SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 14A INFORMATION
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STEWART & STEVENSON SERVICES, INC.
(Name of Registrant as Specified In Its Charter)
----------------------------------------
(Name of Person(s) Filing Proxy Statement if other than the Registrant)
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computed pursuant to Exchange Act Rule 0-11 (Set forth the
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STEWART & STEVENSON SERVICES, INC.
2707 North Loop West
P.O. Box 1637
Houston, Texas 77251-1637
_______________
PROXY STATEMENT FOR ANNUAL MEETING OF SHAREHOLDERS
June 9, 1998, and Adjournments
_______________
Approximate date proxy material first sent to shareholders:
May 15, 1998
SOLICITATION, VOTING AND REVOCABILITY OF PROXIES
The proxy furnished herewith, for use only at the Annual Meeting of
Shareholders to be held at 10:00 a.m. on June 9, 1998, in the Chase Auditorium,
601 Travis Street, Houston, Texas, and any and all adjournments thereof, is
solicited by the Board of Directors of Stewart & Stevenson Services, Inc. (the
"Company"). Such solicitation is being made by mail and may also be made in
person or by telephone by officers, directors and regular employees of the
Company, and arrangements may be made with brokerage houses or other custodians,
nominees and fiduciaries to send proxy material to their principals. All
expenses incurred in this solicitation of proxies will be paid by the Company.
As of the date of these proxy materials, the Board of Directors is aware of
the following matters that will be considered at the meeting:
1. The election of four directors to the Board of Directors of the Company.
2. The ratification of Arthur Andersen LLP as the Company's independent
public accountants for the fiscal year ending January 31, 1999.
The presence of the holders of a majority of the issued and outstanding
shares of Common Stock entitled to vote, either in person or represented by
proxy, is necessary to constitute a quorum for the transaction of business at
the Annual Meeting. Proxies that withhold authority to vote for a nominee or
abstain from voting on any matter are counted for the purpose of determining
whether a quorum is present. Broker non-votes, which may occur when a broker or
nominee has not received timely voting instructions on certain proposals, are
not counted for the purpose of determining whether a quorum is present. If there
are not sufficient shares represented at the meeting to constitute a quorum, the
meeting may be adjourned until a specified future date to allow the solicitation
of additional proxies.
Directors are elected by a plurality of the votes cast at the meeting. The
four nominees that receive the greatest number of votes will be elected even
though the number of votes received may be less than a majority of the shares
represented in person or by proxy at the meeting. Proxies that withhold
authority to vote for a nominee and broker non-votes will not prevent the
election of such nominee if other shareholders vote for such a nominee.
The approval of Arthur Andersen LLP as the Company's independent public
accountants requires the affirmative vote of a majority of the shares
represented in person or by proxy at the meeting. Proxies that abstain from
voting on this proposal have the same effect as a vote against this proposal.
Broker non-votes will not have any effect on this proposal.
Any shareholder executing a proxy retains the right to revoke it by signing
and delivering a proxy bearing a later date, by giving notice of revocation in
writing to the Secretary of the Company at any time prior to its use, or by
voting in person at the meeting. All properly executed proxies received by the
Company and not revoked will be voted at the meeting, or any adjournment
thereof, in accordance with the specifications of the shareholder. If no
instructions are specified on the proxy, shares represented thereby will be
voted FOR the election of the four nominees described herein and FOR
ratification of Arthur Andersen LLP as the Company's independent public
accountants for the current fiscal year. Proxies also grant discretionary
authority as to matters presented at the meeting of which the Board of Directors
had no notice on the date hereof, approval of the minutes of the prior annual
meeting and matters incident to the conduct of the meeting.
VOTING SECURITIES AND OWNERSHIP THEREOF
BY CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
At the close of business on April 22, 1998, the record date for the Annual
Meeting, the Company had outstanding 31,560,868 shares (not including treasury
shares) of Common Stock, without par value. Each outstanding share of Common
Stock is entitled to one vote with respect to each of the four director
positions and one vote with respect to each of the other matters considered at
the meeting. Cumulative voting is not permitted under the Company's Third
Restated Articles of Incorporation. Shareholders of record at the close of
business on April 22, 1998 are entitled to vote at or execute proxies relating
to the Annual Meeting of Shareholders.
The following table lists the beneficial ownership of shares of the
Company's Common Stock by (i) all persons and groups known by the Company to own
beneficially more than 5% of the outstanding shares of the Company's Common
Stock, (ii) each director and nominee, (iii) the Chief Executive Officer and
four highest compensated executive officers who were serving as executive
officers on January 31, 1998, and (iv) all directors and officers as a group.
None of the directors, nominees or officers of the Company owned any equity
security issued by the Company's subsidiaries other than director's qualifying
shares. Information with respect to officers, directors and their families is as
of February 28, 1998 and is based on the books and records of the Company and
information obtained from each individual. Information with respect to
institutional shareholders is based upon the Schedule 13G filed by such
shareholders with the Securities and Exchange Commission. Unless otherwise
stated, the business address of each individual or group is the same as the
address of the Company's principal executive office.
<TABLE>
<CAPTION>
Amount and Nature of
Beneficial Ownership
__________________________________________________________
Sole Shared Sole Shared Total Percent
Name of Voting Voting Investment Investment Beneficial Of
Individual or Group Power Power Power Power Ownership Class
<S> <C> <C> <C> <C> <C> <C>
5% SHAREHOLDERS
FMR Corporation
82 Devonshire Street
Boston, MA 02109........................... 156,300 -0- 2,957,100 -0- 2,957,100 9.3
Neuberger & Berman, LLC
605 Third Avenue
New York, NY 10158-3698.................... 1,066,800 683,300 -0- 1,892,000 1,892,000 5.9
INDIVIDUAL DIRECTORS AND NOMINEES
C. Jim Stewart II............................. 391,399 251,425 411,339 231,425 643,514 (F2) 2.0
J. Carsey Manning............................. 1,026 -0- 1,026 -0- 1,776 (F2) *
Donald E. Stevenson........................... 495,204 940 496,144 -0- 502,594 (F3) 1.6
Robert H. Parsley............................. 2,674 -0- 2,674 -0- 3,424 (F2) *
Jack W. Lander, Jr............................ 6,426 -0- 6,426 -0- 7,176 (F2) *
Robert L. Hargrave............................ 40,463 -0- 40,463 -0- 85,963 (F4) *
Jack T. Currie................................ 6,426 -0- 6,426 -0- 7,176 (F2) *
Robert S. Sullivan............................ 526 -0- 526 -0- 1,276 (F2) *
Richard R. Stewart............................ 133,166 7,935 138,466 2,635 221,101 (F5) *
Orson C Clay.................................. 3,426 -0- 3,426 -0- 4,176 (F2) *
Brian H. Rowe................................. 3,326 -0- 3,326 -0- 4,076 (F2) *
NON-DIRECTOR EXECUTIVE OFFICERS
Garth C. Bates, Jr............................ 70,469 12,126 82,775 -0- 124,775 (F6) *
C. LaRoy Hammer............................... 33,000 -0- 33,000 -0- 71,500 (F7) *
Jay C. Manning................................ 989 -0- 989 -0- 17,589 (F8) *
EXECUTIVE OFFICER NO LONGER
SERVING ON JANUARY 31, 1998
Bob H. O'Neal(1).............................. 34,774 -0- 34,774 -0- 99,774 (F9) *
ALL DIRECTORS AND EXECUTIVE
OFFICERS
(19
Persons)...................................... 2,313,788 279,886 2,357,394 236,220 2,911,014 (F10) 9.1
* Less than 1%
<FN>
_______________
(F1) Mr. O'Neal was on administrative leave in Fiscal 1997 and retired on December 31, 1997.
