<PAGE>
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:
[X] Preliminary Proxy Statement [_] Confidential, for Use of the
Commission Only (as permitted by
Rule 14a-6(e)(2))
[_] Definitive Proxy Statement
[_] Definitive Additional Materials
[_] Soliciting Material Pursuant to Section 240.14a-11(c) or Section 240.14a-12
VIKING OFFICE PRODUCTS, INC.
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), 14a-6(i)(2)
or Item 22(a)(2) of Schedule 14A.
[_] $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3).
[_] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
-------------------------------------------------------------------------
(2) Aggregate number of securities to which transaction applies:
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(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:
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(5) Total fee paid:
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[_] 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:
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(2) Form, Schedule or Registration Statement No.:
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(3) Filing Party:
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(4) Date Filed:
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Notes:
<PAGE>
PRELIMINARY PROXY MATERIALS
VIKING OFFICE PRODUCTS, INC.
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON NOVEMBER 16, 1995
To the Shareholders of Viking Office Products, Inc.:
The Annual Meeting of Shareholders of Viking Office Products, Inc., a
California corporation ("Viking"), will be held on Thursday, November 16, 1995
at 9:00 a.m., P.S.T., at Viking's new executive offices, 879 West 190th Street,
10th Floor, Los Angeles, California 90248, for the following purposes:
(1) To elect a Board of Directors;
(2) To consider and act upon a proposal to adopt amendments to Viking's
Amended and Restated Bylaws to classify the Board of Directors for
purposes of election and to make other related changes;
(3) To consider and act upon a proposal to amend the 1992 Directors' Stock
Option Plan;
(4) To consider and act upon a proposal to amend the Chief Executive
Officer Performance Based Bonus Plan to increase the maximum annual
bonus payable thereunder;
(5) To consider and act upon a proposal to ratify the selection of
auditors; and
(6) To transact any other business which may properly come before the
meeting.
Only shareholders of record at the close of business on September 22, 1995,
are entitled to notice of and to vote at the meeting and any adjournments
thereof.
All shareholders are cordially invited to attend the meeting in person.
Whether or not you expect to attend the meeting, PLEASE COMPLETE AND SIGN THE
ENCLOSED PROXY AND RETURN IT PROMPTLY IN THE ENCLOSED ENVELOPE. The giving of
your proxy will not affect your right to vote in person should you later decide
to attend the meeting.
By Order of the Board of Directors
Los Angeles, California Stephen R. Kroll,
October __, 1995 Secretary
<PAGE>
PRELIMINARY PROXY MATERIALS
VIKING OFFICE PRODUCTS, INC.
13809 SOUTH FIGUEROA STREET
LOS ANGELES, CALIFORNIA 90061-1000
(213) 321-4493
PROXY STATEMENT
OCTOBER __, 1995
GENERAL INFORMATION
This Proxy Statement is furnished in connection with the solicitation
of proxies by the Board of Directors of Viking Office Products, Inc. ("Viking"),
for the Annual Meeting of Shareholders to be held on November 16, 1995, and any
postponements or adjournments thereof. This Proxy Statement and the
accompanying Notice of Annual Meeting and form of proxy were first mailed to
shareholders on or about October __, 1995.
The execution and return of the enclosed proxy will not in any way
affect a shareholder's right to attend the Annual Meeting in person. Any
shareholder giving a proxy may revoke it before it is voted by notifying the
Secretary of Viking in writing before or at the meeting, by providing a proxy
bearing a later date or by attending the meeting and expressing a desire to vote
in person. Your cooperation in promptly returning the enclosed proxy will
reduce Viking's expenses and enable its management and employees to continue
their normal duties for your benefit with minimum interruption for follow-up
proxy solicitation.
Only shareholders of record at the close of business on September 22,
1995, are entitled to receive notice of and to vote at the meeting. On that
date, Viking had outstanding 41,048,659 shares of Common Stock, each of which is
entitled to one vote at the meeting. Directors are elected by a plurality of
the votes cast, and the affirmative vote of the holders of a majority of the
outstanding shares entitled to vote is required to approve the proposal to amend
the Bylaws. The affirmative vote of a majority of the shares present or
represented by proxy at the meeting is required for approval of all other
matters being submitted to the shareholders for their consideration.
The presence at the Annual Meeting, either in person or by proxy, of
the holders of a majority of the shares of Common Stock outstanding on the
record date is necessary to constitute a quorum for the transaction of business.
Abstentions and broker non-votes (which occur if a broker or other nominee does
not have discretionary authority and has not received voting instructions from
the beneficial owner with respect to the particular item) are counted for
purposes of determining the presence or absence of a quorum for the transaction
of business. Abstentions are counted in tabulations of the votes cast on
proposals presented to the shareholders and have the same legal effect as a vote
against a particular proposal. Broker non-votes are not taken into account for
purposes of determining whether a proposal has been approved by the requisite
shareholder vote.
All proxies will be voted as directed by the shareholder on the proxy
card. IF NO CHOICE IS SPECIFIED, PROXIES WILL BE VOTED "FOR" THE DIRECTORS
NOMINATED BY THE BOARD OF DIRECTORS, "FOR" THE AMENDMENTS TO VIKING'S AMENDED
AND RESTATED BYLAWS, "FOR" THE AMENDMENTS TO THE 1992 DIRECTORS' STOCK OPTION
PLAN, "FOR" THE AMENDMENT TO THE CHIEF EXECUTIVE OFFICER PERFORMANCE BASED BONUS
PLAN AND "FOR" THE RATIFICATION OF THE SELECTION OF AUDITORS.
<PAGE>
If any other matters are properly presented at the Annual Meeting,
including, among other things, consideration of a motion to adjourn the Annual
Meeting to another time or place for the purpose of soliciting additional
proxies, the persons named in the enclosed form of proxy and acting thereunder
will have the discretion to vote on those matters in accordance with their best
judgment, subject to direction by the Board of Directors, to the same extent as
the person signing the proxy. It currently is not anticipated that any other
matters will be raised at the Annual Meeting.
The cost of preparing, printing and mailing the Proxy Statement, the
Notice and the enclosed form of proxy, as well as the cost of soliciting proxies
relating to the Annual Meeting, will be borne by Viking. The original
solicitation of proxies by mail may be supplemented by telephone, telegram and
personal solicitation by officers and other regular employees of Viking, but no
additional compensation will be paid to such individuals on account of such
activities. Viking will reimburse banks, brokerage houses and other custodians,
nominees and fiduciaries for their reasonable expenses in forwarding proxy
materials to their principals.
ELECTION OF DIRECTORS
NOMINEES AND VOTING
Viking's Amended and Restated Bylaws (the "Bylaws") currently provide
for a Board of Directors consisting of not less than four nor more than seven
directors. The total number of directors may be fixed or changed from time to
time by the Board of Directors within such authorized limits, and the size of
the Board is presently set at seven. Mr. H.B. Richman, a director of Viking,
has informed the Board that he intends to retire effective as of the date of the
Annual Meeting, and the Board has elected not to fill the vacancy resulting from
Mr. Richman's retirement at this time. Accordingly, the Board has reduced the
size of the Board of Directors to six effective at the Annual Meeting. The Board
of Directors has nominated for election as directors the six persons named
below, all of whom are incumbent directors. All of these nominees have indicated
that they are able and willing to serve as directors.
If the proposed amendments to the Bylaws are approved by the
shareholders at the Annual Meeting (see the discussion below under the caption
"Approval of Amendments to the Bylaws"), Irwin Helford, Charles P. Durkin, Jr.
and Rolf Ostern will be nominated as Class I directors, for terms expiring at
the 1996 Annual Meeting, and Lee A. Ault III, Neil R. Austrian and Joan D.
Manley will be nominated as Class II directors, for terms expiring at the 1997
Annual Meeting. If the proposed amendments are not adopted, all directors will
be nominated for terms expiring in 1996 and until their respective successors
are elected and qualified.
Based on the number of holders of Viking's outstanding Common Stock on
September 22, 1995, the record date for the Annual Meeting, Viking meets the
requirements for a listed corporation within the meaning of the California
Corporations Code. As a result, in accordance with the provisions of Viking's
bylaws, shareholders do not have cumulative voting rights in connection with the
election of directors. Instead, each share of Common Stock is entitled to one
vote for each director to be elected.
The Board of Directors recommends that the shareholders vote "FOR" the
election of its nominees. Unless otherwise instructed, the persons named in the
enclosed proxy intend to vote the shares of Common Stock represented by the
proxies in favor of the election of these nominees. If for any reason any of
these nominees will be unable to serve, the persons named in the enclosed proxy
will vote instead for such other person or persons as the Board of Directors may
recommend.
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<PAGE>
The following table sets forth certain information as of September 22,
1995 with respect to the Board's nominees:
<TABLE>
<CAPTION>
DIRECTOR
NAME OF NOMINEE AGE SINCE
- --------------- --- --------
<S> <C> <C>
Irwin Helford 61 1985
Lee A. Ault III 59 1992
Neil R. Austrian 55 1988
Charles P. Durkin, Jr. 57 1992
Joan D. Manley 63 1989
Rolf Ostern 67 1960
</TABLE>
BUSINESS EXPERIENCE OF DIRECTORS DURING THE PAST FIVE YEARS
Irwin Helford has served as President since joining Viking in January
1984 and also has served as Chairman of the Board and Chief Executive Officer
since September 1988.
Lee A. Ault III served as the Chief Executive Officer of Telecredit,
Inc., a payment services company, from November 1968 until January 1992.
