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>
[LOGO]
RAVEN INDUSTRIES, INC.
205 East 6th Street
P.O. Box 5107
Sioux Falls, South Dakota 57117-5107
------------------------------------------------------------------------------
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
MAY 24, 2000
-----------------------------------------------------------------------------
TO THE SHAREHOLDERS OF RAVEN INDUSTRIES, INC.
Please take notice that the Annual Meeting of Shareholders (the
"Meeting") of Raven Industries, Inc. (the "Company" or "Raven") 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 24, 2000 at 9:00 a.m. (C.D.T.) or at any adjournments or
postponements thereof, for the following purposes:
1. To elect seven directors;
2. To approve the Company's 2000 Stock Option and
Compensation Plan; and
3. 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 12, 2000 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. YOU
MAY ALSO VOTE BY TELEPHONE, OR ELECTRONICALLY THROUGH THE INTERNET, BY
FOLLOWING THE INSTRUCTIONS INCLUDED WITH YOUR PROXY CARD.
IF YOUR SHARES ARE HELD IN "STREET NAME," PLEASE CHECK YOUR PROXY CARD
OR CONTACT YOUR BROKER OR NOMINEE TO DETERMINE WHETHER YOU WILL BE ABLE
TO VOTE BY TELEPHONE OR ELECTRONICALLY.
By Order of the Board of Directors
Raven Industries, Inc.
Thomas Iacarella
Secretary
April 19, 2000
<PAGE>
PROXY STATEMENT
of
RAVEN INDUSTRIES, INC.
205 E. 6th Street
P.O. Box 5107
Sioux Falls, South Dakota 57117-5107
ANNUAL MEETING OF SHAREHOLDERS TO BE HELD
MAY 24, 2000
GENERAL
This Proxy Statement is furnished in connection with the solicitation
of proxies by the Board of Directors of Raven Industries, Inc. (the "Company" or
"Raven") to be used at the Annual Meeting (the "Meeting") of Shareholders of the
Company, which is to be held on Wednesday, May 24, 2000 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 19, 2000. 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
12, 2000 (the "Record Date") 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 3,720,407 shares were outstanding as of the
close of business on the Record Date, 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
1
<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 the Record Date 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 7,000 *
David A. Christensen 219,096(1) 5.8
Gary L. Conradi 41,804(2) 1.1
Thomas S. Everist 500 *
Mark E. Griffin 36,676(3) *
Conrad J. Hoigaard 74,043 2.0
Thomas Iacarella 8,625(4) *
Kevin T. Kirby 51,800 1.4
Ronald M. Moquist 118,730(5) 3.2
Dimensional Fund Advisors Inc. 320,000(6) 8.6
1299 Ocean Avenue
Santa Monica, CA 90401
Fenimore Asset Management, Inc. 573,192(7) 15.4
118 N. Grand Street
Cobleskill, NY 12043
T. Rowe Price Associates, Inc. 409,500(8) 11.0
100 E. Pratt Street
Baltimore, MD 21202
All executive officers, directors &
nominees as a group (9 persons) 558,274(9) 15.0
- --------------------------------------
* Less than 1%
2
<PAGE>
(1)Includes options to purchase 36,250 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.
(2)Includes options to purchase 8,750 shares exercisable within 60 days
of record date. Also includes 100 shares held by spouse.
(3)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.
(4)Includes options to purchase 4,125 shares exercisable within 60 days
of record date.
(5)Includes options to purchase 18,125 shares exercisable within 60
days of record date. Also includes 21,000 shares held by spouse.
(6)Data obtained from shareholder's most recent Schedule 13G filing
with the Securities & Exchange Commission ("SEC").
(7)Data obtained from shareholder's most recent Schedule 13G filing
with the SEC.
(8)Data obtained from shareholder's most recent Schedule 13G filing
with the SEC. 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 350,000 shares,...., 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."
(9)Includes options to purchase 67,250 shares exercisable within 60
days of the record date. Also includes 63,122 shares held by spouses of officers
and directors, as to which beneficial ownership is disclaimed.
3
<PAGE>
ELECTION OF DIRECTORS
PROPOSAL NO. 1
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 (62) President & Chief Executive Officer of Showplace Wood Products, 1995
Harrisburg, SD. Broker Associate Commercial Real Estate,
Hegg Companies, Sioux Falls, SD. Former President, Starmark, Inc.,
Sioux Falls, SD. Director, U.S. Bank of South Dakota.
David A. Christensen (65) President and Chief Executive Officer of the Company 1971
since April 1971. Director of Northern States Power Co.,
Minneapolis, MN, Medcomp Software, Inc., Colorado Springs, CO,
and Wells Fargo & Co., San Francisco, CA, 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, 2000, was $9,500,000 of which
$4,000,000 remained outstanding at January 31, 2000.
Thomas S. Everist (50) President & Chief Executive Officer of L.G. Everist, Inc., Sioux 1996
Falls, SD, since 1987. Director of MDU Resources, Bismarck,
ND, Director of Standard Ready Mix, Inc., Sioux City, IA, Director
of Spencer Quarries, Inc., Spencer, SD.
Mark E. Griffin (49) President and Chief Executive Officer of Lewis Drugs, Inc., Sioux 1987
Falls, SD, since 1986, where he previously served as Executive
Vice President. President & CEO of Griffson Realty Company,
Fredin Assoc. & G.E.F. Assoc., Sioux Falls, SD.
Conrad J. Hoigaard (63) 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 (45) President of Kirby Investment Corp., Sioux Falls, SD, since 1989
1992. Director of H.F. Financial Corp. & Home Federal Savings
Bank, Sioux Falls, SD. Executive Vice President and Treasurer
of Western Surety Company, 1979-1992.
Ronald M. Moquist (54) Executive Vice President, Raven Industries, Inc., since 1985, Vice 1999
President, Raven Industries, 1978-1985, encompassing both corporate
and divisional management positions. Joined Raven Industries
in 1975 as Sales and Marketing Manager.
</TABLE>
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.
4
<PAGE>
The affirmative vote of the holders of the greater of (a) a majority of
the outstanding shares of common stock of the Company present and entitled to
vote for the election of directors or (b) a majority of the voting power of the
minimum number of shares entitled to vote that would constitute a quorum for
transaction of business at the meeting, is required for the election of
directors. A shareholder who abstains with respect to the election of directors
is considered to be present and entitled to vote on the election of directors 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 directors, shall not be
considered present and entitled to vote on the election of directors.
All shares represented by proxies will be voted FOR all the previously
named nominees unless a contrary choice is specified.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT YOU VOTE FOR ALL
NOMINEES.
