<PAGE> 1
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:
<TABLE>
<S> <C>
[ ] Preliminary Proxy Statement [ ] Confidential, for Use of the Commission
Only (as permitted by Rule 14a-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
</TABLE>
CARAUSTAR 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)(1) and 0-11.
(1) Title of each class of securities to which transaction applies:
(2) Aggregate number of securities to which transaction 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> 2
(Caraustar Letterhead)
March 15, 1999
Dear Shareholder:
You are cordially invited to attend the Annual Meeting of Shareholders of
Caraustar Industries, Inc. The meeting will be held on Wednesday, April 21,
1999, at 10:00 A.M. at the Caraustar corporate headquarters, 3100 Washington
Street, Austell, Georgia.
The primary business of the meeting will be the election of directors and the
ratification of the selection of independent public accountants, as more fully
explained in the enclosed proxy statement.
During the meeting, we will also report to you on the condition and performance
of Caraustar and its subsidiaries, including developments during the past fiscal
year. You will have an opportunity to question management on matters that affect
the interest of all shareholders.
We hope to see you on April 21, 1999. Whether you plan to attend or not, please
complete, sign, date and return the enclosed proxy card as soon as possible in
the postage-paid envelope provided. Your vote is important. We appreciate your
continued interest and support of Caraustar.
Sincerely yours,
CARAUSTAR INDUSTRIES, INC.
<TABLE>
<S> <C>
/s/ Russell M. Robinson, II /s/ Thomas V. Brown
Russell M. Robinson, II Thomas V. Brown
Chairman of the Board President and Chief Executive Officer
</TABLE>
<PAGE> 3
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD WEDNESDAY, APRIL 21, 1999
The Annual Meeting of Shareholders of Caraustar Industries, Inc. ("Caraustar")
will be held on Wednesday, April 21, 1999, at 10:00 A.M., at the Caraustar
corporate headquarters, 3100 Washington Street, Austell, Georgia for the
following purposes:
1. To elect three Class I directors to serve until the 2002 Annual Meeting
of Shareholders.
2. To consider and act on a proposal to ratify the selection of Arthur
Andersen LLP as independent public accountants to audit the books of the
Company and its subsidiaries for the year ending December 31, 1999.
3. To transact such other business as may properly come before the meeting
or any adjournments thereof.
The Board of Directors has fixed the close of business on February 19, 1999, as
the record date for determination of shareholders entitled to notice of and to
vote at the meeting and any adjournments thereof.
By Order of the Board of Directors
/s/ MARINAN R. MAYS
Marinan R. Mays
Corporate Secretary and Manager,
Administrative Services
March 15, 1999
PLEASE COMPLETE AND RETURN THE ENCLOSED APPOINTMENT OF PROXY. IF YOU ATTEND THE
MEETING IN PERSON, YOU MAY WITHDRAW YOUR APPOINTMENT OF PROXY AND VOTE YOUR OWN
SHARES.
<PAGE> 4
CARAUSTAR INDUSTRIES, INC.
3100 WASHINGTON STREET
AUSTELL, GEORGIA 30106
---------------------
PROXY STATEMENT
---------------------
The following statement, first mailed on or about March 15, 1999, is
furnished in connection with the solicitation by the Board of Directors (the
"Board") of Caraustar Industries, Inc. (the "Company") of proxy appointment
forms to be used at the Annual Meeting of Shareholders of the Company to be held
on April 21, 1999, at 10:00 A.M., at the Caraustar corporate headquarters, 3100
Washington Street, Austell, Georgia and at any adjournment or adjournments
thereof.
Please complete, date and sign the accompanying proxy appointment form and
return it to ensure that your shares are voted at the meeting. You may revoke
the appointment of proxy at any time before it is exercised by submitting to the
Secretary of the Company written notice of revocation, a properly executed
appointment of proxy of a later date, or by attending the meeting and electing
to vote in person. All shares represented by valid proxy appointment forms
received pursuant to this solicitation, and not revoked before they are
exercised, will be voted in the manner specified therein. If no specification is
made, the proxies will vote in favor of the election to the Board of Directors
of the three Class I director nominees named in this Proxy Statement and a
proposal to ratify action taken by the Board of Directors in selecting Arthur
Andersen LLP as independent public accountants to audit the books of the Company
and its subsidiaries for the year ending December 31, 1999.
The Company will bear the entire cost of preparing this Proxy Statement and
of soliciting the enclosed proxy appointment forms. In addition to the
solicitation of the proxies by mail, the Company will request banks, brokers and
other record holders to send proxy appointment forms and proxy material to the
beneficial owners of the stock and secure their voting instructions, if
necessary. The Company will reimburse them for their reasonable expenses in so
doing. If necessary, the Company may use several of its regular employees, who
will not be specially compensated, to solicit proxy appointment forms from
shareholders, either personally or by telephone, telegram or special letter. The
Company has retained Corporate Investor Communications, Inc. to assist in the
solicitation at an estimated cost of $1,125.
February 19, 1999 has been fixed as the record date for determination of
shareholders entitled to notice of and to vote at such Annual Meeting and,
accordingly, only record holders of the Company's Common Shares, $.10 par value
(the "Common Shares") at the close of business on February 19, 1999 will be
entitled to notice of and to vote at the meeting.
The number of outstanding Common Shares entitled to vote as of the record
date was 24,699,291. Each Common Share is entitled to one vote. In accordance
with North Carolina law and the Company's bylaws, a majority of the outstanding
Common Shares represented in person or by proxy will constitute a quorum for the
election of directors and the ratification of the selection of accountants.
Abstentions and broker non-votes will be counted for purposes of determining the
presence or absence of a quorum. With regard to the election of directors, votes
may either be cast in favor of or withheld, and directors will be elected by a
plurality of the votes cast. Votes that are withheld will be excluded entirely
from the vote and will have no effect on the outcome of the election. The
selection of auditors will be approved if the number of votes cast for the
proposal exceeds the number of votes cast against the proposal. Thus,
abstentions and broker non-votes will have no effect on the outcome of the vote
on the proposals.
