UNITED STATES
SECURITIES AND EXCHANGE
COMMISSION
Washington, D.C. 20549
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement [ ] Confidential, for
Use
of the Commission Only (as
[X] Definitive Proxy Statementpermitted
by
Rule 14a-6(e)(2))
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-
12
CFC International, 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):
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[ ] Fee paid previously with preliminary materials.
[ ]Check box if any part of the fee is offset as provided by
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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.:
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4)Date Filed:
500 State Street, Chicago Heights, Illinois
60411 NOTICE OF ANNUAL MEETING OF
STOCKHOLDERS
July 21, 1997
You are cordially invited to attend the annual meeting
of stockholders of CFC International, Inc., which will be
held at the University of Chicago, Graduate School of
Business, The Conference Center, 450 North Cityfront Plaza
Drive, Chicago, Illinois on July 21, 1997 at 1:00 p.m.
Central Time, for the following purposes:
1. To elect directors; and
2. To transact such other business as may properly come
before the meeting.
Only stockholders of record at the close of business on
June 2, 1997 are entitled to vote at the meeting. A list
of such stockholders will be available for examination by any
stockholder for any purpose germane to the meeting, during
normal business hours, at Harris Trust & Savings Bank, 311
West Monroe, 14th Floor, Chicago, Illinois for a period of
ten days prior to the meeting.
A proxy statement and a proxy card solicited by the Board of
Directors are enclosed herewith. It is important that
your shares be represented at the meeting regardless of the
size of your holdings. Whether or not you intend to be
present at the meeting in person, we urge you to
mark, date and sign the
enclosed proxy card and return it in the envelope provided
for that purpose, which does not require postage if mailed
in the United States. If you attend the meeting, you may, if
you wish, withdraw your proxy and vote in person.
Dennis W. Lakomy
Vice President,
Chief Financial Officer,
Treasurer, and Secretary
YOU ARE URGED TO MARK, DATE, AND SIGN THE ENCLOSED
PROXY AND RETURN IT PROMPTLY. THE PROXY
IS REVOCABLE AT ANY TIME PRIOR TO ITS
USE.
Chicago Heights, Illinois
May 30, 1997
CFC INTERNATIONAL, INC.
PROXY STATEMENT
ANNUAL MEETING OF
STOCKHOLDERS
July 21, 1997
This Proxy Statement is furnished in connection with the
solicitation by the Board of Directors of CFC International,
Inc. (the Company or CFC) of proxies for use at the annual
meeting of stockholders of the Company to be held at the
University of Chicago, Graduate School of Business, The
Conference Center, 450 North Cityfront Plaza Drive,
Chicago, Illinois at 1:00 p.m. Central Time, on July 21,
1997, and at any postponement or adjournment thereof.
Proxies properly executed and returned in a timely manner will
be voted at the meeting in accordance with the directions
noted thereon. If no direction is indicated, they will be
voted for the election of the nominees named herein as
directors, and on other matters presented for a vote
in
accordance with the judgment of the persons acting under
the proxies. Any stockholder giving a proxy may revoke it at
any
time before it is voted, either in person at the meeting,
by
written notice to the Secretary of the Company, or by delivery
of a later-dated proxy.
The Companys principal executive offices are located at
500 State Street, Chicago Heights, Illinois 60411
(telephone: 708/891-3456). This proxy statement is dated May
30, 1997 and it is expected that proxy materials will be
mailed to stockholders beginning on or about June 9, 1997.
SHARES OUTSTANDING AND VOTING RIGHTS
Only stockholders of record at the close of business on June
2, 1997 are entitled to vote at the annual meeting
of
stockholders. The Companys only outstanding voting stock is
its common stock, par value $.01 per share (the Common Stock),
of which 4,136,308 shares were outstanding as of the
close of business on May 30, 1997. Each share of Common Stock
is entitled to one vote.
