SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] 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 Sec. 240.14a-11(c) or Sec. 240.14a-12
BALDOR ELECTRIC COMPANY
- -------------------------------------------------------------------------------
(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:
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4) Proposed maximum aggregate value of transaction:
------------------------------------------------------------------------
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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<PAGE>
<PAGE>
BALDOR ELECTRIC COMPANY
NOTICE OF
ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD MAY 4, 1996
To the Shareholders:
The Annual Meeting of Shareholders of Baldor Electric Company, a Missouri
corporation, will be held at the Holiday Inn, 700 Rogers Avenue, Fort Smith,
Arkansas, on Saturday, May 4, 1996, at 10:30 a.m., local time, for the
following purposes:
1. To elect directors;
2. To consider and act upon a proposal to approve the Baldor Electric
Company 1996 Stock Option Plan for Non-Employee Directors; and
3. To transact such other business as may properly come before the
meeting and all adjournments thereof.
The Board of Directors has fixed the close of business on March 19, 1996, as
the record date for the determination of the shareholders entitled to notice
of, and to vote at, the Annual Meeting and all adjournments thereof.
By Order of the Board of Directors
Lloyd G. Davis
Secretary
March 28, 1996
Even if you expect to attend the meeting in person, please mark, date, and sign
the enclosed proxy and return it in the enclosed return envelope. The return
envelope does not require postage if mailed in the United States. Shareholders
who attend the meeting may revoke their proxies and vote in person if they so
desire.
<PAGE>
<PAGE>
BALDOR ELECTRIC COMPANY
PROXY STATEMENT
ANNUAL MEETING OF SHAREHOLDERS
The enclosed proxy is solicited on behalf of the Board of Directors of Baldor
Electric Company (the "Company") for use at the Annual Meeting of its
shareholders to be held May 4, 1996, at 10:30 a.m. If the proxy is executed
and returned to the Company, it nevertheless may be revoked at any time before
it is exercised either by written notice to the Secretary of the Company or by
attending the meeting and voting in person. If no contrary instructions are
indicated on the proxy, the proxy will be voted for the election of the three
nominees named herein as directors and for the plan proposal. If matters other
than those mentioned herein properly come before the meeting, the proxy will be
voted by the persons named therein in a manner which they consider to be in the
best interests of the Company.
The Company's principal executive offices are located at 5711 R. S. Boreham,
Jr. Street, Fort Smith, Arkansas 72901. This Proxy Statement and the
accompanying form of proxy are first being sent to shareholders on or about
March 29, 1996.
The cost of the solicitation of proxies will be borne by the Company. In
addition to the use of the mails, proxies may be solicited personally or by
telephone or facsimile, by regular employees of the Company, without additional
compensation. Brokerage firms, banks, nominees and others will be requested to
forward proxy material to the beneficial owners of Common Stock held by them of
record. No solicitation is to be made by specially engaged employees or other
paid solicitors.
VOTING
Holders of record of the Company's Common Stock, par value $0.10 per share (the
"Common Stock") at the close of business on March 19, 1996, will be entitled to
notice of and to vote at the Annual Meeting. There were 25,864,259 shares of
Common Stock of the Company outstanding as of the close of business on March 8,
1996. Each shareholder has one vote per share of Common Stock on each item of
business to be presented to shareholders vote at the Annual Meeting, except for
the election of directors, in which case cumulative voting is authorized as
described herein under "Election of Directors". A majority of the outstanding
shares of Common Stock, present in person or by proxy and entitled to vote,
will constitute a quorum for the transaction of business at the Annual Meeting.
Abstentions may be specified on the proposal to adopt the Baldor Electric
Company 1996 Stock Option Plan for Non-Employee Directors (the "Proposal 2")
but not the election of directors.
<PAGE> -1-
<PAGE>
Shares represented by proxies or ballots which are marked to "withhold
authority" with respect to the election of any one or more nominees for
election as directors or to abstain with respect to Proposal 2 will be counted
for purposes of determining the presence or absence of a quorum for the trans-
action of business at the Annual Meeting.
Under Missouri law, the state in which the Company is incorporated, the
affirmative vote of a majority of the holders of the shares entitled to vote
which are present in person or represented by proxy at the Annual Meeting is
required to elect directors. If more persons than the number of director
positions to be filled receive the affirmative vote of a majority of the shares
entitled to vote at the meeting, then the number of persons up to the number of
directorships to be filled who receive the most votes, or a "plurality", will
be elected as directors. Because a director must receive a majority of the
votes cast to be elected (even if such director otherwise received a
plurality), proxies which are marked to "withhold authority" in the election
of directors will have the same effect as if the shares represented thereby
were voted against such nominee or nominees.
Under the rules of the New York Stock Exchange, approval of Proposal 2 requires
the approval of shareholders holding a majority of the Company's issued and
outstanding Common Stock. The shares represented by an abstention are issued
and outstanding but because they are not voted for the adoption of Proposal 2,
an abstention has the practical effect of a vote against Proposal 2.
PROPOSAL 1:
ELECTION OF DIRECTORS
The Restated Articles of Incorporation and Bylaws of the Company provide for a
classified Board of Directors, with the Board divided into three classes whose
terms expire at different times. Three members are to be elected to the Board
of Directors in 1996, each to serve for a term of three years.
In the election of directors, each shareholder is entitled to vote cumula-
tively. To vote cumulatively in the election of directors, each shareholder
may multiply the number of shares of Common Stock held by him by the number of
directors to be elected and cast the whole number of votes for one candidate or
distribute them among two or more candidates. There is no condition precedent
to the exercise of these cumulative voting rights.
The persons named in the enclosed form of proxy intend to vote such proxy for
the election of the three nominees named below as directors of the Company,
unless the shareholder indicates on the form of proxy that the vote should be
withheld or contrary directions are indicated. If the proxy is signed and
returned without any direction given, shares will be voted for the election of
the Board's slate of nominees and in their discretion, the persons named in the
proxy are authorized to cumulate and vote the shares of the shareholders giving
the proxy for any nominee except those nominees with respect to whom authority
has been withheld. The Board of Directors has no reason to doubt the avail-
ability of the nominees and each has indicated a willingness to serve if
elected. If any nominee shall decline or be unable to serve, it is intended
<PAGE> -2-
<PAGE>
that, in the discretion of the Board of Directors, either the size of the Board
will be reduced or the proxies will vote for a substitute nominee designated
by the Board of Directors.
