<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>
INTEGRITY INCORPORATED
- --------------------------------------------------------------------------------
(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
1000 CODY ROAD
MOBILE, ALABAMA 36695
April 14, 1998
Dear Stockholder:
You are cordially invited to attend the Annual Meeting of
Stockholders of Integrity Incorporated, which will be held at the Adam's Mark,
64 South Waterstreet, Mobile, Alabama 36602, on Wednesday, May 6, 1998, at 2:00
p.m. local time.
We look forward to your attendance at the Annual Meeting so that
you can vote your shares in person and become better acquainted with members of
the Board of Directors and management team. Two items of business, which will be
considered and voted upon this year, are explained in the accompanying Proxy
Statement. Even if you are planning to attend, please complete the enclosed
proxy card and return it in the enclosed envelope so that your shares may be
voted. You will still be able to vote your shares in person if you attend the
Annual Meeting.
If you have any questions about the Proxy Statement or the 1997
Annual Report, please contact Ms. Alison S. Richardson at (334) 633-9000.
Sincerely,
P. MICHAEL COLEMAN
Chairman, President and
Chief Executive Officer
<PAGE> 3
INTEGRITY INCORPORATED
1000 CODY ROAD
MOBILE, ALABAMA 36695
NOTICE TO THE HOLDERS OF CLASS A COMMON STOCK
OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON MAY 6, 1998
Notice is hereby given to the holders of the $.01 par value per share
Class A common stock (the "Class A Common Stock") of Integrity Incorporated (the
"Company") that the Annual Meeting of Stockholders (the "Annual Meeting") of the
Company will be held at the Adam's Mark, 64 South Waterstreet, Mobile, Alabama
36602, on Wednesday, May 6, 1998, at 2:00 p.m., local time, for the following
purposes:
(i) To elect five directors to serve until the 1999 Annual Meeting of
Stockholders;
(ii) To ratify the selection of Price Waterhouse LLP as independent
auditors for the fiscal year ending December 31, 1998; and
(iii) To transact such other business as may properly come before the
Annual Meeting or any adjournments thereof.
Only those stockholders of record at the close of business on March 11,
1998, are entitled to notice of and to vote at the Annual Meeting or any
adjournments thereof. The transfer books will not be closed. A complete list of
stockholders entitled to vote at the Annual Meeting will be available at the
Annual Meeting.
By Order of the Board of Directors,
ALISON S. RICHARDSON
April 14, 1998 Secretary
WHETHER OR NOT YOU EXPECT TO ATTEND THE ANNUAL MEETING, PLEASE VOTE,
SIGN, DATE, AND RETURN THE ENCLOSED PROXY PROMPTLY IN THE ENCLOSED BUSINESS
REPLY ENVELOPE. IF YOU ATTEND THE ANNUAL MEETING YOU MAY, IF YOU WISH, WITHDRAW
YOUR PROXY APPOINTMENT AND VOTE IN PERSON.
<PAGE> 4
INTEGRITY INCORPORATED
1000 CODY ROAD
MOBILE, ALABAMA 36695
APRIL 14, 1998
PROXY STATEMENT
FOR CLASS A COMMON STOCK
FOR ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON MAY 6, 1998
INTRODUCTION
This Proxy Statement is furnished to holders of the $.01 par value per
share Class A common stock ("Class A Common Stock") of Integrity Incorporated, a
Delaware corporation (the "Company" or "Integrity"), in connection with the
solicitation of proxies by the Company's Board of Directors from holders of the
outstanding shares of Class A Common Stock for use at the Annual Meeting of
Stockholders to be held at 2:00 p.m. local time at the Adam's Mark, 64 South
Waterstreet, Mobile, Alabama 36602, on Wednesday, May 6, 1998, and at any
adjournments thereof (the "Annual Meeting").
The Annual Meeting will be held for the following purposes: (i) to elect
five directors to serve until the 1999 Annual Meeting of Stockholders and until
their successors are elected and qualified; (ii) to ratify the selection of
Price Waterhouse LLP as independent auditors for the fiscal year ending December
31, 1998; and (iii) to transact such other business as may properly come before
the Annual Meeting or any adjournments thereof.
The Company's mailing address and the location of its principal
executive offices is 1000 Cody Road, Mobile, Alabama 36695. This Proxy Statement
and the accompanying Proxy are first being mailed to stockholders of the Company
on or about April 14, 1998.
STOCKHOLDERS ENTITLED TO VOTE
Only stockholders of record of the Company at the close of business on
March 11, 1998 (the "Record Date") will be entitled to notice of, and to vote
at, the Annual Meeting. On the Record Date, there were 2,079,000 shares of the
Class A Common Stock issued and outstanding held by approximately 108
stockholders of record and 1,700 beneficial stockholders. In addition, there
were 3,435,000 shares of the Company's $.01 par value per share Class B common
stock ("Class B Common Stock") issued and outstanding held by three stockholders
of record. The Company's stock transfer books will not be closed and shares may
be transferred subsequent to the Record Date. However, all votes must be cast in
the names of stockholders of record on the Record Date.
Pursuant to the Certificate of the Company, holders of Class A Common
Stock are entitled to one vote per share. Holders of Class B Common Stock are
entitled to ten votes per share. All actions submitted to a vote of stockholders
are voted on by holders of Class A and Class B Common Stock voting together as a
single class.
QUORUM AND VOTING REQUIREMENTS
Pursuant to the Company's Bylaws, the holders of shares of the Class A
Common Stock and Class B Common Stock entitled to cast a majority of the votes
on the matters at issue at the Annual Meeting, present in person or by proxy,
shall constitute a quorum. For the purpose of determining the presence of a
quorum, abstentions and broker nonvotes will be counted as present.
<PAGE> 5
Proposal I, the election of five directors, requires the affirmative
vote of a plurality of the votes of the shares of Class A Common Stock and Class
B Common Stock represented and entitled to vote in the election at the Annual
Meeting, provided a quorum is present. With respect to Proposal I, the election
of directors, stockholders may (1) vote "for" all five nominees, (2) "withhold"
authority to vote "for" all such nominees, or (3) "withhold" authority to vote
for any individual nominee or nominees but vote for all other nominees. Because
directors are elected by a plurality (more votes in favor than against) of the
votes represented and entitled to vote, withholding authority to vote with
respect to one or more nominees will have the same effect as a vote "against"
the election of such nominee. Any "broker nonvotes" (which occur when shares
held by brokers or nominees for beneficial owners are voted on some matters but
not on others based on their authority) will have no effect on the outcome of
the election of directors.