Mr. Ault also was President of Telecredit, Inc., from 1968 until 1983 and
Chairman of the Board from 1983 until January 1992. Since January 1991, Mr. Ault
has served as a director of Equifax Inc., a New York Stock Exchange listed
company and the parent company of Telecredit, Inc. Mr. Ault also serves as a
director of Alex. Brown Incorporated and Sunrise Medical Inc.
Neil R. Austrian has served as President and Chief Operating Officer
of the National Football League since April 1991. He was a Managing Director of
Dillon, Read & Co. Inc. ("Dillon Read") from October 1987 to March 1991.
Mr. Austrian also serves as a director of Alex. Brown Incorporated and Refac
Technology Development.
Charles P. Durkin, Jr., is a Managing Director of Dillon Read and has
been employed by that firm in various capacities since 1966. Mr. Durkin also
serves as a director of Atlantic Cellular, Big River Minerals, Hi-Lo Automotive
Corporation, Inc., and Capital Markets Assurance Corporation.
Joan D. Manley retired in 1984 after serving six years as a Group Vice
President and a director of Time Incorporated. Ms. Manley also serves as a
director of Sara Lee Corporation, Aon Corporation, Scholastic, Inc., and BFP
Holdings Inc.
Rolf Ostern founded Viking and served as the Chairman of the Board
from Viking's inception until August 1988. From August 1988 to August 1993,
Mr. Ostern served Viking as Creative Director and Special Assistant to the
President.
No family relationships exist between any of the directors or officers
of Viking.
MEETINGS OF THE BOARD OF DIRECTORS AND COMMITTEES
Viking maintains an Audit Committee whose current members are Messrs.
Ault, Austrian and Durkin and Ms. Manley. The Audit Committee approves the
selection and engagement of independent accountants and reviews with them the
plan and scope of their audit for each year, the results of such audit when
completed and their fees for services performed. The Audit Committee also
assists and makes recommendations to the Board of Directors in fulfilling the
Board's responsibilities relating to Viking's
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<PAGE>
accounting, financial reporting and internal auditing policies and practices.
The Audit Committee met once during fiscal 1995.
Viking maintains a Compensation Committee whose current members are
Messrs. Ault, Austrian and Durkin and Ms. Manley. The Compensation Committee
approves the compensation of the officers of Viking, formulates and reviews
significant compensation policies and decisions and administers Viking's
employee benefit plans. The Compensation Committee met four times during fiscal
1995.
Viking's Board of Directors met four times during fiscal 1995. Each
director attended at least 75% all of the meetings of the Board of Directors and
of any committees on which he or she served. Viking does not maintain a
nominating committee.
COMPENSATION OF DIRECTORS
During calendar 1995, directors who were not employees of Viking or
affiliated with Dillon Read were paid an annual retainer of $7,500 plus $2,000
for each Board meeting attended. For calendar 1996, these amounts will be
increased to provide for an annual retainer of $8,000 plus $4,000 for each Board
Meeting attended. All directors are reimbursed for their travel expenses
incurred in attending Board or committee meetings.
Pursuant to the provisions of the Viking Office Products, Inc. 1992
Directors' Stock Option Plan (the "Directors' Plan"), each new non-employee
director, on the date of his or her election to the Board of Directors (whether
elected by the shareholders or the Board of Directors), automatically will be
granted a stock option to purchase 20,000 shares of Common Stock at an exercise
price equal to the fair market value of the Common Stock on the date of grant.
In addition, if the proposed amendments to the Directors' Plan are approved at
the Annual Meeting, each time a non-employee director has served on the Board
for a period of five consecutive years, such director automatically will be
granted a stock option to purchase 10,000 shares of Common Stock at an exercise
price equal to the fair market value of the Common Stock on the date of grant.
See "Approval of Amendments to 1992 Directors' Stock Option Plan".
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<PAGE>
OWNERSHIP OF COMMON STOCK
The following table sets forth information with respect to the
beneficial ownership of Viking Common Stock as of September 22, 1995 by (i) each
person who is known by Viking to be the beneficial owner of more than five
percent (5%) of the outstanding Common Stock, (ii) each director of Viking,
(iii) the executive officers named in the Summary Compensation Table on page 6,
and (iv) all directors and executive officers as a group. Each of the entities
and persons named in the table has sole voting and investment power with respect
to all shares of Common Stock beneficially owned by it, him or her.
<TABLE>
<CAPTION>
SHARES BENEFICIALLY OWNED(1)
----------------------------
NAME AND ADDRESS NUMBER PERCENT OF CLASS
---------------- --------- ----------------
<S> <C> <C>
Irwin Helford(2)...................... 2,366,000 5.76%
13809 South Figueroa Street
Los Angeles, California 90061
AIM Capital Management, Inc........... 2,171,100 5.29%
11 Greenway Plaza, Suite 1919
Houston, Texas 77046
Lee A. Ault III(3).................... 16,400 *
Neil R. Austrian(3)................... 69,424 *
Charles P. Durkin, Jr................. 62,184 *
Joan D. Manley(3)..................... 32,000 *
Rolf Ostern........................... 4,378 *
Donald M. Wilson(2)................... 252,874 *
Mark R. Brown(2)...................... 207,362 *
Mark Muir(2).......................... 185,673 *
Lisa Y. Billig(2)..................... 138,698 *
All directors and executive
officers as a group (13 persons)(4).. 3,541,410 8.53%
- ----------------
</TABLE>
* Indicates ownership of less than one percent.
(1) Except as otherwise noted in the following footnotes, no effect has been
given to the possible issuance of up to 3,596,832 shares issuable upon the
exercise of outstanding stock options.
(2) Includes 50,000 shares issued under the Long Term Stock Incentive Plan (the
"Incentive Plan") which are subject to transfer restrictions and to
forfeiture until June 30, 2007. Also includes 16,000 shares, 112,200
shares, 120,200 shares and 59,000 shares which may be purchased by Messrs.
Helford, Brown and Muir, and Ms. Billig, respectively, pursuant to stock
options exercisable on or before November 22, 1995, and which expire at
various times through July 7, 2004.
(3) Includes 12,000 shares, 20,000 shares and 20,000 shares which may be
purchased by Mr. Ault, Mr. Austrian and Ms. Manley, respectively, pursuant
to stock options exercisable on or before November 22, 1995, and which
expire on March 8, 2002.
(4) Includes 483,840 shares which may be purchased pursuant to stock options
exercisable on or before November 22, 1995, and 300,000 shares issued under
the Incentive Plan which are subject to transfer restrictions and to
forfeiture until June 30, 2007.
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<PAGE>
EXECUTIVE COMPENSATION
SUMMARY COMPENSATION TABLE
The following tables summarizes all compensation paid to Viking's Chief
Executive Officer and to each of the other four most highly paid executive
officers for services rendered in all capacities to Viking and its subsidiaries
for the fiscal years ended June 30, 1995, June 24, 1994 and June 25, 1993.
<TABLE>
<CAPTION>
LONG TERM COMPENSATION
--------------------------
ANNUAL COMPENSATION AWARDS(1)
------------------------- ---------
RESTRICTED SECURITIES
NAME AND STOCK UNDERLYING ALL OTHER
PRINCIPAL POSITION YEAR SALARY BONUS AWARDS($)(2) OPTIONS(#) COMPENSATION(3)
- -------------------------- ----- ---------- ------------ ------------ ---------- ---------------
<S> <C> <C> <C> <C> <C> <C>
Irwin Helford 1995 $600,000 $950,000(4) -- -- $356,577(5)
Chairman of the Board, 1994 550,000 800,000 -- 80,000 16,450
President and Chief 1993 450,000 650,000 $768,750 -- 15,076
Executive Officer
Donald M. Wilson 1995 200,000 135,000 -- 10,000 8,751
Vice President, 1994 175,000 81,000 -- 20,000 12,878
Operations 1993 155,000 67,000 768,750 32,000 12,622
Mark R. Brown 1995 195,000 138,000 -- 10,000 8,751
Vice President, 1994 170,000 93,500 -- 20,000 12,849
Information Systems 1993 145,500 76,500 768,750 32,000 12,622
Mark Muir 1995 185,000 131,000 -- 10,000 8,751
Vice President, 1994 140,000 87,700 -- 32,000 10,783
Marketing 1993 115,000 66,700 768,750 48,000 10,573
Lisa Y. Billig 1995 175,000 106,000 -- 10,000 8,751
Vice President, 1994 134,411 63,700 -- 24,000 9,881
Finance and Chief 1993 95,350 46,600 768,750 24,000 9,735
Financial Officer
</TABLE>
______________________
(1) Stock-based compensation amounts have been adjusted for all years to
reflect Viking's May 1994 two-for-one stock split.
(2) The amounts shown in the table represent the market price on the date of
grant of awards made under the Incentive Plan. The following number of
restricted shares (and the value of such shares based on the closing price
of the Common Stock on June 30, 1995) were held by each of the named
executives as of June 30, 1995: Mr. Helford, 50,000 shares ($1,831,250);
Mr. Wilson, 50,000 shares ($1,831,250); Mr. Brown, 50,000 shares
($1,831,250); Mr. Muir, 50,000 shares ($1,831,250); and Ms. Billig 50,000
shares ($1,831,250). Dividends are payable on such shares at the same rate
as paid to all shareholders. Subject to the executive's continued
employment with Viking, all restricted shares will vest in 2007.
(3) The amounts shown in the table consist of Viking's contributions to its
Profit Sharing Plan for the named executives, and, for Mr. Helford, $3,038
paid in fiscal 1995, and $2,454 paid in each of fiscal 1994 and fiscal
1993, in premiums for additional life insurance benefits payable to
beneficiaries designated by him.