(F2) Includes options to purchase 750 shares of Common Stock.
(F3) Includes options to purchase 6,450 shares of Common Stock.
(F4) Includes options to purchase 45,500 shares of Common Stock.
(F5) Includes options to purchase 80,000 shares of Common Stock.
(F6) Includes options to purchase 42,000 shares of Common Stock.
(F7) Includes options to purchase 38,500 shares of Common Stock.
(F8) Includes options to purchase 16,600 shares of Common Stock.
(F9) Includes options to purchase 65,000 shares of Common Stock.
(F10) Includes options to purchase 317,400 shares of Common Stock.
</FN>
</TABLE>
ELECTION OF DIRECTORS
The Board of Directors of the Company consists of ten directors divided
into three classes. One class of directors consists of four members, and the
other two classes each consist of three members. At each Annual Meeting of
Shareholders, one class is elected to hold office for a term of three years.
Members of the other classes continue to serve for the remainder of their
respective terms. The individuals set forth below have been nominated for
election to the Board of Directors at the Annual Meeting to serve as directors
until 2001. Each of the nominees except for Mr. William R. Lummis currently
serves as a director of the Company, and the Board of Directors believes that
each of the nominees will be willing and able to serve. If any such person is
unable to serve for good cause, or is unwilling to serve for any reason, proxies
will be voted for the election of another person selected by the Nominating
Committee of the Board of Directors. The Board of Directors recommends that the
nominees listed below be elected by the shareholders. Unless otherwise
specified, all properly executed proxies received by the Company will be voted
at the Annual Meeting or any adjournment thereof for the election of the persons
whose names are listed in the following table as nominees for directors whose
term will expire in 2001.
<TABLE>
<CAPTION>
NOMINEES FOR DIRECTORS WHOSE TERM EXPIRES IN 2001
Director
Name and Principal Occupation Age Since
- - -----------------------------------------------------------------------------------------
<S> <C> <C>
J. CARSEY MANNING...................................................... 72 1973
Retired Senior Vice President of the Company.
DONALD E. STEVENSON(F1)(F4)............................................ 54 1975
Vice President of the Company.
ROBERT S. SULLIVAN(F2)(F3)............................................. 54 1992
Dean, Kenan-Flagler Business School of the University of North
Carolina at Chapel Hill. Previously, Director of the IC2 Institute,
The University of Texas at Austin, Austin, Texas, and Dean of
the Graduate School of Industrial Administration, Carnegie Mellon
University, Pittsburgh, Pennsylvania.
WILLIAM R. LUMMIS...................................................... 69 N/A
Retired Chairman of the Board of The Hughes Corporation and
Administrator of the Estate of Howard R. Hughes, Jr. Director for
The Rouse Company and Trustee for the Howard Hughes Medical Institute.
DIRECTORS WHOSE TERM WILL EXPIRE IN 1999
Director
Name and Principal Occupation Age Since
- - -----------------------------------------------------------------------------------------
ROBERT L. HARGRAVE(F1)................................................. 57 1984
President and Chief Executive Officer of the Company.
ORSON C CLAY(F2)....................................................... 67 1994
Retired President of American National Insurance Co., a diversified
life insurance company in Galveston, Texas.
BRIAN H. ROWE(F2)...................................................... 66 1994
Retired Chairman of GE Aircraft Engines, General Electric Company, a
manufacturer of Combustion turbine engines for aircraft, marine and
industrial applications in Cincinnati, Ohio. Before 1993, served as
President and Chief Executive Officer and, before 1991, as Senior Vice
President of GE Aircraft Engines, General Electric Company. Serves as a
director of 5th/3rd Bank Corp. of Cincinnati, Ohio; Atlas Air, Inc. of
Golden, Colorado; B/E Aerospace, Inc. of Wellington, Florida; Textron, Inc.
of Providence, Rhode Island; Canadian Marconi Company of Montreal,
Quebec and Cincinnati Bell Inc. of Cincinnati, Ohio.
DIRECTORS WHOSE TERM EXPIRES IN 2000
Director
Name and Principal Occupation Age Since
- - -----------------------------------------------------------------------------------------
C. JIM STEWART II(F1)(F4).............................................. 72 1955
Chairman of the Board of the Company. Retired Chief Executive
Officer of the Company.
JACK W. LANDER, JR.(F2)(F3)(F4)........................................ 72 1982
Chairman of the Board of Merchants Bancshares, Inc. and Chairman
of the Board and director for its holding company, Gulf Southwest
Bancorp, Inc., in Houston, Texas.
JACK T. CURRIE(F3)(F4)................................................. 69 1988
Personal investments. Retired Managing Director of Mason Best Company,
a merchant banking firm in Houston, Texas and retired Vice Chairman of
Rotan Mosle Financial Corp., an investment banking firm in Houston,
Texas. Director for American Indemnity Financial Corp.; American
National Growth Fund, Inc.; American National Income Fund Inc. and
Triflex Fund, Inc.
_______________
<FN>
(F1) Member of Executive Committee.
(F2) Member of Compensation and Management Development Committee.
(F3) Member of Audit Committee.
