<PAGE>
SCHEDULE 14A
(RULE 14A-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE
SECURITIES EXCHANGE ACT OF 1934
Filed by the Registrant /X/
Filed by a Party other than the Registrant / /
Check the appropriate box:
/ / Preliminary Proxy Statement
/ / Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
/X/ Definitive Proxy Statement
/ / Definitive Additional Materials
/ / Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
OAKLEY, INC.
- --------------------------------------------------------------------------------
(Name of Registrant as Specified in Its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of filing fee (Check the appropriate box):
/X/ No fee required.
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
(1) Title of each class of securities to which transaction applies:
---------------------------------------------------------------------------
(2) Aggregate number of securities to which transaction applies:
---------------------------------------------------------------------------
(3) Per unit price or other underlying value of transaction computed pursuant
to Exchange Act Rule 0-11 (Set forth the amount on which the filing fee is
calculated and state how it was determined):
---------------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
---------------------------------------------------------------------------
(5) Total fee paid:
---------------------------------------------------------------------------
/ / Fee paid previously with preliminary materials:
---------------------------------------------------------------------------
/ / Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
---------------------------------------------------------------------------
(2) Form, Schedule or Registration Statement No.:
---------------------------------------------------------------------------
(3) Filing Party:
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(4) Date Filed:
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<PAGE>
OAKLEY, INC.
ONE ICON
FOOTHILL RANCH, CALIFORNIA 92610
------------------------
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON JUNE 19, 1998
------------------------
You are cordially invited to attend the 1998 Annual Meeting of Shareholders
(the "Meeting") of OAKLEY, INC. (the "Company" or "Oakley") to be held on
Friday, June 19, 1998, at 10:00 a.m. at the Company's headquarters in Foothill
Ranch, California, for the following purposes:
1. To elect 7 Directors to serve as such until the next Annual Meeting of
Shareholders and until their successors are elected and qualified;
2. To ratify the selection of Deloitte & Touche LLP to serve as independent
auditors of the Company for the fiscal year ending December 31, 1998; and
3. To transact such other business as may properly come before the Meeting
or any adjournment(s) thereof.
Only shareholders of record at the close of business on April 23, 1998, will
be entitled to notice of, and to vote at, the Meeting or any adjournment(s)
thereof.
WHETHER OR NOT YOU EXPECT TO BE AT THE MEETING, PLEASE SIGN AND DATE THE
ENCLOSED PROXY WHICH IS BEING SOLICITED BY THE BOARD OF DIRECTORS, AND RETURN IT
PROMPTLY IN THE ENCLOSED ENVELOPE. THE PROXY IS REVOCABLE AT ANY TIME PRIOR TO
THE EXERCISE THEREOF BY WRITTEN NOTICE TO THE COMPANY, AND SHAREHOLDERS WHO
ATTEND THE MEETING MAY WITHDRAW THEIR PROXIES AND VOTE THEIR SHARES PERSONALLY
IF THEY SO DESIRE.
BY ORDER OF THE BOARD OF DIRECTORS
[SIG]
Donna Gordon
SECRETARY
Foothill Ranch, California
Dated: April 27, 1998
<PAGE>
OAKLEY, INC.
ONE ICON
FOOTHILL RANCH, CALIFORNIA 92610
------------------------
PROXY STATEMENT
FOR
ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON JUNE 19, 1998
This Proxy Statement is furnished to shareholders of Oakley, Inc. (the
"Company" or "Oakley"), in connection with the solicitation of proxies in the
form enclosed herewith for use at the Annual Meeting of Shareholders of the
Company to be held on Friday, June 19, 1998, at 10:00 a.m. at the Company's
headquarters in Foothill Ranch, California, and at any and all adjournments or
postponements thereof (the "Meeting"), for the purposes set forth in the Notice
of Meeting. This Proxy Statement and the enclosed form of proxy are being first
mailed to shareholders on April 30, 1998.
This solicitation is made by mail on behalf of the Board of Directors of the
Company (the "Board of Directors"). Costs of the solicitation will be borne by
the Company. Further solicitation of proxies may be made by telephone,
telegraph, fax or personal interview by the Directors, officers and employees of
the Company and its affiliates, who will not receive additional compensation for
the solicitation. The Company will reimburse banks, brokerage firms and other
custodians, nominees and fiduciaries for reasonable expenses incurred by them in
sending proxy materials to shareholders.
Holders of record of the Common Stock, $.01 par value per share, of the
Company (the "Common Stock") as of the close of business on the record date,
April 23, 1998, are entitled to receive notice of, and to vote at, the Meeting.
Each share of Common Stock entitles the holder to one vote. At the close of
business on March 31, 1998, there were 70,662,720 shares of Common Stock issued
and outstanding.
Shares represented by proxies in the form enclosed, if the proxies are
properly executed and returned and not revoked, will be voted as specified.
Where no specification is made on a properly executed and returned proxy, the
shares will be voted FOR the election of all nominees for Director and FOR the
ratification of the selection of Deloitte & Touche LLP to serve as independent
auditors of the Company. To be voted, proxies must be filed with the Secretary
of the Company prior to voting. Proxies may be revoked at any time before voting
by filing a notice of revocation with the Secretary of the Company, by filing a
later dated proxy with the Secretary of the Company or by voting in person at
the Meeting. Shares represented by proxies that reflect abstentions or "broker
non-votes" (i.e., shares held by a broker or nominee which are represented at
the Meeting, but with respect to which such broker or nominee is not empowered
to vote on a particular proposal) will be counted as shares that are present and
entitled to vote for purposes of determining the presence of a quorum.
The Board of Directors knows of no matters to come before the Meeting other
than the matters referred to in this Proxy Statement. If, however, any matters
properly come before the Meeting, it is the intention of each of the persons
named in the accompanying proxy to vote such proxies in accordance with such
person's discretionary authority to act in such person's best judgment.
The principal executive offices of the Company are located at One Icon,
Foothill Ranch, California 92610.
1
<PAGE>
PROPOSAL 1: ELECTION OF DIRECTORS
(ITEM 1 ON PROXY CARD)
Pursuant to the Company's Amended and Restated Articles of Incorporation
(the "Articles"), Directors are elected at each Annual Meeting of Shareholders
and hold office until the next Annual Meeting of Shareholders and until their
successors shall have been elected and qualified. If, for any reason, the
Directors are not elected at the annual meeting, they may be elected at a
special meeting of shareholders called for that purpose in the manner provided
by the Company's Bylaws. The Company's Bylaws currently authorize a Board of
Directors consisting of not less than one nor more than nine persons, and
Oakley's Board of Directors currently consists of seven Directors.
