PLAY-BY-PLAY TOYS & NOVELTIES, INC.
4400 TEJASCO
SAN ANTONIO, TEXAS 78218-0267
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON DECEMBER 9, 1996
To the Shareholders of
PLAY-BY-PLAY Toys & Novelties, Inc.
NOTICE IS HEREBY GIVEN that the 1997 Annual Meeting of Shareholders of
PLAY-BY-PLAY Toys & Novelties, Inc. (the "Company") will be held at the Red Lion
Hotel San Antonio, 37 Northeast Loop 410, San Antonio, Texas 78216 on the 9th
day of December, 1996, at 1:00 p.m. (local time) for the following purposes:
1. To elect three (3) directors to hold office until the 2000 Annual Meeting
of Shareholders of the Company or until their respective successors shall
have been duly elected and shall have qualified;
2. To ratify the appointment of Coopers & Lybrand L.L.P., certified public
accountants, as independent auditors for the Company for the fiscal year
ending July 31, 1997; and
3. To transact such other business as may properly come before the meeting or
any adjournments thereof.
Only common shareholders of record at the close of business on November 19,
1996, are entitled to notice of and to vote at the annual meeting.
All shareholders are cordially invited to attend the meeting in person.
However, if you are unable to attend in person and wish to have your shares
voted, PLEASE FILL IN, SIGN AND DATE THE ENCLOSED PROXY AND RETURN IT IN THE
ACCOMPANYING ENVELOPE AS PROMPTLY AS POSSIBLE. Your proxy may be revoked by
appropriate notice to the Secretary of PLAY-BY-PLAY Toys & Novelties, Inc. at
any time prior to the voting thereof.
BY ORDER OF THE BOARD OF DIRECTORS
SAUL GAMORAN
EXECUTIVE VICE PRESIDENT,
GENERAL COUNSEL AND SECRETARY
San Antonio, Texas
November 19, 1996
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PLAY-BY-PLAY TOYS & NOVELTIES, INC.
4400 TEJASCO
SAN ANTONIO, TEXAS 78218-0267
(210) 829-4666
NOVEMBER 19, 1996
PROXY STATEMENT
FOR THE ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD DECEMBER 9, 1996
This Proxy Statement and the accompanying Proxy and Notice of Annual
Meeting of Shareholders are furnished to holders of common shares, without par
value (the "Common Shares"), of PLAY-BY-PLAY Toys & Novelties, Inc. (the
"Company") in connection with the solicitation by its Board of Directors (the
"Board") of proxies to be used at the 1997 Annual Meeting of Shareholders of the
Company (the "Annual Meeting") to be held on Monday, December 9, 1996, at 1:00
p.m. at the Red Lion Hotel San Antonio, 37 Northeast Loop 410, San Antonio,
Texas 78216, and at any postponements or adjournments thereof. Only those
shareholders of record at the close of business on November 19, 1996 will be
entitled to receive notice of, and to vote at, the Annual Meeting. Copies of
this Proxy Statement and the accompanying Proxy and Notice of Annual Meeting of
Shareholders are first being mailed to shareholders on or about November 20,
1996.
All Common Shares represented by each properly executed Proxy received by
the Board pursuant to this solicitation will be voted in accordance with the
shareholder's directions specified on the Proxy. If no directions have been
specified on a Proxy, the Common Shares represented by that Proxy will be voted
as follows:
"FOR" the election of Directors of the nominees named on the accompanying
Proxy; and
"FOR" the ratification of the selection of Coopers & Lybrand L.L.P. as
independent certified public accountants for the Company for fiscal year 1997.
Management knows of no other matters that may properly be brought, or
which are likely to be brought, before the Annual Meeting. However, if any other
matters are properly brought before the Annual Meeting, the persons named as
proxies in the accompanying Proxy or their substitutes will vote in accordance
with their best judgment on such matters.
Without affecting any vote previously taken, a shareholder signing and
returning a Proxy has the power to revoke it at any time prior to its exercise
by giving notice to the Company in writing mailed to Saul Gamoran, Secretary of
the Company, at the Company's executive offices at 4400 Tejasco, San Antonio,
Texas 78218-0267, by executing a subsequent Proxy, or by attending the Annual
Meeting and declaring to the Company such shareholder's intent to vote in
person. Attendance at the Annual Meeting will not, in and of itself, constitute
revocation of a Proxy.
The presence, in person or by proxy, of the holders of a majority of the
Common Shares issued and outstanding on November 19, 1996, is necessary to
constitute a quorum at the Annual Meeting. As of November 19, 1996, the Company
had 4,881,100 Common Shares issued and outstanding.
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Under Texas law and the Company's Amended and Restated Bylaws, each
shareholder is entitled to one vote for each Common Share held. Common Shares
represented in person or by proxy but not voted with respect to a proposal are
counted as present. In votes other than for the election of directors, the
effect of abstention or a non-vote is the same as a "no" vote. In the election
of directors, Common Shares as to which the authority to vote is withheld and
the Common Shares represented in person or by proxy but not voted with respect
to the election of directors are not counted toward the election of directors or
toward the election of the individual nominees specified on the proxy.
All costs of solicitation of the proxies will be borne by the Company.
Solicitation will be made by mail. Proxies may be further solicited at no
additional compensation by officers, directors or employees of the Company by
telephone, written communication or in person. Upon request, the Company will
reimburse banks, brokerage firms, and other custodians, nominees and fiduciaries
for expenses reasonably incurred by them in sending proxy materials to the
beneficial owners of Common Shares of the Company. No solicitation will be made
by specially engaged employees or other paid solicitors.
MANAGEMENT
The names of the directors and executive officers of the Company, their
respective ages, positions and director terms are as follows:
DIRECTOR
NAME AGE POSITION TERM
---- --- -------- --------
Arturo G. Torres 60 Chairman of the Board and Chief Executive 1998
Officer
Mark A. Gawlik 34 President, Chief Operating Officer and 1997
Director
Juanita E. Lozano 40 Chief Financial Officer and Treasurer -
Saul Gamoran 37 Executive Vice President, General
Counsel, Secretary and Director 1998
Francisco Saez Moya 47 Vice President-European Operations and 1999
Director
Ottis W. Byers 51 Director 1999
Tomas Duran 50 Director 1997
Berto Guerra, Jr. 46 Director 1998
Steve K.C. Liao 50 Director 1999
James F. Place 65 Director 1997
ARTURO G. TORRES has been Chief Executive Officer and Chairman of the
Board of the Company since April 1993. Prior thereto, Mr. Torres was the
Founder, Chairman of the Board, Chief Executive Officer and President of Pizza
Management, Inc. ("PMI") from its inception in 1972 to its eventual sale in
1992. PMI was the largest (approximately 240 restaurants) private Pizza Hut,
Inc. franchisee in the world with operations in the United States, the
Commonwealth of Puerto Rico, Spain and the United States Virgin Islands.