(F4) Member of Nominating Committee.
</FN>
</TABLE>
Each nominee and current director has been employed for more than five
years either as shown in the foregoing table or in various executive capacities
with the Company. All nominees except for Mr. William R. Lummis were last
elected as a director at the 1995 Annual Meeting.
Meetings and Committees of the Board of Directors
The Board of Directors held nine meetings during the fiscal year ended
January 31, 1998 ("Fiscal 1997"). During Fiscal 1997, no director attended fewer
than 75% of the aggregate of (a) the total number of meetings of the Board of
Directors (held during the period for which he was a director) and (b) the total
number of meetings held by all committees of the Board of Directors on which he
served (during the periods that he served).
The Audit Committee of the Board of Directors reviews with the Company's
independent public accountants the plan, scope and results of the annual audit;
reviews with the Company's independent public accountants and internal auditors
the procedures for and results of internal auditing and controls; and reviews
with management the effectiveness of various operational policies and controls,
including the Company's Business Practices Program. The Audit Committee
recommends to the Board of Directors the employment of independent public
accountants and considers, in general, the audit services to be performed by
such public accountants and the possible effect on the independence of the
public accountants from the performance of non-audit services. The Audit
Committee held five meetings during Fiscal 1997.
The Compensation and Management Development Committee recommends the total
compensation payable by the Company to its executive officers, subject to
approval by those members of the Board of Directors that are not and never have
been an officer of the Company or its subsidiaries; grants options pursuant to
the option plans relating to officers and employees; conducts such
investigations and studies as it deems necessary; and considers management
succession and related matters. See the Report of the Compensation and
Management Development Committee elsewhere herein. The Compensation and
Management Development Committee held three meetings during Fiscal 1997.
The Nominating Committee selects nominees for the Board of Directors of the
Company. The Nominating Committee considers nominees submitted by the members of
the Board of Directors, the officers of the Company and the Company's
shareholders. Nominees for the Board of Directors may be submitted to the
Chairman of the Nominating Committee at the Company's executive offices for
consideration by the Nominating Committee. The Nominating Committee held one
meeting during Fiscal 1997.
Compensation Committee Interlocks and Insider Participation
No person serving on the Compensation and Management Development Committee
during Fiscal 1997 is or has ever been an officer of the Company or any of its
subsidiaries, and no executive officer of the Company is serving or has ever
served on a board of directors or compensation committee of any entity, one of
whose executive officers now serves, or at any time in Fiscal 1997 served, on
the Board of Directors or Compensation and Management Development Committee of
the Company. The Company's Compensation and Management Development Committee
presently consists of Messrs. Orson C Clay, Jack W. Lander, Jr., Brian H. Rowe
and Robert S. Sullivan.
Compensation of Directors
During Fiscal 1997, directors whose principal occupation is other than
employment with the Company were compensated at the rate of $8,000 per year plus
$1,000 for each meeting of the Board of Directors and each committee meeting
attended and $500 for each telephone meeting attended. The directors were also
reimbursed for any out-of-pocket expenses incurred to attend meetings. The
Company has a retirement plan for directors, but accrual of benefits thereunder
terminated after the 1997 Annual Meeting. Under such retirement plan,
non-employee directors, including those directors that are retired officers of
the Company, with 60 months of continuous service on the Board of Directors will
receive $1,000 per month for a period equivalent to service on the Board of
Directors up to a maximum of 120 months, commencing on the month following their
70th birthday or the date such director ceases to serve on the Board, whichever
is later.
During Fiscal 1997, each director who was not an officer or employee of the
Company participated in the 1996 Director Stock Plan (the "1996 Plan"). Under
the 1996 Plan, such directors received, on the date of the Annual Meeting in
1997, (i) the number of shares of the Company's Common Stock determined by
dividing (A) the sum of $12,000 by (B) the fair market value of a share of the
Company's Common Stock, and (ii) options to purchase 1,000 shares of the
Company's Common Stock. The options were granted at the closing price on the
date of grant and will become exercisable on the first anniversary of the grant.
All options granted under the 1996 Plan expire on the tenth anniversary of the
grant.
SELECTION OF INDEPENDENT PUBLIC ACCOUNTANTS
The Board of Directors, upon recommendation of the Audit Committee, has
appointed Arthur Andersen LLP as independent public accountants of the Company
for the year ending January 31, 1999. So far as is known to the Company, neither
such firm nor any of its associates has any relationship with the Company or any
affiliate of the Company other than the usual relationship that exists between
independent public accountants and clients. A representative of Arthur Andersen
LLP will be present at the Annual Meeting to make a statement if such
representative desires and to respond to appropriate questions. The Board of
Directors recommends that the appointment of Arthur Andersen LLP as independent
public accountants for the Company for the fiscal year ending January 31, 1999
be ratified by the shareholders. Unless otherwise indicated, all properly
executed proxies received by the Company will be voted for such ratification at
the Annual Meeting or any adjournment thereof. An adverse vote will be
considered a direction to the Audit Committee to select other independent public
accountants in the following year.
Notwithstanding any statement contained in a previous filing by the Company
under the Securities Act of 1933, as amended, or the Securities Act of 1934, as
amended, neither the Performance Graph set forth below nor the Report of the
Compensation and Management Development Committee that follows is incorporated
by reference into any such filing.
PERFORMANCE OF STEWART & STEVENSON COMMON STOCK
The following graph compares the cumulative total shareholder return on the
Company's Common Stock to the cumulative total shareholder return of the
Standard & Poor's 500 Stock Index and the cumulative total shareholder return of
the Standard & Poor's Machinery-Diversified Index for the Company's last five
fiscal years. The graph assumes that the value of an investment in the Company's
Common Stock and each index was $100 on January 31, 1993 and that all dividends
were reinvested.
[Performance Graph]
<TABLE>
<CAPTION>
Year Ended January 31,
1993 1994 1995 1996 1997 1998
<S> <C> <C> <C> <C> <C> <C>
Stewart & Stevenson Services, Inc. 100 134 88 71 72 72
S&P 500 Stock Index 100 113 113 157 199 252
S&P Machinery-Diversified Index 100 144 134 177 210 263
</TABLE>
REPORT OF THE COMPENSATION AND MANAGEMENT DEVELOPMENT COMMITTEE
TO THE SHAREHOLDERS OF STEWART & STEVENSON SERVICES, INC.