<PAGE> 5
SHARE OWNERSHIP
As of March 1, 1999, the only class of voting securities the Company had
issued and outstanding was its Common Shares. On that date there were 24,699,941
Common Shares outstanding. The following table sets forth the names of, and the
numbers and percentages of Common Shares beneficially owned as of March 1, 1999
by: (a) each person known to the Company to own beneficially 5% or more of the
Company's outstanding Common Shares; (b) each director and nominee; (c) each
executive officer of the Company identified below in the Summary Compensation
Table; and (d) all executive officers and directors of the Company as a group. A
"beneficial owner" of Common Shares is a person who has either the voting or
investment power, or both, alone or shared with others, over such Common Shares.
Each of the individuals listed below possesses sole voting and investment power
with respect to the shares listed opposite his or her name, unless noted
otherwise.
<TABLE>
<CAPTION>
SHARES BENEFICIALLY OWNED
--------------------------
NAME AND ADDRESS+ OF BENEFICIAL OWNER NUMBER(1) PERCENT
- ------------------------------------- ---------- --------
<S> <C> <C>
The Capital Group Companies, Inc.(2)........................ 1,539,300 6.2%
333 South Hope Street
Los Angeles, California 90071
Shapiro Capital Management Company, Inc.(3)................. 1,480,650 6.0%
Samuel R. Shapiro
3060 Peachtree Road, N.W.,
Atlanta, Georgia 30305
Thomas V. Brown(4).......................................... 225,988 *
Bob M. Prillaman............................................ 163,649 *
Jimmy A. Russell............................................ 130,970 *
Russell M. Robinson, II(5).................................. 109,357 *
Ralph M. Holt, Jr........................................... 95,590 *
H. Lee Thrash, III(6)....................................... 98,176 *
James L. Walden............................................. 63,385 *
Edward G. Schmitt........................................... 74,852 *
John D. Munford............................................. 6,203 *
James E. Rogers............................................. 5,818 *
James H. Hance, Jr.(7)...................................... 5,818 *
Dennis M. Love.............................................. 193 *
Directors and Executive Officers as a group (14 persons).... 1,000,541 4.0%
</TABLE>
- ---------------
+ Addresses are furnished only for each person known to the Company to own
beneficially 5% or more of the Company's outstanding Common Shares.
(1) Includes the following shares subject to stock options exercisable within 60
days after March 1, 1999: Mr. Brown -- 132,119; Mr. Walden -- 35,598; Mr.
Russell -- 16,819; Mr. Thrash -- 15,124; Mr. Schmitt -- 14,713; Mr.
Robinson -- 3,000; Mr. Holt -- 3,000; Mr. Rogers -- 3,000; Mr. Hance --
3,000; Mr. Munford -- 3,000; Mr. Love -- 0; Directors and Executive Officers
as a group -- 234,625.
(2) Based on a Schedule 13G filed with the Company on or about February 10,
1998. The Capital Group Companies, Inc. is the parent holding company of a
group of investment management companies that hold investment power and, in
some cases, voting power over the securities reported above. The investment
management companies provide investment advisory and management services for
their respective clients, which include registered investment companies and
institutional accounts. The Capital Group Companies, Inc. does not have
investment power or voting power over any of the securities reported above;
however, The Capital Group Companies, Inc. may be deemed to "beneficially
own" such securities within the meaning of Rule 13d-3 under the Securities
Exchange Act of 1934.
(3) Based on a Schedule 13G filed with the Company on or about February 4, 1999.
Shapiro Capital Management Company, Inc. is an investment adviser that
exercises voting and investment power with respect to these securities,
which are held for the account of its clients. Samuel R. Shapiro, who is
president, director and a majority shareholder of Shapiro Capital Management
Group, Inc., has also
2
<PAGE> 6
joined in filing the Schedule 13G to the extent that he may be deemed to
"beneficially own" these securities by virtue of his positions with Shapiro
Capital Management Group, Inc.
(4) Includes 24,200 shares registered in the name of Mr. Brown's wife.
(5) Includes 46,890 shares registered in the name of Mr. Robinson's wife.
(6) Includes 4,434 shares held by Mr. Thrash as custodian for his children and
148 shares held in his wife's Individual Retirement Account.
(7) Includes 2,000 shares held in a family partnership, over which Mr. Hance has
shared voting and investment power.
* Denotes ownership of less than 1% of the Company's Common Shares.
SHAREHOLDER RETURN
Performance Graph. The following graph compares the cumulative total
shareholder return on the Company's Common Shares for the years 1994 through
1998 with (a) the cumulative total return of the S&P 400 Index and (b) the
cumulative total return of the S&P Paper & Forest Products Index. All cumulative
returns assume the investment of $100.00 in each of the Company's Common Shares,
the S&P 400 Index and the S&P Paper & Forest Products Index on December 31, 1993
and assume the reinvestment of dividends.
COMPARISON OF CUMULATIVE TOTAL RETURN
AMONG CARAUSTAR INDUSTRIES, INC., S&P 400 INDEX &
S&P PAPER & FOREST PRODUCTS INDEX FOR THE YEARS 1994 THROUGH 1998
<TABLE>
<CAPTION>
S&P PAPER
& FOREST
MEASUREMENT PERIOD PRODUCTS
(FISCAL YEAR COVERED) CARAUSTAR S&P 400 INDEX
<S> <C> <C> <C>
DECEMBER 31, 1993 100.00 100.00 100.00
DECEMBER 31, 1994 135.48 103.89 104.22
DECEMBER 31, 1995 124.53 139.87 114.72
DECEMBER 31, 1996 210.77 172.06 126.92
DECEMBER 31, 1997 221.33 225.38 136.05
DECEMBER 31, 1998 189.16 301.24 138.61
</TABLE>
3
<PAGE> 7
ELECTION OF DIRECTORS
The Board of Directors currently consists of 9 members and is divided into
3 classes (I, II and III). Each newly elected class of directors will serve
terms of three years. The term of office for incumbent Class I directors will
expire at the 1999 Annual Meeting. The incumbent Class I directors are Thomas V.
Brown and Ralph M. Holt, Jr.