Although Mr. Torres is actively involved in the management of the Company, he is
also involved in various private business endeavors which include Veladi Ranch,
Inc., a registered hereford ranch, and Veladi Ranch Steak House, Inc., a
privately held development stage steak house chain with six restaurants open and
four additional restaurants under development.
MARK A. GAWLIK has been President and a Director of the Company since its
inception in January 1992, and became Chief Operating Officer in April 1993. Mr.
Gawlik is a nominee to the Board of Directors for the 1997 annual shareholders'
meeting. From January 1990 until the May 1992 acquisition by the Company, Mr.
Gawlik was Co-General Manager of the Toys and Novelties Division of PMI. From
February 1986 through December 1989, Mr. Gawlik was Controller of PMI. From June
1983 through February 1986, he was employed by Deloitte, Haskins & Sells, San
Antonio, Texas, most recently as Senior Accountant. Mr. Gawlik is a Certified
Public Accountant and received a Bachelor of Business Administration degree in
accounting, summa cum laude, from The University of Texas in 1984.
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JUANITA E. LOZANO has been Chief Financial Officer and Treasurer of the
Company since July 1996. From March 1995 until June 1996, Ms. Lozano was the
Financial Reporting Manager of the Company. From September 1985 through March
1995, Ms. Lozano was employed by Datapoint Corporation, San Antonio, Texas, most
recently as Financial Analyst, where she coordinated the Marketing Division
budget. Ms. Lozano is a Certified Public Accountant and received a Bachelor of
Business Administration degree in accounting, cum laude, from St. Mary's
University, San Antonio, Texas, in 1978.
SAUL GAMORAN has been Executive Vice President, General Counsel, Secretary
and Director of the Company since May 1996. From April 1995 through May 1996,
Mr. Gamoran was President of Renaissance Strategies, Ltd., a consulting firm
specializing in consumer products. From June 1988 through March 1995, he was
Executive Vice President of Ace Novelty Co., Inc. ("Ace"). Mr. Gamoran is a
past board member of the Toy Manufacturers of America, a toy industry trade
association. Mr. Gamoran received a juris doctor degree from Northwestern
University in 1984 and a Bachelor of Science degree in speech from Northwestern
in 1981.
FRANCISCO SAEZ MOYA has been Vice President-European Operations of the
Company since May 1992. He has been serving as a Director since May 1996 and
also served as a Director from January 1992 until April 1995. Mr. Moya also
serves as Administrator of Play By Play Toys and Novelties Europe, S.A., a
wholly owned subsidiary of the Company, a position he has held since 1989. Mr.
Moya served as Administrator of Restaurants Universal Espana, S.A., a former
wholly owned subsidiary of the Company, a position he held since its formation
in September 1991 until its sale in March 1996. From May 1986 through May 1992,
he served as Vice President-Spain for the Restaurant Division of PMI. Mr. Moya
is fluent in English, Spanish, Italian, Portuguese and French. Mr. Moya received
a M.H.C.C. degree in Hotel and Catering Management-Accounting from the College
of Further Education of Hastings, England in 1973.
OTTIS W. BYERS has been a Director of the Company since September 1995.
Since February 1995, Mr. Byers has been owner and Vice President of B.N.
Transport, Inc. of Cleveland, Texas. From 1978 through 1994, Mr. Byers owned
Byers Enterprises, which operated three Mexican food restaurants in Texas. Mr.
Byers received a Bachelor of Science degree in history from Sam Houston State
University, Huntsville, Texas, in 1968.
TOMAS DURAN has been a Director of the Company since November 1992 and is
a nominee to the Board of Directors for the 1997 annual shareholders' meeting.
Mr. Duran has owned an insurance consulting business located in Corpus Christi,
Texas, since August 1992. From 1988 through July 1992, he was Director of
Management and Budget and Senior City Manager for the City of Corpus Christi,
Texas. Mr. Duran served as Trade Representative for the Monterrey, Veracruz and
Mexico City Foreign Trade Mission and served as President of the Texas Public
Employees Labor Relations Association from 1985 through 1986. Mr. Duran studied
engineering at Universidad de Madrid, Madrid, Spain from 1964 through 1965 and
received a Bachelor of Arts degree in international relations from West Texas
State University in 1970.
BERTO GUERRA, JR. has been a Director of the Company since its inception
in May 1992. Mr. Guerra is the President of Southwestern Bell International
Development, a wholly owned subsidiary of SBC Communications, Inc., and has been
employed by that company or another subsidiary since 1978. Mr. Guerra served on
President Bush's Hispanic Alliance on Free Trade from 1989 through 1992 and has
served on the College of Education Foundation Advisory Council of The University
of Texas from 1988 to the present. In April 1995, Mr. Guerra was elected to the
Board of Trustees of The University of Texas-Pan American Foundation. Mr. Guerra
received a Bachelor of Science degree in interdisciplinary management from
Southwest Texas State University in 1984.
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STEVE K.C. LIAO has been a Director of the Company since October 1995.
Since 1987, Mr. Liao has been the Managing Director of Colorsplendor Graphics,
Inc. located in Foster City, California, which specializes in desk top pre-press
operations. Since 1989, Mr. Liao has also been a real estate investor and
property manager of multi-family properties in Houston, Texas. Mr. Liao is
fluent in the Mandarin and Cantonese Chinese dialects.
JAMES F. PLACE has most recently been a Director of the Company since
March 1996, also served as a Director from October 1994 through January 1996,
and is a nominee to the Board of Directors for the 1997 annual shareholders'
meeting. Since 1967, Mr. Place has owned and managed various commercial real
estate properties and other investments primarily located in Texas, which has
been his primary business occupation since 1967. Mr. Place was a director of PMI
from 1976 to June 1992. Mr. Place has been a director of Grand Prix Tours, Inc.,
a tour operation for automobile racing events, since January 1988. Mr. Place
received a certificate in real estate from College of Lake County, Lake County,
Illinois, in 1981.