Proposal II, the ratification of auditors, requires the affirmative vote
of a majority of the votes of the shares of Class A Common Stock and Class B
Common Stock represented and entitled to vote generally in the election of
directors at the Annual Meeting, provided a quorum is present. With respect to
Proposal II, the ratification of auditors, stockholders may (1) vote "for," (2)
vote "against," or (3) "abstain" from voting on the proposal. An abstention will
have the same effect as a vote "against" while a broker nonvote will have no
effect on the outcome of the ratification of auditors.
PROXIES
If the enclosed Proxy is executed, returned in time and not revoked, the
shares represented thereby will be voted in accordance with the instructions
indicated in such Proxy. IF NO INSTRUCTIONS ARE INDICATED, PROXIES WILL BE VOTED
FOR (I) THE ELECTION OF ALL DIRECTOR NOMINEES, (II) RATIFICATION OF PRICE
WATERHOUSE LLP AS INDEPENDENT AUDITORS FOR THE FISCAL YEAR ENDING DECEMBER 31,
1998; AND (III) IN THE BEST JUDGMENT OF SUCH PROXIES AS TO ANY OTHER MATTERS
WHICH MAY PROPERLY COME BEFORE THE ANNUAL MEETING OR ANY ADJOURNMENTS THEREOF.
A stockholder who has given a Proxy may revoke it at any time prior to
its exercise at the Annual Meeting by either (i) giving written notice of
revocation to the Secretary of the Company, (ii) properly submitting to the
Company a duly executed Proxy bearing a later date, or (iii) appearing at the
Annual Meeting and voting in person. All written notices of revocation of
Proxies should be addressed as follows: Integrity Incorporated, 1000 Cody Road,
Mobile, Alabama 36695, Attention: Alison S. Richardson, Secretary.
PROPOSAL I
ELECTION OF DIRECTORS
The Bylaws of the Company provide that the Board of Directors shall
consist of not less than three, nor more than twelve individuals with the exact
number of directors determined by resolution of the Board of Directors. Pursuant
to the Company's Bylaws, the Board of Directors has set the number of directors
of the Company at five and has nominated the following individuals for election
by the holders of Class A Common Stock and Class B Common Stock as directors of
the Company:
P. Michael Coleman
Jean C. Coleman
John B. Ellis
Charles V. Simpson
Heeth Varnedoe III
Each director will be elected to hold office until the 1999 Annual
Meeting of Stockholders and until their earlier death, resignation or removal.
The persons designated as proxies intend to vote the shares represented thereby
in favor of the election to the Board of Directors of the nominees whose names
-2-
<PAGE> 6
appear above, unless either authority to vote for any or all of the nominees is
withheld or such proxy has previously been revoked. It is believed that the
nominees will be available and able to serve as directors. In the event that a
nominee is unable to serve (which is not anticipated), the persons designated as
proxies will cast votes for the remaining nominees and for such other person as
they may select. It is anticipated that management stockholders of the Company
will vote for the election of the nominees.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE NOMINEES FOR ELECTION
AS DIRECTORS. IF A CHOICE IS SPECIFIED ON THE PROXY BY THE STOCKHOLDER, THE
SHARES WILL BE VOTED AS SPECIFIED. IF NO SPECIFICATION IS MADE, THE SHARES WILL
BE VOTED FOR THE NOMINEES. THE AFFIRMATIVE VOTE OF A PLURALITY OF THE VOTES OF
THE SHARES OF CLASS A COMMON STOCK AND CLASS B COMMON STOCK, VOTING TOGETHER AS
A SINGLE CLASS, REPRESENTED AND ENTITLED TO VOTE IN THE ELECTION AT THE ANNUAL
MEETING AT WHICH A QUORUM IS PRESENT IS REQUIRED FOR THE ELECTION OF THE
NOMINEES.
CERTAIN INFORMATION CONCERNING NOMINEES
The following table sets forth the names of the nominees for election as
directors, their ages, the year in which they were first elected a director,
their positions with the Company, their principal occupations and employers for
at least the last five years, and any other directorships held by them in
certain other companies. For information concerning membership on Committees of
the Board of Directors, see "Meetings of the Board of Directors and Committees"
below. For information concerning directors' ownership of Common Stock, see
"Beneficial Owners of More Than Five Percent of the Company's Common Stock;
Shares Held by Directors and Executive Officers" below.
<TABLE>
<CAPTION>
NAME AND YEAR FIRST POSITIONS WITH THE COMPANY, PRINCIPAL OCCUPATIONS DURING AT
ELECTED DIRECTOR AGE LEAST THE PAST FIVE YEARS, AND OTHER DIRECTORSHIPS
- --------------------- --- -----------------------------------------------------------------
<S> <C> <C>
P. Michael Coleman 44 Mr. Coleman co-founded the Company in 1987 when he and a partner purchased the music
(1987) operations of Integrity Communications, Inc. from Charles Simpson Ministries, Inc.
Prior to 1987, Mr. Coleman was involved in various organizations in the Christian
communications industry.
Jean C. Coleman 51 Mrs. Coleman is a full-time homemaker in Mobile, Alabama and is the wife of P. Michael
(1993) Coleman.
John B. Ellis 73 Mr. Ellis is a member of the Board of Directors of Atlantic Investment Co., Hughes
(1994) Supply, Inc., Intermet Corporation, Interstate/Johnson Lane, Inc., and a director
emeritus of Genuine Parts Company.
Charles V. Simpson 61 Mr. Simpson has been the Senior Pastor of the Covenant Church of Mobile for more than
(1987) five years. Reverend Simpson is Chairman of Charles Simpson Ministries which publishes
Christian Conquest magazine, The Covenant and the Kingdom curriculum, and a monthly
pastoral letter.
Heeth Varnedoe III 61 Mr. Varnedoe was President and Chief Operating Officer of Flowers Industries Inc., a
(1993) publicly-traded company which produces bread and other baked products from 1986 to
1997. Mr. Varnedoe continues to serve on the Board of Directors of Flowers Industries
Inc.