The Compensation and Management Development Committee of the Board of
Directors (the "Committee") consists of four independent, non-employee directors
who have no "interlocking" relationships as defined by the Securities and
Exchange Commission. The Committee reviews and recommends all salary
arrangements and other executive compensation for approval by the independent
members of the Board of Directors, approves the design of executive compensation
programs, administers such programs and assesses their effectiveness in
supporting the Company's compensation policies. The Committee also evaluates
executive performance and considers management succession and related matters.
The Committee is authorized to, and does, retain independent consultants to
assist in the design of compensation programs and assess their effectiveness.
The Committee is committed to implementing a compensation program that
encourages creation of shareholder value. To facilitate the achievement of the
Company's business strategies, the Committee adheres to the following
compensation policies:
To strengthen the relationship between pay and performance, executives'
annual and long-term compensation programs should include variable
compensation that is dependent upon the contribution of each executive
to the Company's performance.
To focus management on the achievement of both short-term performance goals
and the long-term interests of shareholders, a significant portion of
each executive's total compensation should consist of "at-risk"
compensation.
To enable the Company to attract, retain and encourage the development of
the best available executive personnel, competitive compensation
opportunities should be offered.
Total Compensation
In determining the total compensation levels and the levels of each
component of compensation for the Company's executives, the Committee refers to
levels of compensation paid to executives of a comparator group of companies.
This comparator group is comprised of companies with national business
operations and one or more lines of business similar to the major business
segments of the Company. Compensation information relating to the executive
officers of the comparator companies is obtained from independent sources and
adjusted for differences in the size of the comparator companies, as measured by
sales volumes and market capitalization. The Committee uses the adjusted
information as a measurement of competitive compensation levels for executive
positions within the Company.
The selection of companies used for compensation comparison purposes is
reviewed and approved by the Committee each year. The companies comprising the
comparator group used for compensation purposes generally are not the same
companies comprising the published industry index used in the Performance Graph
included in this proxy statement. The Committee believes that the Company's most
direct competitors for executive talent are not necessarily the same companies
included in the Standard & Poor's Machinery - Diversified Index, which is used
for comparing shareholder returns.
The key elements of the Company's executive compensation program are base
salary, annual incentives and long-term incentives, each of which is addressed
separately below. In determining each component of compensation, the Committee
considers all elements of an executive's total compensation package and
relationship of such executive's total compensation to the total compensation
paid to executives holding similar positions in the comparator group of
companies.
The Company's President, Mr. Bob H. O'Neal, was on administrative leave for
most of the twelve months ended January 31, 1998 ("Fiscal 1997"). The total
compensation paid to Mr. O'Neal was substantially below the total compensation
paid to the Presidents of the comparator companies because the Committee
deferred any action on salary increases, annual incentives, and long-term
incentives until such time as Mr. O'Neal returned from leave. During Mr.
O'Neal's absence, Mr. Robert L. Hargrave, the Company's Chief Financial Officer,
undertook the additional duties of the Chief Executive Officer. The total
compensation paid to Mr. Hargrave is below the mean compensation paid to the
Chief Executive Officers of the comparator group because of his temporary
assignment in this position and the disappointing financial performance of the
Company. Total compensation paid to other executive officers of the Company was
also generally below the mean total compensation paid to similar officers in the
comparator group because cash and long-term incentives were reduced to reflect
the Company's performance.
Base Salary
Base salary levels are generally targeted at or below the median levels of
compensation for the Company's comparator group. Each executive's base salary is
reviewed regularly by the Committee. Increases to base salaries are driven
primarily by individual performance, which is evaluated based on sustained
levels of individual contribution to the Company. The executive's experience and
past performance are also considered, as are historical individual base salary
levels, the individual executive's expected role for the upcoming fiscal year
and changes in the cost of living. In making its evaluation, the Committee has
assigned no particular weights to these factors.
Base salaries established by the Committee for Fiscal 1997 were generally
near the median level of salaries for similar positions in the comparator
companies. No change was made to Mr. O'Neal's base salary in Fiscal 1997 because
of his status on administrative leave. In determining Mr. Hargrave's base salary
in Fiscal 1997, the Committee considered his long-term contributions to the
success of the Company and the additional temporary duties as the Company's
Chief Executive Officer. Although Mr. Hargrave's base salary was above the
median salary of the Chief Financial Officers in the comparator group, it was
substantially below the median salary paid by the comparator group to their
Chief Executive Officers and was below the salary paid by the Company to Mr.
O'Neal.
Annual Incentives
The Company provides an annual bonus opportunity to executives. Annual
bonuses motivate executives to maximize short-term performance as a part of
achieving long-term goals. In addition, bonus payments are used to compensate
executives for the lower than median base salaries and provide a competitive
total annual compensation.
In establishing bonus payments made to each executive officer, the
Committee considers (i) the aggregate total annual compensation paid by the
Company to such person compared to amounts paid by the comparator group of
companies for similar positions, (ii) the performance of the Company in
comparison to other companies in the same industry and in comparison to the
market as a whole and (iii) the performance of the cost or profit centers for
which an individual executive is responsible compared to goals established for
such cost or profit centers. The Committee has assigned no particular weights to
these factors in establishing bonus payments.
Bonus payments approved by the Committee for Fiscal 1997 were affected
primarily by the performance of the Company compared to other companies in the
same industry and by the level of salary paid to each position compared to the
mean salaries paid by the comparator companies for similar positions. The
Committee further reduced or increased the bonus paid to each officer based
either on the performance of the business unit for which such officer was
responsible or the perceived contribution of such officer to overall Company
performance if the officer was not directly responsible for a business unit. No
bonus was paid to Mr. O'Neal because of his status on administrative leave. Mr.
Hargrave's bonus reflects both his temporary duties as the Chief Executive
Officer and the Company's overall financial performance. Mr. Hargrave's and
certain other officers' bonuses were increased based on their contribution and
performance in connection with the sale of the Company's Gas Turbine Operations
to the General Electric Company during Fiscal 1997.
Consistent with the Committee's goal of providing competitive compensation
levels with a significant level of "at-risk" compensation, the sum of base
salaries and annual incentives paid to the executives of the Company was
generally below the median annual compensation paid to similar positions by the
comparator group but was considered by the Committee to be within the acceptable
competitive range for each position. Certain positions were in excess of the
mean annual compensation paid by the comparator companies for similar positions
because of the performance of certain highly performing business units during
Fiscal 1997.