There are no family relationships among any of the executive officers or
directors of the Company.
NUMBER, TERM AND COMPENSATION OF DIRECTORS
The Company's Articles of Incorporation divide the Board into three
classes of as equal size as possible, with the terms of each class expiring in
consecutive years so that only one class is elected in any given year.
Successors to directors whose terms have expired are required to be elected by
shareholder vote. Vacancies in unexpired terms and any additional positions
created by Board action are filled by action of the existing Board. The terms of
Messrs. Gawlik, Duran and Place will expire at the 1997 annual meeting of
shareholders of the Company; the terms of Messrs. Torres, Gamoran and Guerra
will expire at the 1998 annual meeting of shareholders; and the terms of Messrs.
Moya, Byers and Liao will expire at the 1999 annual meeting of shareholders. The
executive officers of the Company are elected annually by the Board following
the annual meeting of shareholders and serve at the discretion of the Board
until their successors are elected and qualified.
Effective April 1996, outside members of the Board are compensated $1,000
per meeting for attending Board meetings, $500 per meeting for attending Board
committee meetings and receive reimbursement for out-of-pocket expenses incurred
for attendance at meetings. Prior to April 1996, outside members of the Board
were compensated $500 per meeting for attending Board meetings, $250 per meeting
for attending Board committee meetings and received reimbursement for
out-of-pocket expenses incurred for attendance at meetings.
During fiscal 1996, total outside directors' fees of $27,000 were paid in
cash. Management directors receive no fees for their services as a director.
PROPOSAL NO. 1
ELECTION OF DIRECTORS
Messrs. Gawlik, Duran and Place are the Board's nominees for election as
directors, to serve as Category III directors until the 2000 annual meeting of
shareholders or until their successors are elected and qualified. Information
concerning the nominees is set forth above. Messrs. Gawlik and Duran were
previously elected to the Board by the Company's shareholders before the
Company's initial public offering of its Common Stock. Mr. Place was
previously appointed to the Board to fill a vacancy on the Board.
The Board currently consists of nine members. The Board has determined to
nominate three persons for election. The proxies cannot be voted for a greater
number of persons than the number of nominees named.
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If, for any reason, any of the nominees shall become unavailable for
election, the individuals named in the enclosed Proxy may exercise their
discretion to vote for any substitutes proposed by the Board, unless the Board
should decide to reduce the number of directors to be elected at the Annual
Meeting. The affirmative vote of a majority of the votes cast is required for
the election of each nominee for director.
THE BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE FOR EACH OF THE NOMINEES LISTED
HEREIN.
MEETINGS AND CERTAIN COMMITTEES OF THE BOARD
BOARD MEETINGS
The Board held seven meetings during the fiscal year ended July 31, 1996.
Other than Mr. Liao, who attended four of the six Board meetings (67%) and four
of the five Compensation Committee meetings (80%) held since Mr. Liao's becoming
a member of the Board, the attendance by directors at the meetings of the Board
and Board committees was 100%. Other than Mr. Liao, all directors attended at
least 75% of the meetings of the Board and Board committees of which they are
members.
BOARD COMMITTEES
The Company's Board has two standing committees: the Audit Committee and
the Compensation Committee. The functions of the Audit Committee, of which
Messrs. Byers, Duran, Guerra, Liao and Place are members, are to make
recommendations to the Board regarding the engagement of the Company's
independent accountants and to review with management and the independent
accountants the Company's internal controls, financial statements, basic
accounting and financial policies and practices, audit scope and competency of
accounting personnel. The Audit Committee held one meeting during fiscal 1996.
The functions of the Compensation Committee, of which Messrs. Byers, Duran,
Guerra, Place and Liao are members, are to review and recommend to the Board the
compensation, stock options and employment benefits of all officers of the
Company, to administer the PLAY-BY-PLAY Toys & Novelties, Inc. 1994 Incentive
Plan (the "Incentive Plan"), to fix the terms of other employee benefit
arrangements and to make awards under such arrangements. The Compensation
Committee held seven meetings during fiscal 1996. During fiscal 1996, none of
the individuals serving on the Compensation Committee has ever been an officer
or employee of the Company. No executive officer of the Company has served as a
member of the board of directors or the compensation committee of any company
one of whose executive officers include a member of the Board or the
Compensation Committee of the Company, other than Mr. Torres. Mr. Torres is the
Chairman of the Board and Chief Executive Officer of Veladi Ranch Steak House,
Inc., a privately held development stage steak house chain with six restaurants
open and four additional restaurants under development.
The Board does not have a Nominating Committee.
COMPLIANCE WITH SECTION 16(A) OF THE SECURITIES EXCHANGE ACT OF 1934
Section 16(a) of the Securities Exchange Act of 1934, as amended (the
"Exchange Act") requires each director and officer of the Company, and each
person who owns more than 10% of a registered class of the Company's equity
securities to file by specific dates with the United States Securities and
Exchange Commission (the "SEC") initial reports of ownership and reports of
changes in ownership of Common Stock and other equity securities of the Company.
Officers, directors and 10% shareholders are required by SEC regulation to
furnish the Company with copies of all Section 16(a) forms they file. The
Company is required to report in this Proxy Statement any failure of its
directors and officers and beneficial owners of more than 10% of the Company's
Common Stock to file by the relevant due date any of these reports during the
Company's fiscal year.
5
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To the Company's knowledge, all Section 16(a) filing requirements
applicable to the Company's officers, directors and 10% shareholders were
complied with, except for two late filings as to Juanita E. Lozano. Ms. Lozano's
Form 3 and Form 4 were due on August 1, 1996 and August 12, 1996, respectively,
and both were filed on November 12, 1996.
EXECUTIVE COMPENSATION
NOTWITHSTANDING ANYTHING TO THE CONTRARY SET FORTH IN ANY OF THE COMPANY'S
FILINGS UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT") OR
THE EXCHANGE ACT THAT MIGHT INCORPORATE FUTURE FILINGS BY REFERENCE, INCLUDING
THIS PROXY STATEMENT, IN WHOLE OR IN PART, THE FOLLOWING REPORT OF THE
COMPENSATION COMMITTEE AND THE PERFORMANCE GRAPH SHALL NOT BE INCORPORATED BY
REFERENCE INTO ANY SUCH FILINGS, AND SHALL NOT BE DEEMED SOLICITING MATERIAL OR
FILED UNDER THE SECURITIES ACT OR THE EXCHANGE ACT.