The nominees for election to the seven positions on the Board of Directors
to be voted upon at the Meeting are Jim Jannard, Mike Parnell, Link Newcomb,
Irene Miller, Orin Smith, Michael Jordan and William Schmidt. Irene Miller, Orin
Smith, Michael Jordan and William Schmidt (the "Independent Directors") are not
employed by, or affiliated with, the Company. Unless authority to vote for the
election of Directors has been specifically withheld, the persons named in the
accompanying proxy intend to vote for the election of Jim Jannard, Mike Parnell,
Link Newcomb, Irene Miller, Orin Smith, Michael Jordan and William Schmidt to
hold office as Directors for a term of one year and until their successors are
elected and qualified at the next Annual Meeting of Shareholders. All nominees
have advised the Board of Directors that they are able and willing to serve as
Directors.
If any nominee becomes unavailable for any reason (which is not
anticipated), the shares represented by the proxies may be voted for such other
person or persons as may be determined by the holders of the proxies (unless a
proxy contains instructions to the contrary). In no event will the proxy be
voted for more than seven nominees.
VOTE
Each Director will be elected by a favorable vote of a majority of the votes
cast at the Meeting. Accordingly, abstentions or broker non-votes as to the
election of Directors will not affect the outcome. Unless instructed to the
contrary in the proxy, the shares represented by the proxies will be voted FOR
the election of the seven nominees named above as Directors.
PROPOSAL 2: RATIFICATION OF SELECTION OF INDEPENDENT AUDITORS
(ITEM 2 ON PROXY CARD)
The firm of Deloitte & Touche LLP, the Company's independent auditors for
the year ended December 31, 1997, was selected by the Board of Directors, upon
the recommendation of the Audit Committee, to act in such capacity for the
fiscal year ending December 31, 1998, subject to ratification by the
shareholders. There are no affiliations between the Company and Deloitte &
Touche LLP, its partners, associates or employees, other than as pertain to the
engagement of Deloitte & Touche LLP as independent auditors for the Company in
the previous year. Representatives of Deloitte & Touche LLP are expected to be
present at the Meeting and will be given the opportunity to make a statement if
they so desire and to respond to appropriate questions.
VOTE
The favorable vote of a majority of the votes cast regarding the proposal is
required to ratify the selection of Deloitte & Touche LLP. Accordingly,
abstentions or broker non-votes will not affect the outcome of the vote on the
proposal. Unless instructed to the contrary in the proxy, the shares represented
by the proxies will be voted FOR the proposal to ratify the selection of
Deloitte & Touche LLP to serve as independent auditors for the Company for the
fiscal year ending December 31, 1998.
2
<PAGE>
BOARD OF DIRECTORS AND EXECUTIVE OFFICERS
DIRECTORS AND EXECUTIVE OFFICERS
The following table sets forth certain information (as of March 31, 1998)
concerning the directors and executive officers of the Company:
<TABLE>
<CAPTION>
NAME AGE POSITION
- ------------------- --- ----------------------------------------------------------
<S> <C> <C>
Jim Jannard 48 Chairman of the Board, President and Director
Mike Parnell 45 Vice Chairman and Director
Link Newcomb 36 Chief Executive Officer and Director
Tom George 42 Chief Financial Officer
Donna Gordon 38 Vice President of Finance and Secretary
Kent Lane 44 Vice President of Manufacturing
Carlos Reyes 31 Vice President of Development
Colin Baden 36 Vice President of Design
Jon Krause 34 Vice President of Operations
Irene Miller 45 Director
Orin Smith 55 Director
Michael Jordan 35 Director
William Schmidt 50 Director
</TABLE>
EXECUTIVE OFFICERS
Mr. Jim Jannard, the founder of the Company, has been Chairman of the Board
and President of Oakley since its inception in 1975.
Mr. Mike Parnell joined Oakley in 1985 and has been a Director since 1986.
From 1986 to September 1997, Mr. Parnell served as Chief Executive Officer of
Oakley, and since September 1997, he has served as Vice Chairman. From 1974 to
1985, Mr. Parnell was employed in various positions with OP Sunwear, including
Vice President of Marketing from 1981 to 1985.
Mr. Link Newcomb joined Oakley in June 1994 as its Vice President of
International Sales. Mr. Newcomb served as Executive Vice President from April
1995 until January 1997, as Chief Financial Officer from July 1995 until January
1997 and as Chief Operating Officer from January 1997 to September 1997. In
September 1997, Mr. Newcomb was named Chief Executive Officer. Mr. Newcomb was
appointed to the Board of Directors in January 1997. Prior to joining Oakley,
Mr. Newcomb was an attorney for five years at Skadden, Arps, Slate, Meagher &
Flom LLP, Los Angeles, California. Mr. Newcomb has also been a certified public
accountant since 1984.
Mr. Tom George joined Oakley in October 1997 as its Chief Financial Officer.
Prior to joining Oakley, Mr. George last served as Senior Vice President of
Finance and Chief Financial Officer at REMEC, a designer and manufacturer of
microwave wireless electronics, a position he had held since 1990. Mr. George
has more than 20 years experience in finance and is also a certified public
accountant.
Ms. Donna Gordon joined Oakley in February 1986. Ms. Gordon has held a
number of positions with Oakley, assuming her current position as Vice President
of Finance in October 1995. Ms. Gordon has also been Corporate Secretary since
1993 and Controller since 1990.
Mr. Kent Lane joined Oakley in October 1994 and became Vice President of
Manufacturing in October 1995. Mr. Lane served as Director of Manufacturing from
January 1995 until October 1995. Mr. Lane has 21 years experience in the
manufacturing industry at various companies, including Kaiser Steel for six
years and Water Factory Systems, a manufacturer of water purification equipment,
for eight years.
Mr. Carlos Reyes joined Oakley in July 1989 and became Vice President of
Development in December 1995. Mr. Reyes has held various positions with Oakley,
beginning as a lens coating assistant in
3
<PAGE>
the manufacturing department. Mr. Reyes was promoted to Lens Coating Manager in
1991 and to a leadership position in Oakley's design department in 1993.