5
<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 ($) OTHER ANNUAL (1) OPTIONS (#) ($)
POSITION (a) (b) (c) (d) COMPENSATION ($) (e) AWARDS (g) (i)
- ---------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
David A. Christensen 2000 348,800 70,542 106,447 11,433
President & Chief 1999 338,600 40,632 188,025 10,000 11,425
Executive Officer 1998 328,700 39,444 157,670 15,000 19,373
Gary L. Conradi 2000 105,600 6,336 28,025 3,000 3,345
Vice President 1999 102,500 6,150 47,528 3,000 3,261
Administrative Services 1998 98,500 5,910 43,648 4,000 5,363
Thomas Iacarella 2000 105,000 7,476 19,839 3,000 3,364
Vice President-Finance 1999(3) 94,500 7,565 29,362 3,000 3,038
Secretary & Treasurer
Ronald M. Moquist 2000 175,300 19,369 5,000 5,757
Executive Vice 1999 170,300 17,030 70,158 5,000 5,261
President 1998 165,300 4,991 55,123 7,500 8,647
</TABLE>
6
<PAGE>
(1) Other Annual Compensation - column (e) ($)
2000 1999 1998
---- ---- ----
David A. Christensen
- --------------------
Tax reimbursement on stock based compensation 24,526 105,000 72,844
Life insurance premiums 21,642 21,642 21,642
Company provided auto 16,429 15,848 15,951
Other taxable fringe benefits 9,446 11,453 12,412
Tax reimbursement on taxable fringe benefits 34,404 34,082 34,821
------- ------- -------
106,447 188,025 157,670
======= ======= =======
Gary L. Conradi
- ---------------
Tax reimbursement on stock based compensation 21,000 14,569
Life insurance premiums 8,200 8,200 8,200
Other taxable fringe benefits 10,731 9,720 9,974
Tax reimbursement on taxable fringe benefits 9,094 8,608 10,905
------- ------- -------
28,025 47,528 43,648
======= ======= =======
Thomas Iacarella
- ----------------
Tax reimbursement on stock based compensation 10,500
Life insurance premiums 4,130 4,130
Other taxable fringe benefits 9,271 8,705
Tax reimbursement on taxable fringe benefits 6,438 6,027
------- -------
19,839 29,362
======= =======
Ronald M. Moquist
- -----------------
Tax reimbursement on stock based compensation 52,500 36,422
Life insurance premiums 6,995 6,995 6,995
Other taxable fringe benefits 5,120 4,050 4,029
Tax reimbursement on taxable fringe benefits 7,254 6,613 7,667
------- ------- -------
19,369 70,158 55,113
======= ======= =======
(2) Represents the Company's contribution related to the individual's
participation in the Company's Profit Sharing and 401(k) Plan.
(3) Mr. Iacarella was named Vice President - Finance, Secretary & Treasurer
on August 1, 1998. Compensation information in the table includes the
entire fiscal year.
7
<PAGE>
The following table sets forth information regarding the stock options
that were granted during fiscal 2000 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 JANUARY 31, 2000
<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 0 N/A N/A N/A N/A N/A
Gary L. Conradi 3,000 9.1 14.25 11-29-04 11,811 26,099
Thomas Iacarella 3,000 9.1 14.25 11-29-04 11,811 26,099
Ronald M. Moquist 5,000 15.2 14.25 11-29-04 19,685 43,499
</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. Upon a change in
control, vesting of options is accelerated. The option price may be paid in cash
or by delivery of shares of the Company's common stock, held by the option
holder for at least six months, valued at the market price on the date of the
option exercise. These options were incentive stock options and no income tax is
payable by the executives unless shares are sold. In connection with the
exercise of previously issued non-qualified stock options, the Company pays a
reimbursement cash 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 for the payment of withholding taxes on the
exercise of non-qualified stock options 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 2000 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 2000 and the value of unexercised
in-the-money options at the end of fiscal 2000:
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 0 0 36,250 18,750 0 0
Gary L. Conradi 0 0 8,750 8,250 0 375
Thomas Iacarella 0 0 4,125 6,375 0 375
Ronald M. Moquist 0 0 18,125 14,375 0 625
</TABLE>
8
<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
Russell 2000 and the S&P group of diversified manufacturers.
Total Return on $100 Investment Assuming Reinvestment of Dividends
[LINE CHART]
Source: S&P Compustat Base year = 100: 1/31/95
Company Name Jan-95 Jan-96 Jan-97 Jan-98 Jan-99 Jan-00
- -------------------------- ------- ------- ------- ------- ------- -------
RAVEN INDUSTRIES INC 100.00 105.12 125.94 129.70 94.92 89.07
MANUFACTURING (DIVERS)-500 100.00 146.57 194.02 227.72 269.64 313.90
RUSSELL 2000 INDEX 100.00 129.94 154.57 182.50 183.12 215.85
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION IN COMPENSATION
DECISIONS
The Company's Compensation Committee consists of Messrs. Griffin and
Hoigaard.
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 of Directors. 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, 2000, 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.
9
<PAGE>
o Base salary compensation
o Annual incentive compensation
o 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,
2000, 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 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% to 44% 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 9% 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, other than to eliminate the impact of the sale of the Company's
Glasstite business, 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 2000 granted stock options to officers and key employees.
Mr. Christensen was awarded 2,625 shares of common stock in lieu of a stock
option grant. 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 2000 base cash compensation of Mr. Christensen was $348,800,
which represented a 3.0% increase from his fiscal 1999 annual base 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
10
<PAGE>
EMPLOYMENT AGREEMENTS AND CHANGE IN CONTROL AGREEMENTS
Each of Messrs. Christensen, Conradi, Iacarella and Moquist (the
"Executives") has entered into an employment agreement with the Company
(collectively, the "Employment Agreements"). These Employment Agreements can be
terminated upon 30 days notice. The Employment Agreements provide that the
Executives are entitled to participate in all employee benefit plans and fringe
benefit programs maintained by the Company for its executive officers. In the
event of death or other termination of employment without "cause" (as defined in
the Employment Agreements) during the term of the Employment Agreements, each
Executive who has reached specified retirement criteria is entitled to
continuation of certain benefits. These benefits will be "grossed-up" to cover
anticipated income taxes payable by the Executive on the benefits.
Each Executive has also entered into a Change in Control Agreement with
the Company (collectively, the "Control Agreements"). The Control Agreements
contain provisions designed to encourage the Executives to carry out their
employment duties in the event of a change of control (as defined below). Such
provisions state that, if the Executive's employment is terminated by the
Company or the Executive within two years after the change in control, the
Executive will receive a severance payment in an amount of twice his annual
salary and incentive payment, and certain other benefits. These payments will be
"grossed-up" to cover anticipated income and excise taxes.
A "change in control" is deemed to occur when and if (i) any person
becomes the "beneficial owner" of at least 30% of the Company's stock or (ii) a
majority of the Board of Directors become individuals other than "Incumbent
Members" (as defined in the Control Agreements).
PROPOSALS OF SHAREHOLDERS
Any shareholder who desires to submit a proposal for action by the
shareholders at the next annual meeting must submit such proposal in writing to
David A. Christensen, President & CEO, Raven Industries, Inc., P.O. Box 5107,
Sioux Falls, South Dakota 57117-5107, by December 28, 2000. Due to the
complexity of the respective rights of the shareholders and the Company in this
area, any shareholder desiring to propose such an action is advised to consult
with his or her legal counsel with respect to such rights. It is suggested that
any such proposal be submitted by certified mail, return receipt requested.
On May 21, 1998, the SEC adopted an amendment to Rule 14a-4, as
progmulgated under the Securities and Exchange Act of 1934. The amendment to
14a-4(c)(1) governs the Company's use of its discretionary proxy voting
authority with respect to a shareholder proposal which the shareholder has not
sought to include in the Company's proxy statement. The new amendment provides
that if a proponent of a proposal fails to notify the Company at least 45 days
prior to the month and day of mailing of the prior year's proxy statement, then
the management proxies will be allowed to use their discretionary voting
authority when the proposal is raised at the meeting, without any discussion of
the matter in the proxy statement.
With respect to the Company's fiscal 2001 Annual Meeting of
shareholders, if the Company is not provided notice of a shareholder proposal
which the shareholder has not previously sought to include in the Company's
proxy statement by December 28, 2000, the management proxies will be allowed to
use their discretionary authority as outlined above.