REPORT OF THE COMPENSATION COMMITTEE
THE COMPENSATION COMMITTEE
The Compensation Committee's stated purpose is to review and recommend to
the Board the compensation, stock options and employment benefits of all
officers of the Company, administer the Incentive Plan, fix the terms of other
employee benefit arrangements and make awards under such arrangements. The
Compensation Committee is composed of directors who have never served as
officers of the Company. The following is a summary of policies of the
Compensation Committee that affect the compensation paid to executive officers,
as reflected in the tables and text set forth elsewhere in this Proxy Statement.
GENERAL COMPENSATION POLICY. The Compensation Committee's overall policies
with respect to executive officers is to offer competitive compensation
opportunities for such persons based upon their personal performance, the
financial performance of the Company and their contribution to that performance.
Each executive officer's compensation package is comprised of three elements:
(i) base salary that reflects individual performance and is designed primarily
to be competitive with salary levels in the industry, (ii) stock-based incentive
awards designed to strengthen the mutuality of interests between the executive
officers and the Company's shareholders, and (iii) for executive officers and
certain personnel that perform sales and marketing functions, annual cash
bonuses related to the performance of the Company for such individual's
respective functional area.
FACTORS. Several important factors considered in establishing the
components of each executive officer's compensation package for the 1996 fiscal
year are summarized below. Additional factors were taken into account to a
lesser degree. The Compensation Committee may, in its sole discretion, apply
entirely different factors, such as different measures of financial performance,
for future fiscal years. However, it is presently contemplated that all
compensation decisions will be designed to further the overall compensation
policy described above.
BASE SALARY. The base salary for each executive officer is set on the
basis of personal performance, the salary levels in effect for comparable
positions in similarly situated companies within the toy industry or similarly
sized public companies and internal comparability considerations. However, the
Compensation Committee did not conduct a formal survey of executive officer
salaries at such companies. The Compensation Committee believes that the
Company's most direct competitors for executive talent are not limited to the
companies that the Company would use in a comparison for shareholder returns.
Therefore, the compensation comparison group is not the same as the industry
group index used in the "Performance Graph" section below.
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STOCK-BASED INCENTIVE COMPENSATION. The Company adopted the PLAY-BY-PLAY
Toys & Novelties, Inc. 1994 Incentive Plan (the "Incentive Plan") in August
1994. The Incentive Plan authorizes the Company to award incentive stock options
and nonqualified stock options to purchase Common Stock and restricted stock to
officers and other employees of the Company. The purpose of the Incentive Plan
is to attract, retain and motivate officers and employees. The Incentive Plan
authorizes the award of 700,000 shares of Common Stock to be used for incentive
stock options, nonqualified options or restricted stock. Under the Incentive
Plan and at the discretion of the Board as recommended by the Compensation
Committee, awards may be granted to officers and employees of the Company in the
form of incentive stock options and restricted stock. Stock options may be
exercised at a purchase price as recommended by the Compensation Committee and
determined by the Board of Directors, provided that the exercise price per share
under the Incentive Plan shall be an amount not less than 100% of the fair
market value on the date the option is granted or 110% of fair market value for
beneficial owners of 10% or more of the Company's outstanding shares. Thus, the
optionee receives a return only if the market price of the shares appreciates
over the option term. The grants are designed to align the interests of the
optionees with those of the shareholders and provide each individual with a
significant incentive to manage the Company from the perspective of an owner
with an equity stake in the business, even though certain executive officers of
the Company are already significant shareholders of the Company (see "Principal
Shareholders"). Moreover, the long-term vesting schedules encourage a long-term
commitment to the Company by its executive officers and other optionees. The
size of the option grant to each optionee is set at a level that the
Compensation Committee deems appropriate in order to create a meaningful
opportunity for stock ownership based upon the individual's current position
with the Company, but also takes into account the individual's potential for
future responsibility and promotion over the option vesting period, and the
individual's performance in recent periods. The Compensation Committee
periodically reviews the number of shares owned by, or subject to options held
by, each executive officer, and additional awards are considered based upon past
performance of the executive officer.
ANNUAL CASH BONUSES. The Company does not have a formal cash bonus program
for executive officers, although cash bonuses have been paid from time to time
in the past to selected executive officers in recognition of superior individual
performance. The Compensation Committee did not recommend and the Company did
not award any cash bonuses during fiscal 1996.
CHIEF EXECUTIVE OFFICER
In fiscal 1996, Mr. Arturo G. Torres, Chairman and Chief Executive Officer
of the Company, received total cash payments of $255,000 in salary. In fiscal
1996, Mr. Torres was also granted options under the Incentive Plan to purchase
10,000 shares of Common Stock. These options are exercisable at an average of
$14.58 per share (110% of the market close price on the day of grant), and vest
in one year. The Compensation Committee notes that the Company under the strong
leadership of Mr. Torres produced significant growth in sales and earnings
during the period. The Compensation Committee considers this level of
compensation appropriate in light of Mr. Torres' leadership of a growth oriented
toy company which has experienced significant increases in fiscal 1996 net sales
and net income of 55.5% and 113.5%, respectively, as compared to fiscal 1995, in
spite of the performance of the Company's stock price. Mr. Torres does not have
an employment agreement with the Company.
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LIMITATIONS ON DEDUCTIBILITY
The Compensation Committee has reviewed the Company's informal
compensation policies in light of amendments to the Internal Revenue Code
enacted during 1993 that generally limit deductions for compensation paid to
certain executive officers to $1,000,000 per annum (certain performance based
compensation is not subject to that limit). At present levels of compensation,
these amendments do not limit the deductions to which the Company is entitled
and the Compensation Committee has therefore concluded that no changes in the
Company's compensation policies as a result of these amendments are appropriate.
SUMMARY
The Compensation Committee believes that the compensation programs of the
Company and the administration of those programs well serve the interests of the
Company's shareholders. These programs allow the Company to attract, retain and
motivate exceptional management talent and to compensate executives in a manner
that reflects their contribution to both the short- and long-term performance of
the Company. The Company intends to continue to emphasize programs that it
believes positively affect shareholder value.