Mr. Colin Baden joined Oakley in February 1996 as Director of Design and
became Vice President of Design in February 1997. Prior to joining Oakley, Mr.
Baden was a partner at Lewis Architects of Seattle, Washington for six years and
began advising Oakley on company image issues in 1993.
Mr. Jon Krause joined Oakley in November 1996 as its Director of Information
Technology and was named Vice President of Operations in January 1998. Prior to
joining Oakley, Mr. Krause was a senior manager with Andersen Consulting where
he spent ten years specializing in information technology and manufacturing
operations.
BOARD OF DIRECTORS
Ms. Irene Miller has been an Oakley director since shortly after the
Company's initial public offering in August 1995. Ms. Miller is a private
investor and until June 1997 was Vice Chairman and Chief Financial Officer of
Barnes & Noble, Inc., the world's largest bookseller. She joined Barnes & Noble
in 1991 as Senior Vice President, Corporate Finance, became Executive Vice
President and Chief Financial Officer in 1993 and Vice Chairman in 1995. Prior
to joining Barnes & Noble, Ms. Miller worked as an investment banker at Morgan
Stanley & Co. Incorporated from 1986 to 1990 and at Rothschild, Inc. from 1982
to 1986. Ms. Miller is also a director of Barnes & Noble, Inc.
Mr. Orin Smith is the President and Chief Operating Officer of Starbucks
Corporation and has been an Oakley director since shortly after the Company's
initial public offering in August 1995. Mr. Smith joined Starbucks in 1990 as
Chief Financial Officer and Vice President, became Executive Vice President and
Chief Financial Officer in 1993 and was named President and Chief Operating
Officer in 1994. Prior to joining Starbucks, Mr. Smith was Executive Vice
President and Chief Financial and Administrative Officer of Danzas USA, a
subsidiary of Europe's largest transportation company. Mr. Smith is also a
director of Starbucks.
Mr. Michael Jordan has been an Oakley director since shortly after the
Company's initial public offering in August 1995. Mr. Jordan has achieved one of
the most extraordinary records in professional sports during his career with the
Chicago Bulls and is completing his thirteenth season with the Bulls this year.
Among other achievements, Mr. Jordan was voted Most Valuable Player of the
National Basketball Association in 1988, 1991, 1992 and 1996. He also captured
the NBA's scoring title in seven consecutive seasons, from 1987 through 1993 and
again from 1996 through 1998. Prior to joining the Chicago Bulls, Mr. Jordan was
an All American player at the University of North Carolina, from which he
graduated in 1986.
Mr. William Schmidt is the Vice President of Worldwide Sports Marketing for
Gatorade and has been an Oakley director since October 1997. Mr. Schmidt joined
the Quaker Oats Company in 1984 as Director of Sports Marketing for Gatorade and
became Vice President of Sports Marketing for Gatorade in 1986, responsible for
the development and implementation of sponsorship programs, including those for
several professional and amateur sports organizations.
BOARD OF DIRECTORS MEETINGS AND COMMITTEES
The Board of Directors held five meetings in 1997, including regularly
scheduled and special meetings. The Board of Directors has established standing
audit, compensation, stock option and nominating committees as set forth below.
AUDIT COMMITTEE. The Audit Committee currently consists of two Independent
Directors: Ms. Miller and Mr. Smith. The Audit Committee makes recommendations
to the Board of Directors concerning the engagement of independent auditors,
reviews with the independent auditors the plans and results of the audit
engagement, approves professional services provided by the independent auditors,
reviews the independence of the independent public accountants, considers the
range of audit and non-audit fees and
4
<PAGE>
reviews the adequacy of the Company's internal accounting controls. The Audit
Committee met four times in 1997.
COMPENSATION COMMITTEE. The Compensation Committee currently consists of
Ms. Miller and Mr. Smith. The Compensation Committee determines, and reports to
the Board of Directors with respect to, compensation for the Company's executive
officers. The Compensation Committee met two times in 1997.
STOCK OPTION COMMITTEE. The Stock Option Committee currently consists of
Mr. Parnell and Ms. Miller. The Stock Option Committee reports to the Board of
Directors regarding, and administers, the Company's 1995 Stock Incentive Plan,
except that the entire Board of Directors administers the 1995 Stock Incentive
Plan with respect to directors and officers subject to Section 16 of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"). The Stock
Option Committee met six times in 1997.
NOMINATING COMMITTEE. The Nominating Committee currently consists of
Messrs. Parnell and Jordan. The Nominating Committee is responsible for
selecting a slate of potential Directors to be nominated by the Company's Board
of Directors at each annual meeting of shareholders. Under the Company's Bylaws,
nominations for the election of directors at the 1999 annual meeting of
shareholders, other than those made by the Board of Directors, must be made in
writing and must be received by the Company no later than December 29, 1998. The
Nominating Committee met in April 1997 and March 1998 and recommended to the
Company's Board of Directors the seven nominees for Director referred to herein.
COMPENSATION OF DIRECTORS
Directors who are employees of the Company receive no compensation for
serving on the Board. Directors who are not employees of the Company receive a
retainer fee of $25,000 per year for their services. Under the 1995 Stock
Incentive Plan, each non-employee Director may irrevocably elect annually to
waive the receipt of all or any part of his or her annual retainer and/or
meeting fees (if any) for the year commencing immediately following each annual
shareholders meeting and in lieu thereof receive a fixed number of non-qualified
stock options for such year, with the number of such options fixed by the Board
of Directors, based on the amount of fees so waived and an independent appraisal
of the intrinsic value of such options. Such options are exercisable in full on
March 1 of the year following the date of grant. The option price per share of
Common Stock purchaseable under such options is 100% of the fair market value of
the Common Stock on the date of grant. All Directors are reimbursed for expenses
incurred in connection with attendance at Board or committee meetings. On
February 11, 1997, in recognition of the additional time and effort required of
the Company's non-employee Directors in addressing certain financial and
operating issues, the Board of Directors approved a separate grant of options to
each of such Directors to acquire 3,500 shares of Common Stock with an exercise
price equal to the closing price of the Common Stock on the date of grant.