PROPOSAL TO ADOPT THE 2000 STOCK OPTION AND COMPENSATION PLAN
PROPOSAL NO. 2
On March 11, 2000, the Board of Directors of the Company unanimously
approved the 2000 Stock Option and Compensation Plan (the "Plan"), subject to
approval by the Company's shareholders. A complete text of the Plan is set forth
as Exhibit A to this Proxy Statement. The brief summary of the Plan which
follows is qualified in its entirety by reference to the complete text of the
plan, a copy of which is attached to this Proxy Statement as Exhibit A.
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GENERAL. The purpose of the Plan is to increase shareholder value and
to advance the interests of Raven by furnishing a variety of economic incentives
("Incentives") designed to attract, retain and motivate employees of Raven.
The Plan provides that a committee (the "Committee") composed of at
least two members of the Board of Directors of Raven who have not received
incentives under the Plan or any other plan of Raven for at least one year may
grant Incentives to employees in the following forms: (a) stock options; (b)
stock appreciation rights; (c) stock awards; (d) restricted stock; (e)
performance shares; and (f) cash awards. Incentives may be granted only to
employees of Raven (including officers and directors of Raven, but excluding
directors of Raven who are not also employees of or consultants to Raven)
selected from time to time by the Committee.
The number of shares of Raven Common Stock which may be issued under
the Plan if this proposed amendment is approved may not exceed 250,000 shares,
subject to adjustment in the event of a merger, recapitalization or other
corporate restructuring. This represents approximately 6.7% of the outstanding
shares of Raven Common Stock on the Record Date.
STOCK OPTIONS. Under the Plan, the Committee may grant non-qualified
and incentive stock options to eligible employees to purchase shares of Common
Stock from Raven. The Plan confers on the Committee discretion, with respect to
any such stock option, to determine the number and purchase price of the shares
subject to the option, the term of each option and the time or times during its
term when the option becomes exercisable. The purchase price for incentive stock
options may not be less than the fair market value of the shares subject to the
option on the date of grant. The number of shares subject to an option will be
reduced proportionately to the extent that the optionee exercises a related
Stock Appreciation Right ("SAR"). The term of a non-qualified option may not
exceed 10 years and one day from the date of grant and the term of an incentive
stock option may not exceed 10 years from the date of grant. Any option shall
become immediately exercisable in the event of specified changes in corporate
ownership or control. The Committee may accelerate the exercisability of any
option or may determine to cancel stock options in order to make a participant
eligible for the grant of an option at a lower price. The Committee may approve
the purchase by Raven of an unexercised stock option for the difference between
the exercise price and the fair market value of the shares covered by such
option.
The option price may be paid in cash, check, bank draft or by delivery
of shares of Common Stock valued at their fair market value at the time of
exercise or by withholding from the shares issuable upon exercise of the option
shares of Common Stock valued at their fair market value or as otherwise
authorized by the Committee.
In the event that an optionee ceases to be an employee of Raven for any
reason, including death, any stock option or unexercised portion thereof which
was otherwise exercisable on the date of termination of employment shall expire
at the time or times established by the Committee.
STOCK APPRECIATION RIGHTS. A stock appreciation right or SAR is a right
to receive, without payment to Raven, a number of shares, cash or any
combination thereof, the amount of which is determined pursuant to the formula
described below. An SAR may be granted with respect to any stock option granted
under the Plan, or alone, without reference to any stock option. An SAR granted
with respect to any stock option may be granted concurrently with the grant of
such option or at such later time as determined by the Committee and as to all
or any portion of the shares subject to the option.
The Plan confers on the Committee discretion to determine the number of
shares as to which an SAR will relate as well as the duration and exercisability
of an SAR. In the case of an SAR granted with respect to a stock option, the
number of shares of Common Stock to which the SAR pertains will be reduced in
the same proportion that the holder exercises the related option. The term of an
SAR may not exceed ten years and one day from the date of grant. Unless
otherwise provided by the Committee, an SAR will be exercisable for the same
time period as the stock option to which it relates is exercisable. Any SAR
shall become immediately exercisable in the event of specified changes in
corporate
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ownership or control. The Committee may accelerate the exercisability of any
SAR.
Upon exercise of an SAR, the holder is entitled to receive an amount
which is equal to the aggregate amount of the appreciation in the shares of
Common Stock as to which the SAR is exercised. For this purpose, the
"appreciation" in the shares consists of the amount by which the fair market
value of the shares of Common Stock on the exercise date exceeds (a) in the case
of an SAR related to a stock option, the exercise price of the shares under the
option or (b) in the case of an SAR granted alone, without reference to a
related stock option, an amount determined by the Committee at the time of
grant. The Committee may pay the amount of this appreciation to the holder of
the SAR by the delivery of Common Stock, cash, or any combination of Common
Stock and cash.
RESTRICTED STOCK. Restricted stock consists of the sale or transfer by
Raven to an eligible employee of one or more shares of Common Stock which are
subject to restrictions on their sale or other transfer by the employee. The
price at which restricted stock will be sold will be determined by the
Committee, and it may vary from time to time and among employees and may be less
than the fair market value of the shares at the date of sale. All shares of
restricted stock will be subject to such restrictions as the Committee may
determine. Subject to these restrictions and the other requirements of the Plan,
a participant receiving restricted stock shall have all of the rights of a
shareholder as to those shares.
STOCK AWARDS. Stock awards consist of the transfer by Raven to an
eligible employee of shares of Common Stock, without payment, as additional
compensation for services to Raven. The number of shares transferred pursuant to
any stock award will be determined by the Committee.
PERFORMANCE SHARES. Performance shares consist of the grant by Raven to
an eligible employee of a contingent right to receive cash or payment of shares
of Common Stock. The performance shares shall be paid in shares of Common Stock
to the extent performance objectives set forth in the grant are achieved. The
number of shares granted and the performance criteria will be determined by the
Committee.
CASH AWARDS. A cash award consists of a monetary payment made by Raven
to an eligible employee as additional compensation for his services to Raven.
Payment may depend on the achievement of specified performance objectives. The
amount of any monetary payment constituting a cash award shall be determined by
the Committee.
NON-TRANSFERABILITY OF MOST INCENTIVES. No stock option, SAR,
performance share or restricted stock granted under the Plan will be
transferable by its holder, except in the event of the holder's death, by will
or the laws of descent and distribution. During an employee's lifetime, an
Incentive may be exercised only by him or her or by his or her guardian or legal
representative.
AMENDMENT OF THE PLAN. The Raven Board may amend or discontinue the
Plan at any time. However, no such amendment or discontinuance may, subject to
adjustment in the event of a merger, recapitalization, or other corporate
restructuring, (a) change or impair, without the consent of the recipient
thereof, an Incentive previously granted, (b) materially increase the maximum
number of shares of Raven Common Stock which may be issued to all employees
under the Raven Option Plan, (c) materially change or expand the types of
Incentives that may be granted under the Plan, (d) materially modify the
requirements as to eligibility for participation in the Plan, or (e) materially
increase the benefits accruing to participants. Certain Plan amendments require
shareholder approval, including amendments which would materially increase
benefits accruing to participants, increase the number of securities issuable
under the Plan, or change the requirements for eligibility under the Plan.