In February 1999 the Board of Directors appointed Mr. Dennis M. Love to the
Board to fill the vacancy created by the death of Ms. Maxine F. Forrest. North
Carolina law provides that the term of any director elected to fill a vacancy
expires at the next annual meeting of shareholders at which directors are
elected. Therefore, Mr. Love's term as a director expires at the 1999 Annual
Meeting of Shareholders. The Board has designated Mr. Love as a nominee for
Class I director. If Mr. Love is elected, his term will be extended to the same
length as the other Class I directors so that the term of all Class I Directors
will expire at the 2002 Annual Meeting of Shareholders.
It is intended that the persons named in the accompanying proxy appointment
form will vote only for the three nominees for Class I director, except to the
extent authority to so vote is withheld with respect to one or more nominees.
Although the Board does not expect that any of the nominees named will be
unavailable for election, in the event of a vacancy in the slate of nominees
occasioned by death or any other unexpected occurrence, it is intended that the
Common Shares represented by the accompanying proxy appointment form will be
voted for the election of a substitute nominee selected by the persons named in
the proxy appointment form.
During 1998 the Board of Directors held 7 meetings and on 1 occasion acted
by unanimous written consent.
The Board of Directors maintains an Audit Committee, on which Messrs.
Hance, Holt (chairman) and Rogers serve. The Audit Committee reviews the results
and scope of each audit, the service provided by the Company's independent
accountants and related-party transactions. The Audit Committee met 3 times in
1998.
The Board of Directors also has a Compensation and Employee Benefits
Committee, on which Messrs. Love, Munford and Rogers (Chairman) serve. The
Compensation and Employee Benefits Committee establishes and reviews the
compensation criteria and policies of the Company, and administers the Company's
1998 Key Employee Incentive Compensation Plan. The Compensation and Employee
Benefits Committee met 1 time in 1998.
Each director who is not an employee or former employee of the Company is
being paid (in quarterly installments) an annual retainer fee of $20,000 for
serving as a director. A non-executive Chairman of the Board is paid an annual
retainer fee of $55,000. Under the Company's 1996 Director Equity Plan, half of
these annual retainers are paid in Common Shares, and each such director
receives an annual grant of options to purchase 1,000 Common Shares valued at
the closing price of such shares on the last business day preceding the date of
grant. The chairmen of the Audit Committee, Compensation and Employee Benefits
Committee and Executive Committee also receive an annual retainer fee of $3,500.
Additionally, all directors who are not employees of the Company are paid a fee
of $1,500 per meeting for attending meetings of the Board of Directors, $500 for
participation in a telephonic Board meeting, $1,000 per committee meeting
attended and $250 per committee meeting by telephone conference. All directors
are reimbursed for ordinary and necessary out-of-pocket expenses incurred in
attending meetings of the Board of Directors.
The Board of Directors makes nominations for director candidates as
permitted by the Company's Bylaws. The Company's bylaws prescribe the procedure
a shareholder must follow to make nominations for director candidates, as
described below under "Proposals for 2000 Annual Meeting of Shareholders."
Each director and nominee's name, age, current principal occupation (which
has continued for at least five years unless otherwise indicated) and the name
and principal business of the corporation in which that occupation is carried
on, the year each incumbent was first elected to the Board, all positions and
offices presently held with the Company and directorships in other publicly held
companies are set forth below. None
4
<PAGE> 8
of the following nominees or directors is related (as first cousin or closer) by
blood, marriage or adoption to any other nominee, director or person who may be
deemed to be an executive officer of the Company.
CLASS I DIRECTORS
(Nominees for election to serve until 2002 Annual Meeting)
THOMAS V. BROWN (58), PRESIDENT AND CHIEF EXECUTIVE OFFICER, CARAUSTAR
INDUSTRIES, INC. Mr. Brown has served as President of the Company since January
1991 and as its Chief Executive Officer since October 1991. He has served as a
director since April 1991. Prior to joining the Company, Mr. Brown served as the
Vice President and General Manager, Industrial Packaging Division, of Jefferson
Smurfit Corporation, a recycled paperboard manufacturer, from October 1986
through December 1990. Mr. Brown also serves as a director of Mobile Energy
Services Company, L.L.C.
RALPH M. HOLT, JR.(67), CHAIRMAN AND CHIEF EXECUTIVE OFFICER, Holt Hosiery
Mills, Burlington, North Carolina, a hosiery manufacturer. Mr. Holt has been a
director of the Company since April 1986, and has been the Chairman and Chief
Executive Officer of Holt Hosiery Mills since 1967. Mr. Holt also serves as a
director of Mid Carolina Bank in Burlington, North Carolina.
DENNIS M. LOVE (43), PRESIDENT AND CHIEF EXECUTIVE OFFICER, PRINTPACK,
INC., Atlanta, Georgia, a manufacturer and converter of flexible packaging
materials. Mr. Love was appointed a director in February 1999.
THE BOARD UNANIMOUSLY RECOMMENDS A VOTE FOR ALL NOMINEES.
CLASS II DIRECTORS
(Incumbents to serve until 2000 Annual Meeting)
BOB M. PRILLAMAN (66), SENIOR VICE PRESIDENT (RETIRED), CARAUSTAR
INDUSTRIES, INC. Mr. Prillaman served as Senior Vice President of the Company
from 1980 until his retirement effective March 1, 1998 and as a director since
1980. Mr. Prillaman had been employed by the Company or its predecessors since
1969.
RUSSELL M. ROBINSON, II (67), ATTORNEY AT LAW, ROBINSON, BRADSHAW & HINSON,
P.A., Charlotte, North Carolina, a law firm. Mr. Robinson has been engaged in
the private practice of law since 1956 and is a shareholder, officer and
director of Robinson, Bradshaw & Hinson, P.A. Mr. Robinson has been a director
of the Company since December 1992, and has served as Chairman of the Board of
Directors of the Company since April 1995. Mr. Robinson also serves as a
director of Cadmus Communications Corporation and Duke Energy Corporation.