</TABLE>
-3-
<PAGE> 7
MEETINGS OF THE BOARD OF DIRECTORS AND COMMITTEES
Board of Directors. The property, affairs and business of the Company
are under the general management of its Board of Directors as provided by the
laws of Delaware and the Bylaws of the Company. The Company has standing Audit
and Compensation Committees of the Board of Directors.
Audit Committee. The members of the Audit Committee are John B. Ellis
(Chairman) and Heeth Varnedoe III. The Audit Committee makes recommendations
concerning the engagement of independent public accountants, reviews with the
independent public accountants the plans and results of the audit engagement,
approves professional services provided by the independent public accountants,
reviews the independence of the independent public accountants, considers the
range of audit and non-audit fees and reviews the adequacy of the Company's
internal accounting controls. The Audit Committee held two meetings during 1997.
Compensation Committee. The members of the Compensation Committee are
Heeth Varnedoe III (Chairman) and John B. Ellis. The function of the
Compensation Committee is to review and approve the compensation of executive
officers and establish targets and incentive awards under incentive compensation
plans of the Company. The Compensation Committee held two meetings during 1997.
The Board of Directors held four meetings during 1997. Each director,
during the period he or she was a director, attended at least 75% of the
meetings of the Board of Directors. Each member of a committee, during the
period he or she was a committee member, attended at least 75% of the meetings
of each committee on which they served.
COMPENSATION OF DIRECTORS
The Company historically paid a fee of $1,000 for each Board and
committee meeting attended by its directors who are not employees of the
Company, former employees of the Company or members of the immediate family of a
current or former employee of the Company. Beginning in 1998, this director fee
has been increased to $1,500 for each Board and Committee meeting attended. The
Company also reimburses the directors for travel expenses incurred in connection
with their activities on behalf of the Company.
Pursuant to the Integrity Incorporated 1994 Stock Option Plan for
Outside Directors (the "Director Plan") adopted by the Company, each director
(other than employees, former employees or immediate family members of current
or former employees) automatically receives on the day following each annual
meeting of stockholders a grant of options to purchase 1,000 shares of Class A
Common Stock. Such options will have an exercise price equal to 100% of the fair
market value of the Class A Common Stock at the date of grant of such option.
BENEFICIAL OWNERS OF MORE THAN FIVE PERCENT OF THE COMPANY'S COMMON STOCK;
SHARES HELD BY DIRECTORS AND EXECUTIVE OFFICERS
Based solely upon information made available to the Company, the
following table sets forth certain information with respect to the beneficial
ownership of Class A Common Stock and Class B Common Stock as of December 31,
1997, by (i) each person who is known by the Company to beneficially own more
than five percent of either Class A or Class B Common Stock; (ii) each nominee
for director of the Company; (iii) each of the Named Executive Officers (as
defined under "Executive Compensation" below); and (iv) all officers and
directors as a group. Except as otherwise indicated, the holders listed below
have sole voting and investment power with respect to all shares of Class A or
Class B Common Stock beneficially owned by them.
-4-
<PAGE> 8
<TABLE>
<CAPTION>
SHARES OF CLASS A SHARES OF CLASS B
COMMON STOCK COMMON STOCK PERCENTAGE OF
NAME AND ADDRESS ------------ ------------ CLASS A AND CLASS B
OF BENEFICIAL OWNER NUMBER PERCENTAGE (1) NUMBER PERCENTAGE (1) COMMON STOCK (1)
- ------------------- ------- -------------- --------- -------------- ----------------
<S> <C> <C> <C> <C> <C>
SoGen International Fund, Inc.(2) 326,500 15.7% -- -- 5.9%
Societe Generale Asset Management Corp.
1221 Avenue of the Americas
New York, New York 10020
The Coleman Limited Partnership -- -- 223,021 6.5% 4.0%
c/o Mr. P. Michael Coleman
8561 Z. Dawes Lake Road
Mobile, Alabama 36619
P. Michael Coleman (3) 65,100 3.1% 3,435,000 100.0% 63.5%
Jean C. Coleman (4) -- -- 208,633 6.1% 3.8%
John B. Ellis (5) 4,000 * -- -- *
Charles V. Simpson (6) 4,500 * -- -- *
Heeth Varnedoe III (6) 4,500 * -- -- *
Jerry Weimer (7) 20,000 * -- -- *
Donald J. Moen (8) 27,400 1.3% -- -- *
Daniel D. McGuffey (9) 10,000 * -- -- *
Douglas P. Meduna -- -- -- -- --
All executive officers and 147,500 7.1% 3,435,000 100.0% 65.0%
directors as a group (13 persons)(10)
</TABLE>
- ----------------------------------
* Less than 1%.
(1) Based upon 2,079,000 shares of Class A Common Stock issued and
outstanding as of December 31, 1997 and 3,435,000 shares of Class B
Common Stock issued and outstanding as of December 31, 1997. Except as
indicated, the information presented does not include 525,000 shares of
Class A Common Stock reserved for issuance upon exercise of stock options
under the Incentive Plan and 25,000 shares of Class A Common Stock
reserved for issuance upon exercise of stock options under the Director
Plan.
(2) Based on a Schedule 13G/A filed on February 14, 1997. SoGen International
Fund, Inc. has shared voting and dispositive power as to 300,000 shares
and Societe Generale Asset Management Corp., its investment advisor, has
shared voting and dispositive power as to 326,500 shares.
(3) Includes 65,000 shares of Class A Common Stock held by The Coleman
Charitable Foundation, Inc. over which Mr. Coleman, as Chairman, has
shared voting and dispositive power; 223,021 shares of Class B Common
Stock held by The Coleman Limited Partnership, over which Mr. Coleman, as
General Partner, has sole voting and dispositive power; and 208,633
shares of Class B Common Stock held by Jean C. Coleman.
(4) Does not include 65,000 shares of Class A Common Stock held by The
Coleman Charitable Foundation, Inc. over which Mrs. Coleman, as Vice
Chairman, has shared voting and dispositive power.
(5) Includes options to purchase 3,000 shares of Class A Common Stock granted
under the Director Plan which are immediately exercisable.
(6) Includes options to purchase 4,000 shares of Class A Common Stock granted
under the Director Plan which are immediately exercisable.
(7) Includes options to purchase 20,000 shares of Class A Common Stock which
are immediately exercisable.
(8) Includes options to purchase 20,000 shares of Class A Common Stock which
are immediately exercisable.
(9) Includes options to purchase 10,000 shares of Class A Common Stock which
are immediately exercisable.