PLAY-BY-PLAY Toys & Novelties, Inc. Compensation Committee
Berto Guerra, Jr., Ottis W. Byers, Tomas Duran, Steve K.C. Liao
and James F. Place, 1996 Members
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PERFORMANCE GRAPH
NOTWITHSTANDING ANYTHING TO THE CONTRARY SET FORTH IN ANY OF THE COMPANY'S
PREVIOUS FILINGS UNDER THE SECURITIES ACT OR THE EXCHANGE ACT THAT MIGHT
INCORPORATE FUTURE FILINGS, INCLUDING THIS PROXY STATEMENT, IN WHOLE OR IN PART,
THIS SECTION ENTITLED "PERFORMANCE GRAPH" SHALL NOT BE INCORPORATED BY REFERENCE
INTO ANY FILINGS OR INTO ANY FUTURE FILINGS, AND SHALL NOT BE DEEMED SOLICITING
MATERIAL OR FILED UNDER THE SECURITIES ACT OR THE EXCHANGE ACT.
The following graph compares the cumulative total shareholder return on
the Company's Common Stock from July 19, 1995 (the date the Company became a
public company) until July 31, 1996, with the cumulative total return of the
Standard and Poor's Index and the Peer Group Index (as defined below). The graph
assumes the investment of $100 in the Company's Common Stock and in each of the
indexes on July 19, 1995 and reinvestment of all dividends. The initial public
offering price of the Company's Common Stock was $12.25 per share.
COMPARISON OF CUMULATIVE TOTAL RETURN*
FOR THE PERIOD ENDED JULY 31, 1996
Cumulative Total Return
-----------------------------
7/19/95 7/95 7/96
PLAY-BY-PLAY Toys& Nvlts Inc .............. PBYP 100 107 75
PEER GROUP ................................ PPEER1 100 104 91
S & P 500 ................................. I500 100 102 119
CUMULATIVE TOTAL RETURN* 1996
- ------------------------ ----
PLAY-BY-PLAY TOYS & NOVELTIES, INC...................................75.00
S&P 500...... ......................................................119.00
PEER GROUP**.........................................................91.00
* ANNUAL RETURN ASSUMES REINVESTMENT OF DIVIDENDS. THERE WERE NO DIVIDENDS
PAID BY THE COMPANY DURING THE PERIOD PRESENTED. CUMULATIVE TOTAL RETURN
ASSUMES AN INITIAL INVESTMENT OF $100 ON JULY 19, 1995.
** PEER GROUP INDEX IS COMPOSED OF TOY COMPANIES WITH SIMILAR MARKET
CAPITALIZATION. THESE COMPANIES ARE ACTION PERFORMANCE CO., EMPIRE OF
CAROLINA, INC., EQUITY MARKETING INC., ERO, INC., HAPPINESS EXPRESS, INC.,
JANEX INTERNATIONAL, INC. AND JUST TOYS, INC.
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SUMMARY COMPENSATION TABLE
The following table sets forth certain information concerning compensation
of (i) the Company's Chief Executive Officer, (ii) the highest paid executive
officers of the Company whose annual compensation exceeded $100,000 and (iii)
one former executive officer of the Company:
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG-TERM
ANNUAL COMPENSATION COMPENSATION
------------------- ------------
OTHER SECURITIES
ANNUAL UNDERLYING
NAME AND PRINCIPAL POSITION YEAR SALARY $(1) BONUS $ COMPENSATION($)(2) OPTIONS (#)
- --------------------------- ---- ---------- ------- ----------------- ------------
<S> <C> <C> <C> <C> <C>
Arturo G. Torres, ........................ 1996 $255,000 -- -- --
Chairman of the Board .................. 1995 $180,000 $28,250 -- --
and Chief Executive Officer
Mark A. Gawlik, .......................... 1996 $175,000 -- -- --
President and Chief Operating Officer .. 1995 $127,500 $30,250 -- --
Francisco Saez Moya ...................... 1996 $125,000 -- -- --
Vice President - European Operations ... 1995 $ 70,000 $16,000 -- --
Jay B. Forman, ........................... 1996 -- -- -- --
Vice President - U.S. Operations (3) ... 1995 $126,250 $20,000 -- --
</TABLE>
(1) In April 1996, the Company reevaluated the base salaries of Messrs. Torres,
Gawlik and Moya. Effective April 1, 1996, these employees' annual base salaries
are $255,000, $175,000 and $125,000, respectively. (2) Certain of the Company's
executive officers receive personal benefits in addition to salary; however, the
Company has concluded that the aggregate amounts of such personal benefits did
not exceed the lesser of $50,000 or 10% of annual salary reported for any named
executive officer. (3) Mr. Foreman resigned from the Company on February 29,
1996 and ceased consulting with the Company on April 30, 1996.
EMPLOYMENT ARRANGEMENTS
Other than an employment agreement with Mr. Gamoran, the Company does not
have employment agreements with any of its United States employees. In May 1996,
the Company entered into an employment agreement with Mr. Gamoran, which
agreement will automatically expire three years thereafter, unless it is
terminated by the Company or Mr. Gamoran. During the first year of the Mr.
Gamoran's employment, the Company will pay to Mr. Gamoran an annual base salary
of $150,000. After the first year, the annual base salary will not be less than
$175,000. The Company does have standard national employment contracts with all
of its Spanish employees.
10
<PAGE>
STOCK OPTION GRANT TABLE
The following table sets forth certain information concerning option
granted to the named executive officers during the Company's fiscal year ended
July 31, 1996:
OPTION GRANTS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
Potential Realizable Value at
Assumed Annual Rates of
Stock Price Appreciation for
Individual Grant Option Term (2)
- --------------------------------------------------------------------------------------------------
Number of
Securities % Total
Underlying Options Granted Exercise ----------------------
Option to Employees in Price Expiration 5% 10%
Name Granted(#)(1) Fiscal 1996 ($/Share) Date ($) ($)
- --------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Arturo G. Torres 10,000 2.4% $ 14.58 9/29/2001 $ 40,282 $ 89,012
Mark A. Gawlik 10,000 2.4% $ 14.58 9/29/2001 40,282 89,012
</TABLE>
(1) The numbers of shares indicated are at an exercise price equal to 110% of
the initial public offering price. The granted incentive stock options vest and
become exercisable within one year from the date of grant for Messrs. Torres and
Gawlik.