FEDERAL INCOME TAX CONSEQUENCES. The following discussion sets forth
certain United States income tax considerations in connection with any
Incentives granted under the Raven Option Plan. These tax considerations are
stated in general terms and are based on the Internal Revenue Code and judicial
and administrative interpretations thereof (the "Code"). This discussion does
not address state or local tax considerations with respect to the receipt,
exercise or ownership of such Incentives. Moreover, the tax considerations
relevant to receipt, exercise or ownership
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of such Incentives Common Stock may vary depending on a holder's particular
status.
Under existing Federal income tax provisions, an employee who receives
a stock option or performance shares or an SAR under the Plan or who purchases
or receives shares of restricted stock under the Plan which are subject to
restrictions which create a "substantial risk of forfeiture" (within the meaning
of section 83 of the Code) will not normally realize any income, nor will Raven
normally receive any deduction for federal income tax purposes in the year such
Incentive is granted. An employee who receives a stock award under the Plan
consisting of shares of Common Stock will realize ordinary income in the year of
the award in an amount equal to the fair market value of the shares of Common
Stock covered by the award on the date it is made, and Raven will be entitled to
a deduction equal to the amount the employee is required to treat as ordinary
income. An employee who receives a cash award will realize ordinary income in
the year the award is paid equal to the amount thereof, and the amount of the
cash will be deductible by Raven.
When a non-qualified stock option granted pursuant to the Plan is
exercised, the employee will realize ordinary income measured by the difference
between the aggregate purchase price of the shares of Common Stock as to which
the option is exercised and the aggregate fair market value of shares of the
Common Stock on the exercise date, and Raven will be entitled to a deduction in
the year the option is exercised equal to the amount the employee is required to
treat as ordinary income.
Options which qualify as incentive stock options are entitled to
special tax treatment. Under existing federal income tax law, if shares
purchased pursuant to the exercise of such an option are not disposed of by the
optionee within two years from the date of granting of the option or within one
year after the transfer of the shares to the optionee, whichever is longer, then
(i) no income will be recognized to the optionee upon the exercise of the
option; (ii) any gain or loss will be recognized to the optionee only upon
ultimate disposition of the shares and, assuming the shares constitute capital
assets in the optionee's hands, will be treated as long-term capital gain or
loss; (iii) the optionee's basis in the shares purchased will be equal to the
amount of cash paid for such shares; and (iv) Raven will not be entitled to a
federal income tax deduction in connection with the exercise of the option.
Raven understands that the difference between the option price and the fair
market value of the shares acquired upon exercise of an incentive stock option
will be treated as an "item of tax preference" for purposes of the alternative
minimum tax. In addition, incentive stock options exercised more than three
months after retirement are treated as non-qualified options.
Raven further understands that if the optionee disposes of the shares
acquired by exercise of an incentive stock option before the expiration of the
holding period described above, the optionee must treat as ordinary income in
the year of that disposition an amount equal to the difference between the
optionee's basis in the shares and the lesser of the fair market value of the
shares on the date of exercise or the selling price. In addition, Raven will be
entitled to a deduction equal to the amount the employee is required to treat as
ordinary income.
If the exercise price of an option is paid by surrender of previously
owned shares, the basis of the shares received in replacement of the previously
owned shares is carried over. If the option is a non-qualified option, the gain
recognized on exercise is added to the basis. If the option is an incentive
stock option, the optionee will recognize gain if the shares surrendered were
acquired through the exercise of an incentive stock option and have not been
held for the applicable holding period. This gain will be added to the basis of
the shares received in replacement of the previously owned shares.
When a stock appreciation right granted pursuant to the Plan is
exercised, the employee will realize ordinary income in the year the right is
exercised equal to the value of the appreciation which he is entitled to receive
pursuant to the formula described above, and Raven will be entitled to a
deduction in the same year and in the same amount.
An employee who receives restricted stock or performance shares subject
to restrictions which create a "substantial risk of forfeiture" (within the
meaning of section 83 of the Code) will normally realize taxable income on the
date the shares become transferable or no longer subject to substantial risk of
forfeiture or on the date of their
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earlier disposition. The amount of such taxable income will be equal to the
amount by which the fair market value of the shares of Common Stock on the date
such restrictions lapse (or any earlier date on which the shares are disposed
of) exceeds their purchase price, if any. An employee may elect, however, to
include in income in the year of purchase or grant the excess of the fair market
value of the shares of Common Stock (without regard to any restrictions) on the
date of purchase or grant over its purchase price. Raven will be entitled to a
deduction for compensation paid in the same year and in the same amount as
income is realized by the employee.
The foregoing does not purport to be a complete description of the
Federal income tax aspects or consequences of the Incentives. The above
discussion is very general in nature and may omit certain information that may
affect the tax computations of certain persons receiving such Incentives. Such
persons should, therefore, consult their tax advisors with respect to any
questions they may have regarding the above described matters, as well as any
state and local tax consequences.
PROXIES AND VOTING
The affirmative vote of the holders of the greater of (a) a majority of
the outstanding shares of common stock of the Company present and entitled to
vote on the plan or (b) a majority of the voting power of the minimum number of
shares entitled to vote that would constitute a quorum for transaction of
business at the meeting, is required for adoption of the plan. A shareholder who
abstains with respect to the adoption of the plan is considered to be present
and entitled to vote on the plan 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 plan, shall
not be considered present and entitled to vote on the plan.
All shares represented by proxies will be voted FOR the adoption of the
plan unless a contrary choice is specified.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT YOU VOTE FOR
APPROVAL AND ADOPTION OF THE PLAN.
OTHER MATTERS
BOARD OF DIRECTORS AND COMMITTEES. The Board of Directors held six
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
$7,200, 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 $7,200.
The Company's Audit Committee, which consisted of Messrs. Kirby,
Everist and Bour, had two meetings during the fiscal year ended January 31,
2000. 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
independent auditors assessment of the adequacy of the Company's system of
internal accounting controls.
The Compensation Committee, which consists of Messrs. Hoigaard, and
Griffin, had two meetings during the fiscal year ended January 31, 2000. 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 2000. No executive officer of the Company served as a
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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 2000.
INDEPENDENT AUDITORS. The Board of Directors selected the firm of
PricewaterhouseCoopers LLP as auditors to the Company for the year ended January
31, 2000. PricewaterhouseCoopers LLP, independent certified public accountants,
have audited the Company's financial statements for the past 39 years. A
representative of PricewaterhouseCoopers LLP 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 SEC 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, 2000 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.
Thomas Iacarella, Secretary
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EXHIBIT A
RAVEN INDUSTRIES, INC.
2000 STOCK OPTION AND COMPENSATION PLAN
1. Purpose. The purpose of the 2000 Stock Option and Compensation Plan
(the "Plan") of Raven Industries, Inc. (the "Company") is to increase
shareholder value and to advance the interests of the Company by attracting,
retaining and motivating employees and certain key consultants of the Company by
furnishing opportunities to purchase or receive shares of Common Stock, $1.00
par value, of the Company ("Common Stock") pursuant to the Plan.