(10) Includes options to purchase 69,000 shares of Class A Common Stock which
are immediately exercisable.
-5-
<PAGE> 9
EXECUTIVE OFFICERS OF THE COMPANY
Except for Mr. Coleman, discussed above, the following table sets forth
the names of the executive officers of the Company, their ages, their positions
with the Company and their principal occupations and employers for at least the
last five years. For information concerning executive officers' ownership of
Common Stock, see "Beneficial Owners of More Than Five Percent of the Company's
Common Stock; Shares Held by Directors and Executive Officers."
<TABLE>
<CAPTION>
POSITIONS WITH THE COMPANY AND PRINCIPAL OCCUPATIONS DURING AT
NAME AGE LEAST THE PAST FIVE YEARS
- ---- --- ----------------------------------------------------------------------
<S> <C> <C>
Jerry W. Weimer 50 Mr. Weimer joined the Company in March 1996 as Executive Vice President, Chief Operating
Officer. In this position, Mr. Weimer manages and oversees Integrity's day-to-day operations in
the Creative/Product Development, Retail Marketing and Sales, Distribution Center and
International and Church/Choral groups. Mr. Weimer's previous experience includes more than 15
years in the music industry. From 1992 to 1996, he held the position of Executive Vice President
of Word, Inc., the former Christian music division of Thomas Nelson, Inc., and prior to 1991, he
was President of the Gaither Management Group, which is involved in Christian music publishing.
Donald J. Moen 47 Mr. Moen joined the Company as Creative/Product Director in February 1988 and is currently
Executive Vice President and Creative Director. In this position, Mr. Moen provides creative
input to the product creation process. Also as an artist and songwriter, Mr. Moen has completed
numerous recordings for the Company and has been a worship leader for the Hosanna! Music series.
In 1994, the Company's musical "God With Us," for which Mr. Moen was the key creative director,
won a Dove Award for best musical. In 1993, he was a Dove Award nominee for his recording
"Worship with Don Moen," and in 1992, he was a nominee for his song "God Will Make a Way."
Keith J. Manwaring 51 Mr. Manwaring joined the Company in November 1990 as the Managing Director of the Company's
Australian subsidiary. In February 1992, Mr. Manwaring transferred to the Company's headquarters
in Mobile, Alabama where he assumed the position of Vice President, International, Church
Resources and Special Sales. In September 1995, certain areas of the Company were restructured
and Mr. Manwaring became solely responsible for international sales as Senior Vice President,
International. In December 1996, Mr. Manwaring's title was changed to Senior Vice President,
General Manager International Group to again reflect some restructuring of the Company. Prior to
joining the Company, Mr. Manwaring served as General Manager of the Logos Foundation, the
Company's former Australian distributor, from January 1985 to November 1990.
</TABLE>
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<PAGE> 10
<TABLE>
<CAPTION>
POSITIONS WITH THE COMPANY AND PRINCIPAL
NAME AGE OCCUPATIONS DURING AT LEAST THE PAST FIVE YEARS
- ---- --- -----------------------------------------------
<S> <C> <C>
Alison S. Richardson 32 Mrs. Richardson joined the Company in May 1989 as a Financial Analyst. She was promoted to
Accounting Manager in August 1991, to the position of Corporate Controller in April 1992, Vice
President, Corporate Controller in May 1994, and to her current position of Senior Vice
President of Finance and Administration in December 1996. Mrs. Richardson's responsibilities
include management of the accounting department and all aspects of internal and external
financial reporting. She also is responsible for the administrative function of the Company,
including facilities management, risk management, human resources and information systems and
operations. Prior to joining the Company, Mrs. Richardson was employed by the national
accounting firm of Pannell, Kerr, Forster from January 1987 to May 1989.
Daniel D. McGuffey 44 Mr. McGuffey joined the Company in December 1996 as Senior Vice President, General Manager of
the Integrity Label Group. In this position, he is responsible for retail marketing, sales,
creative services and special markets. Prior to joining Integrity, Mr. McGuffey was Vice
President of Marketing and Sales for Star Song Communications, a Christian music publisher, from
1992 to December 1996, where he was instrumental in the marketing and sales development of over
30 artists and labels. He also held the position of Vice President of Marketing and Sales for
Reunion Records from 1991 to 1992 and began his career in the music industry in 1980 with the
Sparrow Corporation, a Christian music publisher.
Jerry O'Connor 50 Mr. O'Connor joined the Company in December 1996 as Vice President and General Manager, Direct
to Consumer. One of his main responsibilities is the development of new methods of increasing
sales in this area by expanding consumer awareness of the Company's products. Mr. O'Connor has
over 25 years experience in direct to consumer sales, before joining Integrity, Mr. O'Connor was
a Vice President with Tupperware Corporation, where he directed the company's entry into over 30
new markets, providing incremental sales and service improvement. Mr. O'Connor began his career
at Tupperware Corporation in 1970 and was promoted to the position of Vice President in 1989.
Douglas P. Meduna 41 Mr. Meduna joined the Company in 1997 as the Vice President, Direct Response. As Vice President,
Direct Response, Mr. Meduna provides general management for the Direct Response division. Prior
to accepting his position with the Company, Mr. Meduna worked with Guideposts Inc., a nonprofit
publishing organization, for over ten years. During his time with Guideposts, Mr. Meduna served
as Marketing Manager, Circulation Director, Marketing Director and finally Development Director.
</TABLE>
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<PAGE> 11
<TABLE>
<CAPTION>
POSITIONS WITH THE COMPANY AND PRINCIPAL
NAME AGE OCCUPATIONS DURING AT LEAST THE PAST FIVE YEARS
- ---- --- -----------------------------------------------
<S> <C> <C>
Robert G. Rist 51 Mr. Rist joined the Company on March 31, 1997, as Vice President, Church Resources. The Church
Resources division of the Company specializes in providing material to be used by local
congregations specifically in the area of worship. Prior to joining the Company, Mr. Rist served
as President of Warner Press in Anderson, Indiana, for seven years and prior to that in various
positions at Alexandria House, Inc., a music distribution company in Alexandria, Indiana for 14
years.
</TABLE>
EXECUTIVE COMPENSATION
The following table presents certain summary information concerning
compensation paid or accrued by the Company for services rendered in all
capacities during the fiscal years ended December 31, 1995, 1996 and 1997 for
(i) the President and Chief Executive Officer of the Company; and (ii) the four
other most highly compensated executive officers of the Company whose total
salary and bonus exceeded $100,000 (determined as of December 31, 1997 and
collectively, the "Named Executive Officers").