(2) As required by the rules of the SEC, potential values are based on the
assumption that the Company's Common Stock will appreciate in value from the
date of grant to the end of the option term (five years from the date of grant)
at annualized rates of five percent and ten percent (total appreciation of
approximately 27.6% and 61.1%), respectively, and, therefore, are not intended
to forecast possible future appreciation, if any, in the price of the Common
STOCK.
AGGREGATE OPTION EXERCISES IN LAST FISCAL YEAR AND FISCAL YEAR-END OPTION VALUES
The following table set forth information concerning shares acquired on
exercise of stock options during fiscal 1996 and the value of stock options held
at the end of fiscal 1996 by each of the executive officers named in the Summary
Compensation Table above:
<TABLE>
<CAPTION>
NUMBER OF SECURITIES VALUE OF UNEXERCISED
UNDERLYING UNEXERCISED IN-THE-MONEY OPTIONS
SHARES OPTIONS AT FISCAL YEAR END(#) AT FISCAL YEAR END($)
ACQUIRED VALUE ----------------------------- ---------------------
NAME ON EXERCISE(#) REALIZED($) EXERCISABLE UNEXCERCISABLE EXERCISABLE UNEXCERCISABLE
- ----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Arturo G. Torres 0 0 15,000 10,000 0 0
Mark A. Gawlik 0 0 12,000 10,000 0 0
Francisco Saez Moya 0 0 12,000 0 0 0
</TABLE>
11
<PAGE>
1994 INCENTIVE
PLAN
SCOPE. The Board and shareholders of the Company have approved the
Incentive Plan. The Incentive Plan authorizes the Company to award incentive
stock options and nonqualified stock options to purchase Common Stock and
restricted stock to officers and other employees of the Company. The purpose of
the Incentive Plan is to attract, retain and motivate officers and employees.
The Incentive Plan authorizes the award of 700,000 shares of Common Stock
to be used for incentive stock options, nonqualified stock options or restricted
stock. If an award made under the Incentive Plan expires, is canceled or is
otherwise terminated, those shares will be available for future awards under the
Incentive Plan. The Incentive Plan will terminate on August 24, 2004.
ADMINISTRATION. The Incentive Plan is administered by the Company's
Compensation Committee. Subject to the provisions of the Incentive Plan, the
Compensation Committee will have authority to select those officers and other
employees of the Company to receive awards, to determine the time or times of
receipt, to determine the types of awards and the number of shares covered by
the awards, and to establish the terms, conditions and provisions of such
awards. In making such award determinations, the Compensation Committee may take
into account the nature of services rendered by the officer or employee, his or
her present and potential contribution to the Company's growth and success and
such other factors as the Compensation Committee deems relevant. The
Compensation Committee is authorized to interpret the Incentive Plan, to
establish, amend, and revoke any rules and regulations relating to the Incentive
Plan, to determine the terms and provisions of any agreements made pursuant to
the Incentive Plan, and to make all other determinations that may be necessary
or advisable for the administration of the Incentive Plan.
STOCK OPTIONS. Both incentive stock options and nonqualified stock options
(collectively referred to as "Stock Options") may be granted pursuant to the
Incentive Plan. All Stock Options granted under the Incentive Plan will have an
exercise price per share to be determined by the Compensation Committee,
provided that the exercise price per share under each Stock Option shall not be
less than the fair market value of a share of Common Stock at the time the Stock
Option is granted (110% of such fair market value in the case of incentive stock
options granted to a shareholder who owns 10% or more of the Company's Common
Stock). The maximum term for all Stock Options granted under the Incentive Plan
is ten years (five years in the case of an incentive stock option granted to a
shareholder who owns 10% or more of the Company's Common Stock). Moreover, no
Stock Options may be granted under the Incentive Plan more than ten years after
the date of its adoption. All Stock Options are nontransferable other than by
will or the laws of descent and distribution or a qualified domestic relations
order, and during an optionee's lifetime may be exercised only by the optionee
or the optionee's guardian or legal representative. Stock Options are
exercisable at such time and in such installments as the Compensation Committee
may provide at the time the Stock Option is granted. The Compensation Committee
may accelerate the exercisability of any Stock Option at any time. The purchase
price for shares acquired pursuant to the exercise of a Stock Option must be
paid in the manner determined by the Compensation Committee. The terms and
conditions of Stock Options relating to their treatment upon termination of the
optionee's employment will be determined at the time the Stock Options are
granted. An optionee is not deemed to be the owner of any shares of Common Stock
subject to any Stock Option until the Stock Option has been exercised, the
Company has issued and delivered the shares to the optionee and the optionee's
name has been entered as a shareholder of record on the books of the Company.
During fiscal 1996, the Compensation Committee granted incentive stock options
to purchase 311,500 shares of Common Stock under the Incentive Plan to certain
officers and employees of the Company, 310,500 of which are outstanding at July
31, 1996. The options generally have a four-year vesting period and are
exercisable at $13.48 per share. One-fifth of such options will become
exercisable six months after the date of grant and on each of the first four
anniversaries of the date of grant. In the event of a change in control of the
Company, as defined in the Incentive Plan, awards under the Incentive Plan
become exercisable within 60 days of the change in control. 111,400 of the
options were exercisable as of July 31, 1996.
12
<PAGE>
The incentive stock options granted on April 13, 1995 to Mr. Joe M. Guerra,
the former Chief Financial Officer, Secretary and Treasurer of the Company, all
vest and became exercisable on April 13, 1996. On September 29, 1995, the Board
modified the terms of the incentive stock options granted to Messrs. Torres,
Gawlik and Moya, such that all options vest and become exercisable within one
year from the date of grant. The exercise price per share of all such Stock
Options is equal to $13.48. On May 16, 1996, Mr. Gamoran was granted 100,000
options to purchase stock in the Company at $13.75 per share. Of the 100,000
options granted to Mr. Gamoran, 20,000 of said options vested immediately, and
one-third of the remaining options will become exercisable on each of the first
three anniversaries of the date of grant. Mr. Gamoran shall have a period of
five years from the date of each vesting in which to exercise these options.