5
<PAGE>
SUMMARY COMPENSATION TABLE
The following table sets forth the compensation paid by the Company to its
Chief Executive Officer and the four other most highly compensated executive
officers serving as of December 31, 1997 (the "Named Executive Officers") for
the fiscal years ended December 31, 1995, 1996 and 1997.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG-TERM
COMPENSATION
AWARDS
ANNUAL COMPENSATION ----------------
-------------------------------------------- SECURITIES
OTHER ANNUAL UNDERLYING ALL OTHER
NAME AND PRINCIPAL POSITION YEAR SALARY($) BONUS($) COMPENSATION($) OPTIONS/SARS(#) COMPENSATION($)(1)
- -------------------------------- --------- --------- --------------- ---------------- ---------------- -------------------
<S> <C> <C> <C> <C> <C> <C>
Jim Jannard .................... 1997 -- (2) -- (2) -- -- --
Chairman of the Board and 1996 219,633 -- -- -- --
President 1995 380,697 9,312,252(3) -- -- --
Link Newcomb ................... 1997 306,251 -- -- 513,000 2,000
Chief Executive Officer(4) 1996 157,212 362,000 -- 17,500 300
1995 91,346 236,607 201,860(5) 173,914 --
Mike Parnell ................... 1997 302,885 -- -- 13,000 2,000
Vice Chairman(6) 1996 185,577 362,000(3) -- 17,500 300
1995 132,500 1,567,228 -- 86,958 --
Kent Lane ...................... 1997 125,000 -- -- 17,000 2,000
Vice President of Manufacturing 1996 116,165 65,250 -- 26,674 288
1995 96,900 26,000 -- 21,740 --
Donna Gordon ................... 1997 110,000 -- -- 13,000 2,000
Vice President of Finance and 1996 106,923 45,250 66,743(7) 25,174 300
Secretary 1995 79,898 67,923 -- 26,088 --
</TABLE>
- ------------------------
(1) Represents the Company's matching 401(k) plan contribution.
(2) Mr. Jannard has chosen not to receive any base salary and was not entitled
to payment of any annual bonus for fiscal 1997. See "Compensation Committee
Report -- Compensation of the Chairman and President."
(3) Includes bonus payments for 1995 under the Company's Executive Officer
Performance Bonus Plan of $1,096,524 and $657,914, respectively, for Messrs.
Jannard and Parnell. Also includes for 1995 bonuses paid with respect to
periods prior to the Company's initial public offering of Common Stock.
Amounts shown are net of approximately $5,979,823 for Mr. Jannard, and
$664,425 for Mr. Parnell, which represent in each case amounts paid by the
Company in respect of Federal and state income taxes on the Company's income
during 1995. The Company was an S corporation for Federal and state income
tax purposes through August 1995.
(4) Mr. Newcomb served as Chief Operating Officer from January 1997 until
September 1997, at which time he began serving as Chief Executive Officer.
(5) Represents commissions on sales and $75,505 as reimbursement for relocation
and related expenses in 1995.
(6) Mr. Parnell served as Chief Executive Officer until September 1997.
(7) Represents payment to Ms. Gordon to conclude a prior agreement regarding an
automobile.
6
<PAGE>
The following table sets forth information concerning grants of stock
options to the Named Executive Officers during the fiscal year ended December
31, 1997.
OPTION/SAR GRANTS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
INDIVIDUAL GRANTS
- ------------------------------------------------------------------------------------------- POTENTIAL REALIZABLE
NUMBER OF VALUE AT ASSUMED
SECURITIES % OF TOTAL ANNUAL RATES OF STOCK
UNDERLYING OPTIONS/ SARS PRICE APPRECIATION FOR
OPTIONS/SARS GRANTED TO EXERCISE OR OPTION TERM
GRANTED EMPLOYEES IN BASE PRICE EXPIRATION ----------------------
NAME (#)(1) FISCAL YEAR ($/SH) DATE 5% ($)(2) 10% ($)(2)
- --------------------------------- ------------- --------------- ----------- ----------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C>
Jim Jannard...................... 0 0 -- -- -- --
Link Newcomb..................... 300,000 21.8 8.500 2/11/07 1,603,681 4,064,043
200,000 14.5 10.8125 9/18/07 1,359,985 3,446,468
13,000 0.9 9.3125 12/16/07 76,136 192,942
Mike Parnell..................... 13,000 0.9 9.3125 12/16/07 76,136 192,942
Kent Lane........................ 7,000 0.5 10.8125 9/18/07 47,599 120,626
10,000 0.7 9.3125 12/16/07 58,566 148,416
Donna Gordon..................... 13,000 0.9 9.3125 12/16/07 76,136 192,942
</TABLE>
- ------------------------
(1) The options identified in this table were granted under the Company's 1995
Stock Incentive Plan and are exercisable in equal 25% installments on each
of the first four anniversaries of the date of grant. In the event of the
termination of a Named Executive Officer's employment within 12 months
following a change in control (as defined in the stock option agreements
evidencing such grants), the options will become immediately vested and
exercisable in full upon such termination of employment. To the extent
permitted under applicable law, the options granted are "incentive stock
options" for purpose of Section 422 of the Internal Revenue Code of 1986, as
amended, and otherwise are nonqualified stock options.
(2) The potential gains shown are net of the option exercise price and do not
include the effect of any taxes associated with exercise. The amounts shown
are for the assumed rates of appreciation only, do not constitute
projections of future stock price performance and may not necessarily be
realized. Actual gains, if any, on stock option exercises depend on the
future performance of the Common Stock, continued employment of the optionee
through the term of the option and other factors.
The following table sets forth information concerning the fiscal year-end
value of unexercised stock options held by the Named Executive Officers as of
December 31, 1997. No options were exercised by the Named Executive Officers in
fiscal 1997.
AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL YEAR AND FY-END OPTION/SAR VALUES
<TABLE>
<CAPTION>
NUMBER OF SECURITIES VALUE OF
UNDERLYING UNEXERCISED
UNEXERCISED IN-THE-MONEY
OPTIONS/SARS AT OPTIONS/SARS
FY-END (#) AT FY-END ($)(1)
--------------------- ----------------
SHARES ACQUIRED ON VALUE EXERCISABLE/ EXERCISABLE/
NAME EXERCISE (#) REALIZED ($) UNEXERCISABLE UNEXERCISABLE
- ----------------------------------------- --------------------- ----------------- --------------------- ----------------
<S> <C> <C> <C> <C>
Jim Jannard.............................. 0 0 0/0 0/0
Link Newcomb............................. 0 0 91,331/613,083 0/168,750
Mike Parnell............................. 0 0 47,853/69,605 0/0
Kent Lane................................ 0 0 17,537/47,877 0/0
Donna Gordon............................. 0 0 19,338/44,924 0/0
</TABLE>
- ------------------------
(1) Based upon the reported closing price of $9.0625 per share of Common Stock
on the New York Stock Exchange on December 31, 1997.