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
Annual Compensation Long Term Compensation
Name and Securities All Other
Principal Position Year Salary Bonus Underlying Options Compensation (1)
- ------------------ ---- -------- -------- ---------------------- ----------------
<S> <C> <C> <C> <C> <C>
P. Michael Coleman 1997 $282,293 $ 50,000 -- $24,430
Chairman, President and 1996 276,042 -- -- 1,800
Chief Executive Officer 1995 299,704 -- -- 2,197
Jerry W. Weimer(2) 1997 175,294 31,000 -- 24,430
Executive Vice President, 1996 134,616 -- 100,000 1,632
Chief Operating Officer 1995 -- -- -- --
Donald J. Moen 1997 138,727 -- -- 17,066
Executive Vice President, 1996 136,744 -- -- 770
Creative Director 1995 135,625 -- 50,000 --
Daniel D. McGuffey(2) 1997 111,758 112,000 50,000 4,750
Senior Vice President 1996 -- -- -- --
Integrity Label Group 1995 -- -- -- --
Douglas P. Meduna(2) 1997 72,775 54,400 20,000 1,800
Vice President Direct 1996 -- -- -- --
Response 1995 -- -- -- --
</TABLE>
- ----------------------------------
(1) Comprised of contributions made by the Company to the Company's 401(k)
Plan on behalf of each of the Named Executive Officers.
(2) Mr. Weimer joined the Company in March 1996, Mr. McGuffey in December
1996, and Mr. Meduna in December 1996, and as a result compensation
information is presented for only a portion of the last three fiscal
years.
-8-
<PAGE> 12
OPTION GRANTS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
Individual Grants
--------------------------------------------------------- Potential Realizable Value at
Number of Percent of Assumed Annual Rates of Stock
Securities Total Options Price Appreciation
Underlying Granted to for Option Term
Options Employees in Exercise or Expiration ---------------
Name Granted (1) Fiscal Year Base Price Date 5% 10%
- ---- ----------- ------------- ----------- ---------- ---- ---
<S> <C> <C> <C> <C> <C> <C>
P. Michael Coleman -- -- -- -- -- --
Jerry W. Weimer -- -- -- -- -- --
Donald J. Moen -- -- -- -- -- --
Daniel D. McGuffey -- -- -- -- -- --
Douglas P. Meduna 20,000 14.5% 1.625 10/10/2007 20,439 91,640
</TABLE>
- ---------------
(1) All of the options were granted under the Incentive Plan with a vesting
schedule pursuant to which 20% of the options become exercisable one year
following the date of grant and 20% of the options become exercisable on
each of the second, third, fourth and fifth anniversaries of the date of
grant.
FISCAL YEAR-END OPTION VALUES
<TABLE>
<CAPTION>
Number of Securities Underlying Value of Unexercised
Unexercised Options In-the-Money Options
Name at Fiscal Year-End(1) at Fiscal Year-End(2)
------------------------------- ------------------------------
Exercisable Unexercisable Exercisable Unexercisable
----------- ------------- ----------- -------------
<S> <C> <C> <C> <C>
P. Michael Coleman -- -- -- --
Jerry W. Weimer 20,000 80,000 -- --
Donald J. Moen 20,000 39,722 -- --
Daniel D. McGuffey 10,000 40,000 -- --
Douglas P. Meduna -- 20,000 -- --
</TABLE>
- -------------
(1) No options were exercised by the Named Executive Officers in 1997.
(2) The exercise price of all of the options to purchase shares of Class A
Common Stock was higher than the fair market value of the Class A Common Stock
as of December 31, 1997 ($1.25) and thus none of such options were
"in-the-money" as of such date.
-9-
<PAGE> 13
Repricing of Options
On February 14, 1997, the Compensation Committee of the Company resolved
to reprice the stock options that it provided to, among others, certain
executive officers. The Compensation Committee reasoned that since the exercise
price was substantially higher than the trading price of the Class A Common
Stock, a repricing would allow the stock options to better fulfill their purpose
and serve as an incentive for such executive officers to work toward the
improved performance of the Company.
10-YEAR OPTION/SAR REPRICINGS
<TABLE>
<CAPTION>
Length Of
Number Of Market Original
Securities Price Of Exercise Option Term
Underlying Stock At Price At Remaining At
Options/SARs Time Of Time Of New Date Of
Repriced Or Repricing Or Repricing Or Exercise Repricing Or
Name Date Amended Amendment Amendment Price Amendment
---- ---- ------------- ------------ ------------ -------- -------------
<S> <C> <C> <C> <C> <C> <C>
Donald J. Moen Feb. 14, 1997 9,722 $1.75 $9.00 $1.75 7 years
Executive Vice President,
Creative Director
Keith J. Manwaring Feb. 14, 1997 3,888 $1.75 $9.00 $1.75 7 years
Senior Vice President,
General Manager
International Group
Alison S. Richardson Feb. 14, 1997 3,888 $1.75 $9.00 $1.75 7 years
Senior Vice
President of
Finance and
Administration
</TABLE>
Employment Arrangements
Employment Agreements. The Company has entered into an employment
agreement (the "Employment Agreement") with Mr. Weimer for the position of
Executive Vice President/Chief Operating Officer. Mr. Weimer's Employment
Agreement provides for a base salary of $175,000, and Mr. Weimer is eligible to
receive cash bonuses under the executive cash bonus compensation system
established from time to time by the Company. The term of the Employment
Agreement begins on March 28, 1996, and continues until terminated for death,
disability, cause or upon mutual written agreement. The Employment Agreement
also may be terminated after Mr. Weimer has been employed by the Company for at
least eighteen (18) months, upon six (6) months prior written notice of
termination from the Company to Mr. Weimer. The Company, at its sole discretion,
may elect to pay Mr. Weimer an amount equal to his salary for six (6) months in
lieu of providing the above-mentioned notice. The Employment Agreement contains
non-competition, non-solicitation and confidentiality provisions and expressly
incorporates the Key Employee Change in Control Agreement agreed to and executed
by Mr. Weimer and the Company.