RESTRICTED STOCK. Restricted stock awards are grants of Common Stock made
to officers and employees subject to conditions established by the Compensation
Committee. The terms of a restricted stock award, including the restrictions
placed on such shares and the time or times at which such restrictions will
lapse, shall be determined by the Compensation Committee at the time the award
is made. Unless the Compensation Committee determines otherwise, holders of
restricted stock shall have the right to vote the shares of restricted stock and
to receive all dividends thereon. The Compensation Committee may determine at
the time of an award of restricted stock that dividends paid on such shares may
be paid to the grantee or deferred. Deferred dividends (together with any
interest accrued thereon) will be paid upon the lapsing of the restrictions on
the shares of restricted stock or forfeited upon the forfeiture of the shares of
restricted stock. The agreements evidencing awards of restricted stock shall set
forth the terms and conditions of such awards and the effect of a grantee's
termination of employment. No restricted stock shares have been issued pursuant
to the Incentive Plan as of July 31, 1996.
ADJUSTMENTS. In the event of any change in the outstanding shares of Common
Stock by reason of any reclassification, recapitalization, merger,
consolidation, reorganization, spin-off, spli-up, issuance of warrants or rights
or debentures, stock dividend, stock split or reverse stock split, cash
dividend, property dividend or similar change is the corporate structure, the
aggregate number of shares of Common Stock with respect to which awards may be
made under the Incentive Plan, and the terms and the number of shares of
restricted stock, or the number of shares of Common Stock underlying any
outstanding Stock Options may be equitably adjusted by the Compensation
Committee in its sole discretion.
TERMINATION AND AMENDMENT. The Incentive Plan may be terminated or amended
by the Board, provided that, in the absence of shareholder approval, no
amendment of the Incentive Plan may materially increase the total number of
shares of Common Stock with respect to which awards may be made under the
Incentive Plan (except as discussed in "-Adjustments" above), change the
exercise price of a Stock Option, materially modify the requirements as to
eligibility for participation in the Incentive Plan or materially increase the
benefits accruing to participants under the Incentive Plan. No amendment of the
Incentive Plan may adversely alter or impair any Stock Option or share of
restricted stock awarded under the Incentive Plan prior to such amendment
without the consent of the holder thereof.
NON-PLAN OPTIONS
In addition to the Stock Options granted pursuant to the Incentive Plan,
the Company granted in September 1995 and October 1995, nonqualified stock
options outside of the Incentive Plan to purchase 10,000 shares of Common Stock
(the "Non-Plan Options") to each of Messrs. Byers, Duran, Guerra, Liao and Place
and an independent agent of the Company. The Non-Plan Options were granted at
exercise prices equal to $14.58 and $14.03, respectively, which was 110% of the
closing sales price of the Common Shares on the date of the grant. The September
1995 Non-Plan Options are fully exercisable upon the grant date and expire five
years thereafter.
13
<PAGE>
REGISTRATION OF SHARES
On June 27, 1996, the Company registered the shares that are the subject of
the Incentive Plan and such nonqualified stock options with the United States
Securities and Exchange Commission.
PRINCIPAL SHAREHOLDERS
The following table presents certain information as of July 31, 1996,
regarding the beneficial ownership of Common Stock by (i) each of the directors
and executive officers of the Company individually, (ii) all persons known by
the Company to be beneficial owners of five percent or more of the Common Stock,
and (iii) all directors and executive officers of the Company as a group. Unless
otherwise noted, the persons listed below have sole voting and investment power
and record and beneficial ownership with respect to such shares.
NUMBER
SHARES
BENEFICIALLY
NAME OWNED PERCENTAGE
- --------------------------------------------------------------------------------
Arturo G. Torres .......................... 1,450,990(1) 29.97%
Mark A. Gawlik ............................ 218,321 4.51%
Francisco Saez Moya ....................... 241,272 4.98%
Berto Guerra, Jr .......................... 35,665 *
James F. Place ............................ 15,373 *
Tomas Duran ............................... 12,710 *
All directors and executive
officers as a group (ten persons) ....... 1,994,431 41.20%
Oppenheimer Funds ......................... 324,900 6.71%
- ------------------------
*Less than 1%
(1) Includes 49,200 shares held in trust for the benefit of Mr. Torres' three
minor children (16,400 shares each), for which Mr. Torres is the trustee and has
sole voting and investment power.
The business address of all officers and directors of the Company is 4400
Tejasco, San Antonio, Texas 78218-0267.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
SHAREHOLDER LOANS
To partially finance the Acquisition of Ace, Mr. Torres provided a $3.0
million unsecured demand loan. Interest on this loan is payable monthly at a per
annum rate equal to the lesser of the "Alternate Base Rate" (as defined in the
Company's $65 million Credit Agreement with The Chase Manhattan Bank, the
"Credit Agreement") which means, as of any day of determination thereof, a rate
per annum equal to the sum of (a) the greater of (i) the Prime Rate (as defined
in the Credit Agreement) in effect on a such day, (ii) the Federal Funds
Effective Rate (as defined in the Credit Agreement) in effect for such a day
plus 1/2 of 1.0% and (iii) the Base CD Rate (as defined in the Credit Agreement)
in effect for such a day plus 1.0% or the "Maximum Lawful Rate" (as defined in
the Credit Agreement). Repayment of the note is subordinated to payment of the
Credit Facility pursuant to the terms of a Subordination Agreement dated June
20, 1996, by and among Mr. Torres, the Company and The Chase Manhattan Bank,
formerly Chemical Bank. Outstanding and unpaid principal and interest on the
loan is payable no later than June 21, 1998; however, earlier repayment of the
note is not permissible.
14
<PAGE>
OTHER TRANSACTIONS
The Company leases a building used as a video arcade located in Odessa,
Texas, from Mr. Torres. Rental expense for such arcade was approximately $9,000
during fiscal 1996. The Company believes that the arrangements with Mr. Torres
are fair and reasonable and are on terms at least as favorable as would be
available from non-affiliated parties.
Mr. Place, a Director of the Company is a partner in Espinoza's Pizza
Company, Ltd. ("Espinoza") which owns and operates 11 restaurants in which the
Company has placed coin-operated amusement game machines. Espinoza was paid, as
its percentage of revenues attributable to such games, approximately $103,000
during fiscal 1996. The Company believes that the arrangements with and the
amounts paid to Espinoza are fair and reasonable and are on terms at least as
favorable as would be available from non-affiliated parties.