H. LEE THRASH, III (48), VICE PRESIDENT, PLANNING AND DEVELOPMENT, AND
CHIEF FINANCIAL OFFICER, CARAUSTAR INDUSTRIES, INC. Mr. Thrash has been employed
by the Company since 1983 and has served as Vice President and Chief Financial
Officer of the Company since 1986 and as a director since 1987.
CLASS III DIRECTORS
(Incumbents to serve until 2001 Annual Meeting)
JAMES H. HANCE, JR.(54), VICE CHAIRMAN AND CHIEF FINANCIAL OFFICER,
BANKAMERICA CORPORATION, Charlotte, North Carolina, a bank holding company. Mr.
Hance has served as Vice Chairman and Chief Financial Officer of BankAmerica
Corporation (formerly NationsBank Corporation) since October 1993, and as Chief
Financial Officer since August 1988. Prior to joining NationsBank Corporation
(formerly NCNB Corporation) in March 1987, Mr. Hance, a certified public
accountant, spent 17 years with the public accounting firm of Price Waterhouse
in Philadelphia and Charlotte. Mr. Hance is also a director of Family Dollar
Stores, Inc., Lance, Inc. and Summit Properties, Inc. Mr. Hance has been a
director of the Company since November 1995.
5
<PAGE> 9
JOHN D. MUNFORD (71), VICE CHAIRMAN (RETIRED), UNION CAMP CORPORATION,
Franklin, Virginia, a paper and forest products company. Mr. Munford served as
Executive Vice President of the fine papers group of Union Camp Corporation from
1984 until April 1991 and thereafter as Vice Chairman of the board of directors
of Union Camp Corporation until August 1993. During his 42 years of employment
with Union Camp Corporation, Mr. Munford held management positions in both sales
and operations. Mr. Munford has been a director of the Company since November
1994. Mr. Munford also serves as a director of Cadmus Communications
Corporation.
JAMES E. ROGERS (53), PRESIDENT, SCI INVESTORS INC., Richmond, Virginia, a
private equity investment firm. Mr. Rogers has been President of SCI Investors
Inc. since April 1993. From 1993 to 1996, Mr. Rogers also served as Chairman of
Custom Papers Group, Inc., a paper manufacturing company. From 1991 to 1993, Mr.
Rogers served as President and Chief Executive Officer of Specialty Coatings
International, Inc., a manufacturer of specialty paper and film products. Prior
to that time, Mr. Rogers was Senior Vice President, Group Executive of James
River Corporation, a paper and packaging manufacturer. Mr. Rogers has been a
director of the Company since November 1993. Mr. Rogers also serves as a
director of Wellman, Inc. and Owens & Minor, Inc.
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934 requires the Company's
directors and executive officers, and persons who own more than 10% of a
registered class of the Company's equity securities, to file with the Securities
and Exchange Commission initial reports of ownership and reports of changes in
ownership of Common Shares and other equity securities of the Company. Executive
officers, directors and greater than 10% shareholders are required by SEC
regulations to furnish the Company with copies of all Section 16(a) forms they
file. To the Company's knowledge, based solely on review of the copies of such
reports furnished to the Company during the year ended December 31, 1998, all
Section 16(a) filing requirements applicable to its executive officers and
directors and any greater than 10% beneficial owners (the Company is aware of
none) were complied with.
EXECUTIVE COMPENSATION
Compensation Committee Report. The Company's Compensation and Employee
Benefits Committee (the "Compensation Committee") considers and makes
recommendations to the Board of Directors with respect to the compensation of
the chief executive officer and management incentive plans, sets and adjusts
salaries for the Company's other officers, and administers the Company's 1998
Key Employee Incentive Compensation Plan (the "Incentive Plan"). Set forth below
is the Compensation Committee's report on its actions and policies with regard
to the compensation of Thomas V. Brown, the Company's Chief Executive Officer,
and the Company's executive officers generally.
COMPENSATION POLICIES
The Compensation Committee's policies with regard to senior officer
compensation are (1) to pay appropriate base salaries based on reviews of base
salaries paid to executives in comparable companies and evaluations of
individual responsibilities and performance, (2) to provide long-term incentives
and encourage investment in the Company's shares by granting stock options and
other stock-based awards, and (3) to tie compensation to Company performance
through an annual incentive bonus plan. The Compensation Committee regularly
reviews compensation paid to executives in other comparable companies and uses
surveys produced by Hewitt Associates and the Paper Industry Compensation
Association as its principal resources in this regard.
BASE SALARY
Base salary is a primary component of the Company's officer compensation
arrangements. Executive officer salaries are administered by the Compensation
Committee to ensure they remain competitive with
6
<PAGE> 10
those of companies of comparable revenues and similar industries. As stated
above, the Company periodically engages compensation consultants and surveys
industry data for this purpose. Based on its review of the survey data, the
Compensation Committee approved certain base salary increases for 1998 for the
Company's senior officers and recommended an increase, which the Board approved,
in Mr. Brown's base salary from $510,000 to $540,000.
LONG TERM INCENTIVES
The Compensation Committee believes that share ownership by executives is
important to align the interests and outlook of executives with those of the
shareholders. The Company's Incentive Plan provides for stock option and
restricted share awards, the amount and mix of which are contingent upon the
attainment of measurable, pre-established Company performance goals. The types
of possible option awards are traditional options, which are priced at market
value on the date of grant, and performance options, which are priced at 120% of
market value on the date of grant. The higher the Company performs relative to
its performance goals, the higher the award mix is weighted toward traditional
versus performance options. In addition, a participant may elect in advance to
receive up to 50% of his option award entitlement in restricted share rights. A
restricted share right is the right to acquire one restricted share of common
stock upon the purchase of two shares of unrestricted common stock (whether by
option exercise, open market purchase or otherwise). The participant is required
to hold the underlying two shares of purchased stock for a period of five years
in order to retain the awarded share of restricted stock.