Long-Term Incentives
In keeping with the Company's philosophy of providing a total compensation
package favoring "at-risk" components of pay, long-term incentives comprise a
significant portion of each executive's total compensation package. Long-term
incentives during Fiscal 1997 consisted exclusively of stock options pursuant to
the Stewart & Stevenson 1988 Nonstatutory Stock Option Plan. Stock options under
this plan are granted at an option price not less than the fair market value of
the Common Stock on the date of grant. Accordingly, stock options have value
only if the stock price appreciates from the date the options are granted. The
design of these stock options focuses executives on the creation of shareholder
value over the long term and encourages equity ownership in the Company.
The size of award to each executive is effected by individual performance,
level of responsibility, historical award data, other compensation and the
number of shares of common stock already owned by the recipient. Overall, the
Committee attempts to provide a competitive long-term benefit based on the
dollar value of the options granted. As a result, the number of shares
underlying stock option awards varies from year to year and is dependent on the
stock price on the date of grant.
No stock options were awarded to Mr. O'Neal during Fiscal 1997 because of
his status on administrative leave. The dollar value of the stock options
granted to Mr. Hargrave and the other officers of the Company during Fiscal 1997
was substantially below the median value of long-term incentives granted to
similar positions by the comparator group because the Committee believes that
the market price of the Company's Common Stock on the date of grant was below
normal levels.
Policy with Respect to the $1 Million Deduction Limit
Section 162(m) of the Internal Revenue Code of 1986 generally limits the
corporate deduction for compensation paid to executive officers named in the
proxy to $1 million, unless certain requirements are met. The Committee has
carefully considered the impact of this provision on the Company's incentive
plans and has determined that Section 162(m) is currently inapplicable because
no named executive officer is expected to receive compensation, other than
performance-based compensation, in excess of $1 million in the foreseeable
future. The Committee believes it is in the Company's and shareholders' best
interest to retain the Committee's discretionary evaluation of individual and
Company performance when determining total compensation payable to the Company's
executive officers.
Additional Information About Executive Compensation
On September 21, 1997, the Company signed an agreement to sell
substantially all of the assets of its Gas Turbine Operations to the General
Electric Company for an aggregate sale price of approximately $600 million,
subject to certain adjustments. Certain officers that became employees of
General Electric in connection with this transaction were paid substantial
bonuses as compensation for their past efforts in increasing the value of the
Gas Turbine Operations and their efforts in maximizing the purchase price
received by the Company.
The Committee has retained a new compensation consultant to assist it in
designing and implementing a performance based incentive compensation program
for the Company's officers which will incorporate objective measurements of
Company performance. The Committee intends to continue its practice of
exercising discretion in the application of the incentive compensation plans but
such discretion will affect only a portion of the incentives paid to each
executive in future fiscal years.
Conclusion
The Committee believes these executive compensation policies and programs
serve the interests of the shareholders and the Company effectively. The various
pay vehicles offered are appropriately balanced to provide increased motivation
for executives to contribute to the Company's overall future success, thereby
enhancing the value of the Company for the shareholders' benefit. The Committee
will continue to monitor the effectiveness of the Company's total compensation
program to meet the current needs of the Company.
Respectfully submitted,
THE COMPENSATION AND MANAGEMENT
DEVELOPMENT COMMITTEE
Orson C Clay - Chairman
Jack W. Lander, Jr.
Robert S. Sullivan
Brian H. Rowe
EXECUTIVE OFFICERS
The names, ages and positions of all the executive officers of the Company
as of January 31, 1998 are listed below. Except as noted below, each officer was
last elected as an executive officer at the meeting of directors immediately
following the 1997 Annual Meeting of Shareholders. The term of each executive
officer will expire at the meeting of directors following the 1998 Annual
Meeting of Shareholders, except that Richard R. Stewart and Jay C. Manning
resigned from the Company effective February 2, 1998 in connection with the sale
of the Company's Gas Turbine Operations to the General Electric Company. There
exist no arrangements or understandings between any officer and any other person
pursuant to which the officer was elected.
<TABLE>
<CAPTION>
Officer
Name Age Position Since
___________________________________ ____ _______________________________________________ ______
<S> <C> <C> <C>
Robert L. Hargrave................. 57 Chief Executive Officer, Chief Financial 1981
Officer & Treasurer
Richard R. Stewart................. 48 Group Vice President (Engineered Power Systems) 1986
Garth C. Bates, Jr................. 49 Group Vice President (Distribution) 1991
C. LaRoy Hammer.................... 61 Group Vice President (Tactical Vehicle Systems) 1980
T. Michael Andrews................. 57 Vice President 1982
Donald E. Stevenson................ 54 Vice President 1984
Keith T. Stevenson................. 51 Vice President 1986
C. Jim Stewart III................. 49 Vice President 1988
Jay Manning........................ 41 Vice President 1996
Lawrence E. Wilson................. 45 Vice President and Secretary 1989
</TABLE>
Each of the officers listed above, except Jay C. Manning, has been employed
by the Company in an executive capacity for more than five years. Jay C. Manning
was elected as a Vice President of the Company in 1996. He previously served as
a Vice President of Stewart & Stevenson International, Inc., a subsidiary of the
Company, from 1994 to 1996, and as an International Sales Manager from 1992 to
1994.
Richard R. Stewart and C. Jim Stewart III are sons of Mr. C. Jim Stewart
II, the Chairman of the Board of Directors of the Company. Garth C. Bates, Jr.
is a nephew of Mr. C. Jim Stewart II and a first cousin of Richard R. Stewart
and C. Jim Stewart III. Keith T. Stevenson is the brother, and T. Michael
Andrews is a first cousin, of Mr. Donald E. Stevenson, a director of the
Company. These persons and other members of the Stewart family and the Stevenson
family could be deemed "control persons" with respect to the Company as such
term is defined in the rules and regulations of the Securities and Exchange
Commission. Jay C. Manning is the son of Mr. J. Carsey Manning, a director of
the Company.
At a meeting of directors on April 14, 1998, the following actions were
taken regarding the executive officers of the Company. Robert L. Hargrave was
elected to serve as President and Chief Executive Officer of the Company, and
Garth C. Bates, Jr. and C. LaRoy Hammer were each elected to serve as Senior
Vice Presidents of the Company. Also, the following new executive officers were
elected. Donavon L. Wallin, 63, was elected to serve as a Vice President of the
Company. Mr. Wallin previously served as President of Stewart & Stevenson
Operations, Inc., a subsidiary of the Company. Patrick G. O'Rourke, 48, was
elected to serve as Controller of the Company. Mr. O'Rourke previously served as
the Company's corporate controller. David R. Stewart, 47, was elected to serve
as Treasurer of the Company. Mr. Stewart has served the Company as Director of
Investor Relations and will continue to serve in that position. Patrick G.