Mr. Torres leases seven land and building packages to Pizza Hut of America,
Inc. ("Pizza Hut") and one land and building package to Espinoza. The Company
has entered into revenue sharing agreements with Pizza Hut and Espinoza
concerning the placement of amusement machines which may benefit Mr. Torres due
to percentage rent provisions in these real property leases. The Company paid
Pizza Hut approximately $1.1 million and Espinoza approximately $103,000 during
fiscal 1996, pursuant to the terms of such revenue sharing agreements. The
Company believes the amounts paid to Pizza Hut and Espinoza were fair and
reasonable and were on terms at least as favorable as would be available from
non-affiliated parties.
During fiscal 1996, the Company's subsidiary in Spain subcontracted
stuffing services to Tuexa Export, S.L. ("Tuexa"). Mr. Moya was a major
shareholder of Tuexa. The Company was invoiced and has paid $392,030 for work
performed during fiscal 1996. The Company requested Mr. Moya, as an
accommodation to the Company, concerning the Company's sale of Tuexa, to remain
a shareholder of such company. As of October 8, 1996, Mr. Moya sold his interest
in Tuexa for a nominal amount, per prior agreement. The Company believes that
the arrangements with and the amount paid to Tuexa were fair and reasonable and
were on terms at least as favorable as would be available from non-affiliated
parties.
FUTURE TRANSACTIONS
In the future, all transactions between the Company and its affiliated
entities, executive officers, directors or significant shareholders will be on
terms which will continue to be no less favorable to the Company than the
Company could obtain from non-affiliated parties.
PROPOSAL NO. 2
RATIFICATION OF INDEPENDENT ACCOUNTANTS
Coopers & Lybrand L.L.P. has served as the Company's independent
accountants since its appointment for fiscal 1992. The Board, on the unanimous
recommendation of the Audit Committee, has selected Coopers & Lybrand L.L.P as
the Company's independent accountants for the fiscal year ending July 31, 1997,
subject to ratification by the shareholders at the Annual Meeting.
Representatives of Coopers & Lybrand L.L.P. are expected to be present at the
meeting to respond to questions and will have an opportunity to make a statement
if they desire to do so.
All services provided to the Company by Coopers & Lybrand L.L.P. were
approved by the Audit Committee. The Audit Committee also considered the
possible effect on the independence of Coopers & Lybrand L.L.P. by reason of its
rendering such services.
15
<PAGE>
Audit services of Coopers & Lybrand L.L.P. for fiscal 1996 included the
examination of the consolidated financial statements, services related to
filings with the SEC, and the performance of limited reviews of the Company's
unaudited financial information.
The affirmative vote of a majority of the votes cast on this proposal will
constitute ratification of the appointment of Coopers & Lybrand L.L.P.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE RATIFICATION OF THE APPOINTMENT
OF COOPERS & LYBRAND L.L.P. AS INDEPENDENT PUBLIC ACCOUNTANTS FOR FISCAL YEAR
1997.OTHER MATTERS
As of the date of this Proxy Statement, the Board knows of no other
business that will be presented by management for consideration at the Annual
Meeting. If any other business properly comes before the Annual Meeting, the
proxy holders intend to vote the proxies as recommended by the Board.
SHAREHOLDER PROPOSALS FOR 1998 ANNYUAL MEETING
Shareholder proposals intended to be presented at the 1998 annual meeting
of the shareholders must be received by the Company in writing no later than
July 23, 1997. Proposals must be mailed to Play-By-Play Toys & Novelties, Inc.,
4400 Tejasco, San Antonio, Texas 78218-0267, Attention: Secretary, Saul Gamoran.
16
<PAGE>
ANNUAL REPORT (FORM 10-K)
The Company undertakes, on written request and without charge, to provide
each person from whom the accompanying Proxy is solicited with a copy of the
Company's Annual Report on Form 10-K for the fiscal year ended July 31, 1996, as
filed with the SEC, including the financial statements and schedules. Requests
should be addressed to PLAY-BY-PLAY Toys & Novelties, Inc., 4400 Tejasco, San
Antonio, Texas 78218-0267, Attention: Secretary, Saul Gamoran.
By Order of the Board of Directors
/s/ SAUL GAMORAN
Saul Gamoran
Executive Vice President,
General Counsel and Secretary
November 19, 1996
17
<PAGE>
PLAY-BY-PLAY TOYS & NOVELTIES, INC
4400 Tejasco
San Antonio, Texas 78218-0267
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby appoints Arturo G. Torres, Mark A. Gawlik and
Saul Gamoran, or any one or more of them, as proxies, each with the power to
appoint his substitute, and hereby authorizes each of them to represent and to
vote, as designated below, all the shares of common stock of Play By Play Toys &
Novelties, Inc. (the "Company") held of record by the undersigned on November
19, 1996 at the Annual Meeting of Shareholders to be held on December 9, 1996,
or any adjournments thereof.
1. ELECTION OF DIRECTORS
FOR all nominees listed below WITHHOLD AUTHORITY
(except as marked to the To vote for all nominees listed
contrary below) [ ] below [ ]
(INSTRUCTIONS TO WITHHOLD AUTHORITY TO VOTE FOR ANY INDIVIDUAL
NOMINEE, STRIKE A LINE THROUGH THE NOMINEE'S NAME IN THE LIST BELOW)
Mark A. Gawlik, Tomas Duran, James F. Place
2. Proposal to ratify the appointment of Coopers & Lybrand L.L.P., certified
public accountants, as the independent auditors for the Company for the fiscal
year ending July 31, 1997.
FOR [ ] AGAINST [ ] ABSTAIN [ ]
3. In their discretion, the proxies are authorized to vote upon such other
business as may properly come before the meeting or any adjournments thereof.
(BACK OF PROXY CARD)
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 PROPOSALS 1 AND 2.
Please sign exactly as name appears below. When shares are held by joint
tenants, both should sign. When signing as attorney, executor, administrator,
trustee or guardian, please give full title as such. If a corporation, please
sign full corporate name by President or authorized officer. If a partnership,
please sign in partnership name by authorized person.
Dated ____________________________
----------------------------------
Signature
----------------------------------
Signature if held jointly
PLEASEMARK, SIGN, DATE AND RETURN THE PROXY CARD
PROMPTLY USING THE ENCLOSED ENVELOPE.