7
<PAGE>
EMPLOYMENT AGREEMENTS
Neither Mr. Jannard nor Mr. Parnell has a written employment agreement with
the Company. Since the expiration of their former employment agreements with the
Company in 1997, their employment has continued on an at-will basis. Mr. Jannard
currently receives no base salary but has a target bonus under the Performance
Bonus Plan of $1,000,000 per year, while Mr. Parnell has an annual base salary
of $150,000 and a target bonus of $150,000 per year. In addition, Messrs.
Jannard and Parnell have each entered into a Consultant Agreement with the
Company providing that within 30 days following termination of their employment,
the Company will have the option to retain them as consultants at the rate of
$100,000 per year for a period expiring on August 1, 2002 (or, if later, the
date that is two years from the date the Company exercises such option). The
Consultant Agreements each contain a non-competition provision effective through
the end of the consultant period. In addition, pursuant to their prior
employment agreements, each executive is entitled to Company-paid medical
insurance for himself and his immediate family during his lifetime.
On January 31, 1997, Mr. Newcomb entered into an employment agreement with
the Company which reflected his promotion to Chief Operating Officer and
replaced his prior employment agreement. Mr. Newcomb's agreement has a term of
three years, which will automatically be extended by one year on each
anniversary of the agreement, unless either party provides written notice that
it does not wish to extend the term. The agreement provides for a base salary of
not less than $350,000 per year and an annual target bonus under the Performance
Bonus Plan of not less than $200,000. In addition, in connection with his
promotion first to Chief Operating Officer and then to Chief Executive Officer,
Mr. Newcomb received grants of options to purchase 300,000 and 200,000 shares of
the Company's Common Stock at an exercise price equal to the closing price of
the Common Stock on the respective dates of grant. Mr. Newcomb's agreement also
contains a non-competition provision effective through the term of the agreement
and, in the event his employment is terminated by the Company for cause or by
Mr. Newcomb without good reason, for a period of two years thereafter.
On October 6, 1997, Mr. George entered into an employment agreement with the
Company whereby he will serve as the Chief Financial Officer of the Company. Mr.
George's agreement has a term of two years, which will automatically be extended
by one year on each anniversary of the agreement, unless either party provides
written notice that it does not wish to extend the term. The agreement provides
for a base salary of $195,000 per year and an annual target bonus under the
Performance Bonus Plan of not less than $80,000. In addition, pursuant to the
terms of the agreement, Mr. George received a grant of options to purchase
90,000 shares of the Company's Common Stock with an exercise price equal to the
closing price of the Common Stock on his date of hire. The agreement also
provides for reimbursement of certain relocation expenses incurred by Mr.
George. Mr. George's agreement also contains a non-competition provision
effective through the term of the agreement and, in the event his employment is
terminated by the Company for cause or by Mr. George without good reason, for a
period of two years thereafter.
8
<PAGE>
COMPENSATION COMMITTEE REPORT
The report of the Compensation Committee of the Board of Directors with
respect to compensation in fiscal 1997 is as follows:
COMPENSATION PHILOSOPHY
The overall policy of the Compensation Committee is to provide the Company's
executive officers and other key employees with competitive compensation
opportunities based upon their contribution to the financial success of the
Company and their personal performance. It is the Compensation Committee's
objective to have a substantial portion of each officer's compensation
contingent upon the Company's performance as well as upon the officer's own
level of performance. Accordingly, the compensation package for each executive
officer is comprised of three primary elements: (i) base salary which reflects
individual performance and is designed primarily to be competitive with salary
levels in effect at companies within and outside the industry with which the
Company competes for executive talent, (ii) annual variable performance awards
payable in cash and tied to the Company's achievement of financial performance
targets and (iii) long-term stock-based incentive awards which strengthen the
mutuality of interests between the executive officers and the Company's
shareholders. As an executive officer's level of responsibility increases, it is
the Company's general intent that a greater portion of the executive officer's
total compensation be dependent upon Company performance and stock price
appreciation than upon base salary.
COMPONENTS OF COMPENSATION
The principal components of executive officer compensation are generally as
follows:
- BASE SALARY. With respect to Messrs. Newcomb and George, their base
salary is fixed in accordance with the terms of their respective
employment agreements. See "Employment Agreements." Mr. Jannard has chosen
not to receive any base salary from the Company. With respect to officers
who do not have employment agreements with the Company, salary is
determined on the basis of individual performance and competitive market
practices as reflected in informal information available to the Company.
- ANNUAL PERFORMANCE BONUS. Annual bonuses are payable to the Company's
executive officers under the Company's Executive Officer Performance Bonus
Plan (the "Performance Bonus Plan") based on the Company's achievement of
certain pre-set corporate financial performance targets established for
the fiscal year. The minimum target bonuses for Messrs. Newcomb and George
are set forth in their respective employment agreements. With respect to
officers who do not have employment agreements with the Company, their
target bonuses are determined on the basis of individual performance and
competitive market practices as reflected in informal information
available to the Company. The actual financial performance (measured by
operating income) for fiscal 1997 was significantly below the target
established. Accordingly, no bonuses were paid to the Company's executive
officers with respect to fiscal 1997.
- LONG-TERM INCENTIVE COMPENSATION. Long-term incentives are provided
through stock option grants and other stock-based awards under the
Company's 1995 Stock Incentive Plan. Awards under the 1995 Stock Incentive
Plan are designed to further align the interests of each executive officer
with those of the shareholders and provide each officer with a significant
incentive to manage the Company from the perspective of an owner with an
equity stake in the Company's business. Due to certain requirements of
Rule 16b-3 under the Exchange Act, grants to the Named Executive Officers
are made by the entire Board of Directors. In February and September 1997,
Mr. Newcomb received grants of options to purchase 300,000 and 200,000
shares of Common Stock, respectively, to reflect his promotion first to
Chief Operating Officer and then to Chief Executive Officer. As part of a
broad-based grant of stock options made to a large group of key employees,
additional grants were made to Ms. Gordon, to Messrs. Newcomb, Parnell and
Lane and to other executive officers in December 1997.