2. Administration. The Plan shall be administered by the Board of
Directors or by the compensation committee (the "Committee") of the Board of
Directors of the Company. The Committee shall consist of not less than two
directors who shall be appointed from time to time by the Board, each of which
such appointees shall be a "disinterested person" within the meaning of Rule
16b-3 of the Securities Exchange Act of 1934, and the regulations promulgated
thereunder (the "1934 Act"). The Board of Directors of the Company may from time
to time appoint members of the Committee in substitution for, or in addition to,
members previously appointed, and may fill vacancies, however caused, in the
Committee. The Committee shall select one of its members as its chairman and
shall hold its meetings at such times and places as it shall deem advisable. A
majority of the Committee's members shall constitute a quorum. All action of the
Committee shall be taken by the majority of its members. Any action may be taken
by a written instrument signed by majority of the members and actions so taken
shall be fully effective as if it had been made by a majority vote at a meeting
duly called and held. The Committee may appoint a secretary, shall keep minutes
of its meetings and shall make such rules and regulations for the conduct of its
business as it shall deem advisable. The Committee shall have complete authority
to award Incentives under the Plan, to interpret the Plan, and to make any other
determination which it believes necessary and advisable for the proper
administration of the Plan. The Committee's decisions and matters relating to
the Plan shall be final and conclusive on the Company and its participants.
3. Eligible Participants. Employees of or consultants to the Company or
its subsidiaries or affiliates (including officers and directors, but excluding
directors who are not also employees of or consultants to the Company or its
subsidiaries or affiliates), shall become eligible to receive Incentives under
the Plan when designated by the Committee. Participants may be designated
individually or by groups or categories (for example, by pay grade) as the
Committee deems appropriate. Participation by officers of the Company or its
subsidiaries or affiliates and any performance objectives relating to such
officers must be approved by the Committee. Participation by others and any
performance objectives relating to others may be approved by groups or
categories (for example, by pay grade) and authority to designate participants
who are not officers and to set or modify such targets may be delegated.
4. Types of Incentives. Incentives under the Plan may be granted in any
one or a combination of the following forms: (a) incentive stock options and
non-statutory stock options (section 6); (b) stock appreciation rights ("SARs")
(section 7); (c) stock awards (section 8); (d) restricted stock (section 8); and
(e) performance shares (section 9).
5. Shares Subject to the Plan.
5.1. Number of Shares. Subject to adjustment as provided in
Section 10.6, the number of shares of Common Stock which may be issued
under the Plan shall not exceed 250,000 shares of Common Stock.
5.2. Cancellation. To the extent that cash in lieu of shares
of Common Stock is delivered upon the exercise of a SAR pursuant to
Section 7.4, the Company shall be deemed, for purposes of applying the
limitation on the number of shares, to have issued the greater of the
number of shares of Common Stock which it was entitled to issue upon
such exercise or on the exercise of any related option. In the event
that a stock option or SAR granted hereunder expires or is terminated
or canceled unexercised as to any shares of Common Stock, such shares
may again be issued under the Plan either pursuant to stock options,
SARs or otherwise. In the event that shares of Common Stock are issued
as restricted stock or pursuant to a stock award and thereafter are
forfeited or reacquired by the Company pursuant to rights reserved upon
issuance thereof, such forfeited and reacquired
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shares may again be issued under the Plan, either as restricted stock,
pursuant to stock awards or otherwise. The Committee may also determine
to cancel, and agree to the cancellation of, stock options in order to
make a participant eligible for the grant of a stock option at a lower
price than the option to be canceled.
5.3. Type of Common Stock. Common Stock issued under the Plan
in connection with stock options, SARs, performance shares, restricted
stock or stock awards, may be authorized and unissued shares.
6. Stock Options. A stock option is a right to purchase shares of
Common Stock from the Company. Each stock option granted by the Committee under
this Plan shall be subject to the following terms and conditions:
6.1. Price. The option price per share shall be determined by
the Committee, provided that such price shall not be below the Fair
Market Value of the Common Stock subject to the adjustment under
Section 10.6.
6.2. Number. The number of shares of Common Stock subject to
the option shall be determined by the Committee, subject to adjustment
as provided in Section 10.6. The number of shares of Common Stock
subject to a stock option shall be reduced in the same proportion that
the holder thereof exercises a SAR if any SAR is granted in conjunction
with or related to the stock option.
6.3. Duration and Time for Exercise. Subject to earlier
termination as provided in Section 10.4, the term of each stock option
shall be determined by the Committee but shall not exceed ten years and
one day from the date of grant. Each stock option shall become
exercisable at such time or times during its term as shall be
determined by the Committee at the time of grant. The Committee may
accelerate the exercisability of any stock option. Subject to the
foregoing and with the approval of the Committee, all or any part of
the shares of Common Stock with respect to which the right to purchase
has accrued may be purchased by the Company at the time of such accrual
or at any time or times thereafter during the term of the option.
6.4. Manner of Exercise. A stock option may be exercised, in
whole or in part, by giving written notice to the Company, specifying
the number of shares of Common Stock to be purchased and accompanied by
the full purchase price for such shares. The option price shall be
payable in United States dollars upon exercise of the option and may be
paid by cash; uncertified or certified check; bank draft; by delivery
of shares of Common Stock in payment of all or any part of the option
price, which shares shall be valued for this purpose at the Fair Market
Value on the date such option is exercised; by instructing the Company
to withhold from the shares of Common Stock issuable upon exercise of
the stock option shares of Common Stock in payment of all or any part
of the option price, which shares shall be valued for this purpose at
the Fair Market Value or in such other manner as may be authorized from
time to time by the Committee. Prior to the issuance of shares of
Common Stock upon the exercise of a stock option, a participant shall
have no rights as a shareholder.
6.5. Incentive Stock Options. Notwithstanding anything in the
Plan to the contrary, the following additional provisions shall apply
to the grant of stock options which are intended to qualify as
Incentive Stock Options (as such term is defined in Section 422 of the
Internal Revenue Code of 1986, as amended):
(a) The aggregate Fair Market Value (determined as of
the time the option is granted) of the shares of Common Stock
with respect to which Incentive Stock Options are exercisable
for the first time by any participant during any calendar year
(under all of the Company's plans) shall not exceed $100,000.
(b) Any Incentive Stock Option certificate authorized
under the Plan shall contain such other provisions as the
Committee shall deem advisable, but shall in all events be
consistent with and contain all provisions required in order
to qualify the options as Incentive Stock Options.
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(c) All Incentive Stock Options must be granted
within ten years from the earlier of the date on which this
Plan was adopted by Board of Directors or the date this Plan
was approved by the shareholders.
(d) Unless sooner exercised, all Incentive Stock
Options shall expire no later than 10 years after the date of
grant.
(e) The option price for Incentive Stock Options
shall be not less than the Fair Market Value of the Common
Stock subject to the option on the date of grant.
(f) No Incentive Stock Options shall be granted to
any participant who, at the time such option is granted, would
own (within the meaning of Section 422 of the Code) stock
possessing more than 10% of the total combined voting power of
all classes of stock of the employer corporation or of its
parent or subsidiary corporation.
7. Stock Appreciation Rights. A SAR is a right to receive, without
payment to the Company, a number of shares of Common Stock, cash or any
combination thereof, the amount of which is determined pursuant to the formula
set forth in Section 7.4. A SAR may be granted (a) with respect to any stock
option granted under this Plan, either concurrently with the grant of such stock
option or at such later time as determined by the Committee (as to all or any
portion of the shares of Common Stock subject to the stock option), or (b)
alone, without reference to any related stock option. Each SAR granted by the
Committee under this Plan shall be subject to the following terms and
conditions:
7.1. Number. Each SAR granted to any participant shall relate
to such number of shares of Common Stock as shall be determined by the
Committee, subject to adjustment as provided in Section 10.6. In the
case of an SAR granted with respect to a stock option, the number of
shares of Common Stock to which the SAR pertains shall be reduced in
the same proportion that the holder of the option exercises the related
stock option.