Change in Control Agreements. The Company has entered into change in
control agreements (the "Change in Control Agreements") with certain Named
Executive Officers as well as other senior officers of the Company. The Change
in Control Agreements provide that in the event the officer is employed by the
Company at the time of a Change in Control (as defined in the Change in Control
Agreement), the officer shall be entitled to supplemental employment benefits
should his employment with the Company terminate within 18 months after the
Change in Control has occurred. The Change in
-10-
<PAGE> 14
Control Agreements provide that such termination of employment can be
involuntary, other than termination for cause or the result of death,
disability, or retirement age, or voluntary, following a material change in the
nature or location of his position or a material change in the benefits provided
to the officer by the Company. The supplemental benefits that are required to be
provided to the officer upon such a termination include a severance payment in
an amount equal to one-half of the officer's annual base salary as well as
various other benefits including basic life insurance, long-term disability
insurance, health insurance and other medical benefits.
Without the consent of the officer, the terms of the Change in Control
Agreement may be terminated or amended by the Company following the first
anniversary of its execution at any time prior to the first to occur of (1) a
Change in Control, (ii) the public announcement of a proposal for transaction
that, if consummated, will constitute a Change in Control, or (iii) the Board of
Directors learns of a proposal for a transaction that, if consummated, would
constitute a Change in Control. Upon the occurrence of any of the foregoing
events, the Change in Control Agreements continue in effect at such time without
termination or further change by the Company until the earlier of (x) 18 months
following any Change in Control, or (y) the final withdrawal or termination of a
proposal under item (ii) or (iii) that, had it been consummated, would have
constituted a Change in Control, at which time the Change in Control Agreement
may, once again, be amended or terminated by the Company until one of such
events occurs.
A Change in Control, as defined in the Change in Control Agreements,
includes, among other things: a change of control of the Company such that any
person, other than current affiliates of the Company, becomes the beneficial
owner of securities of the Company representing 50% or more of the combined
voting power of the Company's then outstanding securities; any consolidation,
merger or share exchange involving the Company in which the Company is not the
continuing or surviving corporation or pursuant to which shares of Company stock
would be converted into cash, securities or other property; the stockholders of
the Company approve any plan or proposal for the liquidation or dissolution of
the Company; or substantially all of the assets of the Company are sold or
otherwise transferred to parties that are not within a controlled group of
corporations in which the Company is a member.
Cash Incentive Plan. The Company has adopted the Integrity Incorporated
1995 Cash Incentive Plan (the "Cash Incentive Plan"). Under the Cash Incentive
Plan key employees of the Company are eligible to be awarded Units which are
payable only in cash. The Units vest in one-fifth increments on each anniversary
of the date of grant until vested in full. In addition, a participant becomes
fully vested, but not paid, in all of the Units of his or her award on the date
which is six months after the occurrence of a Change in Control (as defined in
the Cash Incentive Plan) of the Company if he or she is an employee of the
Company on such date (such six-month period being referred to as the "Transition
Period") or upon his or her termination of employment with the Company as a
result of death, disability, retirement after attaining retirement age, or
termination by the Company other than for cause during the Transition Period.
Participants are entitled to interim payments under the Cash Incentive Plan on
January 15 of each of the five years beginning January 15, 1997, unless the
participant has previously received a final payment. Participants are entitled
to a final payment on January 15, 2001, or January 15 of the year following the
participant's termination of employment or next following the end of the
Transition Period following a Change in Control. The value of the Units, and the
calculation of interim and final payments, is determined based on the difference
between the fair market value of a number of shares of the Class A Common Stock
of the Company equal to the number of Units at the date of determination and the
fair market value of the same number of shares on the date of grant of the
Units. The Board of Directors may discontinue the Cash Incentive Plan at any
time, and may amend it from time to time; however, no outstanding award under
the Cash Incentive Plan may be revoked or altered in a manner unfavorable to the
participant without the consent of the participant. In 1995, awards were made
under the Cash Incentive Plan to certain of the Named Executive Officers, as
well as other senior officers of the Company, which awards, individually,
currently do not have a value in excess of $100,000. In 1996, one award was made
under the Cash Incentive Plan to one of the Named Executive Officers, which
currently does not have a value in excess of $100,000. No further awards were
made under the Cash Incentive Plan in 1997.
-11-
<PAGE> 15
Severance Agreements. The Company has entered into severance agreements
(the "Severance Agreements") with certain Named Executive Officers as well as
other senior officers of the Company. The Severance Agreements provide for the
payment of severance benefits to such persons upon their termination of
employment by the Company without cause. Such persons are not entitled to
severance benefits under the Severance Agreement if they voluntarily resign,
quit, abandon their job or cannot perform their duties due to death or
disability. In addition, if an officer is entitled to severance benefits upon
termination of employment under the terms of a Change in Control Agreement, as
described above, the officer shall not be entitled to any benefits under the
Severance Agreement.
STOCKHOLDER RETURN COMPARISON.
The following line graph presentation compares cumulative stockholder
returns of the Company with the Nasdaq Stock Market (U.S. Companies) and a Peer
Index over the period beginning with the Company's initial public offering on
July 1, 1994 through December 31, 1997 (assuming the investment of $100 in the
Company's Class A Common Stock, the Nasdaq Stock Market (U.S. Companies) and the
Peer Index on July 1, 1994, and reinvestment of all dividends).
YEAR-END CUMULATIVE RETURNS
<TABLE>
<CAPTION>
DECEMBER 31,
----------------------------------------------
1995 1996 1997
---- ---- ----
<S> <C> <C> <C>
INTEGRITY INCORPORATED 23.6 18.1 13.9
THE NASDAQ STOCK MARKET 151.3 186.0 228.3
PEER INDEX 126.5 142.9 214.6
</TABLE>
Total return calculations for the Nasdaq Stock Market (U.S. Companies)
and the Peer Index were prepared by the Center for Research in Security Prices,
The University of Chicago. The Peer Index is based upon the companies comprising
the Publishing Index in the Dow Jones Media Industry Group. Specific information
regarding the companies comprising the Peer Index will be provided to any
stockholder upon request to Alison S. Richardson, at the Company.
-12-
<PAGE> 16
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION.
The Compensation Committee of the Board of Directors has furnished the
following report on executive compensation:
Overview and Philosophy. The Compensation Committee of the Board of
Directors (the "Compensation Committee") is responsible for reviewing and making
decisions under a delegation of authority from the Board with respect to
salaries, wages, bonuses, stock options and other benefits for officers of the
Company.