9
<PAGE>
COMPENSATION OF THE CHAIRMAN AND PRESIDENT
Mr. Jannard has chosen not to receive any base salary from the Company. As
explained in "Components of Compensation--Annual Performance Bonus," Mr. Jannard
was not entitled to any bonus under the Performance Bonus Plan for fiscal 1997.
Mr. Jannard also did not receive a grant of stock options in fiscal 1997 under
the 1995 Stock Incentive Plan. Mr. Jannard is a major shareholder of the
Company.
COMPLIANCE WITH INTERNAL REVENUE CODE SECTION 162(M)
Section 162(m) of the Internal Revenue Code of 1986, as amended, generally
provides that publicly held companies may not deduct compensation paid to
certain of its top executive officers to the extent such compensation exceeds $1
million per officer in any year. However, pursuant to regulations issued by the
Treasury Department, certain limited exemptions to Section 162(m) apply with
respect to "qualified performance-based compensation" and to compensation paid
in certain circumstances by companies in the first few years following their
initial public offering of stock. The Company has taken steps to provide that
these exemptions will apply to compensation paid to its executive officers, and
the Company will continue to monitor the applicability of Section 162(m) to its
ongoing compensation arrangements. Accordingly, the Company does not expect that
amounts of compensation paid to its executive officers will fail to be
deductible by reason of Section 162(m).
IRENE MILLER
ORIN SMITH
JIM JANNARD*
MICHAEL JORDAN*
LINK NEWCOMB*
MIKE PARNELL*
WILLIAM SCHMIDT*
*With respect to that portion of the report entitled "--Long Term Compensation"
only.
THE COMPENSATION COMMITTEE REPORT WILL NOT BE DEEMED TO BE INCORPORATED BY
REFERENCE INTO ANY FILING BY THE COMPANY UNDER THE SECURITIES ACT OF 1933, AS
AMENDED, OR THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED, EXCEPT TO THE
EXTENT THAT THE COMPANY SPECIFICALLY INCORPORATES THE SAME BY REFERENCE.
10
<PAGE>
STOCK PRICE PERFORMANCE GRAPH
The following graph shows a comparison of cumulative total returns for
Oakley, Inc., the Standard & Poor's 500 Composite Index and the Standard &
Poor's Midcap 400 Index, during the period commencing on August 10, 1995, the
date of the Company's initial public offering, and ending on December 31, 1997.
The comparison assumes $100 was invested on August 10, 1995 in each of the
Common Stock, the Standard & Poor's 500 Composite Index and the Standard &
Poor's Midcap 400 Index and assumes the reinvestment of all dividends, if any.
At this time, the Company does not believe it can reasonably identify an
industry peer group, and therefore the Company has instead selected the Standard
& Poor's Midcap 400 Index, which includes companies with similar market
capitalizations to that of the Company, as a comparative index for purposes of
complying with certain requirements of the Securities and Exchange Commission.
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
COMPARISON CUMULATIVE TOTAL RETURN
<S> <C> <C> <C>
AMONG OAKLEY, INC.,
S&P 500 INDEX AND S&P 500 MIDCAP 400 INDEX
Oakley, Inc. S&P 500 Composite Index S&P Midcap 400
8/10/95 $100 $100 $100
12/31/95 $125 $111 $103
12/31/96 $81 $136 $123
12/31/97 $67 $182 $162
</TABLE>
<TABLE>
<CAPTION>
8/10/95 12/31/95 12/31/96 12/31/97
<S> <C> <C> <C> <C>
- -------------------------------------------------------------------------------------------------------
Oakley, Inc. $ 100 $ 125 $ 81 $ 67
S&P 500 Composite Index $ 100 $ 111 $ 136 $ 182
S&P Midcap 400 $ 100 $ 103 $ 123 $ 162
</TABLE>
THE STOCK PRICE PERFORMANCE GRAPH WILL NOT BE DEEMED TO BE INCORPORATED BY
REFERENCE INTO ANY FILING BY THE COMPANY UNDER THE SECURITIES ACT OF 1933, AS
AMENDED, OR THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED, EXCEPT TO THE
EXTENT THAT THE COMPANY SPECIFICALLY INCORPORATES THE SAME BY REFERENCE.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The members of the Company's Compensation Committee are Irene Miller and
Orin Smith. However, pursuant to certain requirements of Rule 16b-3 under the
Exchange Act, grants of stock options to the Named Executive Officers in 1997
were made by all the then members of the Board of Directors (with each of Mr.
Parnell and Mr. Newcomb abstaining with respect to his own option grants).
Messrs. Jannard, Parnell and Newcomb are officers of the Company. See "Certain
Transactions" immediately below.
11
<PAGE>
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
In June 1997, the Company entered into a lease agreement for the lease of an
office facility owned by the M. and M. Parnell Revocable Trust, of which Mr.
Parnell and his wife are the trustees. The lease has a term of four years with
monthly lease payments of $2,025. During 1997, the Company made aggregate
payments under such lease of $16,200.
As part of a distribution by the Company to its shareholders (the "S
Corporation Distribution") that included all of its and its predecessor's
previously earned and undistributed taxable S corporation earnings through the
date of the consummation of the Company's initial public offering, the Company
distributed certain aircraft to Mr. Jannard and a trust (the "Parnell Trust")
for the benefit of Mr. Parnell and his immediate family (collectively, the
"Principal Shareholders"). The Company leased back certain of such aircraft from
companies controlled by the Principal Shareholders ("Lessors"). Such leases have
terms of five years with aggregate annual lease payments of $100,000, and are
renewable at the option of the Company and the applicable Lessor. The Company
bears all costs and expenses of operating and maintaining the aircraft while
under lease. During 1997, the Company made aggregate payments to the Lessors
under such leases of $100,000.
In July 1995, the Company entered into a ten-year agreement with Mr. Jordan
for the endorsement of Oakley eyewear. Pursuant to such agreement, Mr. Jordan is
paid an annual retainer of $500,000 and received options to purchase 217,392
shares of Common Stock at an exercise price of $11.50 per share (the fair market
value on the date of grant). The Company paid Mr. Jordan $500,000 during 1997
pursuant to this agreement.