Election of each director requires the affirmative vote of
the holders of a plurality of the shares of the Companys
Common Stock present in person or represented by proxy and
entitled to vote at the meeting. In general, approval of
any other matter submitted to the stockholders for their
consideration requires the affirmative vote of the holders of
a majority of the shares of the Common Stock present in
person or represented by proxy. An automated system
administered by the Companys transfer agent will tabulate the
votes.
ELECTION OF DIRECTORS
Six directors are to be elected at the meeting. The Board of
Directors has designated the persons named below as nominees
for election as directors for a term expiring at the annual
meeting of stockholders in 1998. All of the nominees are
serving as directors as of the date of this Proxy Statement.
The six nominees for director receiving the vote of
the holders of a plurality of the shares of Common Stock
present in person or represented by proxy and entitled to
vote at the meeting will be elected. Unless otherwise
instructed, properly executed proxies that are returned in a
timely manner will be voted for election of the six
nominees. If, however, any of the nominees should be unable
or should fail to act as a nominee by virtue of an unexpected
occurrence, the proxies will be voted for such other person
as will be determined by the holders of the proxies in their
discretion, or the Board of Directors may make an appropriate
reduction in the number of directors to be elected.
Biographical information concerning the six nominees
is
presented below:
Roger F. Hruby, age 62, has been a director of the
Company since its formation. Currently, Mr. Hruby also
serves as the Companys Chairman of the Board and Chief
Executive Officer. Prior thereto, Mr. Hruby was the
President and Chief Operating Officer of the Companys
predecessor, Bee Chemical, from 1977 until the sale of that
company to Morton Thiokol, Inc., in 1985, at which time Mr.
Hruby also became its Chief Executive Officer. Mr. Hruby also
organized the formation of Bee Chemicals Japanese joint
venture in 1970 and supervised its growth from a start-up
venture to a significant manufacturing company with sales
in excess of $40 million. In 1986, Mr. Hruby formed the
Company, which purchased Bee Chemicals specialty
transferable solid coatings division from Morton Thiokol and
has been Chairman of the Board, Chief Executive Officer,
and until June 1995, President of the Company since the
date of its incorporation. Mr. Hruby has been involved in
the specialty chemical industry since 1958. Mr. Hruby
earned a bachelors degree in chemistry from North
Central College and a Masters of
Business
Administration from the University of Chicago.
Robert J. DuPriest, age 56, has been a director of the
Company since August 1995. Mr. DuPriest also is the President
and Chief Operating Officer of the Company. He joined the
Company in 1990
as Vice President and Chief Operating Officer, and
became President in June 1995. Prior to joining the
Company, Mr. DuPriest served from 1985 in successive
management positions with Rank Video Services of America,
where he was responsible for worldwide operations and joint
ventures. Mr. DuPriest earned a bachelors degree from
American University.
Dennis W. Lakomy, age 52, has been a director of the
Company since August 1995. Mr. Lakomy also is Vice
President, Chief Financial Officer, Secretary, and Treasurer
of the Company. He
joined Bee Chemical in 1975 and served as Vice President
and Controller of that company from 1982 until co-founding CFC
with Mr. Hruby in 1986. Mr. Lakomy earned a bachelors
degree in accounting from Loyola University of Chicago and a
Masters of Business Administration from the University of
Chicago.
William G. Brown, age 54, has been a director of the Company
since August 1995. Mr. Brown currently is a partner of
Bell, Boyd & Lloyd, Chicago, Illinois, counsel to the Company.
He is also a
Director of the MYR Group Inc., Medicus Systems
Corporation, Managed Care Solutions, Inc., and
Dovenmuehle Mortgage, Inc.
Richard Pierce, age 58, became a director of the Company
in August 1995. Before becoming a director, Mr. Pierce served
as an Advisory Director of the Company in 1991. He currently
is the Managing Director of the Chicago office of Russell
Reynolds Associates, Inc., an executive recruiting firm, which
he joined in 1976.