Information Regarding the Nominees for Directors
to be Elected in 1996 for Terms Ending in 1999
Jefferson W. Asher, Jr. ... Independent Management Consultant providing
assistance to corporations, attorneys, banking institutions, and other
creditors for more than the past five years; Director of California Beach
Restaurants, Inc.; Age 71; Present term expires 1996; Director of the Company
since 1973. (1)
Robert J. Messey ... Senior Vice President, Chief Financial Officer, and
Director of Sverdrup Corporation, engineering and architectural firm, since
January 1, 1993; Partner of Ernst & Young LLP, international accounting firm,
prior to January 1, 1993; Age 50; Present term expires 1996; Director of the
Company since 1993. (2)
Willis J. Wheat ... President Emeritus of Oklahoma City University; Professor
of Management and Marketing, Oklahoma City University, 1987 through 1995;
Age 70; Present term expires 1996; Director of the Company since 1991. (3)
Information Regarding the Directors Who Are Not Nominees for
Election and Whose Terms Continue Beyond 1996
Fred C. Ballman ... Former Chairman and Chief Executive Officer of the Company
(retired); Age 83; Present term expires 1998; Director of the Company from 1944
to 1982 and since 1992. (3)(4)
O. A. Baumann ... The Company's manufacturer's sales representative in St.
Louis, Missouri, from 1947 to 1987 (retired); Age 74; Present term expires
1997; Director of the Company since 1961. (5)
R. S. Boreham, Jr. ... Chairman of the Board of the Company since 1981; Chief
Executive Officer of the Company from 1978 through fiscal year 1992; Director
of U.S.A. Truck, Inc.; Age 71; Present term expires 1998; Director of the
Company since 1961. (6)
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<PAGE>
Robert L. Proost ... Corporate Vice President and Director of Administration,
A.G. Edwards & Sons, Inc., securities brokerage and investment banking; Age 58;
Present term expires 1997; Director of the Company since 1988. (2)(5)(7)
R. L. Qualls ... Chief Executive Officer of the Company beginning January 3,
1993 and President of the Company since 1990; Chief Operating Officer of the
Company from February 1991 through fiscal year 1992; Age 62; Present term
expires 1998; Director of the Company since 1987. (8)
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(1) Chairman of the Audit Committee
(2) Member of the Audit Committee
(3) Member of the Stock Option Committee
(4) Chairman of the Nominating Committee
(5) Member of the Nominating Committee
(6) Chairman of the Executive Committee
(7) Chairman of the Stock Option Committee
(8) Member of the Executive Committee
Information About the Board of Directors
and Committees of the Board
Board of Directors ... During the fiscal year ended December 30, 1995 ("fiscal
year 1995"), five meetings of the Board of Directors were held.
Executive Committee ... Between meetings of the Board, the Executive Committee
is empowered to act in lieu of the Board of Directors except on those matters
for which the Board of Directors has specifically reserved authority to itself.
The Executive Committee held two meetings during fiscal year 1995.
Audit Committee ... The Audit Committee performs the following functions:
assists in the selection of independent auditors, directs and supervises
investigations into matters relating to audit functions, reviews with
<PAGE> -4-
<PAGE>
independent auditors the plans and results of the audit engagement, reviews the
degree of independence of the auditors, considers the range of audit and non-
audit fees, and reviews the adequacy of the Company's system of internal
accounting controls. The Audit Committee held three meetings during fiscal
year 1995.
Stock Option Committee ... The Stock Option Committee administers four of the
Company's five existing stock option plans. Awards can be made from three
plans and the committee has the exclusive authority to determine the persons
eligible to participate and to determine the amount and the terms and condi-
tions of the awards made to each participant. The Stock Option Committee held
one meeting during fiscal year 1995.
Nominating Committee ... The Nominating Committee is responsible for proposing
a slate of directors for election by the shareholders at each annual meeting
and proposing candidates to fill any vacancies on the Board. Pursuant to the
Bylaws, any shareholder of the Company eligible to vote in an election of
directors may nominate a person or persons for election to the Board of
Directors by written notice mailed to the Company not less than 45 nor more
than 90 days prior to the regularly scheduled date set forth in the Bylaws for
the annual meeting of shareholders. The notification to the Company shall
state the name and residence address of the nominating shareholder and, to the
extent known to the nominating shareholder: the name and principal address of
the proposed nominee, the total number of shares to be voted for the proposed
nominee, the number of shares held by the nominating shareholder, and the name
and residence address of each notifying or nominating shareholder. The commit-
tee will consider candidates for Board membership proposed by shareholders who
have complied with the aforementioned procedures. The Nominating Committee
held one meeting during fiscal year 1995.
Director Compensation ... During fiscal year 1995, each member of the Board of
Directors who was not a Company employee received $3,300 per quarter for
services as a director. Each director who is a member of the Audit Committee
received an additional $2,500 per quarter as chairman or $1,600 per quarter as
a member. Each director who is a member of the Stock Option Committee received
an additional $600 per quarter during fiscal year 1995. The Company also main-
tains the 1989 Stock Option Plan for Non-Employee Directors (the "1989 Plan").
Under the terms of the 1989 Plan, all non-employee directors received an annual
option grant on January 31, 1995, to purchase shares of Common Stock of the
Company, consisting of an option to purchase 2,430 shares having an exercise
price of $20.50 (the fair market value per share on that date) and an addition-
al option to purchase 1,620 shares having an exercise price of $10.25 (50% of
the fair market value per share on that date). Annual option grants become
exercisable in five equal installments beginning on the grant's first anniver-
sary. All options expire ten years after the grant date. The 1989 Plan is
administered by a committee of non-participating directors.
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<PAGE>
SECURITY OWNERSHIP OF
CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth information as of March 8, 1996, regarding all
persons known to the Company to be the beneficial owners of more than five
percent of the Company's Common Stock. The table also includes security
ownership for each director of the Company, the Company's Chief Executive
Officer, each of the Company's four other most highly compensated executive
officers for fiscal year 1995, and all executive officers and directors as a
group.