(4) Mr. Helford's bonus was determined pursuant to the Chief Executive Officer
Performance Based Bonus Plan (the "Bonus Plan"). Pursuant to the Bonus
Plan, one third of such bonus ($316,667) was paid to Mr. Helford in fiscal
1996 by the issuance of stock options to purchase an aggregate of 9,819
shares of Viking Common Stock under the Amended and Restated 1991
Nonstatutory
-6-
<PAGE>
Stock Option Plan (the "1991 Plan") with an exercise price of $2.50 per
share. See "Compensation Committee Report on Executive Compensation -
Compensation of Irwin Helford".
(5) In fiscal 1995, Viking paid insurance premiums under a split dollar life
insurance arrangement with a trust for named beneficiaries of Mr. Helford.
At the death of Mr. Helford or, if certain assumptions as to life
expectancy, policy dividends and other factors are realized, at the
surrender of the policies, Viking will recover the full amount of premiums
it paid. The amount in the table for fiscal 1995 includes $344,788 which
represents the present value of the benefit from premiums paid by Viking.
OPTION GRANTS IN LAST FISCAL YEAR
The following table sets forth certain information at June 30, 1995, and
for the fiscal year then ended, with respect to stock options granted to the
individuals named in the Summary Compensation Table. No options were granted
during fiscal 1995 at an exercise price below the market price of the Common
Stock on the date of grant.
<TABLE>
<CAPTION>
POTENTIAL
REALIZABLE VALUE
NUMBER OF PERCENTAGE AT ASSUMED ANNUAL
SECURITIES OF TOTAL EXERCISE RATES OF STOCK PRICE
UNDERLYING OPTIONS GRANTED PRICE APPRECIATION FOR OPTION TERM(3)
OPTIONS TO EMPLOYEES PER EXPIRATION ---------------------
NAME GRANTED(1) IN FISCAL 1995 SHARE(2) DATE 5% 10%
- ---- ----------- --------------- -------- ---------------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
Irwin Helford(4) -- -- -- -- -- --
Donald M. Wilson 10,000 1.9% $26.00 7/7/04 $163,513 $414,373
Mark R. Brown 10,000 1.9% 26.00 7/7/04 163,513 414,373
Mark Muir 10,000 1.9% 26.00 7/7/04 163,513 414,373
Lisa Y. Billig 10,000 1.9% 26.00 7/7/04 163,513 414,373
- ----------------
</TABLE>
(1) All options have a ten-year term and are subject to vesting over a five-
year period, with 20% of the options becoming exercisable on each
successive anniversary of the date of grant. The vesting of the options
will be accelerated upon a sale of substantially all of Viking's assets,
the dissolution of Viking or upon a change in the controlling shareholder
interest in Viking resulting from a tender offer, reorganization, merger or
consolidation.
(2) The exercise price may be paid by delivery of owned shares of Common Stock
valued at fair market value on the date of exercise. The Compensation
Committee retains discretion, subject to plan limits, to modify the terms
of outstanding options, to reprice the options and to provide for the
payment of any tax withholding obligations related to the exercise of the
stock options to be made by offset of the underlying shares.
(3) The potential realizable values shown under these columns represent the
future value of the options (net of exercise price) assuming the market
price of the Common Stock appreciates by 5% and 10%, respectively, during
each year of the options' ten-year term. The 5% and 10% rates of
appreciation are prescribed by regulations of the Securities and Exchange
Commission and are not intended to forecast possible future appreciation of
Viking Common Stock.
(4) Does not include options granted to Mr. Helford in fiscal 1996 in payment
of a portion of his fiscal 1995 bonus under the Bonus Plan.
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR AND FISCAL YEAR END VALUE
The following table sets forth information with respect to the named
executive officers with respect to the unexercised stock options held by them as
of the end of the fiscal year. No stock options were exercised by any of the
named executive officers during the fiscal year ended June 30, 1995.
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<PAGE>
<TABLE>
<CAPTION>
NUMBER OF SECURITIES
UNDERLYING UNEXERCISED VALUE OF UNEXERCISED IN-THE-MONEY
OPTIONS HELD AT JUNE 30, 1995(#) OPTIONS AT JUNE 30, 1995($)(1)
-------------------------------- ---------------------------------
NAME EXERCISABLE / UNEXERCISABLE EXERCISABLE / UNEXERCISABLE
- ------------------- -------------------------------- ---------------------------------
<S> <C> <C> <C> <C>
Irwin Helford 16,000 / 64,000 $ 200,000 / $ 800,000
Donald M. Wilson 110,600 / 64,400 3,603,720 / 1,616,930
Mark R. Brown 93,600 / 56,400 3,019,800 / 1,343,450
Mark Muir 97,600 / 72,400 3,088,600 / 1,694,650
Lisa Y. Billig 44,400 / 51,600 1,355,200 / 1,130,050
</TABLE>
- ------------------
(1) Based on the difference between the closing price on The Nasdaq National
Market of Viking Common Stock on that date ($36.625) and the exercise
price.
EMPLOYMENT AGREEMENTS AND CHANGE-IN-CONTROL ARRANGEMENTS
Mr. Helford serves as Chairman, Chief Executive Officer and President
pursuant to the terms of an employment agreement which continues in effect until
June 30, 1998, and automatically renews for successive 12-month periods
thereafter unless terminated by either party. Under the terms of the agreement,
Mr. Helford receives an annual salary of $600,000 (increased to $700,000 by the
Compensation Committee in July 1995) and a bonus in an amount determined by the
Board of Directors (which has delegated this authority to the Compensation
Committee). In addition to salary and bonus, Mr. Helford is entitled to receive
an automobile allowance at the rate of $31,200 per year, and Viking is required
to maintain insurance on Mr. Helford's life in the amount of $500,000, payable
to beneficiaries designated by Mr. Helford.
In April 1995, Viking entered into an agreement with M. Bruce Nelson,
Viking's Executive Vice President and Chief Operating Officer, which provides
for certain payments to Mr. Nelson in the event of a change in control of
Viking. Under the agreement, if Mr. Nelson's employment is terminated following
a change in control of Viking, Mr. Nelson will receive an amount equal to three
times the average of his annual salary and bonus for the three years immediately
preceding the change in control (or such shorter period for which he has been
employed by Viking) unless such termination is (i) because of Mr. Nelson's death
or disability, (ii) by Viking for "Cause" (as defined in the agreement) or (iii)
by Mr. Nelson's resignation other than for "Good Reason" (as defined in the
agreement). The amount otherwise payable to Mr. Nelson under the agreement will
be reduced to the extent necessary to prevent the payments made to Mr. Nelson
from exceeding the limits imposed by Section 280G of the Internal Code of 1986.
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
The Compensation Committee (the "Committee") of the Board of Directors,
which consists of Ms. Manley and Messrs. Ault, Austrian and Durkin, each of whom
is a non-employee director, sets Viking's compensation policies applicable to
executive officers, determines the compensation of the executive officers,
subject to review by the Board of Directors, and administers Viking's stock
option and stock incentive plans, other than the 1992 Directors' Stock Option
Plan, which is administered by the Board. The Committee has prepared the
following report (the "Report") for inclusion in this Proxy Statement.
Compensation Policy for Executive Officers
The policy of the Committee is to provide each executive officer current
cash compensation that is reasonable and consistent with Viking's size, industry
and performance, and long-term incentive
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<PAGE>
compensation based on the increase in the value of Viking's Common Stock and the
achievement of Viking's long term goals. In addition to salary, current cash
compensation includes a bonus based in part on Viking's current annual
performance and in part on the executive's individual performance. The
Committee has relied heavily on the recommendations of Mr. Helford in setting
the compensation of the other executive officers.
Compensation of Irwin Helford
Mr. Helford's salary is fixed by his employment contract, and he is
entitled under the contract to a bonus determined by the Board of Directors in
its discretion. The Board has delegated this responsibility to the Committee.
In view of Viking's continued outstanding performance and Mr. Helford's
contribution to such performance, the Committee approved a $50,000 increase in
Mr. Helford's base salary under his employment agreement for fiscal 1995 and a
$100,000 increase for fiscal 1996.
In keeping with the Committee's objective of rewarding executive officers
based on corporate performance, and in order to assure the deductibility to
Viking of amounts paid to Mr. Helford, in July 1994, the Committee adopted the
Chief Executive Officer Performance Based Bonus Plan (the "Bonus Plan"), which
was approved by shareholders in November 1994. The Bonus Plan provides for the
payment to Mr. Helford of a bonus for each fiscal year, commencing with fiscal
1995, consisting of the sum of specified percentages of his salary if Viking
meets or exceeds 90% of the target amounts contained in Viking's business plan
for that fiscal year for one or more of the following: consolidated revenues,
gross profit, pretax profit and net income. A separate percentage of salary
applies to each such target, with a maximum annual bonus payable under the Bonus
Plan set at $950,000 for fiscal 1995. Pursuant to the Bonus Plan, Mr. Helford
was paid a bonus of $950,000 for fiscal 1995, with one-third of such bonus
($316,667) paid to Mr. Helford by the issuance of stock options to purchase an
aggregate of 9,819 shares of Viking Common Stock under the Amended and Restated
1991 Nonstatutory Stock Option Plan (the "1991 Plan"). Pursuant to the Bonus
Plan, all such options have an exercise price of $2.50 per share, subject to
adjustment as provided in the 1991 Plan, and are deemed to have a value equal to
the difference between such exercise price and the closing price of Viking
Common Stock on July 13, 1995 ($34.75), the last trading day prior to the date
of grant.