In January 1997, the Company borrowed $3.0 million from Mr. Jannard. This
amount, together with interest at the rate payable by the Company under its bank
credit agreement, was repaid in March 1997. Since the beginning of 1997, Mr.
Jannard has borrowed from the Company various amounts for use by Mr. Jannard in
connection with various matters unrelated to the business of Oakley. All of such
indebtedness was repaid by Mr. Jannard within one month of the date incurred.
The largest amount of such indebtedness outstanding at any time since the
beginning of 1997 was approximately $68,285.
Since early 1996, the Company has been paying the fees of its tax advisors
for certain work involving both the Company and Messrs. Jannard and Parnell.
Messrs. Jannard and Parnell reimbursed the Company for all of such fees in 1997,
in an aggregate amount equal to $272,906.
LEGAL PROCEEDINGS
The Company has been named as a nominal defendant in a putative derivative
lawsuit against certain of its directors and officers filed in March 1997 in the
California Superior Court for the County of Orange (the "Superior Court"). The
case is captioned BLACKMAN V. JAMES JANNARD, MIKE PARNELL AND DOES 1 THROUGH
100, Case No. 777098 (filed March 27, 1997) (the "California Derivative
Action").
In the California Derivative Action, the plaintiff, purporting to sue on
behalf of the Company, alleges claims for breach of fiduciary duty, constructive
fraud, unjust enrichment and violations of the insider trading provisions of the
California Corporations Code. The plaintiff's claims in the California
Derivative Action are, among other things, based upon alleged material
misstatements and omissions in certain of the Company's public statements and
Securities and Exchange Commission filings regarding the Company, its operations
and future prospects. The plaintiff seeks to recover damages and other relief on
behalf of the Company. The defendants filed a demurrer to the original complaint
in the California Derivative Action, and the plaintiff subsequently filed an
amended complaint. The defendants filed a demurrer to the amended complaint in
the California Derivative Action, and the Superior Court sustained the demurrer
with leave to amend in September 1997. The plaintiff subsequently filed a second
amended complaint in the California Derivative Action. The defendants then filed
a demurrer to the second amended complaint in the California Derivative Action,
and the Superior Court sustained the demurrer without leave to amend on December
19, 1997. On February 4, 1998, the Superior Court entered a final order of
dismissal of the California Derivative Action. On April 8, 1998, the plaintiff
in the California Derivative Action filed a notice of appeal with the Superior
Court.
Although it is too soon to predict the outcome of the California Derivative
Action with any certainty, based on its current knowledge of the facts, the
Company believes that the plaintiff's claims are without merit and intends to
defend the California Derivative Action vigorously.
12
<PAGE>
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth certain information available to the Company,
as of March 31, 1998, with respect to shares of its Common Stock (i) held by
those persons known to the Company to be the beneficial owners (as determined
under the rules of the Securities and Exchange Commission) of more than 5% of
such shares, (ii) held by each of the Directors and nominees, (iii) held by each
of the Named Executive Officers and (iv) held as a group by the Directors and
executive officers of the Company.
<TABLE>
<CAPTION>
PERCENTAGE OF
NAME AND ADDRESS SHARES OF COMMON STOCK
OF BENEFICIAL OWNER (1) COMMON STOCK OUTSTANDING
- -------------------------------------------------------------------------------- --------------- -----------------
<S> <C> <C>
DIRECTORS AND EXECUTIVE OFFICERS
Jim Jannard..................................................................... 38,002,000 53.8%
Mike Parnell(2)................................................................. 3,887,853(3) 5.5%
Link Newcomb.................................................................... 174,639(4) *
Kent Lane....................................................................... 20,145(5) *
Donna Gordon.................................................................... 20,860(6) *
Irene Miller.................................................................... 17,546(7) *
Orin Smith...................................................................... 6,700(8) *
Michael Jordan.................................................................. 204,296(9) *
William Schmidt................................................................. 3,090(10) *
Directors and executive officers as a group (13 persons)...................... 42,357,708(11) 59.7%
5% OR GREATER HOLDERS:
The Crabbe Huson Group, Inc..................................................... 6,751,800(12) 9.6%
M. and M. Parnell Revocable Trust............................................... 3,840,000 5.4%
</TABLE>
- ------------------------
(1) Unless otherwise indicated, the address of the beneficial owner is c/o
Oakley, Inc., One Icon, Foothill Ranch, California 92610.
(2) All of the shares beneficially owned by Mr. Parnell are held through the M.
and M. Parnell Revocable Trust, other than 47,853 shares issuable upon
exercise of stock options.
(3) Includes 47,853 shares issuable pursuant to stock options exercisable
within 60 days of March 31, 1998.
(4) Includes 166,331 shares issuable pursuant to stock options exercisable
within 60 days of March 31, 1998.
(5) Includes 17,537 shares issuable pursuant to stock options exercisable
within 60 days of March 31, 1998.
(6) Includes 19,338 shares issuable pursuant to stock options exercisable
within 60 days of March 31, 1998.
(7) Includes 13,200 shares issuable pursuant to stock options exercisable
within 60 days of March 31, 1998.
(8) Includes 3,500 shares issuable pursuant to stock options exercisable within
60 days of March 31, 1998.
(9) Includes 56,474 shares issuable pursuant to stock options exercisable
within 60 days of March 31, 1998.
(10) Includes 3,090 shares issuable pursuant to stock options exercisable within
60 days of March 31, 1998.
(11) Includes 344,219 shares issuable pursuant to stock options exercisable
within 60 days of March 31, 1998.
(12) Pursuant to the Schedule 13G filed as of February 5, 1998 with the
Securities and Exchange Commission, The Crabbe Huson Group, Inc. does not
directly own any shares of the Company. It shares voting and dispositive
power with respect to the 6,751,800 shares owned by approximately 60 of its
clients. The Crabbe Huson Group, Inc. disclaims beneficial ownership of all
shares owned by each of its clients and also disclaims that a "group" within
the meaning of Rule 13d-5(b) under the Exchange Act has been or will be
formed. The address of The Crabbe Huson Group, Inc. is 121 SW Morrison,
Suite 1400, Portland, Oregon 97204.
* Less than one percent.
