
all compensation matters affecting the Company.
No member of the Compensation Committee of the Board of Directors was
an officer, former officer or associate of the Company or its subsidiaries
during fiscal 1998. No executive officer of the Company served as a member of
the Compensation Committee or Board of Directors of another entity in which one
of whose executive officers served on the Company's Compensation Committee or
Board of Directors during fiscal 1998.
INDEPENDENT AUDITORS. The Board of Directors selected the firm of
Coopers & Lybrand L.L.P. as auditors to the Company for the year ended January
31, 1998. Coopers & Lybrand L.L.P., independent certified public accountants,
have audited the Company's financial statements for the past 37 years. A
representative of Coopers & Lybrand L.L.P. is expected to be present at the
Annual Meeting and will have an opportunity to make a statement and/or respond
to appropriate questions from stockholders.
COMPLIANCE WITH SECTION 16(a) OF THE SECURITIES EXCHANGE ACT OF 1934.
Section 16(a) of the Securities Exchange Act of 1934 requires the Company's
officers and directors, 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 Securities and Exchange Commission
and Nasdaq. Officers, directors and greater than ten percent shareholders are
required by SEC regulation to furnish the Company with copies of all Section
16(a) forms they file. Based solely on review of the copies of such forms
furnished to the Company, or written representations that no Form 5's were
required, the Company believes that during the year ended January 31, 1998 all
Section 16(a) filing requirements applicable to its officers, directors and
greater than ten-percent beneficial owners were complied with.
SOLICITATION. The Company will bear the cost of preparing, assembling
and mailing the proxy, Proxy Statement, Annual Report and other material which
may be sent to the shareholders in connection with this solicitation. Brokerage
houses and other custodians, nominees and fiduciaries may be requested to
forward soliciting material to the beneficial owners of stock, in which case
they will be reimbursed by the Company for their expenses in doing so. Proxies
are being solicited primarily by mail, but, in addition, officers and regular
employees of the Company, without extra compensation, may solicit proxies
personally, by telephone, by telegram or by special letter.
The Board of Directors does not intend to present to the meeting any
other matter not referred to above and does not presently know of any matter
that may be presented to the meeting by others. However, if other matters come
before the meeting, it is the intention of the persons named in the enclosed
proxies to vote the proxy in accordance with their best judgment.
By Order of the Board of Directors
Raven Industries, Inc.
Arnold J. Thue, Secretary