The objectives of the Company's executive compensation program are to:
- Encourage the achievement of Company performance by providing
compensation which directly relates to the performance of the individual and the
achievement of internal strategic objectives.
- Establish compensation policies and guidelines that will attract and
retain qualified personnel through an overall level of compensation opportunity
that is competitive within the Company's industry.
- Promote a direct relationship between compensation and Company
performance by facilitating executive officer stock ownership through stock
option awards.
Overall, the Company's executive officer compensation program is
comprised of base salary, annual cash incentive bonus compensation, long-term
incentive compensation in the form of stock options, and various other benefits,
including a medical plan, which are generally available to all employees of the
Company.
Base Salary. The base salaries for the Company's executive officers vary
depending on the responsibilities of the officers. While the executive officer
base salary compensation is designed to be competitive with other companies in
the Company's industry, the Company believes that bonus compensation described
below better serves the compensation philosophy of the Company.
1997 Cash Incentive Compensation. In order to maximize the common
interests of the Company's stockholders and its management, the Company awards
cash bonuses based on the Company's operating performance. The Company's
budgeted financial performance goals are set at the beginning of each fiscal
year and cash bonuses are then awarded in the judgment of the Compensation
Committee based on the achievement of budgeted targets and the individual
performance of the executive officer. As a result of their performance, six of
the Company's executive officers received cash bonuses in fiscal 1997.
Stock Options. The stock option programs of the Company are long-term
incentive plans for executive officers and employees intended to relate employee
and stockholder long-term interests by creating a strong and direct link between
compensation and stockholder returns. In general, stock option awards are
granted on an annual basis if warranted by the Company's growth and
profitability. To encourage long-term performance, options generally vest over a
five-year period. The Compensation Committee considers current stock ownership
and option holdings in deciding the number of options to be awarded to each
recipient.
Compensation of Chief Executive Officer. In fiscal 1997, the Chief
Executive Officer of the Company, Mr. P. Michael Coleman, was compensated
pursuant to an unwritten employment agreement approved by the Board of Directors
of the Company prior to the Company's initial public offering in July 1994.
Under the agreement, Mr. Coleman received a base salary of $282,293 during
fiscal 1997.
-13-
<PAGE> 17
The Compensation Committee has adopted several plans and agreements
designed to assist the Company in retaining key employees of outstanding ability
during a period of financial difficulty and consideration of various
alternatives to enhance stockholder value, including business transactions with
third parties. These plans and agreements are designed to offer key employees an
increased incentive to join or continue in the service of the Company and to
increase their efforts for its welfare by participating in the growth of the
Company. Specifically, the Compensation Committee adopted a form of Change in
Control Agreement, the Cash Incentive Plan, and a form of Severance Agreement,
which were utilized with various key employees. See "Proposal I - Election of
Directors -- Executive Compensation -- Employment Arrangements."
Section 162(m) of the Internal Revenue Code (the "Code") adopted as part
of the Revenue Reconciliation Act of 1993, generally limits to $1 million the
deduction that can be claimed by any publicly-held corporation for compensation
paid to any "covered employee" in any taxable year beginning after December 31,
1993. The term covered employee for this purpose is defined generally as the
Chief Executive Officer and the four other highest paid employees of the
corporation. Performance-based compensation is outside the scope of the $1
million limitation, and hence, generally can be deducted by a publicly-held
corporation without regard to amount, provided that, among other requirements,
such compensation is approved by the stockholders. The Compensation Committee
has not, and, given the current levels of executive compensation in the Company,
does not foresee the need in the immediate future, to formulate a policy for the
Company with regard to Section 162(m) and executive compensation. Generally
speaking, the Compensation Committee's executive compensation policies are
performance-based.
COMPENSATION COMMITTEE
Heeth Varnedoe III
John B. Ellis
-14-
<PAGE> 18
CERTAIN TRANSACTIONS
Donald J. Moen. Mr. Donald J. Moen, Integrity's Executive Vice President
and Creative Director, is also one of the Company's exclusive songwriters and
artists. Mr. Moen received royalties of $197,831 in 1997.
The Board of Directors of the Company has adopted a policy which requires
that transactions between the Company and its officers, directors or other
affiliates shall be on terms no less favorable to the Company than could be
obtained from unaffiliated third parties on an arm's-length basis and, further,
that any such transaction shall be approved by a majority of the Company's
directors who have no interest in any such transaction.
PROPOSAL II
APPROVAL OF SELECTION OF AUDITORS
The Company's Board of Directors has selected Price Waterhouse LLP to
conduct the annual audit of the financial statements of the Company for the
fiscal year ending December 31, 1998. Price Waterhouse LLP has no financial
interest, direct or indirect, in the Company, and does not have any connection
with the Company except in its professional capacity as an independent auditor.
The ratification by the holders of Class A Common Stock of the selection
of Price Waterhouse LLP as independent auditors is not required by law or by the
Bylaws of the Company. The Board of Directors, consistent with the practice of
many publicly held corporations, is nevertheless submitting this selection to
the holders of Class A Common Stock and the Class B Common Stock. If this
selection is not ratified at the Annual Meeting, the Board of Directors intends
to reconsider its selection of independent auditors for the fiscal year ending
December 31, 1998. Even if the selection is ratified, the Board of Directors in
its sole discretion may direct the appointment of a different independent
accounting firm at any time during the fiscal year if the Board determines that
such a change would be in the best interest of the Company and its stockholders.
The Audit Committee, which is composed of directors who are not employees
of the Company, approves in advance all material non-audit services to be
provided by Price Waterhouse LLP and believes that these services have no effect
on audit independence.
Representatives of Price Waterhouse LLP will be present at the Annual
Meeting and will have an opportunity to make a statement, if they so desire, and
respond to appropriate questions.
THE BOARD OF DIRECTORS RECOMMENDS THAT STOCKHOLDERS VOTE FOR RATIFICATION
OF THE SELECTION OF PRICE WATERHOUSE LLP AS INDEPENDENT AUDITORS FOR THE FISCAL
YEAR ENDING DECEMBER 31, 1998. IF A CHOICE IS SPECIFIED ON THE PROXY BY THE
STOCKHOLDER, THE SHARES WILL BE VOTED AS SPECIFIED. IF NO SPECIFICATION IS MADE,
THE SHARES WILL BE VOTED FOR RATIFICATION. THE AFFIRMATIVE VOTE OF A MAJORITY OF
THE VOTES OF THE SHARES OF CLASS A COMMON STOCK AND CLASS B COMMON STOCK, VOTING
TOGETHER AS A SINGLE CLASS, REPRESENTED AND ENTITLED TO VOTE AT THE ANNUAL
MEETING AT WHICH A QUORUM IS PRESENT IS REQUIRED FOR APPROVAL OF PROPOSAL II.