In light of Mr. Helford's contribution to Viking's continued outstanding
performance, and the fact that the maximum bonus limit was reached in the first
year of the Bonus Plan, the Committee, subject to shareholder approval, has
increased the maximum annual bonus payable under the Bonus Plan for each fiscal
year commencing with fiscal 1996. If the amendment to the Bonus Plan is not
approved at the Annual Meeting, the maximum annual bonus payable under the Bonus
Plan will remain at $950,000. See "Approval of Amendments to the Chief
Executive Officer Performance Based Bonus Plan".
In fiscal 1995, the Committee approved a split dollar life insurance
arrangement with a trust for beneficiaries named by Mr. Helford. At the death
of Mr. Helford or, if certain assumptions as to life expectancy, policy
dividends and other factors are realized, at the surrender of the policies,
Viking will recover the full amount of premiums it paid.
Compensation of Other Executive Officers
The salaries of the executive officers other than Mr. Helford reflect
annual discretionary increases based primarily on individual performance
factors. The Committee believes that the salaries of these executive officers
are comparable to the salaries of executives with similar responsibilities based
on a study prepared for the Committee in 1991 by a management compensation
consultant. Several of the executive
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<PAGE>
officers were promoted to their current positions from subordinate positions
they held with Viking and received salary increases consistent with their
increased responsibility.
In awarding bonuses to the executive officers (other than Mr. Helford) for
the fiscal year ended June 30, 1995, the Committee considered Viking's overall
performance, as reflected in its revenues and net income, each executive's
success in meeting individual performance targets applicable to his or her area
of responsibility and the personal performance of the executive, including
commitment, leadership and effort. These targets were set near the beginning of
the year by Mr. Helford in consultation with the executive and generally relate
to reducing the cost or increasing the productivity or efficiency of the
activity managed by the executive. The amount of bonus that each executive
received was discretionary with the Committee, with 40% of the potential bonus
contingent on attaining specific objective goals related to Viking's overall
performance, 40% contingent on attaining specified goals related to the
executive's individual performance in his or her area of responsibility and 20%
contingent on the executive's personal performance.
Amounts of compensation deemed to have been realized by executive officers
as a result of the exercise of stock options that were granted to them in prior
years were not taken into account in determining their bonuses for the current
year.
Equity-Based Incentive Plans
The Committee believes that basing a significant portion of the
compensation of executive officers and other key employees on increases in the
value of Viking Common Stock harmonizes the interests of the executives and the
shareholders and is in the best interests of the shareholders. Viking's option
plans are designed to accomplish this purpose. The Incentive Plan, which
provides incentive to attain long term financial performance goals, is not
solely dependent on increases in the value of the Common Stock.
Executive officers (including Mr. Helford) and other key employees have
been awarded stock options under the Amended and Restated Incentive Stock Option
Plan (the "ISO Plan"). For each key employee, including executive officers, the
Committee determines, on an annual basis, the number of options shares to be
granted under the ISO Plan to the employee based upon his or her level of
responsibility, a review of Viking's overall performance and prior grants.
Newly hired management personnel, including executive officers, are eligible to
receive stock options under the ISO Plan after satisfactory completion of an
introductory period, and annually thereafter. Internally promoted management
personnel are eligible to receive additional options at the time of their
promotion in order to reflect their new positions and increased responsibilities
and are eligible to receive additional grants annually thereafter.
Based on a review of Viking's stock option procedures conducted in December
1993 by a management compensation consultant and by senior managers at Viking,
the Committee currently believes that the number of option shares for each level
is appropriate for the responsibility of the optionee and sufficient to provide
incentive to each optionee. Options generally become exercisable over a five
year period. To fully exercise an option, the optionee generally must remain in
the employ of Viking throughout the period.
Options have been granted under the 1991 Plan, which permits the grant of
stock options with exercise prices at less than the fair market value of the
Common Stock on the date of grant, only in limited instances when it has been
found to be appropriate to provide special incentives over and above the
incentives provided by the grant of a stock option at fair market value. In
addition to options granted to Mr. Helford pursuant to the terms of the Bonus
Plan, during fiscal 1995, Viking granted to each of two
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key employees, including one executive officer, an option under the 1991 Plan to
purchase 10,000 shares of Common Stock, at an exercise price of $5.00 per share.
Each of nine current key employees, including six current executive
officers, has been awarded 50,000 shares of Common Stock, subject to vesting,
under the Incentive Plan. Each participant is considered to be an employee
whose responsibilities and decisions directly affect the management, growth,
performance or profitability of Viking. The Committee awarded the shares to
provide for the participants' retirement if they remain in the employ of Viking
until June 30, 2007, or until retirement at age 65, death or disability, if
sooner.
The Committee intends to adopt during fiscal 1996, subject to shareholder
approval, an additional equity-based long-term incentive plan relating to
Viking's performance for the three-year period and fiscal year ending June 26,
1998. The Committee is currently in the process of developing this plan and has
not as yet established any performance based criteria or goals for such plan.
Recent Internal Revenue Code Amendments
The Committee will continue to consider the anticipated tax treatment to
Viking regarding the compensation and benefits paid to the Chief Executive
Officer and the four other most highly compensated executive officers of Viking
in light of the 1993 addition to Section 162(m) of the Internal Revenue Code of
1986, as amended ("Section 162(m)"). The Committee will from time to time
consider amendments to Viking's compensation, including further amendments to
its equity-based incentive plans, necessary to preserve the deductibility of all
compensation paid by Viking which is subject to Section 162(m). While Viking
does not expect to pay its executive officers compensation in fiscal 1996 in
excess of the Section 162(m) deductibility limit, the Board of Directors and the
Committee retain discretion to authorize the payment of compensation that does
not qualify for income tax deductibility under Section 162(m).
Lee A. Ault III Neil R. Austrian
Charles P. Durkin, Jr. Joan D. Manley
PERFORMANCE GRAPH
The following graph compares the cumulative shareholder return on Viking
Common Stock from June 28,1991 through June 30, 1995, based on the market price
of the Common Stock, with the cumulative total return of the Nasdaq Market Value
Index (Broad Market) and the Media General Retail - Other Index (Peer Group).
The graph assumes that the value of the investment in Viking Common Stock and
each index was $100 on June 28, 1991 and that all dividends, if any, were
reinvested. The comparisons in this table are not intended to forecast or be
indicative of possible future price performance.
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<PAGE>
COMPARISON OF CUMULATIVE SHAREHOLDER RETURN OF
VIKING OFFICE PRODUCTS, INC., NASDAQ MARKET VALUE INDEX
AND MEDIA GENERAL RETAIL - OTHER INDEX
PERFORMANCE GRAPH APPEARS HERE
<TABLE>
<CAPTION>
Measurement Period VIKING OFFICE BROAD PEER
(Fiscal Year Covered) PRODUCTS, INC. MARKET INDEX GROUP INDEX
- ------------------- -------------- --------- ----------
<S> <C> <C> <C>
Measurement Pt- JUNE 28, 1991 $100 $100 $100
FYE JUNE 26, 1992 $176.19 $107.75 $138.14
FYE JUNE 25, 1993 $316.67 $132.27 $166.43
FYE JUNE 25, 1994 $455.95 $145.04 $202.21
FYE JUNE 30, 1995 $697.62 $170.11 $262.99
</TABLE>
CERTAIN TRANSACTIONS
Viking has assisted certain of its executive officers in acquiring
residences by paying a portion of the purchase price of such residences. Viking
receives an undivided interest in the property in proportion to the amount of
purchase price paid by Viking, and all debt service and other costs relating to
the property are paid by the executive officer. Upon any sale of the property,
the net sales proceeds will be divided according to the parties' respective
ownership interests, provided that Viking is to receive at least as much as it
paid for its portion of the property. Pursuant to such arrangements, in January
1991, Viking paid $200,000 of the $572,000 purchase price of the residence
purchased by Mr. Wilson and his wife and in October 1993, Viking paid $119,000
of the $595,000 purchase price of a residence purchased by Mr. Muir and his wife
and $140,000 of the $1,125,000 purchase price of a residence purchased by
Stephen R. Kroll, Viking's Vice President, Administration, and his wife.
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<PAGE>
APPROVAL OF AMENDMENTS TO THE BYLAWS
The authorized number of directors under Viking's Bylaws is currently a
minimum of four and a maximum of seven, with the exact number set from time to
time within such authorized limits by the Board of Directors. Currently the
number of directors is set at seven, and the Board has reduced this number to
six, effective at the 1995 Annual Meeting. The Bylaws also currently provide
that all directors are to be elected annually to serve for a term of
approximately one year, from annual meeting to annual meeting.
The Board of Directors has adopted resolutions, subject to shareholder
approval, to amend the Bylaws to set the number of directors at a minimum of six
and a maximum of nine, subject to change in the manner provided in the Bylaws,
and to divide the Board into two classes of directors, each serving two-year
terms, with the number of directors in the two classes as nearly equal as
possible. Under the California Corporations Code, if the Board is divided into
two classes, the authorized number of directors may not be less than six.
Initially each class will consist of three members.
If the Bylaw amendments are approved by the shareholders, one-half of the
Board of Directors would be elected each year. Initially, members of both
classes will be first elected at the 1995 Annual Meeting, with directors elected
to Class I (Messrs. Helford, Durkin and Ostern have been nominated for this
class) elected to serve until the 1996 Annual Meeting and directors elected to
Class II (Messrs. Ault and Austrian and Ms. Manley have been nominated for this
class) elected to serve until the 1997 Annual Meeting. Commencing with the
election of Class I directors at the 1996 Annual Meeting, each class of
directors elected at an Annual Meeting would be elected to two-year terms.