Number of Percent of
Name Shares Class (1)
- --------------------------------- ---------------- -------------
The Baldor Electric Company
Profit Sharing and Savings Plan 2,548,288 (2) 9.9 %
P. O. Box 2400
Fort Smith, Arkansas 72902
Fred C. Ballman 2,254,849 (3) 8.7 %
P. O. Box 6638
Fort Smith, Arkansas 72906
R. S. Boreham, Jr. 1,264,747 (4) 4.9 %
O. A. Baumann 467,919 (5) 1.8 %
R. L. Qualls 190,215 (6) *
James R. Kimzey 146,150 (7) *
John A. McFarland 139,229 (8) *
Lloyd G. Davis 136,483 (9) *
Jefferson W. Asher, Jr. 44,820 (10) *
Robert L. Proost 37,530 (11) *
Willis J. Wheat 23,490 (12) *
Robert J. Messey 14,572 (13) *
All executive officers and directors
as a group (17 persons) 5,201,810 (14) 19.4 %
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* Less than 1%.
<PAGE> -6-
<PAGE>
(1) Percentage is calculated in accordance with Section 13-3(d)(3)(i)
with number of shares as the numerator which includes shares
issuable upon exercise of options. The denominator consists of
shares issued and outstanding plus shares issuable upon exercise of
options, if any, awarded to the named individual or group.
(2) Sole voting power over 5,610 shares; shared investment power over
2,542,678 shares.
(3) Shared voting and shared investment power over 2,244,319 shares;
includes exercisable options to purchase 10,530 shares.
(4) Shared voting and shared investment power over 54,226 shares; sole
voting and sole investment power over 980,689 shares; sole voting
and shared investment power over 86,842 shares in the Company's
Profit Sharing and Savings Plan; includes exercisable options to
purchase 142,990 shares.
(5) Shared voting and shared investment power over 435,519 shares;
includes exercisable options to purchase 32,400 shares.
(6) Shared voting and shared investment power over 151,397 shares; sole
voting and shared investment power over 1,098 shares in the
Company's Profit Sharing and Savings Plan; includes exercisable
options to purchase 37,720 shares.
(7) Shared voting and shared investment power over 30,444 shares; sole
voting and sole investment power over 2,389 shares; sole voting and
shared investment power over 5,102 shares in the Company's Profit
Sharing and Savings Plan; includes exercisable options to purchase
108,215 shares.
(8) Sole voting and sole investment power over 20,314 shares; shared
voting and shared investment power over 7,000 shares; sole voting
and shared investment power over 14,350 shares in the Company's
Profit Sharing and Savings Plan; includes exercisable options to
purchase 97,565 shares.
(9) Sole voting and sole investment power over 39,033 shares; sole
voting and shared investment power over 11,744 shares in the
Company's Profit Sharing and Savings Plan; includes exercisable
options to purchase 85,706 shares.
(10) Sole voting and sole investment power over 10,515 shares; shared
voting and shared investment power over 25,395 shares; includes
exercisable options to purchase 8,910 shares.
(11) Sole voting and sole investment power over 18,000 shares; shared
voting and shared investment power over 4,950 shares; includes
exercisable options to purchase 14,580 shares.
(12) Shared voting and shared investment power over 2,430 shares;
includes exercisable options to purchase 21,060 shares.
(13) Sole voting and sole investment power over 1,800 shares; shared
voting and shared investment power over 622 shares; includes
exercisable options to purchase 12,150 shares.
(14) Includes 153,143 shares in the Company's Profit Sharing and Savings
Plan; includes exercisable options to purchase 895,989 shares.
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<PAGE>
EXECUTIVE COMPENSATION
The following table sets forth certain information regarding compensation paid
during each of the Company's last three fiscal years to the Company's Chief
Executive Officer and each of the Company's four other most highly compensated
executive officers.
<TABLE>
Summary Compensation Table
<CAPTION>
Long Term Compensation
Annual Compensation Awards Payouts
Other Restricted Securities All
Annual Stock Underlying LTIP Other
Name and Principal Position Year Salary Bonus Compensation Awards Options Payouts Compensation(1)
($) ($) ($) ($) (#) ($) ($)
<S> <C> <C> <C> <C> <C> <C> <C> <C>
R. L. Qualls 1995 270,000 286,187 0 0 21,000 0 61,554
President and Chief Executive Officer 1994 240,000 262,570 0 0 25,000 0 59,570
1993 200,000 219,856 0 0 27,000 0 64,604
R. S. Boreham, Jr. 1995 220,000 256,582 0 0 16,800 0 98,657
Chairman of the Board of Directors 1994 200,000 235,777 0 0 10,000 0 96,768
1993 200,000 219,856 0 0 21,000 0 170,382
Lloyd G. Davis 1995 120,000 78,948 0 0 10,500 0 21,817
Chief Financial Officer, 1994 100,000 58,944 0 0 12,000 0 19,007
Vice President Finance, Secretary, 1993 100,000 32,978 0 0 15,000 0 16,979
and Treasurer
James R. Kimzey 1995 120,000 47,369 0 0 7,500 0 23,076
Vice President-Research and Engineering 1994 100,000 42,869 0 0 2,000 0 19,711
1993 100,000 29,681 0 0 6,000 0 16,291
John A. McFarland 1995 120,000 78,948 0 0 10,500 0 19,567
Vice President - Sales 1994 100,000 58,944 0 0 5,000 0 16,723
1993 90,000 29,681 0 0 15,000 0 12,341
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(1) The amounts disclosed in this column include contributions by the
Company to the Baldor Electric Company Employees' Profit Sharing and
Savings Plan, a defined contribution plan, which is two plans in one:
a Profit Sharing Plan and a Savings Plan. The Company makes all
contributions to the Profit Sharing Plan which are equal to 12% of
pre-tax earnings for participating companies. The contributions are
allocated among eligible employees in proportion to their total
compensation. The Company makes matching contributions to the Savings
Plan at a rate equal to 25% of the first 4% of the participating
employee's compensation earned and contributed. The Company also
maintains a split-dollar life insurance plan for all executive
officers. The Company makes the premium payments on the split-dollar
life insurance policies which vary according to age and insurance
coverage for each officer. Each officer reimburses the Company for a
portion of the premium that represents the full value attributable to
term life coverage. The amounts included as compensation for each
named officer represents the full dollar value of the premium paid by
the Company during the covered fiscal year less the reimbursement