7.2. Duration. Subject to earlier termination as provided in
Section 10.4, the term of each SAR shall be determined by the Committee
but shall not exceed ten years and one day from the date of grant.
Unless otherwise provided by the Committee, each SAR shall become
exercisable at such time or times, to such extent and upon such
conditions as the stock option, if any, to which it relates is
exercisable. No SAR may be exercised during the first twelve months of
its term. Except as provided in the preceding sentence, the Committee
may in its discretion accelerate the exercisability of any SAR.
7.3. Exercise. A SAR may be exercised, in whole or in part, by
giving written notice to the Company, specifying the number of SARs
which the holder wishes to exercise. Upon receipt of such written
notice, the Company shall, within 90 days thereafter, deliver to the
exercising holder certificates for the shares of Common Stock or cash
or both, as determined by the Committee, to which the holder is
entitled pursuant to Section 7.4.
7.4. Payment. Subject to the right of the Committee to deliver
cash in lieu of shares of Common Stock (which, as it pertains to
officers and directors of the Company, shall comply with all
requirements of the 1934 Act), the number of shares of Common Stock
which shall be issuable upon the exercise of a SAR shall be determined
by dividing:
(a) the number of shares of Common Stock as to which
the SAR is exercised multiplied by the amount of the
appreciation in such shares (for this purpose, the
"appreciation" shall be the amount by which the Fair Market
Value of the shares of Common Stock subject to the SAR on the
exercise date exceeds (1) in the case of a SAR related to a
stock option, the purchase price of the shares of Common Stock
under the stock option or (2) in the case of a SAR granted
alone, without reference to a related stock option, an amount
which shall be determined by the Committee at the time of
grant, subject to adjustment under Section 10.6); by
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(b) the Fair Market Value of a share of Common Stock
on the exercise date.
In lieu of issuing shares of Common Stock upon the exercise of
a SAR, the Committee may elect to pay the holder of the SAR cash equal
to the Fair Market Value on the exercise date of any or all of the
shares which would otherwise be issuable. No fractional shares of
Common Stock shall be issued upon the exercise of a SAR; instead, the
holder of the SAR shall be entitled to receive a cash adjustment equal
to the same fraction of the Fair Market Value of a share of Common
Stock on the exercise date or to purchase the portion necessary to make
a whole share at its Fair Market Value on the date of exercise.
8. Stock Awards and Restricted Stock. A stock award consists of the
transfer by the Company to a participant of shares of Common Stock, without
other payment therefor, as additional compensation for services to the Company.
A share of restricted stock consists of shares of Common Stock which are sold or
transferred by the Company to a participant at a price determined by the
Committee (which price shall be at least equal to the minimum price required by
applicable law for the issuance of a share of Common Stock) and subject to
restrictions on their sale or other transfer by the participant. The transfer of
Common Stock pursuant to stock awards and the transfer and sale of restricted
stock shall be subject to the following terms and conditions:
8.1. Number of Shares. The number of shares to be transferred
or sold by the Company to a participant pursuant to a stock award or as
restricted stock shall be determined by the Committee.
8.2. Sale Price. The Committee shall determine the price, if
any, at which shares of restricted stock shall be sold to a
participant, which may vary from time to time and among participants
and which may be below the Fair Market Value of such shares of Common
Stock at the date of sale.
8.3. Restrictions. All shares of restricted stock transferred
or sold hereunder shall be subject to such restrictions as the
Committee may determine, including, without limitation any or all of
the following:
(a) a prohibition against the sale, transfer, pledge
or other encumbrance of the shares of restricted stock, such
prohibition to lapse at such time or times as the Committee
shall determine (whether in annual or more frequent
installments, at the time of the death, disability or
retirement of the holder of such shares, or otherwise);
(b) a requirement that the holder of shares of
restricted stock forfeit, or (in the case of shares sold to a
participant) resell back to the Company at his or her cost or
other specified amount as the Board or the Committee shall
determine, all or a part of such shares in the event of
termination of his or her employment or consulting engagement
during any period in which such shares are subject to
restrictions;
(c) such other conditions or restrictions as the
Committee may deem advisable.
8.4. Escrow. In order to enforce the restrictions imposed by
the Committee pursuant to Section 8.3, the participant receiving
restricted stock shall enter into an agreement with the Company setting
forth the conditions of the grant. Shares of restricted stock shall be
registered in the name of the participant and deposited, together with
a stock power endorsed in blank, with the Company. Each such
certificate shall bear a legend in substantially the following form:
The shares represented by this certificate have not been
registered under the Securities Act of 1933 or the securities
law of any state. The shares have been acquired for investment
and without a view to their distribution and may not be sold
or otherwise disposed of in the absence of any effective
registration statement for the shares under the Securities Act
of 1933 or unless an exemption from registration is available
under the securities laws.
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The transferability of this certificate and the shares of
Common Stock represented by it are subject to the terms and
conditions (including conditions of forfeiture) contained in
the 2000 Employee Stock Option and Compensation Plan of Raven
Industries, Inc. (the "Company"), and an agreement entered
into between the registered owner and the Company. A copy of
the Plan and the agreement is on file in the office of the
secretary of the Company.
8.5. End of Restrictions. Subject to Section 10.5, at the end
of any time period during which the shares of restricted stock are
subject to forfeiture and restrictions on transfer, such shares will be
delivered free of all restrictions to the participant or to the
participant's legal representative, beneficiary or heir.
8.6. Shareholder. Subject to the terms and conditions of the
Plan, each participant receiving restricted stock shall have all the
rights of a shareholder with respect to shares of stock during any
period in which such shares are subject to forfeiture and restrictions
on transfer, including without limitation, the right to vote such
shares. Dividends paid in cash or property other than Common Stock with
respect to shares of restricted stock shall be paid to the participant
currently.
9. Performance Shares. A performance share consists of an award which
shall be paid in shares of Common Stock, as described below. The grant of a
performance share shall be subject to such terms and conditions as the Committee
deems appropriate, including the following:
9.1. Performance Objectives. Each performance share will be
subject to performance objectives for the Company or one of its
operating units to be achieved by the end of a specified period. The
number of performance shares granted shall be determined by the
Committee and may be subject to such terms and conditions, as the
Committee shall determine. If the performance objectives are achieved,
each participant will be paid in shares of Common Stock or cash. If
such objectives are not met, each grant of performance shares may
provide for lesser payments in accordance with formulas established in
the award.
9.2. Not Shareholder. The grant of performance shares to a
participant shall not create any rights in such participant as a
shareholder of the Company, until the payment of shares of Common Stock
with respect to an award.
9.3. No Adjustments. No adjustment shall be made in
performance shares granted on account of cash dividends which may be
paid or other rights which may be issued to the holders of Common Stock
prior to the end of any period for which performance objectives were
established.
9.4. Expiration of Performance Share. If any participant's
employment or consulting engagement with the Company is terminated for
any reason other than normal retirement, death or disability prior to
the achievement of the participant's stated performance objectives, all
the participant's rights on the performance shares shall expire and
terminate unless otherwise determined by the Committee. In the event of
termination of employment by reason of death, disability, or normal
retirement, the Committee, in its own discretion may determine what
portions, if any, of the performance shares should be paid to the
participant.