O'Rourke is a first cousin of Keith T. Stevenson, Donald E. Stevenson and T.
Michael Andrews. David R. Stewart is the son of Mr. C. Jim Stewart II and the
brother of Richard R. Stewart and C. Jim Stewart III.
EXECUTIVE COMPENSATION
The following Summary Compensation Table shows the aggregate compensation
paid or accrued by the Company during each of the last three fiscal years to or
for the Company's current Chief Executive Officer and each of the four highest
compensated executive officers.
<TABLE>
<CAPTION>
SUMMARY OF COMPENSATION
Long-Term
Annual Compensation Compensation
_________________________________ ___________________
Other All
Annual Other
Name and Year ended Compen- Options LTIP Compen-
Principal Position January 31 Salary Bonus sation Granted Payout sation(F2)
<S> <C> <C> <C> <C> <C> <C> <C>
Robert L. Hargrave......... 1998 $260,000 $200,000 (F1) 20,000 -0- $ 668
Chief Executive Officer, 1997 234,169 150,000 (F1) 20,000 -0- 1,066
Chief Financial Officer & 1996 207,115 200,000 (F1) 14,000 -0- 842
Treasurer
Richard R. Stewart......... 1998 270,000 250,000 (F1) 20,000 -0- 1,319 (F3)
Group Vice President, 1997 259,353 85,000 (F1) 20,000 -0- 3,663 (F4)
(Engineered Power Systems) 1996 238,115 170,000 (F1) 17,500 -0- 976
Garth C. Bates, Jr......... 1998 260,000 150,000 (F1) 20,000 -0-
Group Vice President 1997 234,108 120,000 (F1) 18,000 -0- 668
(Distribution) 1996 205,000 150,000 (F1) 14,000 -0- 935
C. LaRoy Hammer............ 1998 250,000 60,000 (F1) 20,000 -0- 643
Group Vice President 1997 224,169 70,000 (F1) 16,000 -0- 896
(Tactical Vehicle Systems) 1996 197,308 130,000 (F1) 14,000 -0- 811
Jay C. Manning............. 1998 120,000 200,000 (F1) 7,000 -0- 308
Vice President 1997 77,750 194,700 (F5)(F1) 3,000 -0- 314
1996 74,500 204,736 (F5)(F1) 3,000 -0- 192
Bob H. O'Neal.............. 1998 337,333 -0- (F1) -0- -0- 3,110 (F6)
President* 1997 368,308 -0- (F1) -0- -0- 3,708 (F7)
1996 367,308 -0- (F1) 30,000 -0- 3,589 (F8)
* Mr. O'Neal was on administrative leave in Fiscal 1997 and retired on December 31, 1997.
<FN>
(F1) The total amount of all perquisites and other personal benefits,
securities or property paid or accrued by the Company is less than 10%
of the total of annual salary and bonus. There have been no amounts
paid or accrued with respect to above-market or preferential earnings
on restricted stock, options, SARs or deferred compensation or with
respect to earnings on long-term incentive plans or tax
reimbursements. Except for purchases pursuant to the Stewart &
Stevenson Employee Stock Purchase Plan, participation in which is
available to all employees, there were no purchases of any security of
the Company for less than the fair market value thereof on the date of
purchase.
(F2) Unless otherwise indicated, All Other Compensation consists of the
dollar value of insurance premiums for term life insurance policies
for the benefit of the named executive.
(F3) Other Compensation for Mr. Stewart during the fiscal year ended
January 31, 1998 consists of term life insurance premiums of $694 and
contributions by the Company to a defined contribution pension plan of
$625.
(F4) Other Compensation for Mr. Stewart during the fiscal year ended
January 31, 1997 consists of term life insurance premiums of $1,038
and contributions by the Company to a defined contribution pension
plan of $2,625.
(F5) Bonus compensation for Mr. Manning includes sales commission.
(F6) Other Compensation for Mr. O'Neal during the fiscal year ended January
31, 1998 consists of term life insurance premiums of $947 and
contributions by the Company to a defined contribution pension plan of
$2,163.
(F7) Other Compensation for Mr. O'Neal during the fiscal year ended January
31, 1997 consists of term life insurance premiums of $1,479 and
contributions by the Company to a defined contribution pension plan of
$2,229.
(F8) Other Compensation for Mr. O'Neal during the fiscal year ended January
31, 1996 consists of term life insurance premiums of $1,550 and
contributions by the Company to a defined contribution pension plan of
$2,039.
</FN>
</TABLE>
Grants and Exercises of Stock Options and Stock Appreciation Rights
The Company has three stock option plans. The 1988 Nonstatutory Stock
Option Plan (as amended and restated effective as of June 10, 1997) (the "1988
Plan") authorizes the grant of options to employees, including officers, to
purchase shares of Common Stock and provides that limited stock appreciation
rights may be granted in connection with such options. The 1988 Plan authorizes
the grant of options to employees, including officers, to purchase an aggregate
of up to 1,500,000 shares of Common Stock and provides that limited stock
appreciation rights may be granted in connection with such options. The 1993
Nonofficer Stock Option Plan (the "1993 Plan") authorizes the grant of options
to employees other than officers of the Company to purchase an aggregate of up
to 984,950 shares of Common Stock. Stock appreciation rights may not be granted
under the 1993 Plan. The 1996 Director Stock Plan (the "1996 Plan") authorizes
the grant of options to directors other than officers or employees of the
Company.
The recipients and terms of options granted pursuant to the 1988 Plan and
the 1993 Plan are determined by the Compensation and Management Development
Committee of the Board of Directors, none of whom are employees of the Company
or eligible for any benefits under such plans. Under the 1996 Plan, an option to
purchase 1,000 shares of the Company's Common Stock is automatically granted on
the date of each Annual Meeting of Shareholders to each eligible director who is
elected to serve as a director at, or whose term as a director continues after,
such meeting.