received from each individual. The fiscal year 1995 amounts in this
column represent Company contributions consisting of the following:
Contributions Contributions Split-Dollar
to the to the Life Insurance
Name Profit Sharing Plan Savings Plan Premiums
- ------------------ ------------------- ------------- --------------
($) ($) ($)
R. L. Qualls 14,628 1,500 45,426
R. S. Boreham, Jr. 14,628 1,500 82,529
Lloyd G. Davis 14,628 1,200 5,989
James R. Kimzey 14,628 1,200 7,248
John A. McFarland 14,628 1,200 3,739
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<PAGE>
Option Grants in Last Fiscal Year
Individual Grants
----------------------------------------------------
Number of % of Total Market
Securities Options Price
Underlying Granted on Grant Date
Options in Exercise Grant Expiration Present
Name Granted Fiscal Year Price Date Date Value (1)
- ------------ --------- ----------- -------- ------ ---------- ----------
(#) ($/sh) ($/sh) ($)
R.L.Qualls 15,000 (2) 4.8% 18.0833 18.0833 01/02/2005 111,857
6,000 (3) 1.9% 9.0417 18.0833 01/02/2005 66,233
R.S.Boreham,Jr. 12,000 (2) 3.8% 18.0833 18.0833 01/02/2005 89,485
4,800 (3) 1.5% 9.0417 18.0833 01/02/2005 52,987
Lloyd G. Davis 7,500 (2) 2.4% 18.0833 18.0833 01/02/2005 55,928
3,000 (3) 1.0% 9.0417 18.0833 01/02/2005 33,117
James R. Kimzey 4,500 (2) 1.4% 18.0833 18.0833 01/02/2005 33,557
3,000 (3) 1.0% 9.0417 18.0833 01/02/2005 33,117
John A.McFarland 7,500 (2) 2.4% 18.0833 18.0833 01/02/2005 55,928
3,000 (3) 1.0% 9.0417 18.0833 01/02/2005 33,117
- ------------
(1) The Company used the Black-Scholes option pricing model to determine
grant date present value. Calculations are based on a ten-year option
term and assumptions are: interest rate of 7.9%; annual dividend yield
of 1.8%; and volatility of 19.2%. As indicated, the present values
are based on assumptions and the amounts reflected in this table may
not be achieved.
(2) Incentive options to purchase shares of Common Stock of the Company
were granted at the market value of the Common Stock on the date of
grant and are 100% exercisable six months and one day following the
grant date.
(3) Non-qualified options to purchase shares of restricted Common Stock of
the Company were granted at 50% of the market value of the Common
Stock on the date of grant with full vesting occurring on the fifth
anniversary date. Vesting may be accelerated by early exercise or
when certain events relating to change of the Company's ownership
occurs. The restricted shares purchased on exercise of such options
may be voted but cannot be sold or transferred until they are vested.
The options are 100% exercisable six months and one day following the
grant date.
<PAGE> -9-
<PAGE>
Aggregated Option Exercises in Last Fiscal Year
and FY-End Option Values
Number of
Securities Underlying Value of
Shares Unexercised Unexercised
Acquired Value Options In-the-Money Options
Name on Exercise Realized(1) at FY-End (#) at FY-End($)(2)
- ----------- ----------- -------- -------------------- --------------------
(#) ($) (A) (B) (A) (B)
------- -------- ------- -------
R.L.Qualls 178,602 2,697,797 37,720 0 520,262 0
R.S.Boreham,Jr. 36,200 717,498 142,990 0 1,711,864 0
Lloyd G.Davis 6,004 106,732 85,706 0 847,020 0
James R.Kimzey 28,300 576,729 108,215 0 1,408,654 0
John A.McFarland 4,500 70,158 100,065 0 1,085,211 0
- -------------
(A) Exercisable
(B) Unexercisable
(1) Represents the difference between the option exercise price and the
market price of the Common Stock on the date of exercise multiplied by
the number of shares acquired upon exercise.
(2) Represents the difference between the $20.125 closing price of the
Common Stock as reported by the New York Stock Exchange on December
29, 1995, the last trading day of fiscal year 1995, and the exercise
price of the options multiplied by the number of shares of Common
stock underlying the option. The numbers shown reflect the value of
options accumulated over a seven-year period.
Change-of-Control Arrangements
Pursuant to agreements under the 1987 Incentive Stock Plan and the 1994
Incentive Stock Plan, outstanding restricted Common Stock of the Company
acquired by an early exercise of a non-qualified stock option will fully vest
and be free of restrictions without the requirement of any further act by the
Company or shareholder in the event of a "Change-of-Control" of the Company as
defined in those agreements.
Compensation Committee Interlocks and Insider Participation
Although the Company has no standing compensation committee of the Board of
Directors, the Executive Committee performs functions similar to those
customarily performed by such committees. Except for grants under the various
incentive stock plans, the Board of Directors, as a whole, approves the salary
and bonus remuneration arrangements for directors and executive officers as
recommended by the Executive Committee. The members of the Executive
Committee are the following executive officers: R. S. Boreham, Jr. and R. L.
Qualls. The Stock Option Committee administers four of the five incentive
stock plans. The members of the Stock Option Committee are the following non-
employee directors: Fred C. Ballman, Robert L. Proost, and Willis J. Wheat.
<PAGE> -10-
<PAGE>
Report of the Executive and Stock Option Committees
The Company applies a consistent philosophy to compensation for all employees,
including senior management. This philosophy is based on the premise that the
achievements of the Company result from the coordinated efforts of all
individuals working toward common objectives. The Company strives to achieve
those objectives through teamwork that is focused on meeting the expectations
of customers and shareholders.
The Company's Officer's Compensation Plan (the "Plan") is objective, formula
driven, and has been consistently applied since 1973. The Plan is designed to
ensure that an appropriate relationship exists between executive pay and the
creation of shareholder value. The primary goals of the Plan are to ensure
that total compensation is fair internally, is competitive externally, and
offers performance motivation. For purposes of this section, total compen-
sation is defined as salary plus bonus. The Plan combines annual base compen-
sation with a bonus based upon the Company's performance. The Company believes
that the goals of the Plan are met by providing competitive compensation which
will motivate and retain key employees.