10. General.
10.1. Effective Date. The Plan will become effective upon its
approval by the affirmative vote of the holders of a majority of the
voting stock of the Company at a meeting of its stockholders. Unless
approved within one year after the date of the Plan's adoption by the
Board of Directors, the Plan shall not be effective for any purpose.
10.2. Duration. The Plan shall remain in effect until all
Incentives granted under the Plan have either been satisfied by the
issuance of shares of Common Stock or the payment of cash or been
terminated under the terms of the Plan and all restrictions imposed on
shares of Common Stock in connection with their issuance
21
<PAGE>
under the Plan have lapsed. No Incentives may be granted under the Plan
after the tenth anniversary of the date the Plan is approved by the
shareholders of the Company.
10.3. Non-transferability of Incentives. No stock option, SAR,
restricted stock or performance award may be transferred, pledged or
assigned by the holder thereof (except, in the event of the holder's
death, by will or the laws of descent and distribution to the limited
extent provided in the Plan or in the Incentive) or pursuant to a
qualified domestic relations order as defined by the Code or Title I of
the Employee Retirement Income Security Act, or the rules thereunder,
and the Company shall not be required to recognize any attempted
assignment of such rights by any participant. Notwithstanding the
preceding sentence, stock options may be transferred by the holder
thereof to Employee's spouse, children, grandchildren or parents
(collectively, the "Family Members"), to trusts for the benefit of
Family Members, to partnerships or limited liability companies in which
Family Members are the only partners or shareholders, or to entities
exempt from federal income taxation pursuant to Section 501(c)(3) of
the Internal Revenue Code of 1986, as amended. During a participant's
lifetime, an Incentive may be exercised only by him or her, by his or
her guardian or legal representative or, in the case of stock options,
by the transferees permitted by the preceding sentence.
10.4. Effect of Termination of Employment or Death. In the
event that a participant ceases to be an employee of or consultant to
the Company for any reason, including death, any Incentives may be
exercised or shall expire at such times as may be determined by the
Committee.
10.5. Additional Condition. Notwithstanding anything in this
Plan to the contrary: (a) the Company may, if it shall determine it
necessary or desirable for any reason, at the time of award of any
Incentive or the issuance of any shares of Common Stock pursuant to any
Incentive, require the recipient of the Incentive, as a condition to
the receipt thereof or to the receipt of shares of Common Stock issued
pursuant thereto, to deliver to the Company a written representation of
present intention to acquire the Incentive or the shares of Common
Stock issued pursuant thereto for his own account for investment and
not for distribution; and (b) if at any time the Company further
determines, in its sole discretion, that the listing, registration or
qualification (or any updating of any such document) of any Incentive
or the shares of Common Stock issuable pursuant thereto is necessary on
any securities exchange or under any federal or state securities or
blue sky law, or that the consent or approval of any governmental
regulatory body is necessary or desirable as a condition of, or in
connection with the award of any Incentive, the issuance of shares of
Common Stock pursuant thereto, or the removal of any restrictions
imposed on such shares, such Incentive shall not be awarded or such
shares of Common Stock shall not be issued or such restrictions shall
not be removed, as the case may be, in whole or in part, unless such
listing, registration, qualification, consent or approval shall have
been effected or obtained free of any conditions not acceptable to the
Company.
10.6. Adjustment. In the event of any merger, consolidation or
reorganization of the Company with any other corporation or
corporations, there shall be substituted for each of the shares of
Common Stock then subject to the Plan, including shares subject to
restrictions, options, or achievement of performance share objectives,
the number and kind of shares of stock or other securities to which the
holders of the shares of Common Stock will be entitled pursuant to the
transaction. In the event of any recapitalization, stock dividend,
stock split, combination of shares or other change in the Common Stock,
the number of shares of Common Stock then subject to the Plan,
including shares subject to restrictions, options or achievements of
performance shares, shall be adjusted in proportion to the change in
outstanding shares of Common Stock. In the event of any such
adjustments, the purchase price of any option, the performance
objectives of any Incentive, and the shares of Common Stock issuable
pursuant to any Incentive shall be adjusted as and to the extent
appropriate, in the discretion of the Committee, to provide
participants with the same relative rights before and after such
adjustment.
10.7. Incentive Plans and Agreements. Except in the case of
stock awards or cash awards, the terms of each Incentive shall be
stated in a plan or agreement approved by the Committee. The Committee
may also determine to enter into agreements with holders of options to
reclassify or convert certain outstanding options,
22
<PAGE>
within the terms of the Plan, as Incentive Stock Options or as
non-statutory stock options and in order to eliminate SARs with respect
to all or part of such options and any other previously issued options.
10.8. Withholding.
(a) The Company shall have the right to withhold from
any payments made under the Plan or to collect as a condition
of payment, any taxes required by law to be withheld. At any
time when a participant is required to pay to the Company an
amount required to be withheld under applicable income tax
laws in connection with a distribution of Common Stock or upon
exercise of an option or SAR, the participant may satisfy this
obligation in whole or in part by electing (the "Election") to
have the Company withhold from the distribution shares of
Common Stock having a value up to the amount required to be
withheld. The value of the shares to be withheld shall be
based on the Fair Market Value of the Common Stock on the date
that the amount of tax to be withheld shall be determined
("Tax Date").
(b) Each Election must be made prior to the Tax Date.
The Committee may disapprove of any Election, may suspend or
terminate the right to make Elections, or may provide with
respect to any Incentive that the right to make Elections
shall not apply to such Incentive. An Election is irrevocable.
(c) If a participant is an officer or director of the
Company within the meaning of Section 16 of the 1934 Act, then
an Election must comply with all of the requirements of the
1934 Act.
10.9. No Continued Employment, Engagement or Right to
Corporate Assets. No participant under the Plan shall have any right,
because of his or her participation, to continue in the employ of, or
to continue his or her consulting engagement for, the Company for any
period of time or to any right to continue his or her present or any
other rate of compensation. Nothing contained in the Plan shall be
construed as giving an employee, a consultant, such person's
beneficiaries or any other person any equity or interests of any kind
in the assets of the Company or creating a trust of any kind or a
fiduciary relationship of any kind between the Company and any such
person.
10.10. Deferral Permitted. Payment of cash or distribution of
any shares of Common Stock to which a participant is entitled under any
Incentive shall be made as provided in the Incentive. Payment may be
deferred at the option of the participant if provided in the Incentive.
10.11. Amendment of the Plan. The Board may amend or
discontinue the Plan at any time. However, no such amendment or
discontinuance shall, subject to adjustment under Section 10.6, (a)
change or impair, without the consent of the recipient, an Incentive
previously granted, (b) increase the maximum number of shares of Common
Stock which may be issued to all participants under the Plan, (c)
change or expand the types of Incentives that may be granted under the
Plan, (d) change the class of persons eligible to receive Incentives
under the Plan, or (e) materially increase the benefits accruing to
participants under the Plan.
10.12 Immediate Acceleration of Incentives. Notwithstanding
any provision in this Plan or in any Incentive to the contrary, (a) the
restriction on all shares of restricted stock award shall lapse
immediately, (b) all outstanding options and SARs will become
exercisable immediately, and (c) all performance shares shall be deemed
to be met and payment made immediately. If any of the following events
occur unless otherwise determined by the Board of Directors and a
majority of the Continuing Directors (as defined below):
(1) any person or group of persons becomes the
beneficial owner of 30% or more of the voting power of the
Company entitled to vote for the election of directors;
23
<PAGE>
(2) a majority of the members of the Board of
Directors of the Company is replaced within the period of less
than two years by directors not nominated and approved by the
Board of Directors; or
(3) the shareholders of the Company approve an
agreement to merge or consolidate with or into another
corporation (unless, after such merger or consolidation, the
former shareholders of the Company own 51 percent or more of
the successor entity's voting equity securities) or an
agreement to sell or otherwise dispose of all or substantially
all of the Company's assets (including a plan of liquidation).