Under the Bylaws, any vacancies or newly created directorships, however
occurring, may be filled by a vote of the majority of directors then remaining
in office. Vacancies also may be filled by a majority vote of shareholders
unless the vacancy has been previously filled by the Board of Directors. Under
the proposed amendment, any director chosen to fill a vacancy will hold office
until the next election of the class for which such director was chosen and
until his or her successor is elected and qualified. If the size of the Board
is increased or decreased, the Board would apportion the increase or decrease
between the two classes to keep both classes as nearly equal as possible.
The Board of Directors believes that creation of a classified board is in
the best interests of Viking and its shareholders because it will help lend
continuity and stability to the management of Viking and in the Board's
leadership and policies. Following the adoption of the classified board
structure, it is likely that at all times a portion of the Board of Directors
will have had prior experience as directors of Viking. The Board believes that
this will facilitate long-range planning, strategy and policy, because it will
enhance the likelihood of continuity and stability in the composition of the
Board and its policies. The Board of Directors believes that this, in turn,
will permit the Board to more effectively represent the interests of all
shareholders.
The Board also believes that the classified structure may reduce the
possibility that a third party could effect a sudden or surprise change in
control of the Board of Directors. This could discourage future tender offers
and other takeover attempts which many shareholders may deem to be in their best
interests and could make Viking's Common Stock less attractive to investors who
purchase stocks in anticipation of an increase in price if a takeover attempt
develops.
The Board has no knowledge of any present effort to gain control of Viking
or to organize a proxy contest, and there has been no problem in the past or at
the present time with continuity or stability of the Board. However, the Board
believes that it is prudent and in the interests of shareholders generally
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<PAGE>
to provide the greater assurance of continuity of Board composition and policies
that will result from a classified structure. The Board believes such advantage
outweighs any disadvantages relating to discouraging potential acquirors from
seeking to obtain control of Viking.
APPROVAL OF AMENDMENTS TO 1992 DIRECTORS' STOCK OPTION PLAN
INTRODUCTION
The 1992 Directors' Stock Option Plan (the "Director's Plan") was adopted
by the Board of Directors on March 9, 1992, and was thereafter approved by the
shareholders. The Directors' Plan allows each non-employee director of Viking
to receive an option to purchase 20,000 shares of Common Stock on the date of
his or her election to the Board. Non-Employee Directors are not eligible to
participate in any other stock option or similar plan currently maintained by
Viking.
The purpose of the Directors' Plan is to promote increased incentive and
personal interest in the welfare of Viking by those individuals who are
primarily responsible for shaping the long-range plans of Viking, to assist
Viking in attracting and retaining on the Board persons of exceptional
competence and to provide additional incentives to serve as a director of
Viking.
The shareholders are being asked to vote on a proposal to amend the
Directors' Plan to provide (i) for the automatic grant at five year intervals of
additional stock options to purchase 10,000 shares of Common Stock to each non-
employee director who continues to serve on the Board and (ii) that any director
who was an employee of Viking and later ceases to be an employee, automatically
will be granted a stock option to purchase 20,000 shares of Common Stock on the
first date after shareholder approval of the amendment to the Directors' Plan
that such director is not an employee and is re-elected as a director. The
Board recommends that shareholders vote "FOR" the approval of the amendments to
the Directors' Plan.
The full text of the Directors' Plan, as amended, is set forth as Exhibit A
hereto, and shareholders are urged to refer to it for a complete description of
the Directors' Plan. The summary of the principal features of the Directors'
Plan which follows is qualified in its entirety by reference to the complete
text of the Directors' Plan.
PRINCIPAL FEATURES OF THE PLAN
Pursuant to the Directors' Plan, on March 9, 1992, the non-employee
directors then serving (Mr. Ault, Mr. Austrian and Ms. Manley) were each granted
a stock option to purchase 20,000 shares of Common Stock at an exercise price of
$8.9375 per share, the fair market value of the Common Stock on the date of
grant. In addition each new non-employee director, on the date of his or her
election to the Board of Directors (whether elected by the shareholders or the
Board of Directors), automatically will be granted a stock option to purchase
20,000 shares of Common Stock at an exercise price equal to the fair market
value of the Common Stock on the date of grant.
Pursuant to the terms of the amendment, on September ___, 1995,
Mr. Austrian and Ms. Manley were each granted, subject to shareholder approval,
a stock option to purchase 10,000 shares of Common Stock at an exercise price of
$______, the fair market value of the Common Stock on the date of grant.
Assuming continued service on the Board, Mr. Ault will receive an additional
stock option in 1997, and Mr. Austrian, Ms. Manley and Mr. Ault will receive
additional 10,000 share options at the end of each subsequent five year period.
Mr. Durkin also is eligible to receive a stock option under the terms of the
Directors' Plan. However, in accordance with the policies of Dillon Read,
Mr. Durkin declined the stock
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<PAGE>
option award to which he would otherwise have been entitled under the Directors'
Plan and, if the amendment is approved by the shareholders, intends to decline
all future awards to which he may become entitled as a result of his continuous
service on the Board. In addition, if the amendment is approved and Mr. Ostern
is re-elected to the Board at the Annual Meeting, he automatically will be
granted a stock option to purchase 20,000 shares of Common Stock on November 16,
1995.
The determination of fair market value is based on quotations from The
Nasdaq National Market. On October ___, 1995, the last sale price of the Common
Stock, as reported on The Nasdaq National Market, was $___ per share.
A stock option, once granted to a non-employee director, will remain in
effect in accordance with its terms, even if the non-employee director later
enters the employ of Viking or one of its subsidiaries. A maximum of 200,000
shares of Common Stock may be issued under the Directors' Plan. If a stock
option expires, terminates or is cancelled for any reason without having been
exercised in full, the shares of Common Stock not purchased thereunder are
available again for purposes of the Directors' Plan. No stock options may be
granted under the Directors' Plan after March 8, 2002.
The stock option term is for a period of ten years from the date of grant,
and, except as described below, each stock option is subject to vesting over a
five-year period, with 20% of the option becoming exercisable on each successive
anniversary of the date of grant. For purposes of determining the vesting
period of the stock options granted to the non-employee directors serving on the
Board of Directors on the date the Directors' Plan was adopted by the Board (Mr.
Ault, Mr. Austrian and Ms. Manley), the stock options were treated as if they
were granted on the date the non-employee director first became a director of
Viking. In addition, all outstanding options immediately become exercisable in
full in the event of certain changes in control of Viking. Notwithstanding any
of the foregoing, no stock option may be exercised until six months and one day
after the date of grant.
Each stock option may be exercised in whole or in part by delivering it for
surrender or endorsement to Viking together with payment of the exercise price.
The exercise price may be paid in cash, by cashier's or certified check or, if
authorized by the Board or a committee thereof, by surrender of previously owned
shares of Common Stock.
Except as otherwise provided below, a non-employee director may not
exercise a stock option unless from the date of grant to the date of exercise
the non-employee director continuously serves on the Board of Directors. Upon
the termination of the service of a non-employee director as a director of
Viking for any reason, the stock options then currently exercisable remain
exercisable for a period of 90 days after the date of such termination, subject
to earlier termination at the end of their fixed term.
The Directors' Plan is administered by the Board of Directors or by a duly
authorized committee of the Board. The Board or its duly authorized committee
has complete authority, subject to the express provisions of the Directors'
Plan, to adopt such rules and regulations, and to make all other determinations,
deemed necessary or desirable for the administration of the Directors' Plan.
However, neither the Board nor any committee has any discretion as to (1) the
selection of directors to whom stock options may be granted, (2) the number of
stock options that may be granted to each director, (3) the times at which or
the periods within which stock options may be exercised or (4) except for the
determination of fair market value in accordance with the provisions of the
Directors' Plan, the price at which stock options may be exercised.
The Board of Directors may at any time suspend, amend or terminate the
Directors' Plan. Shareholder approval is required, however, to materially
increase the benefits accruing to non-employee
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<PAGE>
directors, materially increase the number of securities which may be issued
(except for adjustments under anti-dilution clauses) or materially modify the
requirements as to eligibility for participation.
Stock options granted under the Directors' Plan are non-statutory stock
options and are not eligible for the tax benefits applicable to incentive stock
options. Viking maintains a current registration statement under the Securities
Act of 1933 with respect to the shares of Common Stock issuable upon the
exercise of outstanding stock options under the Directors' Plan.
The following table sets forth certain information with respect to options
granted, subject to shareholder approval, upon the amendment to the Directors'
Plan.
NEW PLAN BENEFITS
1992 DIRECTORS' STOCK OPTION PLAN
<TABLE>
<CAPTION>
NUMBER OF
NAME OR GROUP OPTIONS GRANTED
------------- ---------------
<S> <C>
Irwin Helford.......................... 0
Donald M. Wilson....................... 0
Mark R. Brown.......................... 0
Mark Muir.............................. 0
Lisa Billig............................ 0
Executive Group........................ 0
Non-Executive Director Group........... 20,000
Non-Executive Officer Employee Group... 0
</TABLE>
SUMMARY OF FEDERAL INCOME TAX CONSEQUENCES
The following discussion is a short summary of the Federal income tax
consequences of the grant and exercise of stock options under the Directors'
Plan.
Tax Consequences to Non-Employee Directors
A non-employee director recognizes no taxable income upon the grant of a
stock option under the Directors' Plan. In general, upon the exercise of the
option, the non-employee director will recognize ordinary income in an amount
equal to the excess of the fair market value of the shares purchased at the date
of exercise over the exercise price. Withholding tax obligations arising from
the exercise of a nonstatutory stock option may be satisfied by any payment
method deemed appropriate by the Board, including by withholding from the shares
of Common Stock otherwise issuable upon exercise of the stock option the number
of option shares having a fair market value equal to the amount of the
withholding tax obligation.