Total compensation for all executive officers is established within the range
of salaries and bonuses for persons holding similar positions at other
comparably-sized manufacturing companies utilizing independent salary survey
data. The survey data is a composite of all manufacturing companies that are
comparably-sized based upon sales volume. The independent survey does not
provide a detailed list of all participating companies and the companies
included may or may not include those in the performance graph. The total
compensation for all executive officers is expected to be slightly below the
median for similar positions compared to the independent survey data. This is
accomplished by establishing the annual base portion of compensation at the low
end of the survey with the potential incentive portion being slightly above
the median. This results in a greater emphasis being placed upon the Company's
performance.
The total compensation individual officers may earn is subjective based upon
the individual's position, experience, and ability to impact the Company's
performance. In establishing each officer's annual base and potential bonus
portion of compensation, additional consideration includes the individual's
past performance, initiative and achievement, and future potential, as well as
the Company's performance.
The potential bonus pool is based upon the sales and earnings performance of
the Company and the relative weights are 75% sales and 25% earnings. Compensa-
tion attributable to the sales component increases or decreases in relation to
sales. Compensation attributable to the earnings component increases if earn-
ings exceed a percentage of shareholders' equity as determined by the Board of
Directors (currently 10%) and decreases if earnings are less than such amount.
Each individual officer's participation in the potential bonus pool is deter-
mined as described above and is assigned such that if the Company achieves its
sales and earnings objectives, the salary and bonus combined will be competi-
tive with the industry and will remain consistent with the Company's philosophy
and Plan. The Company exceeded planned sales and earnings which resulted in
actual bonuses equaling 28% to 54% of total compensation for named executive
officers.
<PAGE> -11-
<PAGE>
The factors considered in determining the compensation package for the Presi-
dent and Chief Executive Officer for fiscal year 1995 were the same as those
described above for executive officers. The total compensation for the Presi-
dent and the Chief Executive Officer is expected to be slightly below the
median of comparably-sized manufacturing companies. This median is obtained
from independent salary survey data which is utilized in the same manner for
the CEO as well as all other executive officers. The CEO's total compensation
is competitive and reflective of the Company's performance with 51% of the
CEO's compensation at risk in the form of a performance bonus. In 1995, 44% of
the increase in the CEO's total compensation over 1994 total compensation was
the result of improved sales and earnings.
The Company also maintains stock option plans to provide additional incentives
to executive officers and other employees to work to maximize shareholder
value. The Stock Option Committee has granted incentive options to purchase
shares of Common Stock of the Company (at the fair market value of the Common
Stock on the date of grant) and non-qualified options to purchase shares of
restricted stock (at 50% of the fair market value of the Common Stock on the
date of grant) to executive officers and other employees. Grants were made in
fiscal year 1995 to named executives and other employees to continue to encour-
age long-term growth and profitability. The number of options granted to each
executive officer is subjective based upon individual performance, future
potential, and abilities to impact the Company's performance.
The President and Chief Executive Officer received an incentive stock option to
purchase 21,000 shares of Common Stock, which represented 6.7% of total shares
granted. The number of options granted was subjective based upon the CEO's
ability to impact the Company's performance as well as individual performance,
and future potential.
The Company, the Executive Committee, and the Stock Option Committee, as
appropriate, continually review the executive compensation policies in regards
to Section 162(m) of the Internal Revenue Code of 1986 as Amended pertaining to
the Company's $1,000,000 deductibility limitation for applicable compensation
paid to named executive officers. In 1995, the deductibility of the Company's
executive compensation was not affected by the limitation under Section 162(m).
EXECUTIVE COMMITTEE STOCK OPTION COMMITTEE
R. S. Boreham, Jr., Chairman Robert L. Proost, Chairman
R. L. Qualls Fred C. Ballman
Willis J. Wheat
<PAGE> -12-
<PAGE>
Performance Graph
Comparison of Five-Year Cumulative Total Return
Among Baldor Electric Company, S&P 500 Index,
and S&P Electrical Equipment composite Indes
CAGR
Compound Annual Growth Rate
Baldor $360.79 29.3%
S&P Elec Eqp Grp $248.67 20.0%
S&P 500 $215.45 16.6%
12/31/90 12/31/91 12/31/92 12/31/93 12/31/94 12/31/95
-------- -------- -------- -------- -------- --------
Baldor $100.00 $143.26 $208.40 $275.68 $317.39 $360.79
S&P Elec Eqp Grp $100.00 $132.47 $145.18 $175.16 $177.20 $248.67
S&P 500 $100.00 $130.47 $140.41 $154.56 $156.60 $215.45
Assumes $100 invested on December 31, 1990
in Baldor Electric Company, S&P 500 Index,
and S&P Electrical Equipment Composite Index
<PAGE> -13-
<PAGE>
CERTAIN TRANSACTIONS
The manufacturer's representative for the Company in eastern Missouri and
southern Illinois is owned by Mr. Mark Baumann who is the son of O. A. Baumann,
a current director of the Company. During fiscal year 1995, the Company paid
the Baumann Company sales commissions and warehouse fees of approximately
$640,000. The Company believes that the foregoing transactions were on terms
comparable to those which would have been obtained from unaffiliated persons
because each of the Company's manufacturer's representative organizations is an
independent business. The Company pays sales commissions and warehouse fees to
the manufacturer's representatives who, in turn, pay all costs associated with
maintaining sales offices and warehouses and employing the various sales and
other personnel required to represent the Company in their respective
territories.
PROPOSAL 2:
TO CONSIDER AND ACT UPON A PROPOSAL TO ADOPT THE
BALDOR ELECTRIC COMPANY
1996 STOCK OPTION PLAN FOR NON-EMPLOYEE DIRECTORS
In 1990, the shareholders of the Company approved the Baldor Electric Company
1989 Stock Option Plan for Non-Employee Directors (the "1989 Plan"). The 1989
Plan expires in 1996 and no more grants will be made under the 1989 Plan. On
February 5, 1996, the Board of Directors of the Company approved the Baldor
Electric Company 1996 Stock Option Plan for Non-Employee Directors (the "1996
Plan") and directed that it be submitted to the shareholders for their
approval. The 1996 Plan will become effective subject to the approval at this
Annual Meeting by the affirmative vote of the holders of at least a majority of
the Company's issued and outstanding Common Stock.