13
<PAGE>
OTHER MATTERS
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE. Section 16(a) of
the Exchange Act requires the Company's executive officers and Directors, and
persons who own more than ten percent of a registered class of the Company's
equity securities, to file reports (Forms 3, 4 and 5) of stock ownership and
changes in ownership with the Securities and Exchange Commission and the New
York Stock Exchange. Officers, Directors and beneficial owners of more than ten
percent of the Company's stock are required by Securities and Exchange
Commission regulation to furnish the Company with copies of all such forms that
they file.
Based solely on the Company's review of the copies of such forms received by
it, and on written representations from certain reporting persons, the Company
believes that during fiscal 1997, all Section 16(a) filing requirements
applicable to its directors, officers and ten percent stockholders were complied
with, subject to the following exception: Robert Bruning, the Company's former
Chief Financial Officer, inadvertently failed to timely file a Form 4 reporting
a transaction in January of 1997. The report was filed on March 10, 1997.
SHAREHOLDERS' PROPOSALS. Proposals of shareholders intended to be presented
at the Company's Annual Meeting of Shareholders to be held in 1999 must be
received by the Company, marked to the attention of the Secretary, no later than
December 29, 1998. Proposals must comply with the requirements as to form and
substance established by the Securities and Exchange Commission for proposals in
order to be included in the proxy statement.
THE BOARD OF DIRECTORS
Foothill Ranch, California
14
<PAGE>
PROXY OAKLEY, INC. PROXY
COMMON STOCK
PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
THE UNDERSIGNED HEREBY APPOINT(S) MIKE PARNELL AND LINK NEWCOMB AS PROXIES
WITH FULL POWER OF SUBSTITUTION, HEREBY AUTHORIZE(S) EACH OF THEM TO REPRESENT
AND TO VOTE, AS DESIGNATED ON THE REVERSE SIDE HEREOF, ALL SHARES OF COMMON
STOCK OF OAKLEY, INC. (THE "COMPANY") HELD OF RECORD BY THE UNDERSIGNED ON APRIL
23, 1998 AT THE ANNUAL MEETING OF SHAREHOLDERS TO BE HELD ON JUNE 19, 1998, AT
10:00 A.M., LOCAL TIME, OR ANY ADJOURNMENTS OR POSTPONEMENTS THEREOF, AT THE
OAKLEY, INC. HEADQUARTERS AT ONE ICON, FOOTHILL RANCH, CALIFORNIA 92610 AND
HEREBY REVOKE(S) ANY PROXIES HERETOFORE GIVEN.
BY SIGNING AND DATING THE REVERSE SIDE OF THIS CARD, THE UNDERSIGNED
AUTHORIZE(S) THE PROXIES TO VOTE EACH PROPOSAL, AS MARKED, OR IF NOT MARKED TO
VOTE "FOR" EACH PROPOSAL. PLEASE COMPLETE AND MAIL THIS CARD AT ONCE IN THE
ENVELOPE PROVIDED.
THIS PROXY IS REVOCABLE AND THE UNDERSIGNED MAY REVOKE IT AT ANY TIME PRIOR TO
ITS EXERCISE. ATTENDANCE OF THE UNDERSIGNED AT THE ABOVE MEETING OR ANY
ADJOURNED OR POSTPONED SESSION THEREOF WILL NOT BE DEEMED TO REVOKE THIS PROXY
UNLESS THE UNDERSIGNED WILL INDICATE AFFIRMATIVELY THERE AT THE INTENTION OF THE
UNDERSIGNED TO VOTE SAID SHARES IN PERSON.
(CONTINUED AND TO BE SIGNED AND DATED ON REVERSE SIDE)
<PAGE>
PLEASE DATE, SIGN AND MAIL YOUR
PROXY CARD BACK AS SOON AS POSSIBLE!
ANNUAL MEETING OF SHAREHOLDERS
OAKLEY, INC.
JUNE 19, 1998
Please Detach and Mail in the Envelope Provided
A /X/ Please mark your
votes as in this
example.
THE BOARD OF DIRECTORS OF OAKLEY, INC. RECOMMENDS A VOTE FOR THE
NOMINEES SET FORTH IN PROPOSAL 1 AND FOR PROPOSAL 2.
WITHHOLD AUTHORITY
FOR ALL NOMINEES TO VOTE FOR ALL NOMINEES
LISTED TO THE RIGHT LISTED TO THE RIGHT
1. Election of
Directors / / / /
For, except vote withheld from the following nominee(s)
- -------------------------------------------------------
NOMINEES: Jim Jannard
Mike Parnell
Link Newcomb
Irene Miller
Orin Smith
Michael Jordan
William Schmidt
FOR AGAINST ABSTAIN
2. Ratification of the selection of Deloitte & / / / / / /
Touche LLP as independent auditors.
3. In their discretion, the proxyholders are authorized to vote on such other
matters that may properly come before the Annual Meeting or any adjournment
or postponement thereof.
IMPORTANT: PLEASE SIGN EXACTLY AS YOUR NAME APPEARS ON THIS PROXY. 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.
WHEN SIGNING IN A REPRESENTATIVE CAPACITY, PLEASE SIGN IN FULL CORPORATE NAME BY
PRESIDENT OR OTHER AUTHORIZED OFFICER. IF A PARTNERSHIP, PLEASE SIGN IN THE
PARTNERSHIP NAME BY AN AUTHORIZED PERSON.
UNLESS OTHERWISE SPECIFIED, THIS PROXY WILL BE VOTED FOR ALL NOMINEES FOR
DIRECTOR, FOR THE RATIFICATION OF THE SELECTION OF DELOITTE & TOUCHE LLP AS
INDEPENDENT AUDITORS AND, IN THE DISCRETION OF THE PROXY HOLDERS, ON SUCH OTHER
MATTERS AS MAY PROPERLY COME BEFORE THE MEETING.
THE UNDERSIGNED HEREBY ACKNOWLEDGES RECEIPT OF THE NOTICE OF THE ANNUAL MEETING
OF THE STOCKHOLDERS AND A PROXY STATEMENT FOR THE ANNUAL MEETING PRIOR TO THE
SIGNING OF THIS PROXY.
SIGNATURE DATE , 1998
----------------------------------- -----------------------
(Be sure to date proxy)
SIGNATURE DATE , 1998
----------------------------------- -----------------------
Signature if held jointly (Be sure to date proxy)