Shares acquired upon the exercise of an option by the payment of cash will
have a basis equal to their fair market value on the date of exercise and have a
holding period beginning on such date. Different rules apply if a non-employee
director exercises a stock option by surrendering previously owned shares of
Common Stock.
Gain or loss recognized on a disposition of the shares purchased generally
will qualify as long-term capital gain or loss if the shares have a holding
period of more than twelve months.
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<PAGE>
Tax Consequences to Viking
Viking generally is allowed an income tax deduction for amounts that are
taxable to non-employee directors as ordinary income under the foregoing rules.
APPROVAL OF AMENDMENT TO CHIEF EXECUTIVE OFFICER
PERFORMANCE BASED BONUS PLAN
The Chief Executive Officer Performance Based Bonus Plan (the "Bonus Plan")
was adopted by the Committee during fiscal 1994 and was thereafter approved by
the shareholders. The Bonus Plan was adopted in order to assure the
deductibility for federal income tax purposes of bonuses paid to Mr. Helford in
light of the 1993 addition to Section 162(m).
The Bonus Plan provides for the payment to Mr. Helford of an annual bonus
consisting of the sum of specified percentages of his salary if Viking meets or
exceeds 90% of the target amounts contained in Viking's business plan for that
fiscal year for one or more of the following: consolidated revenues, gross
profit, pretax profit and net income. A separate percentage of salary applies
to each such target, with a maximum annual bonus payable under the Bonus Plan
set at $950,000 for fiscal 1995. Pursuant to the Bonus Plan, Mr. Helford was
paid a bonus of $950,000 for fiscal 1995, with one-third of such bonus
($316,667) paid to Mr. Helford by the issuance of stock options to purchase an
aggregate of 9,819 shares of Viking Common Stock under the 1991 Plan. Pursuant
to the Bonus Plan, all such options have an exercise price of $2.50 per share,
subject to adjustment as provided in the 1991 Plan, and are deemed to have a
value equal to the difference between such exercise price and the closing price
of Viking Common Stock on July 13, 1995 ($34.75), the last trading day prior to
the date of grant. In September 1995, the Committee amended the Bonus Plan to
provide that one-quarter (as opposed to one-third) of the annual bonus will be
paid by issuing him stock options under the 1991 Plan.
The shareholders are being asked to vote on a proposal to amend the Bonus
Plan to increase the maximum annual bonus payable under the Bonus Plan from
$950,000 to $1,300,000 for fiscal 1996, $1,400,000 for fiscal 1997 and
$1,500,000 for fiscal 1998. The Committee believes that the maximum annual
bonus under the Bonus Plan was initially set too low, and an increase would
provide Mr. Helford with additional incentive to assist Viking in meeting the
targets set forth in Viking's annual business plans. The Committee believes
that an annual bonus for Mr. Helford is an important part of his overall
compensation and recommends that shareholders vote "FOR" the amendment.
Participation in the Bonus Plan is not exclusive and will not prevent Mr.
Helford from participating in other compensation plans of Viking or from
receiving other compensation from Viking. If the proposed amendment to the
Bonus Plan is not approved by the shareholders at the Annual Meeting, the
current annual limit of $950,000 will remain in effect.
The following table sets forth the bonus that would have been payable under
the Bonus Plan to Mr. Helford for fiscal 1995 assuming the amendment had been in
effect for such year.
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NEW PLAN BENEFITS
CHIEF EXECUTIVE OFFICER PERFORMANCE BASED BONUS PLAN
<TABLE>
<CAPTION>
DOLLAR VALUE OF
NAME AND POSITION FISCAL 1995 BONUS
----------------- -----------------
<S> <C>
Irwin Helford, Chairman of the Board
President and Chief Executive Officer........... $983,000(1)
</TABLE>
- -------------------
(1) Pursuant to the terms of the Bonus Plan as amended, one-fourth of such
bonus ($245,750) would have been paid to Mr. Helford by the issuance of
stock options to purchase an aggregate of 7,620 shares of Viking Common
Stock under the 1991 Plan, with an exercise price of $2.50 per share.
RATIFICATION OF SELECTION OF AUDITORS
The Board of Directors has selected the accounting firm of Deloitte &
Touche to serve as independent auditors for the current fiscal year, subject to
ratification by the shareholders. Deloitte & Touche has served as Viking's
independent auditors since 1986.
The Board of Directors recommends a vote "FOR" ratification of this
selection. Shareholder ratification of the selection of auditors is not
required under the laws of the State of California, but the Board has determined
to ascertain the position of the shareholders on the selection. The Board of
Directors will reconsider the selection if it is not ratified by the
shareholders.
It is anticipated that representatives of Deloitte & Touche will be present
at the Annual Meeting, and such representatives will be given the opportunity to
make a statement, if they so desire, and to answer appropriate questions.
MISCELLANEOUS
SHAREHOLDER PROPOSALS
Shareholder proposals intended to be presented at the 1996 Annual Meeting
of Shareholders must be received by Viking by June 6, 1996 to be considered by
Viking for inclusion in Viking's proxy statement and form of proxy relating to
that meeting. Such proposals should be directed to the attention of the
Secretary, Viking Office Products, Inc., 879 West 190th Street, 10th Floor, Los
Angeles, California 90248.
COMPLIANCE WITH SECTION 16(A) OF THE SECURITIES EXCHANGE ACT
Section 16(a) of the Securities Exchange Act of 1934 requires Viking's
officers and directors, and persons who own more than ten percent of a
registered class of Viking's equity securities, to file reports of ownership and
changes in ownership with the Securities and Exchange Commission. Officers,
directors and greater than ten percent shareholders are required by Securities
and Exchange Commission regulations to furnish Viking with copies of all Section
16(a) forms they file.
Based solely on a review of the copies of such forms furnished to Viking,
or written representations that no Forms 5 were required, Viking believes that
during the period from June 24, 1994 to June 30, 1995 all Section 16(a) filing
requirements applicable to its officers, directors and greater than ten-percent
beneficial owners were complied with, except that Messrs. Brown, Kroll, Muir and
Wilson and Ms. Billig were late in reporting the grant of an incentive stock
option under the ISO Plan.
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OTHER MATTERS
Neither Viking nor any of the persons named as proxies knows of any matters
to be voted on at the Annual Meeting other than as described in this Proxy
Statement. However, if any other matters are properly presented at the meeting,
it is the intention of the persons named as proxies to vote in accordance with
their judgment on such matters, subject to direction by the Board of Directors.
The 1995 Annual Report to Shareholders accompanies this Proxy Statement,
but is not to be deemed a part of the proxy soliciting material.
WHILE YOU HAVE THE MATTER IN MIND, PLEASE COMPLETE, SIGN AND RETURN THE
ENCLOSED PROXY CARD.
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<PAGE>
EXHIBIT A
VIKING OFFICE PRODUCTS, INC.
1992 DIRECTORS' STOCK OPTION PLAN
1. PURPOSE.
-------
This Viking Office Products, Inc., 1992 Directors' Stock Option Plan
(the "Plan") is intended to promote the best interests of Viking Office
Products, Inc., a California corporation ("Viking"), and its shareholders by
providing to each member of Viking's Board of Directors (the "Board") who is a
Non-Employee Director (as defined in paragraph 3 herein) of Viking with an
opportunity to acquire a proprietary interest in Viking by receiving an option
("Stock Option") to purchase Viking's common stock, without par value ("Common
Stock"), as herein provided. It is intended that the Plan will promote an
increased incentive and personal interest in the welfare of Viking by those
individuals who are primarily responsible for shaping the long-range plans of
Viking. In addition, Viking seeks both to attract and retain on its Board
persons of exceptional competence and to provide a further incentive to serve as
a director of Viking.
2. ADMINISTRATION.
--------------
2.1 The Plan shall be administered by the Board or by a duly
authorized committee of the Board. Unless and until the Board specifically
delegates administration of the Plan to a committee of the Board empowered to
administer the Plan, all references in the Plan to the "Committee" shall mean
the Board.
2.2 The Committee shall have no discretion as to (a) the selection of
directors to whom Stock Options may be granted, (b) the number of Stock Options
granted to each director, (c) the times at which or the periods within which
Stock Options may be exercised, or (d) except to the limited extent provided in
paragraph 5, the price at which Stock Options may be exercised. However, the
Committee shall have full and complete authority, subject to the express
provisions of the Plan, to adopt such rules and regulations and to make all
other determinations deemed necessary or desirable for the administration of the
Plan. All interpretations and constructions of the Plan by the Committee, and
all of its actions hereunder, shall be binding and conclusive on all persons for
all purposes.
2.3 Viking shall indemnify and hold harmless each Committee member
and each director of Viking, and the estate and heirs of such Committee member
or director, against all claims, liabilities, expenses, penalties, damages or
other pecuniary losses, including legal fees, which such Committee member or
director, his or her estate or heirs may suffer as a result of his or her
responsibilities, obligations or duties in connection with the Plan, to the
extent that insurance, if any, does not cover the payment of such items.