During 1998, the Compensation Committee selected 60 key employees to
receive stock-based awards under the Incentive Plan. The amount and mix of
stock-based awards granted was determined by the extent to which the Company
achieved 1997 targeted goals for economic profit. Economic profit is a measure
of the after-tax operating profit of the Company, less a charge for the cost of
all debt and equity capital of the Company. Based on the Company's achievement
of approximately 67% of 1997 targeted economic profit, application of the option
formula yielded option awards of 33.4% of base salary to participants and a mix
of 58% traditional options and 42% performance options. Mr. Brown participated
in the Incentive Plan on the same basis as that of all other participating
executives, with the amount and mix of stock-based awards granted to him being
substantially the same, in proportion to his base salary, as the amounts granted
to other senior executives. In accordance with the Incentive Plan, Mr. Brown
elected to receive the maximum allowable portion (50%) of his option award
entitlement in restricted share rights.
ANNUAL BONUS
The Incentive Plan provides for an annual bonus contingent on Company
performance. Approximately 60 executives participated in this plan in 1998. Each
year the Compensation Committee establishes a formula pursuant to which the
amount of the bonuses for that year is to be determined, based on some measure
or measures of Company performance. The bonus generally is payable in cash;
however, participants who own less than their specified target level of stock
ownership at the time of the bonus award are required to take up to 30% of their
bonus in the form of Common Shares, and participants may voluntarily elect to
receive up to 50% of their bonus award in fully vested nonqualified stock
options. For 1998, bonuses depended on the extent to which the Company achieved
certain target levels of economic profit and a certain threshold level of
earnings per share. In 1998, the Company achieved 75% of its economic profit
target and exceeded the earnings per share threshold. Based on these results,
application of the bonus formula yielded bonuses equal to 25% of salary. Mr.
Brown participated in the bonus program to the same extent as other Incentive
Plan participants and, accordingly, received a bonus equal to 25% of his 1998
salary. In accordance with the Incentive Plan, Mr. Brown elected to receive the
maximum allowable portion (50%) of his bonus in the form of nonqualified stock
options. Thus, Mr. Brown's 1998 bonus compensation was dependent upon the
Company's achievement of economic profit and earnings per share performance
goals.
CORPORATE TAX CONSIDERATIONS
Section 162(m) of the Internal Revenue Code prohibits publicly held
corporations from deducting as an expense for tax purposes the amount by which
compensation paid to any of the Company's chief executive
7
<PAGE> 11
officer or four other most highly compensated executive officers exceeds
$1,000,000, unless such compensation qualifies as "performance-based." Although
the current cash compensation levels of the Company's executives generally
remain well below the $1,000,000 limit, the Compensation Committee has
considered the implications of Section 162(m) in implementing the Incentive Plan
and intends that the stock option component of compensation payable under the
Incentive Plan will qualify as "performance-based" compensation that is exempt
from the Section 162(m) deduction limitations.
COMPENSATION COMMITTEE:
JAMES E. ROGERS, CHAIRMAN
JOHN D. MUNFORD
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
During the last completed fiscal year, no member of the Compensation and
Employee Benefits Committee was an employee or officer of the Company.
Summary Compensation Table. The following table sets forth information
concerning the compensation for the years ended December 31, 1996, 1997 and 1998
for those persons who were, at December 31, 1998, the chief executive officer of
the Company and the Company's four other most highly compensated executive
officers (collectively, the "Named Officers").
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG-TERM
ANNUAL COMPENSATION COMPENSATION AWARDS
------------------------------------ --------------------------
RESTRICTED
OTHER ANNUAL STOCK SECURITIES ALL OTHER
NAME AND SALARY BONUS COMPENSATION AWARDS UNDERLYING COMPENSATION
PRINCIPAL POSITION YEAR ($) ($) ($) ($) OPTIONS (#) ($)
- -------------------------------- ---- -------- -------- ------------ ---------- ----------- ------------
<S> <C> <C> <C> <C> <C> <C> <C>
Thomas V. Brown,................ 1998 $535,000 $ 66,875(1) -- $10,017(2) 15,876(3) $4,760(4)
President and Chief 1997 $499,167 $ 0 -- -- 8,000 $4,700(5)
Executive Officer 1996 $440,833 $320,045 -- -- 8,000 $1,560(6)
James L. Walden,................ 1998 $307,840 $ 76,960 -- -- 7,997(7) $3,200(8)
Vice President 1997 $296,006 $ 0 -- -- 4,500 $3,200(8)
1996 $285,007 $206,915 -- -- 4,500 --
Jimmy A. Russell,............... 1998 $258,120 $ 64,530 -- -- 6,595(7) $3,033(8)
Vice President 1997 $242,287 $ 0 -- -- 5,000 $3,200(8)
1996 $223,486 $162,251 -- -- 4,000 --
Edward G. Schmitt,.............. 1998(10) $282,533 $ 35,317(1) -- --(11) 9,476(9) $3,200(8)
Vice President 1997 $213,024 $ 0 -- -- 4,500 $3,200(8)
H. Lee Thrash, III,............. 1998 $218,307 $ 54,577 -- -- 5,626(7) $3,200(8)
Vice President 1997 $207,490 $ 0 -- -- 3,500 $3,167(8)
1996 $189,107 $137,292 -- -- 3,500 --
</TABLE>
- ---------------
(1) In accordance with the Incentive Plan, this Named Officer elected to
receive nonqualified stock options, the amounts of which are reflected in
the Securities Underlying Options column, in lieu of 50% of the cash bonus
to which he was entitled.
(2) This amount represents the value of 389 shares acquired through the
exercise of restricted share rights valued at $25.75 per share. As of
December 31, 1998, Mr. Brown held a total of 13,234 restricted common
shares valued at $377,996.
(3) This amount consists of the following: (1) traditional options, priced at
100% of market value on date of grant, to purchase 3,971 shares; (2)
performance options, priced at 120% of market value on date of grant, to
purchase 2,875 shares; (3) restricted share rights to acquire 2,581 shares;
and (4) options, priced at 100% of fair market value on date of grant, to
purchase 6,449 shares, which options were elected in lieu of 50% of the
Named Officer's 1998 cash bonus entitlement.
8
<PAGE> 12
(4) Amount includes $3,200 in employer matching contributions under the
Company's 401(k) plan and $1,560 representing the portion of term life
insurance premiums paid by the Company on terms not otherwise available to
all salaried employees.