For purposes of this Section 10.12, beneficial ownership by a
person or group of persons shall be determined in accordance with
Regulation 13D (or any similar successor regulation) promulgated by the
Securities and Exchange Commission pursuant to the 1934 Act. Beneficial
ownership of more than 30% of an equity security may be established by
any reasonable method, but shall be presumed conclusively as to any
person who files a Schedule 13D report with the Securities and Exchange
Commission reporting such ownership. If the restrictions and
forfeitability periods are eliminated by reason of provision (1), the
limitations of this Plan shall not become applicable again should the
person cease to own 30% or more of any equity security of the Company.
For purposes of this Section 10.12, "Continuing Directors" are
directors (a) who were in office prior to the time of any of provisions
(1), (2) or (3) occurred or any person publicly announced an intention
to acquire 20% or more of any equity security of the Company, (b)
directors in office for a period of more than two years, and (c)
directors nominated and approved by the Continuing Directors.
10.13. Dilution and Other Adjustments. In the event of any
change in the outstanding Common Stock of the Company by reason of any
stock split, stock dividend, split-up, split-off, spin-off,
recapitalization, merger, consolidation, rights offering,
reorganization, combination or exchange of shares, a sale by the
Company of substantially all of its assets, any distribution to
shareholders other than a normal cash dividend, or other extraordinary
or unusual event, the number or kind of shares subject to an Incentive,
and the option price per share under all outstanding options shall be
automatically adjusted so that the proportionate interest of the
participant shall be maintained as before the occurrence of such event;
such adjustment in outstanding Incentives shall be made without change
in any option exercise price applicable to the unexercised portion of
such Incentive and with a corresponding adjustment in the option
exercise price per share, if any, and such adjustment shall be
conclusive and binding for all purposes of the Plan.
10.14. Definition of Fair Market Value. For purposes of this
Plan, the "Fair Market Value" of a share of Common Stock at a specified
date shall, unless otherwise expressly provided in this Plan, be the
amount which the Committee determines in good faith to be 100% of the
fair market value of such a share as of the date in question; provided,
however, that notwithstanding the foregoing, if such shares are listed
on a U.S. securities exchange or are quoted on the Nasdaq National
Market System or Nasdaq SmallCap Stock Market ("Nasdaq"), then Fair
Market Value shall be determined by reference to the last sale price of
a share of Common Stock on such U.S. securities exchange or Nasdaq on
the applicable date. If such U.S. securities exchange or Nasdaq is
closed for trading on such date, or if the Common Stock does not trade
on such date, then the last sale price used shall be the one on the
date the Common Stock last traded on such U.S. securities exchange or
Nasdaq.
24
<PAGE>
[LOGO]
RAVEN
INDUSTRIES
RAVEN INDUSTRIES, INC.
ANNUAL MEETING OF SHAREHOLDERS
WEDNESDAY, MAY 24, 2000
9:00 A.M.
RAMKOTA INN
38E AND I-29
SIOUX FALLS, SD 57104
[LOGO]
RAVEN RAVEN INDUSTRIES, INC.
INDUSTRIES BOX 5107, SIOUX FALLS, SD PROXY
- --------------------------------------------------------------------------------
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS.
The shares of stock you hold in your account or in a dividend reinvestment
account will be voted as you specify on the reverse side of this form.
IF NO CHOICE IS SPECIFIED, THE PROXY WILL BE VOTED "FOR" ITEMS 1 AND 2.
By signing the proxy, you hereby appoint Conrad J. Hoigaard and David A.
Christensen, or either of them, each with the power to appoint his substitute,
to represent and to vote all the shares of common stock of RAVEN INDUSTRIES,
INC. held by you on April 12, 2000, at the ANNUAL MEETING OF SHAREHOLDERS to be
held on May 24, 2000 and at any adjournments or postponements thereof.
NOTE: The proxies named above may choose to exercise cumulative voting in the
manner described in the accompanying Proxy Statement.
SEE REVERSE FOR VOTING INSTRUCTIONS.
<PAGE>
--------------------
COMPANY #
CONTROL #
THERE ARE THREE WAYS TO VOTE YOUR PROXY --------------------
YOUR TELEPHONE OR INTERNET VOTE AUTHORIZES THE NAMED PROXIES TO VOTE YOUR SHARES
IN THE SAME MANNER AS IF YOU MARKED, SIGNED AND RETURNED YOUR PROXY CARD.
VOTE BY PHONE -- TOLL FREE -- 1-800-240-6326 -- QUICK --- EASY --- IMMEDIATE
o Use any touch-tone telephone to vote your proxy 24 hours a day, 7 days a
week, until 12:00 p.m. on May 23, 2000.
o You will be prompted to enter your 3-digit Company Number and your 7-digit
Control Number which are located above.
o Follow the simple instructions the Voice provides you.
VOTE BY INTERNET -- HTTP://WWW.EPROXY.COM/RAVN/ -- QUICK --- EASY --- IMMEDIATE
o Use the Internet to vote your proxy 24 hours a day, 7 days a week, until
12:00 p.m. on May 23, 2000.
o You will be prompted to enter your 3-digit Company Number and your 7-digit
Control Number which are located above to obtain your records and create an
electronic ballot.
VOTE BY MAIL
Mark, sign and date your proxy card and return it in the postage-paid envelope
we've provided or return it to Raven Industries, c/o Shareowner Services(SM),
P.O. Box 64873, St. Paul, MN 55164-0873.
<TABLE>
<CAPTION>
\/ PLEASE DETACH HERE \/
- ------- -------
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR ITEMS 1 AND 2.
<S> <C> <C> <C> <C>
1. Election of directors: 01 Anthony W. Bour 05 Conrad J. Hoigaard [ ] Vote FOR all [ ] Vote WITHHELD
02 David A. Christensen 06 Kevin T. Kirby nominees (Except from all nominees
03 Thomas S. Everist 07 Ronald M. Moquist as indicated below)
04 Mark E. Griffin
-----------------------------------------------
(INSTRUCTIONS: TO WITHHOLD AUTHORITY TO VOTE FOR ANY INDICATED NOMINEE,
WRITE THE NUMBER(S) OF THE NOMINEE(S) IN THE BOX PROVIDED TO THE RIGHT.)
-----------------------------------------------
2. To approve the Company's 2000 Stock Option and Compensation Plan; [ ] For [ ] Against [ ] Abstain
3. Upon such other business as may properly come before the meeting.
NOTE: The proxies named above may choose to exercise cumulative voting in the manner described in the accompanying Proxy
Statement.
THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED AS DIRECTED OR, IF NO DIRECTION IS GIVEN, WILL BE VOTED FOR EACH PROPOSAL.
Address Change? Mark Box [ ] Indicate changes below:
Date _____________________________________
-----------------------------------------------
-----------------------------------------------
Signature(s) in Box
Please sign exactly as your name(s) appear on
Proxy. If held in joint tenancy, all persons
must sign. Trustees, administrators, etc.,
should include title and authority.
Corporations should provide full name of
corporation and title of authorized officer
signing the proxy.
</TABLE>