David D. Wesselink, age 54, became a director of the
Company in August 1995. Before becoming a director, Mr.
Wesselink served as an Advisory Director of the Company since
1992. He has been Chief Financial Officer of Advanta
Corporation, a consumer credit company, since 1993. Prior
thereto, he served in several capacities with Household
International, a consumer and
commercial financial services company, including Chief
Financial Officer, Treasurer and Vice President, Research and
Development.
The Board of Directors recommends that stockholders vote
FOR
the election of each of the nominees for director.
Meetings and Committees of the Board
The three standing committees of the Board of Directors of
the Company are the Audit Committee, the Stock Option
Committee, and the Compensation Committee, the functions and
membership of which are described below. The Board of
Directors does not have a standing nominating committee.
The Board of Directors held four meetings and acted four
times by unanimous written consent in 1996.
The Audit Committees functions include making
recommendations to the Board of Directors on the selection
of the Companys independent auditors, reviewing the
overall scope of the
independent auditors examination, reviewing the proposed
annual financial statements of the Company with the independent
auditors and reporting a summary of the Audit Committees
conclusions to the Board of Directors; and reviewing the
Companys internal controls and accounting policies with the
independent auditors and certain officers of the Company.
The Audit Committee currently consists of Messrs. Brown,
Pierce, and Wesselink.
The Stock Option Committee is responsible for
the
administration and interpretation of, and the granting of
options under the CFC International, Inc. Stock Option Plan
(the Stock Option Plan) and the CFC International, Inc. Stock
Purchase Plan (the Stock Purchase Plan and, collectively
with the Stock Option Plan, referred to as the Employee
Plans). Messrs. Pierce and Wesselink currently are members
of the Stock Option Committee.
The Compensation Committee is responsible for approving
all employment contracts with, and salaries of, officers
of the Company. The Compensation Committee also is
responsible for all bonuses, other payments, plans (other
than the Employee Plans),
or programs, and benefits for the Companys officers.
Messrs.
Hruby, Brown, and Pierce currently comprise the
Compensation Committee.
Nominations for election of directors are made by the Board
of Directors and, pursuant to the Companys bylaws, may be made
by a committee appointed by the Board or by any stockholder
entitled to vote in the election of directors. See
Submission of Stockholder Proposals for the 1998 Annual
Meeting for procedures with respect to nominations by
stockholders.
During 1996, the Stock Option Committee held two
meetings. The Audit Committee met twice and the Compensation
Committee met once during 1996. In 1996, during the time each
director served in such capacity, no director attended less
than 75% of the aggregate of all meetings of the Board and
all meetings held by committees of the Board on which such
director served.
Other Matters
Management knows of no other matters to be brought before
the annual meeting other than those described above. If any
other business should come before the meeting, it is intended
that the persons named in the enclosed proxy will vote the
shares in accordance with their best judgment on any such
matter.
PRINCIPAL STOCKHOLDERS
The following table sets forth, as of March 24, 1997,
certain information regarding the beneficial ownership of the
Companys Common Stock by each person known by the Company
to be the beneficial owner of 5% or more of the outstanding
Common Stock, by each director, nominee for director, and
Named Executive Officer (as defined below), and by all
directors and executive officers as a group. As of such
date, there were 112 record holders and approximately 1,200
beneficial holders of Common Stock and 3,987,217 shares of
Common Stock outstanding.
Shares Beneficially
Owned Name (1) Number(2)
Percent
Roger F. Hruby (3) 2,528,973 63.4
Robert J. DuPriest 92,009 2.3
Dennis W. Lakomy 317,537 8.0
William G. Brown (4) 161,269 4.0
Richard Pierce 3,500 *
David D. Wesselink 3,500 *
RFH Investments, LP (5) 999,160
25.1
Stein Roe & Farnham Incorporated (6) 318,200
7.7
One South Wacker Drive
Chicago, Illinois 60606
All directors and executive officers as a group
(7 persons) (3)(4) 2,568,118 64.2
___________
* Represents less than 1% of the outstanding Common Stock.