During Fiscal 1997, the Company granted options to purchase an aggregate of
(i) 121,000 shares of Common Stock under the 1988 Plan, (ii) 246,900 shares of
Common Stock under the 1993 Plan and (iii) 8,000 shares of Common Stock under
the 1996 Plan. No limited stock appreciation rights were granted under the 1988
Plan during Fiscal 1997 or during any previous fiscal year. The following tables
set forth information as to options under the Company's stock option plans
granted to or exercised by the individuals described in the Summary Compensation
Table during 1997 and the value of all outstanding options owned as of January
31, 1998 by the individuals named in the Summary Compensation Table.
<TABLE>
<CAPTION>
OPTION/SAR GRANTS DURING FISCAL 1997
Potential Realizable Value
at
Assumed Annual Rates of
Individual Grants Stock Price Appreciation
for Option Term
______________________________________________ ________________________
% of Total Exercise
Options Price
Options Granted to per Expiration
Name Granted (F1) Employees share (F2) Date 5% 10%
<S> <C> <C> <C> <C> <C> <C>
Robert L. Hargrave........ 20,000 5.4 $ 20.00 04/01/07 $ 251,558 $ 637,497
Richard R. Stewart........ 20,000 5.4 20.00 04/01/07 251,558 637,497
Garth C. Bates, Jr. 20,000 5.4 20.00 04/01/07 251,558 637,497
C. LaRoy Hammer........... 20,000 5.4 20.00 04/01/07 251,558 637,497
Jay C. Manning............ 7,000 1.9 20.00 04/01/07 88,045 223,124
Bob H. O'Neal............. -0- 0.0 N/A N/A N/A N/A
All Employees, including
officers................. 367,900 100.0 20.00 04/01/07 4,627,407 11,726,757
_______________
<FN>
(F1) All options become exercisable in four 25% cumulative annual installments commencing on April 1, 1998.
(F2) All options are exercisable at the closing market price on the date of grant.
</FN>
</TABLE>
<TABLE>
<CAPTION>
OPTION/SAR EXERCISES DURING FISCAL 1997
AND YEAR-END VALUES
Number of Unexercised Value of Unexercised In-the-
Options at Money Options at
January 31, 1998 January 31, 1998
_______________________ ________________________
Shares
Acquired
Name on Value
Exercise Realized Exercisable Unexercisable Exercisable Unexercisable
<S> <C> <C> <C> <C> <C> <C>
Robert L. Hargrave........ -0- $ N/A 29,500 44,500 $ 938 $ 91,563
Richard R. Stewart........ -0- N/A 33,125 46,875 938 91,563
Garth C. Bates, Jr........ -0- N/A 26,500 43,000 844 91,281
C. LaRoy Hammer........... 2,500 2,500 23,500 41,500 750 91,000
Jay C. Manning............ 4,000 3,000 5,925 10,675 141 31,484
Bob H. O'Neal............. -0- N/A 65,000 -0- -0- -0-
All Employees, including
officers 70,000 269,250 572,046 792,179 14,849 1,617,196
</TABLE>
Retirement Plans
The Company has a defined benefit Pension Plan (the "Pension Plan") under
which benefits are determined primarily by average final base salary and years
of service. The Pension Plan covers substantially all of its full-time
employees, including officers, and, subject to certain limitations described
below, bases pension benefits on 1.5% of (a) the employee's highest consecutive
five-year average base salary out of the last ten years or (b) $235,840
($160,000 in 1997 and thereafter subject to adjustment for increases in the cost
of living), whichever is lower, times the employee's years of credited service.
The Internal Revenue Code of 1986, as amended, limited benefits that may be paid
under the Pension Plan to $125,000 per year in 1997.
The Company has a Supplemental Executive Retirement Plan (the "SERP") under
which certain key executives will receive retirement benefits in addition to
those provided under the Pension Plan. The Compensation and Management
Development Committee determines which executive officers are eligible for
benefits under the SERP. Supplemental benefits are based upon the average final
compensation and years of service without regard to the limitations imposed by
the Internal Revenue Code of 1986, as amended, and using the total of base
salary and bonus to compute final average compensation. Benefits under the SERP
are limited to an amount such that the aggregate of all retirement benefits paid
under the Pension Plan and the SERP will not exceed 75% of the executive's
highest consecutive five-year average salary not including bonus payments.
The following table sets forth the estimated annual benefits payable upon
retirement to persons in specified compensation and years-of-service
classification pursuant to the Stewart & Stevenson Employee Pension Plan and the
Stewart & Stevenson Supplemental Executive Retirement Plan.
<TABLE>
<CAPTION>
Estimated Annual Retirement Benefit (F1)
Years of Service
______________________________________________________________________
Final Average Compensation 20 25 30 35 40 45
<S> <C> <C> <C> <C> <C> <C>
$100,000.......................... $ 24,863 $ 31,079 $ 37,294 $ 43,939 $ 51,439 $ 58,939
200,000........................... 54,863 68,579 82,294 96,439 111,439 126,439
300,000........................... 84,863 106,079 127,294 148,939 171,439 193,939
400,000........................... 114,863 143,579 172,294 201,439 231,439 261,439
500,000........................... 144,863 181,079 217,294 253,939 291,439 328,939
600,000........................... 174,863 218,579 262,294 306,439 351,439 396,439
700,000........................... 204,863 256,079 307,294 358,939 411,439 463,939
800,000........................... 234,863 293,579 352,294 411,439 471,439 531,439
900,000........................... 264,863 331,079 397,294 463,939 531,439 598,939
1,000,000......................... 294,863 368,579 442,294 516,439 591,439 666,439
_______________
<FN>
(1) Computation of estimated annual retirement benefit based on a
straight-line annuity for the life of the employee, net of base Social
Security benefits under the Social Security law currently in effect,
assuming the employee retires in 2000 at age 65.
</FN>
</TABLE>
The five-year average compensation of each executive officer listed in the
Summary of Compensation Table differs from the present salary and bonus in such
table as a result of changes in the rate of pay during the average period. The
following table sets forth the years of credited service, five-year average
compensation and consecutive five-year average base salary for each of the
individuals listed in the Summary of Compensation Table.