3. ELIGIBILITY.
-----------
Each member of the Board who is not an employee of Viking or any of
its Subsidiaries (as herein defined) or of any parent corporation of Viking (a
"Non-Employee Director") shall be eligible to be granted a Stock Option under
the Plan. Eligibility shall be determined (i) with respect to each director
serving on the Board on the date this Plan was adopted by the Board (i.e., March
9, 1992) on that date; (ii) with respect to each director first elected after
this Plan was adopted by the Board, on the date such director is first so
elected; and (iii) with respect to each director who was an employee of Viking
or one of its Subsidiaries or a parent corporation on the date this Plan was
adopted by the Board or on the subsequent date that such director was first
elected to the Board and later ceases to be such an employee, the first time
after the date the first amendment of this Plan (the "First Amendment") is
approved by the shareholders that such director is no longer such an employee
and is re-elected as a director. A Stock
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Option, once granted to a Non-Employee Director, shall remain in effect in
accordance with its terms even if the optionee later enters the employ of Viking
or a Subsidiary or parent. "Subsidiary" shall mean each corporation which is a
"subsidiary corporation" of Viking within the definition contained in Section
424(f) of the Internal Revenue Code of 1986, as amended (the "Code").
4. GRANTS.
------
4.1 Each Non-Employee Director serving on the Board on the date the
Board adopted this Plan (March 9, 1992) was granted a Stock Option to purchase
20,000 shares (reflects adjustment for 2:1 stock split in May 1994) of Common
Stock automatically on that date. Each Non-Employee Director who first becomes
eligible (as provided in paragraph 3) after the Plan was adopted by the Board
shall be granted an option to purchase 20,000 shares (reflects adjustment for
2:1 stock split in May 1994) of Common Stock automatically on the date of such
eligibility. Subject to the provisions of paragraph 11 of this Plan, the number
of shares of Common Stock issued and issuable upon the exercise of Stock Options
granted under this Plan shall not exceed 200,000 (reflects adjustment for 2:1
stock split in May 1994).
4.2 Subject to shareholder approval of the First Amendment: (i) each
Non-Employee Director who has been a director continuously for at least five
years on the date the First Amendment is approved by the Board (the "First
Amendment Effective Date"), shall be granted a Stock Option to purchase 10,000
shares of Common Stock automatically on the First Amendment Effective Date, and,
provided such Non-Employee Director continues to be a Non-Employee Director,
shall be granted a Stock Option to purchase 10,000 additional shares of Common
Stock automatically at the expiration of each five year period thereafter during
such Non-Employee Director's continuous service; and (ii) each director who
completes five continuous years as a Non-Employee Director after the First
Amendment Effective Date shall be granted a Stock Option to purchase 10,000
shares of Common Stock automatically on the day following the completion of such
five year period, and, provided such Non-Employee Director continues to be a
Non-Employee Director, shall be granted a Stock Option to purchase 10,000
additional shares of Common Stock automatically at the expiration of each five
year period thereafter during such Non-Employee Director's continuous service.
Except as otherwise provided herein, the period of continuous service for any
Non-Employee Director shall be deemed to include continuous periods prior to the
adoption of the Plan in which the director was not an employee of Viking or any
of its Subsidiaries or any parent corporation. The period of continuous service
for any Non-Employee Director who becomes eligible to receive Stock Options by
reason of clause (iii) of paragraph 3 shall not include any period prior to the
date on which such Non-Employee Director first became so eligible.
5. PURCHASE PRICE.
--------------
The purchase price (the "Exercise Price") of shares of Common Stock
subject to each Stock Option ("Option Shares") shall equal the fair market value
("Fair Market Value") of such shares on the date of grant (the "Date of Grant")
of such Stock Option. The Fair Market Value of a share of Common Stock on any
date shall be equal to the closing price of the Common Stock for the last
preceding day on which Viking's shares were traded, and the method for
determining the closing price shall be determined by the Committee.
6. OPTION PERIOD.
-------------
The term of each Stock Option shall commence on the Date of Grant of
the Stock Option and shall be ten years. Subject to the other provisions of the
Plan, each Stock Option shall be exercisable during its term as to 20% of the
Option Shares during the twelve months beginning on the first anniversary of the
Date of Grant; 20% of the Option Shares during the twelve months beginning on
the
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second anniversary of the Date of Grant; 20% during the twelve months beginning
on the third anniversary of the Date of Grant; 20% during the twelve months
beginning on the fourth anniversary of the Date of Grant; and 20% during the
twelve months beginning on the fifth anniversary of the Date of Grant; provided,
however, that the initial Stock Option granted to each Non-Employee Director
serving on the Board on the date this Plan was adopted by the Board (as now
described in paragraph 4.1) shall be exercisable from time to time after the
actual Date of Grant as to the number of Option Shares determined in accordance
with the foregoing schedule as if the Date of Grant were the date such Non-
Employee Director first became a director. If an optionee shall not in any
period purchase all of the Option Shares which the optionee is entitled to
purchase in such period, the optionee may purchase all or any part of such
Option Shares at any time after the end of such period and prior to the
expiration of the Option. Notwithstanding the foregoing, subject to the
provisions of paragraph 11.3, Stock Options granted under this Plan shall not be
exercisable until at least six months and one day after the actual Date of
Grant.
7. EXERCISE OF OPTIONS.
-------------------
7.1 Each Stock Option may be exercised in whole or in part (but not
as to fractional shares) by delivering it for surrender or endorsement to
Viking, attention of the Corporate Secretary, at Viking's principal office,
together with payment of the Exercise Price and an executed Notice and Agreement
of Exercise in the form prescribed by paragraph 7.2. Payment may be made in
cash, by cashier's or certified check, or by surrender of previously owned
shares of the Viking's Common Stock valued pursuant to paragraph 5 (if the
Committee authorizes payment in stock).
7.2 Exercise of each Stock Option is conditioned upon the agreement
of the Non-Employee Director to the terms and conditions of this Plan and of
such Stock Option as evidenced by the Non-Employee Director's execution and
delivery of a Notice and Agreement of Exercise in a form to be determined by the
Committee in its discretion. Such Notice and Agreement of Exercise shall set
forth the agreement of the Non-Employee Director that: (a) no Option Shares
will be sold or otherwise distributed in violation of the Securities Act of 1933
(the "Securities Act") or any other applicable federal or state securities laws,
(b) each Option Share certificate may be imprinted with legends reflecting any
applicable federal and state securities law restrictions and conditions, (c)
Viking may comply with said securities law restrictions and issue "stop
transfer" instructions to its Transfer Agent and Registrar without liability,
(d) each Non-Employee Director will furnish to Viking a copy of each Form 4 or
Form 5 filed by said Non-Employee Director under Section 16(a) of the Securities
Exchange Act of 1934 (the "Exchange Act") and will timely file all reports
required under federal securities laws, and (e) each Non-Employee Director will
report all sales of Option Shares to Viking in writing on a form prescribed by
Viking.
7.3 No Stock Option shall be exercisable unless and until any
applicable registration or qualification requirements of federal and state
securities laws, and all other legal requirements, have been fully complied
with. Viking will use reasonable efforts to maintain the effectiveness of a
Registration Statement under the Securities Act for the issuance of Stock
Options and shares acquired thereunder, but there may be times when no such
Registration Statement will be currently effective. The exercise of Stock
Options may be temporarily suspended without liability to Viking during times
when no such Registration Statement is currently effective, or during times
when, in the reasonable opinion of the Committee, such suspension is necessary
to preclude violation of any requirements of applicable law or regulatory bodies
having jurisdiction over Viking. If any Stock Option would expire for any
reason except the end of its term during such a suspension, then if exercise of
such Stock Option is duly tendered before its expiration, such Stock Option
shall be exercisable and exercised (unless the attempted exercise is withdrawn)
as of the first day after the end of such suspension. Viking shall have no
obligation to file any Registration Statement covering resales of Option Shares.
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8. CONTINUOUS DIRECTORSHIP.
-----------------------
Except as provided in paragraph 10 below, a Non-Employee Director may
not exercise a Stock Option unless from the Date of Grant to the date of
exercise such Non-Employee Director continuously serves as a director of Viking.
9. RESTRICTIONS ON TRANSFER.
------------------------
Each Stock Option granted under this Plan shall be transferable only
by will or the laws of descent and distribution or pursuant to a qualified
domestic relations order as defined in the Code. No interest of any Non-
Employee Director under the Plan shall be subject to attachment, execution,
garnishment, sequestration, the laws of bankruptcy or any other legal or
equitable process. Each Stock Option granted under this Plan shall be
exercisable during a Non-Employee Director's lifetime only by such Non-Employee
Director or by such Non-Employee Director's legal representative.
10. TERMINATION OF SERVICE.
----------------------
Upon the termination of the service of a Non-Employee Director as a
director of Viking for any reason, (a) all Stock Options to the extent then
presently exercisable by such Non-Employee Director shall remain exercisable
only for a period of ninety (90) days after the date of such termination of
service and may be exercised pursuant to the provisions thereof, including
expiration at the end of the fixed term thereof, and (b) all Stock Options to
the extent not then presently exercisable by such Non-Employee Director shall
terminate as of the date of such termination of service and shall not be
exercisable thereafter.
11. ADJUSTMENTS UPON CHANGE IN CAPITALIZATION.
-----------------------------------------
11.1 The number and class of shares subject to each outstanding Stock
Option, the Exercise Price thereof (but not the total price), the maximum number
of Stock Options that may be granted under the Plan, and the minimum number of
shares as to which a Stock Option may be exercised at any one time, shall be
proportionately adjusted in the event of any increase or decrease in the number
of the issued shares of Common Stock which results from a split-up or
consolidation of shares, payment of a stock dividend or dividends exceeding a
total of five percent (5%) for which the record dates occur in any one fiscal
year, a recapitalization (other than the conversion of convertible securities
according to their terms), a combination of shares or other like capital
adjustment, so that upon exercise of the Stock Option, the Non-Employee Director
shall receive the number and class of shares such Non-Employee Director would
have received had such Non-Employee Director been the holder of the number of
shares of Common Stock for which the Stock Option is being exercised upon the
date of such change or increase or decrease in the number of issued shares of
Viking.