(1) Unless otherwise indicated, the address of all of the
persons named or identified above is c/o CFC International,
Inc., 500 State Street, Chicago Heights, Illinois 60411.
(2) The numbers and percentages of shares shown above as owned
by the directors, Named Executive Officers, and by all
directors and executive officers as a group assume in each
case that currently outstanding stock options covering shares
of Common Stock that were exercisable within 60 days of March
24, 1997 had been exercised by that person or group as follows:
(i)Robert J. DuPriest - 2,500; (ii) William G. Brown - 2,500;
(iii) Richard Pierce - 2,500; (iv) David D. Wesselink -
2,500; and all directors and executive officers as a group
(including such individuals) - 10,000.
(3) Includes 999,160 shares of Common Stock owned by RFH
Investments, LP, a limited partnership of which Mr. Hruby is
the managing general partner (and of which all of the partners
are members of Mr. Hrubys immediate family or trusts for the
benefit of such family members), but does not include 523,404
shares of
Class B Common Stock owned by RFH Investments, LP. The shares
of Common Stock shown above as beneficially owned by Mr. Hruby
also include 538,670 shares of Common Stock which Messrs.
DuPriest and Lakomy and members of Mr. Browns family
beneficially owned immediately after the IPO, which they still
hold, and for which Mr. Hruby holds an irrevocable voting
proxy. In addition to the Common Stock set forth in the table
above, Mr. Hruby owns an option to purchase 534 shares of the
Companys Voting Preferred Stock with an exercise price of
$500 per share. The Voting Preferred Stock is entitled to
1,000 votes per share on all matters to be voted upon by the
Companys stockholders.
(4) Includes 157,067 shares of Common Stock which are owned by
the William Gardner Brown 1993 GST Trust, a trust for the
benefit of Mr. Browns family and of which Mr. Brown is not a
beneficiary nor is he, or a member of his immediate family, a
trustee.
(5) RFH Investments, LP also owns 523,404 shares of Class B
Common Stock, which is substantially equivalent to the Common
Stock in all respects except that the Class B Common Stock
generally is not entitled to vote on any matters submitted to a
vote of the Companys stockholders.
(6) The number of shares of Common Stock shown as
beneficially owned is derived from a Schedule 13G dated
February 12, 1997 filed with the Securities and Exchange
Commission by the listed stockholder.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
The directors and certain officers of the Company are
required
to report their transactions in the Common Stock to
the
Securities and Exchange Commission within a specified
period following a transaction. During 1996, the directors and
officers filed all such reports within the specified time
period.
MANAGEMENT COMPENSATION
The following table provides certain summary
information concerning the compensation paid or accrued during
the year ended December 31, 1996 to the Companys Chief
Executive Officer and to each of the other executive officers
of the Company who received compensation in excess of $100,000
during the last fiscal year (the Named Executive Officers).
The Company does not have a restricted stock award program or
a long-term incentive plan.
Summary Compensation Table
Long-Term
Compensation
Annual Compensation Awards
Other Securities
Annual UnderlyingAll
Other Name and Principal
SalaryBonusCompensationOptions/SARs
Compensation
Position Year ($) ($) ($) (#)
($)*
Roger F. Hruby 1996285,00028,50024,000(1) - 3,000
Chairman of the Board and 1995 285,000 28,500 -
- - 3,000
Chief Executive Officer 1994282,08828,500 -
-
3,000
Robert J. DuPriest 1996181,50018,1506,727(2)10,000
3,000
President and Chief 1995165,00051,150523(2) -
3,000
Operating Officer 1994165,00016,500 - -
3,300
Dennis W. Lakomy 1996165,37516,537 - -
3,000
Vice President, Chief Financial 1995 157,500
15,750
- - -3,000
Officer, Treasurer and Secretary 1994 157,500
15,750
- - -3,150
___________
* Reflects matching contributions made by the Company pursuant
to the Companys contributory retirement savings plan, which
covers eligible employees who qualify as to age and length of
service. Under the plan, the Company makes matching
contributions equal to 50% of the first 4% of the employees
income that the employee contributes.