<TABLE>
<CAPTION>
Years of Average Total Average
NAME Service Compensation Base Salary
__________________________ _________ _____________ ____________
<S> <C> <C> <C>
Robert L. Hargrave............. 30 $ 372,234 $ 213,600
Richard R. Stewart............. 26 423,216 237,000
Garth C. Bates, Jr.............. 27 348,229 208,200
C. LaRoy Hammer................ 40 326,149 203,600
Jay C. Manning................. 19 269,601 82,600
Bob H. O'Neal.................. 33 539,461 350,800
</TABLE>
TRANSACTIONS WITH MANAGEMENT AND CERTAIN BUSINESS RELATIONSHIPS
The Company continues to lease certain land and buildings from Mr. Miles
McInnis, a former officer and director of the Company, and Mrs. Faye Manning
Totsch, Mr. J. Carsey Manning's mother, for $6,500 per month under a lease which
will expire April 14, 2002. The Board of Directors believes that the term of
this lease has been at least as fair to the Company as could have been obtained
from nonaffiliated persons.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Each officer and each director of the Company is required by Section 16 of
the Securities Exchange Act of 1934 to report to the Securities Exchange
Commission all transactions in the Company's Common Stock within a specified
time period. Based solely on a review of such reports filed by the officers and
directors of the Company, the Company believes that all filings were made on a
timely basis.
FORM 10-K FOR FISCAL 1997
The Company will provide without charge to any shareholder entitled to vote
at the Annual Meeting a copy of its most recent Annual Report on Form 10-K upon
receipt of a request therefor. Such requests should be directed to:
Lawrence E. Wilson
Vice President & Secretary
P.O. Box 1637
Houston, Texas 77251-1637
(713) 868-7700
SHAREHOLDER PROPOSALS FOR THE 1999 ANNUAL MEETING
Shareholders may submit proposals for the 1999 Annual Meeting by sending
such proposals to the attention of the Corporate Secretary. In order to be
considered for inclusion in the proxy statement for the 1999 Annual Meeting,
such proposals should be received by the Company on or before January 15, 1999.
By Order of the Board of Directors,
LAWRENCE E. WILSON
Vice President, Secretary and
General Counsel
Dated: Houston, Texas
May 15, 1998
APPENDIX
STEWART & STEVENSON SERVICES, INC. ANNUAL MEETING OF SHAREHOLDERS
2707 NORTH LOOP WEST TO BE HELD JUNE 9, 1998
P.O. BOX 1637
HOUSTON, TEXAS 77251-1637
Dear Shareholder:
The Annual Meeting of Shareholders of Stewart & Stevenson Services, Inc.
will be held at 10:00 a.m. on Tuesday, June 9, 1998, in the Chase Auditorium,
601 Travis Street, Houston, Texas, for the following
purposes:
1. Election of four directors to the Board of Directors.
2. Ratification of the selection of independent public accountants
of the Company.
Only holders of Common Stock of Stewart & Stevenson Services, Inc. of record at
the close of business on April 22, 1998 will be entitled to vote at the meeting
or any adjournment thereof.
IT IS IMPORTANT THAT YOUR SHARES BE REPRESENTED AT THE MEETING. EVEN IF YOU PLAN
TO ATTEND, WE URGE YOU TO COMPLETE AND SIGN THE PROXY CARD BELOW, DETACH IT FROM
THIS LETTER AND RETURN IT IN THE POSTAGE PAID ENVELOPE ENCLOSED IN THIS PACKAGE.
The giving of such proxy does not affect your right to vote in person if you
attend the meeting. The prompt return of your signed proxy will aid the Company
in reducing the expense of additional proxy solicitation.
BY ORDER OF THE BOARD OF DIRECTORS
/s/ Lawrence E. Wilson
LAWRENCE E. WILSON
Vice President, General Counsel and Secretary
May 15, 1998
DETACH PROXY CARD HERE
STEWART & STEVENSON SERVICES, INC.
ANNUAL MEETING OF SHAREHOLDERS - JUNE 9, 1998
COMMON STOCK PROXY
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby appoints Lawrence E. Wilson and Rita M.
Schaulat, and each of them, the attorneys and proxies of the undersigned (each
with power to act without the other and with power of substitution) to vote, as
designated on the reverse side, all shares of Common Stock, without par value,
of Stewart & Stevenson Services, Inc. which the undersigned may be entitled to
vote at the Annual Meeting of Shareholders to be held at the Chase Auditorium,
601 Travis Street, Houston, Texas at 10:00 a.m. on the 9th day of June, 1998
and any adjournments thereof, upon all matters which may
properly come before said Annual Meeting.
THIS PROXY SHALL BE VOTED IN ACCORDANCE WITH THE INSTRUCTIONS MARKED ON
THE REVERSE SIDE HEREOF. IF NO CHOICE IS MARKED, THE UNDERSIGNED GRANTS THE
PROXIES DISCRETIONARY AUTHORITY WITH RESPECT TO THE ELECTION OF DIRECTORS AND
PROPOSAL 2. UNLESS OTHERWISE SPECIFIED, THIS PROXY WILL BE VOTED FOR
THE ELECTION OF ALL NOMINEES LISTED ON THE REVERSE SIDE AND FOR PROPOSAL 2.
Any proxy heretofore given by the undersigned with respect to such
stock is hereby revoked. Receipt of the Notice of the Annual Meeting, Proxy
Statement and Annual Report to Shareholders is hereby acknowledged.
(Please sign proxy on reverse side and return in enclosed envelope.)
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE FOLLOWING NOMINEES AND "FOR"
ITEM 2.
1. Election of Directors FOR all nominees WITHHOLD AUTHORITY to vote
listed below [ ] for all nominees listed below [ ]
EXCEPTIONS [ ]
Nominees: J. Carsey Manning, Donald E. Stevenson, Robert S. Sullivan and
William R. Lummis (INSTRUCTIONS: To withhold authority to vote for any
individual nominee, mark the "Exceptions" box and write that nominee's name in
the space provided below.)
*Exceptions___________________________________________________________________
2. Approval of Arthur Andersen LLP as independent In their discretion the
public accountants of the Company. Proxies are authorized to
vote upon such other
matters as may properly
come before the meeting
or any adjournment or
postponement thereof.
FOR [ ] AGAINST [ ] ABSTAIN [ ]
Address Change and/or
Comments Mark Here [ ]
The signature on the Proxy
should correspond exactly
with shareholder's name as
printed to the left. In the
case of joint tenancies,
co-executors or
co-trustees, both should
sign.
Persons signing as
Attorney, Executor,
Administrator, Trustee or
Guardian should give
their full title.
Dated: _____________, 1998
__________________________
Signature
__________________________
Signature
__________________________
VOTES MUST BE INDICATED (x)
IN BLACK OR BLUE INK. X
(Please sign, date and return this proxy in the enclosed postage paid envelope.)