STOCKHOLDER PROPOSALS
Any proposal which a Company stockholder intends to be presented at the
next annual meeting of stockholders to be held in 1999 must be received by the
Company on or before December 17, 1998. Only proper proposals which are timely
received will be included in the Proxy Statement and Proxy.
-15-
<PAGE> 19
OTHER MATTERS
FILINGS UNDER SECTION 16(A)
Section 16(a) of the Securities Exchange Act of 1934 requires the
Company's officers and directors, and persons who own more than ten percent of a
registered class of the Company's equity securities to file reports of ownership
and changes in ownership of such securities with the Securities and Exchange
Commission and the National Association of Securities Dealers, Inc. Officers,
directors and greater than ten percent beneficial owners are required by
applicable regulations to furnish the Company with copies of all Section 16(a)
forms they file.
Based solely upon a review of the copies of the forms furnished to the
Company, or written representations from certain reporting persons that no Forms
5 were required, the Company believes that during fiscal 1997 all of its
officers and directors complied with all applicable filing requirements with the
exception of: Daniel D. McGuffey who failed to file timely his Form 3 upon
starting employment with the Company; and Douglas P. Meduna who failed to file
timely a Form 4, with regard to the purchase of shares by family members.
EXPENSES OF SOLICITATION
The cost of soliciting proxies in the accompanying form will be borne by
the Company. In addition to the use of the mails, proxies may be solicited by
directors, officers or other employees of the Company, personally, by telephone
or by telegraph. The Company does not expect to pay any compensation for the
solicitation of proxies, but may reimburse brokers, custodians or other persons
holding stock in their names or in the names of nominees for their expenses in
sending proxy materials to principals and obtaining their instructions.
MISCELLANEOUS
Management does not know of any matters to be brought before the Annual
Meeting other than as described in this Proxy Statement. Should any other
matters properly come before the Annual Meeting, the persons designated as
proxies will vote in accordance with their best judgment on such matters.
AVAILABILITY OF ANNUAL REPORT
ACCOMPANYING THIS PROXY STATEMENT IS A COPY OF THE COMPANY'S ANNUAL
REPORT FOR THE YEAR ENDED DECEMBER 31, 1997. STOCKHOLDERS WHO WOULD LIKE
ADDITIONAL COPIES OF THE ANNUAL REPORT SHOULD DIRECT THEIR REQUESTS IN WRITING
TO: INTEGRITY INCORPORATED, 1000 CODY ROAD, MOBILE, ALABAMA 36695, ATTENTION:
ALISON S. RICHARDSON.
-16-
<PAGE> 20
APPENDIX
PROXY INTEGRITY INCORPORATED
MOBILE, ALABAMA
ANNUAL MEETING OF STOCKHOLDERS
The undersigned stockholder of Integrity Incorporated (the "Company"),
Mobile, Alabama, hereby constitutes and appoints P. Michael Coleman or Alison S.
Richardson either one of them, each with full power of substitution, to vote the
number of shares of Class A Common Stock which the undersigned would be entitled
to vote if personally present at the Annual Meeting of Stockholders to be held
at the Adam's Mark, 64 South Waterstreet, Mobile, Alabama, 36602, on Wednesday,
May 6, 1998, at 2:00 p.m., local time, or at any adjournments thereof (the
"Annual Meeting"), upon the proposals described in the Notice of Annual Meeting
of Stockholders and Proxy Statement, both dated April 14, 1998, the receipt of
which is acknowledged, in the manner specified below. The proxies, in their
discretion, are further authorized to vote for the election of a person to the
Board of Directors if any nominee named herein becomes unable to serve or for
good cause will not serve, are further authorized to vote on matters which the
Board of Directors does not know a reasonable time before making the proxy
solicitation will be presented at the Annual Meeting, and are further authorized
to vote on other matters which may properly come before the Annual Meeting and
any adjournments thereof. The Board of Directors recommends a vote FOR Proposals
1 and 2.
1. ELECTION OF DIRECTORS. On the proposal to elect the following slate of
directors to serve until the 1999 Annual Meeting of Stockholders of the
Company and until their successors are elected and qualified:
<TABLE>
<S> <C>
P. Michael Coleman
Jean C. Coleman Charles V. Simpson
John B. Ellis Heeth Varnedoe III
[ ] FOR [ ] WITHHOLD AUTHORITY
</TABLE>
(INSTRUCTION: TO WITHHOLD AUTHORITY FOR ANY INDIVIDUAL NOMINEE(S), WRITE THE
NAME OF THE NOMINEE(S) IN THE SPACE PROVIDED:)
-------------------------------------------------------------------------
2. SELECTION OF AUDITORS. On the proposal to ratify the selection of Price
Waterhouse LLP as the Company's independent auditors for the fiscal year
ending December 31, 1998:
[ ] FOR [ ] AGAINST [ ] ABSTAIN
THIS PROXY, WHEN PROPERLY EXECUTED, WILL BE VOTED IN THE MANNER DIRECTED BY
THE UNDERSIGNED STOCKHOLDER. IF NO DIRECTION IS MADE, THIS PROXY WILL BE VOTED
FOR PROPOSALS 1 AND 2 AND WITH DISCRETIONARY AUTHORITY ON ALL OTHER MATTERS THAT
MAY PROPERLY COME BEFORE THE ANNUAL MEETING OR ANY ADJOURNMENTS THEREOF.
Please sign exactly as your name appears on your stock certificate and date.
Where shares are held jointly, each stockholder should sign. When signing 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.
Shares Held:
------------------------
------------------------------
Signature of Stockholder
------------------------------
Signature of Stockholder (If
held jointly)
Dated: , 1998
----------------------
Month Day
THIS PROXY IS SOLICITED ON BEHALF OF INTEGRITY INCORPORATED'S BOARD OF DIRECTORS
AND MAY BE REVOKED BY THE STOCKHOLDER PRIOR TO ITS EXERCISE.