11.2 Upon a reorganization, merger or consolidation of Viking with
one or more corporations as a result of which Viking is not the surviving
corporation or in which Viking survives as a subsidiary of another corporation,
or upon a sale of all or substantially all of the property of Viking to another
corporation, or any dividend or distribution to stockholders of more than ten
percent (10%) of Viking's assets, adequate adjustment or other provisions shall
be made by Viking or other party to such transaction so that there shall remain
and/or be substituted for the Option Shares provided for herein, the shares,
securities or assets which would have been issuable or payable in respect of or
in exchange for such Option Shares then remaining, as if the Non-Employee
Director had been the owner of such shares as of the applicable date. Any
securities so substituted shall be subject to similar successive adjustments.
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11.3 Subject to paragraph 19, in the event of a change in control
("Change in Control") of Viking, all outstanding Stock Options shall immediately
become and shall thereafter be exercisable in full. A Change in Control of
Viking shall be deemed to have occurred (a) on the date Viking first has actual
knowledge that any person (as such term is used in Sections 13(d) and 14(d)(2)
of the Exchange Act or any amendment or replacement of such sections) has become
the beneficial owner (as defined in Rule 13(d)-3 under the Exchange Act or any
amendment or replacement of such Rule), directly or indirectly, of securities of
the Company representing forty percent (40%) or more of the combined voting
power of Viking's then outstanding securities or (b) on the date the
shareholders of Viking approve (i) a merger of Viking with or into any other
corporation in which Viking is not the surviving corporation or in which Viking
survives as a subsidiary of another corporation, (ii) a consolidation of Viking
with any other corporation, or (iii) the sale or disposition of all or
substantially all of Viking's assets or a plan of complete liquidation.
12. WITHHOLDING TAXES.
-----------------
Viking shall have the right at the time of exercise of any Stock
Option to make adequate provision for any federal, state, local or foreign taxes
which it believes are or may be required by law to be withheld with respect to
such exercise ("Tax Liability"), to ensure the payment of any such Tax
Liability. Viking may provide for the payment of any Tax Liability by any of
the following means or a combination of such means, as determined by the
Committee in its sole and absolute discretion in the particular case: (i) by
requiring the Non-Employee Director to tender a cash payment to Viking, (ii) by
withholding from the Non-Employee Director's cash compensation, (iii) by
withholding from the Option Shares which would otherwise be issuable upon
exercise of the Stock Option that number of Option Shares having an aggregate
fair market value (determined in the manner prescribed by paragraph 5) as of the
date the withholding tax obligation arises in an amount which is equal to the
Non-Employee Director's Tax Liability or (iv) by any other method deemed
appropriate by the Committee. Satisfaction of the Tax Liability of a Non-
Employee Director may be made by the method of payment specified in clause (iii)
above only if the following two conditions are satisfied:
(a) the withholding of Option Shares and the exercise of the related
Stock Option occurs at least six months and one day following the date of grant
of such Stock Option; and
(b) the withholding of Option Shares is made either (i) pursuant to an
irrevocable election ("Withholding Election") made by such Non-Employee Director
at least six months in advance of the withholding of Options Shares or (ii) on a
day within a ten-day "window period" beginning on the third business day
following the date of release of Viking's quarterly or annual summary statement
of sales and earnings.
Anything herein to the contrary notwithstanding, a Withholding Election may be
disapproved by the Committee at any time.
13. AMENDMENTS AND TERMINATION.
--------------------------
The Board of Directors may at any time suspend, amend or terminate
this Plan; provided, however, that the provisions of paragraphs 3, 4, 5 and 6 of
this Plan may not be amended more than once every six months, other than to
comport with changes in the Code, the Employee Retirement Income Security Act or
the rules thereunder. No amendment or modification of this Plan may be adopted,
except subject to stockholder approval, which would: (a) materially increase the
benefits accruing to Non-Employee Directors under this Plan, (b) materially
increase the number of securities which may be issued
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under this Plan (except for adjustments pursuant to paragraph 11 hereof), or (c)
materially modify the requirements as to eligibility for participation in the
Plan.
14. SUCCESSORS IN INTEREST.
----------------------
The provisions of this Plan and the actions of the Committee shall be
binding upon all heirs, successors and assigns of Viking and of Non-Employee
Directors.
15. OTHER DOCUMENTS.
---------------
All documents prepared, executed or delivered in connection with this
Plan shall be, in substance and form, as established and modified by the
Committee or by persons under its direction and supervision; provided, however,
that all such documents shall be subject in every respect to the provisions of
this Plan, and in the event of any conflict between the terms of any such
document and this Plan, the provisions of this Plan shall prevail.
16. MISCONDUCT OF A NON-EMPLOYEE DIRECTOR.
-------------------------------------
Notwithstanding any other provision of this Plan, all unexercised
Stock Options held by a Non-Employee Director shall automatically terminate as
of the date his or her directorship is terminated, if such directorship is
terminated on account of any act of fraud, embezzlement, misappropriation or
conversion of assets or opportunities of Viking. Upon termination of such Stock
Options, such Non-Employee Director shall forfeit all rights and benefits under
this Plan.
17. TERM OF PLAN.
------------
This Plan was adopted by the Board on March 9, 1992. No Stock Options
may be granted under this Plan after March 8, 2002.
18. GOVERNING LAW.
-------------
This Plan shall be construed in accordance with, and governed by, the
laws of the State of California.
19. SHAREHOLDER APPROVAL.
--------------------
No Stock Option shall be exercisable unless and until the shareholders
of Viking have approved this Plan on or before February 28, 1993, and all other
legal requirements have been fully complied with. If shareholder approval is
not timely obtained, this Plan and all Stock Options granted hereunder shall be
null and void.
20. PRIVILEGES OF STOCK OWNERSHIP.
-----------------------------
The holder of a Stock Option shall not be entitled to the privileges
of stock ownership as to any shares of Viking common stock not actually issued
to such holder.
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IN WITNESS WHEREOF, this Plan has been executed on March 9, 1992.
VIKING OFFICE PRODUCTS, INC.
By /s/ Irwin Helford
------------------------------
Irwin Helford, President
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PRELIMINARY PROXY MATERIALS
VIKING OFFICE PRODUCTS, INC.
PROXY SOLICITED BY THE BOARD OF DIRECTORS FOR THE ANNUAL
MEETING OF SHAREHOLDERS TO BE HELD ON NOVEMBER 16, 1995
The undersigned, revoking any previous proxies for such stock, hereby appoints
Irwin Helford and Stephen R. Kroll, and each of them, proxies of the undersigned
with full power of substitution to each, to vote all shares of common stock of
VIKING OFFICE PRODUCTS, INC., which the undersigned is entitled to vote at the
Annual Meeting of Shareholders of Viking Office Products, Inc., to be held on
November 16, 1995, and all postponements or adjournments thereof, with all the
power the undersigned would possess if personally present, with authority to
vote (i) as specified by the undersigned below and (ii) in the discretion of any
proxy upon any other business that may come before the meeting.
Vote this proxy as follows:
1. Election of Directors:
FOR ALL NOMINEES LISTED BELOW [_] WITHHOLD VOTE [_]
(except as marked to the contrary below) (for all nominees)
Irwin Helford, Lee A. Ault III, Neil R. Austrian, Charles P. Durkin, Jr.,
Joan D. Manley and Rolf Ostern.
INSTRUCTION: TO WITHHOLD VOTE FOR ANY INDIVIDUAL NOMINEE, MARK THROUGH THE
NOMINEE'S NAME IN THE ABOVE LIST.
2. Proposal to approve an amendment to Viking's Amended and Restated Bylaws
to classify the Board of Directors for purposes of election and to make other
related changes:
FOR [_] AGAINST [_] ABSTAIN [_]
3. Proposal to approve amendments to the 1992 Directors' Stock Option Plan:
FOR [_] AGAINST [_] ABSTAIN [_]
4. Proposal to approve an amendment to the Chief Executive Officer
Performance Based Bonus Plan to increase the maximum annual bonus payable
thereunder:
FOR [_] AGAINST [_] ABSTAIN [_]
5. Proposal to ratify the selection of Deloitte & Touche as independent
auditors:
FOR [_] AGAINST [_] ABSTAIN [_]
THIS PROXY WILL BE VOTED AS DIRECTED, OR, IF NO DIRECTION IS INDICATED, FOR THE
ELECTION OF THE NOMINEES OF THE BOARD OF DIRECTORS, FOR THE AMENDMENTS TO
AMENDED AND RESTATED BYLAWS, FOR THE AMENDMENTS TO THE 1992 DIRECTORS' STOCK
OPTION PLAN, FOR THE AMENDMENT TO THE CHIEF EXECUTIVE OFFICER PERFORMANCE BASED
BONUS PLAN, FOR THE RATIFICATION OF AUDITORS AND OTHERWISE IN THE DISCRETION OF
ANY OF THE PERSONS ACTING AS PROXIES.
<PAGE>
IMPORTANT: Please date this proxy and sign exactly as your name or names appear
hereon. If stock is held jointly, each should sign. Executors, administrators,
trustees, guardians and others signing in a representative capacity, please give
your full title(s). If this proxy is submitted to a corporation or partnership,
it should be executed in the full corporate or partnership name by a duly
authorized person.
_______________________________________
_______________________________________
(Signature of Shareholder)
Dated ____________, 1995
IMPORTANT: PLEASE SIGN PROXY EXACTLY AS YOUR NAME
OR NAMES APPEAR HEREON.