The purpose of the 1996 Plan is to increase the ownership interest in the
Company of non-employee directors whose services are considered essential to
the Company's continued progress and to provide a further incentive to serve as
a director of the Company. The 1996 Plan is very similar to the 1989 Plan
except that the 1996 Plan does not allow for an initial grant to be made to new
directors. The following summary description of the 1996 Plan is qualified in
its entirety by reference to the full text of the 1996 Plan, which is attached
to this Proxy Statement as Exhibit "A".
General... The proposed 1996 Plan provides for the issuance of stock options to
purchase up to 150,000 shares of the Common Stock of the Company. Only the
directors of the Company who are not employees of the Company or any of its
affiliates on the date of a grant from the 1996 Plan are eligible to partici-
pate in the 1996 Plan. The Plan will be administered by a committee of
nonparticipating directors who will be authorized to interpret the 1996 Plan
but will have no discretion with respect to the eligibility or selection of
directors to receive options, the number of shares of stock subject to the 1996
Plan or any grant thereunder, or the purchase price for such shares. The Com-
mittee shall have no authority to materially increase the benefits under the
1996 Plan.
<PAGE> -14-
<PAGE>
Stock Option Grants... The 1996 Plan provides for annual grants, beginning in
January 1997 and ending in January 2001, to each non-employee director of the
Company. Options granted under the Plan become exercisable in five equal
installments, beginning on the first anniversary of the date of grant and
annually thereafter. Options expire ten years after the date they were granted,
or earlier under certain conditions as set forth in the 1996 Plan. Options are
exercised upon payment to the Company in cash, Common Stock of the Company, or
a combination thereof, as provided in the agreement, for the full exercise
price of the option. Each grant will consist of options to purchase 4,050
shares and will be made on the last trading day of January for Common Stock of
the Company on the New York Stock Exchange. The exercise price for 1,620
shares will be 50% of the fair market value of the Company's Common Stock on
the date of grant and the exercise price for 2,430 shares will be the fair
market value of the Company's common stock on the date of the grant. The "fair
market value" will be the closing per share price of the Company's Common Stock
based upon its consolidated trading as generally reported for New York Stock
Exchange listed stocks. There are currently six non-employee directors of the
Company who would be eligible to receive grants under the 1996 Plan in January
1997 and for each year thereafter until January 2001, assuming that each
remains a non-employee director under the 1996 Plan and assuming the 1996 Plan
stays in effect through its scheduled termination.
Federal Tax Consequences... The options granted under the 1996 Plan shall be
non-qualified under Section 422 of the Internal Revenue Code of 1986, as
amended. The grant of options will not result in taxable income to the non-
employee director or a tax deduction for the Company. The exercise of an
option will result in taxable ordinary income to the non-employee director and
a corresponding tax deduction for the Company equal to the difference between
the fair market value of the shares on the date the option was exercised and
the exercise price of the option.
Adjustments Upon Changes in Common Stock... If any change is made in the shares
of the Common Stock of the Company by reason of any merger, consolidation,
reorganization, recapitalization, stock dividend, stock split, exchange of
stock, or other change in the corporate structure, the Administrator shall make
appropriate adjustments to the aggregate number and kind of shares under the
1996 Plan and to the kind and number of shares and price per share of options
outstanding and to subsequent option grants and in the purchase price of
outstanding options to reflect such change.
Amendment and Termination... The Board of Directors may suspend or terminate
the 1996 Plan or revise or amend it. However, any revision or amendment that
changes the selection or eligibility of directors to receive options, the
number of shares of Common Stock subject to the 1996 Plan or any option there-
under, the exercise price for options, or that materially increases benefits
under the 1996 Plan will require the approval of the shareholders of the
Company.
Death or Termination of Service... In the event of death of the holder of any
option, each of the then outstanding options of such holder will immediately
mature in full and become exercisable by the holder's legal representative at
any time within a period of five years after death, but in no event after the
expiration date of the term of the option. If the holder dies within five years
following termination of service on the Board, such option shall only be
<PAGE> -15-
<PAGE>
exercisable for two years after the holder's death or five years after
termination of service, whichever is longer, or until the expiration date of
the term of the option, if earlier. In the event of termination of service on
the Board by a holder of an option, each of the then outstanding options of
such holder will continue to mature and become exercisable and the holder may
exercise the matured installments at any time within five years after such
termination of service but in no event after the expiration date of the term of
the option.
Market Value of the Company's Common Stock... The last reported sale price of
the Company's Common Stock as reported by the New York Stock Exchange on
March 8, 1996, was $20.625.
Your Board of Directors recommends a vote "FOR" this proposal 2.
INDEPENDENT AUDITORS
The Company is presently utilizing the services of Ernst & Young LLP, which has
been the Company's independent auditors since 1972. The Audit Committee and
the Board of Directors will consider the reappointment of Ernst & Young LLP as
the Company's independent auditors for the fiscal year ending December 28,
1996, at the Company's next regular Board of Directors meeting in May. The
Company has no reason to believe that Ernst & Young LLP will not be
reappointed. Representatives of Ernst & Young LLP will be present at the
Annual Meeting with an opportunity to make a statement if they desire to do so
and will be available to respond to appropriate questions.
SHAREHOLDER PROPOSALS
Any shareholder proposals intended to be presented at the 1997 Annual Meeting
must be received by the Company at its principal executive offices no later
than November 27, 1996, in order to be considered for inclusion in the proxy
materials.
OTHER MATTERS
The Board of Directors knows of no other matters to be presented for
consideration at the meeting by the Board of Directors or by shareholders who
have requested inclusion of proposals in the Proxy Statement. If any other
matter shall properly come before the meeting, the persons named in the
accompanying form of proxy intend to vote on such matters in accordance with
their judgment.
March 28, 1996
<PAGE> -16-
<PAGE>
EXHIBIT "A"
BALDOR ELECTRIC COMPANY
1996 STOCK OPTION PLAN
FOR NON-EMPLOYEE DIRECTORS
1. Purpose
The purpose of this Stock Option Plan for Non-Employee Directors (the
"Plan") of Baldor Electric Company (the "Company") is to increase the
ownership interest in the Company of non-employee directors whose
services are considered essential to the Company's continued progress
and to provide a further incentive to serve as a director of the
Company.
2. Administration
The Plan shall be administered by a committee consisting of directors
who are not eligible to participate in the Plan (the "Committee").