(5) Amount includes $3,200 in employer matching contributions under the
Company's 401(k) Plan and $1,500 representing the portion of term life
insurance premiums paid by the Company on terms not otherwise available to
all salaried employees.
(6) Amount represents the portion of term life insurance premiums paid by the
Company on terms not otherwise available to all salaried employees.
(7) Based on the extent to which the Company achieved performance goals
established under the Incentive Plan, 58% of these options were awarded as
traditional options, priced at 100% of market value on date of grant, and
42% were awarded as performance options, priced at 120% of market value on
date of grant.
(8) Amount represents employer matching contributions under the Company's
401(k) plan.
(9) This amount consists of the following: (1) traditional options, priced at
100% of market value on date of grant, to purchase 3,521 shares; (2)
performance options, valued at 120% of market value on date of grant, to
purchase 2,549 shares; and (3) options, priced at 100% of market value on
date of grant, to purchase 3,406 shares, which options were elected in lieu
of 50% of the Named Officer's 1998 cash bonus entitlement.
(10) Mr. Schmitt did not become an executive officer of the Company until 1997.
(11) As of December 31, 1998, Mr. Schmitt held a total of 5,000 restricted
common shares valued at $142,813.
Option Grants Table. The following table sets forth certain information
concerning grants of stock options to the Named Officers during the year ended
December 31, 1998.
OPTION GRANTS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
POTENTIAL REALIZABLE
NUMBER OF % OF TOTAL VALUE AT ASSUMED
SECURITIES OPTIONS ANNUAL RATES OF STOCK
UNDERLYING GRANTED TO EXERCISE PRICE APPRECIATION
OPTIONS EMPLOYEES OR BASE FOR OPTION TERM
GRANTED IN FISCAL PRICE EXPIRATION ---------------------
NAME (#) YEAR ($/SH) DATE 5% ($) 10% ($)
---- ---------- ---------- -------- ---------- --------- ---------
<S> <C> <C> <C> <C> <C> <C>
Thomas V. Brown.................... 3,971(1) 2.5% $34.00 2008 $ 84,900 $215,188
2,875(2) 3.9% $40.80 2008 $ 41,918 $136,246
2,581(3) 11.5% $ 0 2008 $142,936 $227,531
James L. Walden.................... 4,638(1) 2.9% $34.00 2008 $ 99,160 $251,333
3,359(2) 4.6% $40.80 2008 $ 48,974 $159,183
Jimmy A. Russell................... 3,825(1) 2.4% $34.00 2008 $ 81,779 $207,277
2,770(2) 3.8% $40.80 2008 $ 40,387 $131,270
Edward G. Schmitt.................. 3,521(1) 2.2% $34.00 2008 $ 75,279 $190,803
2,549(2) 3.5% $40.80 2008 $ 37,164 $120,797
H. Lee Thrash, III................. 3,263(1) 2.0% $34.00 2008 $ 69,763 $176,822
2,363(2) 3.2% $40.80 2008 $ 34,453 $111,983
</TABLE>
- ---------------
(1) These amounts represent the number of shares of common stock underlying
grants of traditional options under the Incentive Plan, priced at 100% of
market value on date of grant. These options are, to the extent permitted
under the Internal Revenue Code (the "Code"), intended to be incentive stock
options within the meaning of Section 422 of the Code. All of these options
are currently unvested, and will vest over 5 years beginning on April 20,
1999 in annual increments of 20%.
(2) These amounts represent the number of shares of common stock underlying
grants of performance options under the Incentive Plan, priced at 120% of
market value on the date of grant. These options are, to the extent
permitted under the Code, intended to be incentive stock options within the
meaning of
9
<PAGE> 13
Section 422 of the Code. All of these options are currently unvested, and
will vest over 5 years beginning on April 20, 1999 in annual increments of
20%.
(3) This amount represents the number of shares of common stock underlying
grants of restricted share rights under the Incentive Plan elected by the
Named Officer in lieu of stock options. The restricted share rights are
fully vested on the date of grant and entitle the holder to obtain, without
additional consideration, one restricted share for each two shares the
holder otherwise purchases (whether through option exercise, open market
purchase or otherwise). The holder must hold the two underlying shares of
purchased stock for a period of five years in order to retain the one
awarded share of restricted stock.
Option Exercises and Year-End Value Table. The following table sets forth
certain information concerning the exercise of stock options by the Named
Officers during 1998 and unexercised options held as of December 31, 1998.
AGGREGATED OPTION EXERCISES IN LAST
FISCAL YEAR AND FY-END OPTION VALUE
<TABLE>
<CAPTION>
NUMBER OF
SECURITIES UNDERLYING VALUE OF
UNEXERCISED OPTIONS UNEXERCISED IN-THE-MONEY
SHARES ACQUIRED VALUE AT FY-END (#) OPTIONS AT FY-END ($)(1)
ON EXERCISE REALIZED ---------------------------- ----------------------------
NAME (#) ($) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- ---- --------------- -------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Thomas V. Brown........ 0 0 126,750 18,846 $2,727,672 $53,875
0 0
0 0
James L. Walden........ 0 0 31,750 14,747 $ 342,945 $30,305
Jimmy A. Russell....... 0 0 13,250 13,345 $ 137,751 $26,938
0 0
Edward G. Schmitt...... 0 0 11,500 12,070 $ 118,868 $23,570
H. Lee Thrash, III..... 0 0 12,250 10,876 $ 132,180 $23,570
</TABLE>
- ---------------
(1) The fair market value used for computations in this column was $28.5625,
which was the closing market price of the Company's Common Shares on
December 31, 1998.
Retirement Plans. Substantially all of the Company's employees participate
in a non-contributory defined benefit pension plan. The pension plan provides
for retirement, disability and death benefits. Employees who retire at the
normal retirement age of 65 and receive their benefits as a single life annuity
are entitled to annual pension benefits equal to 1.35% of their average annual
compensation multiplied by the number of years of credited service (not greater
than 33 years), less .65% of final average annual compensation (up to the
taxable wage base as established by the Social Security Administration) for each
year of credited service at normal retirement date (not greater than 33 years).
Average annual compensation is the highest average compensation received by an
employee for any consecutive five-year period during the last 10 consecutive
plan years of an employee's participation in the plan. Average annual
compensation is defined as an employee's gross wages, excluding fringe benefits
and deferred compensation (salary and bonus columns of the Summary Compensation
Table less any deferred compensation included in the salary column), and final
average compensation is defined as average annual compensation up to the taxable
wage base as determined by the Social Security Administration.
The Company also maintains a Supplemental Executive Retirement Plan
("SERP"), which supplements the Company's pension plan benefits by providing to
certain highly compensated employees the additional retirement benefits to which
they otherwise would be entitled under the Company's pension plan in the absence
of certain limitations imposed by the Internal Revenue Code. The additional
benefits payable under the SERP will be based on the same formula as the pension
plan, but without regard to the taxable wage base established by the Social
Security Administration or the 33-year maximum limit on credited years of
service.
10
<PAGE> 14
The following table shows the estimated annual benefits payable upon
retirement to employees participating in the Company's non-contributory defined
benefit pension plan, as supplemented by the SERP, at specified compensation
levels and years of service:
COMBINED RETIREMENT PLANS ESTIMATED ANNUAL BENEFITS
<TABLE>
<CAPTION>
CREDITED YEARS OF SERVICE
AVERAGE ANNUAL ------------------------------------------------------------------------------------
COMPENSATION 10 15 20 25 30 35 40 45
- -------------- ------- -------- -------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
$150,000 $18,101 $ 27,152 $ 36,202 $ 45,253 $ 54,303 $ 63,354 $ 72,404 $ 81,455
200,000 24,851 37,277 49,702 62,128 74,553 86,979 99,404 111,830
250,000 31,601 47,402 63,202 79,003 94,803 110,604 126,404 142,205
300,000 38,351 57,527 76,702 95,878 115,053 134,229 153,404 172,580
350,000 45,101 67,652 90,202 112,753 135,303 157,854 180,404 202,955
400,000 51,851 77,777 103,702 129,628 155,553 181,479 207,404 233,330
450,000 58,601 87,902 117,202 146,503 175,803 205,104 234,404 263,705
500,000 65,351 98,027 130,702 163,378 196,053 228,729 261,404 294,080
600,000 78,851 118,277 157,702 197,128 236,553 275,979 315,404 354,830
</TABLE>
At December 31, 1998, the estimated credited years of service and average
annual compensation under the retirement plans for each of the Named Officers
were as follows: Thomas V. Brown, 36 years and $569,159 (credited years of
service include term of service with former employer in accordance with Mr.
Brown's employment agreement); James L. Walden, 6 years and $354,269; Jimmy A.
Russell, 23 years and $277,784; Edward G. Schmitt, 24 years and $236,152
(credited years of service include term of service with former employer); H. Lee
Thrash, III, 15 years and $237,405.
Employment Agreements. The Company entered into an employment agreement,
effective January 1, 1991, with Thomas V. Brown. The employment agreement
established Mr. Brown's initial annual base salary at $350,000, and provides
that subsequent increases in his base salary are to be determined by the
Compensation and Employee Benefits Committee. Pursuant to the employment
agreement, the Company granted to Mr. Brown options to purchase 120,000 shares
of Common Stock at $4.00 per share, which expire January 1, 2001, and which were
subject to vesting at a rate of 20% per year over a five-year period. These
options are fully vested. Pursuant to the employment agreement, the Company has
provided Mr. Brown with $1,000,000 in term life insurance, the initiation fee
and monthly dues for a local country club, an annual $5,000 allowance for
financial planning and tax preparation services and travel and accident
insurance in the amount of $1,000,000.
Mr. Brown's employment agreement runs for an indefinite term, but may be
terminated by the Company or Mr. Brown with or without cause upon 60 days' prior
notice. Certain terms of the agreement (i) providing for one year's severance
pay to Mr. Brown in the event of his termination by the Company without cause
and (ii) prohibiting Mr. Brown from competing with the Company for one year
following his voluntary termination of employment with the Company expired in
1996.
The Company entered into an employment agreement with James L. Walden on
January 25, 1993 to establish Mr. Walden's compensation during the first year of
his employment. Under the employment agreement, Mr. Walden's base salary for his
first year of employment was set at $250,000, with future increases to be
determined by the Compensation and Employee Benefits Committee. The agreement
also provided Mr. Walden with a guaranteed minimum bonus of 10% of his base
salary for the first year and provided that Mr. Walden was eligible for
immediate participation in the 1993 Key Employees' Share Ownership Plan and the
Company's Incentive Bonus Plan. Pursuant to the employment agreement, the
Company granted Mr. Walden options to purchase 20,000 shares of Common Stock at
$17.75, the fair market value of such shares on the date of grant. These options
expire on February 5, 2003 and are subject to vesting at a rate of 20% per year
over a five-year period. Options for these 20,000 shares were fully vested as of
February 5, 1998. Under the agreement, the Company also has provided Mr. Walden
with term life insurance in an amount equal two times his annual base salary,
travel and accident insurance in the amount of $500,000,
11
<PAGE> 15
an annual $5,000 allowance for financial planning and tax preparation services
and an allowance for local country club dues of up to $3,000 per year.
APPOINTMENT OF INDEPENDENT PUBLIC ACCOUNTANTS
The Board, upon the recommendation of the Audit Committee, has approved the
selection of the firm of Arthur Andersen LLP as independent public accountants
to examine the books of the Company and its subsidiaries for the current year,
to report on the consolidated statement of financial position and related
statement of earnings of the Company and its subsidiaries, and to perform such
other appropriate accounting services as may be required by the Board. The Board
recommends that the shareholders vote in favor of ratifying and approving the
selection of Arthur Andersen LLP for the purposes set forth above. The Company
has been advised by Arthur Andersen LLP that the firm did not have any direct
financial interest or any material indirect financial interest in the Company
and its subsidiaries during the Company's most recent fiscal year.
Representatives of Arthur Andersen LLP are expected to be present at the
Annual Meeting with the opportunity to make a statement if they so desire, and
they are expected to be available to respond to appropriate questions.