Subject to the provisions of the Plan, the Committee shall be
authorized to interpret the Plan, to establish, amend, and rescind
any rules and regulations relating to the Plan, and to make all other
determinations necessary or advisable for the administration of the
Plan; provided, however, that the Committee shall have no discretion
with respect to the eligibility or selection of directors to receive
options under the Plan, the number of shares of stock subject to any
such options under the Plan, or the purchase price thereunder, and
provided further that the Committee shall not have the authority to
take any action or make any determination that would materially
increase the benefits accruing to participants under the Plan. The
determination of the Committee in the administration of the Plan, as
described herein, shall be final and conclusive and binding upon all
persons including, without limitation, the Company, its shareholders,
and persons granted options under the Plan. The Secretary of the
Company shall be authorized to implement the Plan in accordance with
its terms and to take such actions of a ministerial nature as shall
be necessary to effectuate the intent and purposes thereof. The
validity, construction, and effect of the Plan and any rules and
regulations relating to the Plan shall be determined in accordance
with the laws of the State of Missouri.
3. Participation in the Plan
Directors of the Company who are not employees of the Company or any
affiliate of the Company on an Option Grant Date shall be eligible
to participate in the Plan ("Eligible Directors") on that Option
Grant Date.
<PAGE> A-1
<PAGE>
4. Shares Subject to the Plan
Subject to adjustment as provided in Section 7, an aggregate of
150,000 shares of Company common stock ("Stock") shall be available
for issuance upon the exercise of options granted under the Plan.
The shares of Stock deliverable upon the exercise of options may be
made available from authorized but unissued shares or shares
reacquired by the Company, including shares purchased in the open
market or in private transactions. If any option granted under the
Plan shall expire or terminate for any reason without having been
exercised in full, the shares subject to, but not delivered under,
such option may again become available for the grant of other options
under the Plan.
5. Non-Statutory Stock Options
All options granted under the Plan shall be non-statutory options not
intended to qualify under Section 422 of the Internal Revenue code
of 1986, as amended.
6. Terms, Conditions, and Form of Options
Each option granted under this Plan shall be evidenced by a written
agreement in such form as the Committee shall from time to time
approve, which agreements shall comply with and be subject to the
following terms and conditions:
a. Option Grant Dates. Options to purchase 4,050 shares of Stock
(as adjusted pursuant to Section 7) shall be granted
automatically to each Eligible Director on the last trading
day of January of Stock on the New York Stock Exchange in the
five-year period beginning January 1, 1997, and ending in 2001.
b. Purchase Price. The purchase price per share of Stock for
which each option is exercisable shall be the fair market value
per share of Stock (except that for 40% of each Annual Grant,
the purchase price per share of Stock shall be 50% of the fair
market value) on the date the option is granted, which shall be
the closing per share price of the Stock based upon its
consolidated trading as generally reported for New York Stock
Exchange listed stocks.
c. Exercisability and Term of Options. Each option granted under
the Plan will become exercisable and mature in five equal
installments, commencing on the first anniversary of the date
of grant and annually thereafter. Each option granted under
the Plan shall expire ten years from the date of the grant, and
shall be subject to earlier termination as hereinafter provided.
d. Death or Termination of Service. In the event of death of the
holder of any option, each of the then outstanding options of
such holder will immediately mature in full and become
exercisable by the holder's legal representative at any time
<PAGE> A-2
<PAGE>
within a period of five years after death, but in no event after
the expiration date of the term of the option. However, if the
holder dies within five years following termination of service
on the Board, such option shall only be exercisable for two
years after the holder's death or five years after termination
of service, whichever is longer, or until the expiration date
of the term of the option, if earlier. In the event of
termination of service on the Board by a holder of an option,
each of the then outstanding options of such holder will
continue to mature and become exercisable in accordance with
paragraph c. above and the holder may exercise the matured
installments at any time within five years after such
termination of service but in no event after the expiration date
of the term of the option.
e. Payment. Options may be exercised only upon payment to the
Company in full of the purchase price of the shares to be
delivered. Such payment shall be made in cash or, if permitted
in the agreement, in Stock or in a combination of cash and
Stock. The sum of the cash and the fair market of such Stock
shall be at least equal to the aggregate price of the shares to
be delivered.
7. Adjustment upon Changes in Stock
If there shall be any change in Stock subject to the Plan or to any
option granted thereunder through merger, consolidation,
reorganization, recapitalization, stock dividend, stock split,
exchange of stock or other change in the corporate structure,
appropriate adjustments shall be made in the aggregate number and
kind of shares or other securities or property subject to the Plan,
and the number and kind of shares or other securities or property
subject to outstanding and to subsequent option grants and in the
purchase price of outstanding options to reflect such changes.
8. Options Non-Assignable and Non-Transferable
Each option and all rights thereunder shall be non-assignable and
non-transferable other than by will or the laws of descent and
distribution and shall be exercisable during the holder's lifetime
only by the holder or the holder's guardian or legal representative
(the "Optionee").
9. Tax Consequences
There are no taxes due by the Optionee at the time of grant; however,
the Company will report to the Optionee in an appropriate manner the
amount of taxable ordinary income created at the time of exercise.
It will be the Optionee's responsibility to further report this
taxable income and to pay any and all taxes due by the Optionee.
<PAGE> A-3
<PAGE>
10. Limitation of Rights
a. No Right to Continue as a Director. Neither the Plan, nor the
granting of an option, nor any other action taken pursuant to
the Plan, shall constitute or be evidence of any agreement or
understanding, express or implied, that the Eligible Director
has a right to continue as a director for any period of time,
or at any particular rate of compensation.
b. No Shareholders' Right for Options. An Optionee shall have no
rights as a shareholder with respect to the shares covered by
options granted hereunder until the date of the issuance of a
stock certificate therefor, and no adjustment will be made for
dividends or other rights for which the record date is prior to
the date such certificate is issued.
11. Effective Date and Duration of Plan
The Plan shall become effective immediately following approval by the
shareholders at the 1996 Annual Meeting of Shareholders. The period
during which option grants shall be made under the Plan shall
terminate on the day following the 2001 Annual Meeting of
Shareholders (unless the Plan is extended or terminated at an earlier
date by shareholders) but such termination shall not affect the terms
of any then outstanding options.