Approval of the proposal requires the affirmative vote of a majority of the
Common Shares voted on the proposal. Should the shareholders vote negatively,
the Board of Directors will consider a change in auditors for the next year.
THE BOARD UNANIMOUSLY RECOMMENDS A VOTE FOR RATIFYING THE SELECTION OF
ARTHUR ANDERSEN LLP AS INDEPENDENT PUBLIC ACCOUNTANTS TO AUDIT THE BOOKS OF THE
COMPANY AND ITS SUBSIDIARIES FOR THE CURRENT YEAR.
PROPOSALS FOR 2000 ANNUAL MEETING OF SHAREHOLDERS
Shareholders who intend to present proposals at next year's annual meeting
are advised that any such proposal must be received by the Secretary of the
Company no later than the close of business on November 16, 1999 in order to be
considered for inclusion in the Company's proxy statement and proxy appointment
form relating to that meeting. Only persons who have held beneficially or of
record at least $2,000 in market value, or 1% of the outstanding Common Shares,
for at least one year on the date the proposal is submitted and who continue in
such capacity through the meeting date are eligible to submit proposals to be
considered for inclusion in the Company's proxy statement. In addition, the
Company's bylaws prescribe procedures a shareholder must follow to make
nominations for director candidates or propose any other business to be
considered at an annual meeting. Shareholder nominations for director will be
considered at an annual meeting or any other meeting at which an election is to
be held if the shareholder delivers to the Secretary of the Company, not later
than the close of business on the fifth business day following the date on which
notice is first given to shareholders of the meeting at which such election is
to be held, a notice setting forth the information specified in Section 3 of
Article III of the Company's bylaws. Other shareholder proposals will be
considered at an annual meeting if the shareholder delivers to the Secretary of
the Company at its principal executive office, no less than 60 nor more than 90
days prior to the meeting, a written notice setting forth the information
specified in Section 15 of Article III of the Company's bylaws. Notwithstanding
the limitations described in the preceding sentence, in the event the Company's
annual meeting is held on a date other than the third Wednesday in April, and
public disclosure of the date of the annual meeting is made less than 70 days
prior to the meeting date, a shareholder's notice of proposed business will be
considered timely if received by the Company no later than the tenth day
following the date of public disclosure of the meeting date. Any shareholder
desiring a copy of the Company's bylaws will be furnished one without charge
upon written request to the Secretary at 3100 Washington Street, Austell,
Georgia, 30106.
12
<PAGE> 16
OTHER MATTERS
The Board is not aware of any other matters which may be presented for
action at the meeting, but if other matters do properly come before the meeting,
it is intended that the Common Shares represented by the accompanying proxy
appointment form will be voted by the persons named in the form in accordance
with their best judgment.
You are cordially invited to attend this year's meeting. However, whether
you plan to attend the meeting or not, you are respectfully urged to sign and
return the enclosed proxy appointment form, which will, of course, be returned
to you at the meeting if you are present and so request.
/s/ Russell M. Robinson, II
Russell M. Robinson, II
Chairman of the Board
/s/ Thomas V. Brown
Thomas V. Brown
President and Chief Executive Officer
13
<PAGE> 17
(Caraustar Logo)
<PAGE> 18
REVOCABLE CARAUSTAR INDUSTRIES, INC.
APPOINTMENT
OF PROXY ANNUAL MEETING OF SHAREHOLDERS
to be held on April 21, 1999
This Appointment of Proxy is Solicited on Behalf of the Board of Directors.
The undersigned hereby constitutes and appoints Russell M. Robinson, II and
Thomas V. Brown as Proxies with full power of substitution to act and vote for
and on behalf of the undersigned, as designated below, all the common shares of
Caraustar Industries, Inc. (the "Company") held of record by the undersigned on
February 19, 1999, at the annual meeting of shareholders to be held at the
Caraustar corporate headquarters, 3100 Washington Street, Austell, Georgia on
April 21, 1999 or any adjournment thereof.
THE PROXIES WILL VOTE FOR THE ELECTION OF THE DIRECTOR NOMINEES NAMED HEREIN
AND FOR THE PROPOSALS UNLESS THE SHAREHOLDER DIRECTS OTHERWISE, IN WHICH CASE
THE PROXIES WILL VOTE AS DIRECTED.
(Continued and to be dated and signed on the reverse side.)
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR ALL PROPOSALS.
---
1. ELECTION OF THREE CLASS I DIRECTORS
<TABLE>
<S> <C> <C>
[ ] FOR all nominees [ ] WITHHOLD AUTHORITY to vote [ ] *EXCEPTIONS
listed below for all nominees listed below
</TABLE>
Nominees: Thomas V. Brown, Ralph M. Holt, Jr., Dennis M. Love
(INSTRUCTIONS: To withhold authority to vote for any individual nominee, mark
the "Exceptions" box and write that nominee's name in the space provided below.)
*Exceptions
--------------------------------------------------------------------
2. PROPOSAL TO RATIFY THE BOARD OF DIRECTORS' SELECTION OF ARTHUR ANDERSEN LLP
as the Company's independent public accountants.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
3. In their discretion, the Proxies are authorized to vote upon such other
business as may properly come before the meeting.
Change of Address and or Comments Mark Here [ ]
The undersigned
acknowledges receipt of the
Notice of Annual Meeting and
Proxy Statement dated March
15, 1999, and revokes all
Appointments of Proxy
heretofore given by the
undersigned.
Please sign exactly as
name appears below. When
shares are held by joint
tenants, both should sign.
When signing as attorney, as
executor, administrator,
trustee or guardian, please
give full title as such. If a
corporation, please sign in
full corporate name by
President or other authorized
officer. If a partnership,
please sign in partnership
name by authorized person.
DATED: , 1999
------------------
------------------------------
Signature
------------------------------
Signature if held jointly
Votes must be indicated
(x) in Black or Blue ink. [ ]
PLEASE MARK, SIGN, DATE AND RETURN THIS PROXY PROMPTLY USING THE ENCLOSED
POSTAGE PREPAID ENVELOPE.