12. Amendment, Suspension, or Termination of the Plan
The Board of Directors may suspend or terminate the Plan or revise
or amend it in any respect whatsoever; provided, however, that
without approval of the Shareholders, no revision or amendment shall
change the selection or eligibility of directors to receive options
under the Plan, the number of shares of Stock subject to any such
options or the Plan, the purchase price thereunder, or materially
increase the benefits accruing to participants under the Plan.
If required to qualify the Plan under Rule 16b-3, no amendment to the
Plan shall be made more than once every six months that would change
the amount, price, or timing of any benefits awarded by the terms in
the Plan, other than to comport with changes in the Internal Revenue
Code or the rules thereunder.
13. Notice
Any written notice to the Company required by any of the provisions
of this Plan shall be addressed to the Secretary of the Company and
shall become effective when it is received.
14. Use of Proceeds
Proceeds from the sale of Stock pursuant to options granted under the
Plan shall constitute general funds of the Company.
<PAGE> A-4
<PAGE>
15. Fractional Shares
No fractional shares of Stock shall be issued pursuant to options
granted hereunder, but in lieu thereof, the cash value of such
fraction shall be paid.
<PAGE> A-5
<PAGE>
(PROXY CARD - FRONT)
BALDOR ELECTRIC COMPANY
PROXY SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
For Annual Meeting of Shareholders on May 4, 1996
The undersigned hereby appoints R. S. Boreham, Jr. and R. L. Qualls, and each
of them, with power of substitution, as proxies of the undersigned, to attend
the Annual Meeting of Shareholders of Baldor Electric Company, to be held at
the Holiday Inn, 700 Rogers Avenue, Fort Smith, Arkansas, on Saturday, May 4,
1996, at 10:30 a.m. local time, and all adjournments thereof, and there to
vote, as indicated below, the shares of Common Stock of Baldor Electric Company
which the undersigned is entitled to vote with all the powers the undersigned
would possess if present at the meeting.
(1) Election of Directors FOR all nominees listed below (except
WITHHOLD AUTHORITY to vote as marked to the contrary below) [ ]
for all nominees listed below [ ]
Jefferson W. Asher, Jr. Robert J. Messey Willis J. Wheat
(INSTRUCTION: To withhold authority to vote for any individual nominee,
write that nominee's name in the space provided below.)
- -------------------------------------------------------------------------------
(2) Adoption of the Baldor Electric Company 1996 Stock Option Plan for
Non-Employee Directors FOR [ ] AGAINST [ ] ABSTAIN [ ]
(3) In their discretion, the proxies are authorized to cumulate and vote the
shares of the undersigned for any nominee other than nominees with respect to
whom authority to vote has been withheld, and to vote upon such other business
as may properly come before the meeting and all adjournments thereof. This
proxy, when properly executed, will be voted in the manner directed herein by
the undersigned shareholder.
If no direction is made, this proxy will be voted FOR the election of directors
and FOR proposal 2.
Please date and sign on the reverse side and mail promptly in the enclosed
envelope.
<PAGE>
(PROXY CARD - BACK)
PROXY SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby revokes all proxies heretofore given by the undersigned
for said meeting. This proxy may be revoked prior to its exercise.
Dated:
---------------------------------------------------------,1996
- -------------------------------------------------------------------------------
Signature
- -------------------------------------------------------------------------------
Signature
Note: Please sign exactly as your name or names appear hereon. When
signing as Attorney, Executor, Trustee, Guardian, or Officer of a
Corporation, please give title as such. For joint accounts, all named
holders should sign.
PLEASE MARK, SIGN, DATE, AND PROMPTLY
RETURN THIS PROXY CARD IN THE ENCLOSED ENVELOPE.
NO POSTAGE IS REQUIRED IF
MAILED IN THE UNITED STATES.
<PAGE>
(DIRECTION CARD - FRONT)
BALDOR ELECTRIC COMPANY
The undersigned, a participant in the Baldor Electric Company Profit Sharing
and Savings Plan (the "Plan") hereby directs Wachovia Bank of North Carolina,
N.A., as trustee (the "Trustee") of the Plan Trust (the "Trust"), at the Annual
Meeting of Shareholders of Baldor Electric Company, to be held at the Holiday
Inn, 700 Rogers Avenue, Fort Smith, Arkansas, on Saturday, May 4, 1996, at
10:30 a.m. local time, and all adjournments thereof, to vote, as indicated
below, the shares of Common Stock of Baldor Electric Company which the under-
signed is entitled to vote with all the powers the undersigned would possess if
present at the meeting.
(1) Election of Directors FOR all nominees listed below (except
WITHHOLD AUTHORITY to vote as marked to the contrary below) [ ]
for all nominees listed below [ ]
Jefferson W. Asher, Jr. Robert J. Messey Willis J. Wheat
(INSTRUCTION: To withhold authority to vote for any individual
nominee, write that nominee's name in the space provided below.)
- -------------------------------------------------------------------------------
(2) Adoption of the Baldor Electric Company 1996 Stock Option Plan for
Non-Employee Directors FOR [ ] AGAINST [ ] ABSTAIN [ ]
(3) As Trustee, you are authorized to cumulate and vote the shares of the
undersigned for any nominee other than nominees with respect to whom authority
to vote has been withheld, and to vote upon such other business as may properly
come before the meeting and all adjournments thereof. This direction card,
when properly executed, will be voted in the manner directed herein by the
undersigned participant.
If no direction is made by a participant, voting will be controlled by the
terms of the Plan and the Trust.
Please date and sign on the reverse side and mail promptly in the enclosed
envelope.
<PAGE>
(DIRECTION CARD - BACK)
The undersigned hereby revokes all prior directions (the "Direction") given by
the undersigned to the Trustee with respect to the subject matter hereof for
said meeting. This Direction may be revoked prior to its exercise.
Dated:
---------------------------------------------------------------,1996
- -------------------------------------------------------------------------------
Signature
- -------------------------------------------------------------------------------
Signature
Note: Please sign exactly as your name or names appear hereon. When
signing as Attorney, Executor, Trustee, Guardian, or Officer of a
Corporation, please give title as such. For joint accounts, all named holders
should sign.
PLEASE MARK, SIGN, DATE, AND PROMPTLY RETURN THIS CARD IN THE ENCLOSED
ENVELOPE.
NO POSTAGE IS REQUIRED IF MAILED IN THE UNITED STATES.
</TABLE>