(1) A $1 million life insurance policy on Mr. Hruby is paid
for by the Company, with Mr. Hrubys estate as the
beneficiary. The amount shown above is the premium paid for
such policy.
(2) In connection with Mr. DuPriests exercise of options
covering 31,414 shares of Common Stock on November 24, 1995,
the Company loaned him $81,838 for the payment of taxes on the
gain realized upon the exercise of those options. The Company
loaned Mr. DuPriest another $28,715 to pay the final estimated
taxes due on January 15, 1996. The loan accrues no interest
and is due on January 31, 2001. The amount shown above
represents taxable income from imputed interest in accordance
with Internal Revenue Service requirements.
The following table sets forth individual grants of stock
options made to the Named Executive Officers during 1996.
Potential
Realizable
Value at Assumed
Percent of Total Annual Rates of
Stock Options GrantedExercisePrice
Appreciation
Date ofOptionsto Employeesor Base Expiration
for Option Term (2)
Grant Granted in Fiscal Year Price (1)
Date 5% 10%
Roger F. Hruby - - - - - - -
Robert J. DuPriest 3/1/9610,000 13.8%$10.873/1/06$68,392
$173,320
Dennis W. Lakomy - - - - - - -
__________
(1) Under the Stock Option Plan, the exercise price must be the
fair market value of the Common Stock on the date of grant and
the options granted generally become exercisable as to one-fourth
of the grant on each of the first, second, third, and fourth
anniversary of the date of grant.
(2) These amounts represent certain assumed annual rates of
appreciation calculated from the exercise price, as required by
the rules of the Securities and Exchange Commission. Actual
gains, if any, on stock option exercises and Common Stock
holdings are dependent on the future performance of the Common
Stock. There can be no assurance that the amounts reflected in
this table will be achieved.
Option Exercises and Year-End Valuation
The following table provides certain information with respect
to the Named Executive Officers concerning the exercise of
options and/or stock appreciation rights (SARs) during 1996 and
unexercised options and SARs held on December 31, 1996:
AGGREGATE 1996 OPTION/SAR EXERCISES AND VALUES
Number of SecuritiesValue of Une
xercised
Underlying Unexercised In-the-Money
Options/
Shares AcquiredValue Options/SARs at 12/31/96
SARs at 12/31/96*
on ExerciseRealizedExercisableUnexercisableEx
ercisable Unexercisable
Name (#) ($) (#) (#) ($) ($)
Roger F. Hruby - - - - - -
Robert J. DuPriest - - - 10,000 - 3,750
Dennis W. Lakomy - - - - - -
____________
* This column indicates the aggregate amount, if any, by
which
the market value of the Common Stock on December 31, 1996
exceeded the options exercise price and is based on the
closing per share sale price of the Common Stock on such date
of $11.25 as quoted on the Nasdaq National Market.
Directors Compensation
Directors of the Company who are not employees of the
Company are paid $1,500 for each board meeting attended and
$750 each board committee meeting attended which is not held
on the same day as a board meeting, but are not paid an
annual retainer. Directors of the Company who are also
employees of the Company are not paid any compensation for
serving as directors.
Upon the closing of the Companys initial public offering of
Common Stock (the IPO), each of the Companys non-employee
directors, Messrs. Brown, Pierce and Wesselink,
were automatically granted, pursuant to the CFC International,
Inc. Directors Stock Option Plan, a one-time option covering
10,000 shares of Common Stock. Each of the options has a term
of ten years and a per share exercise price of $9.50. The
options become exercisable as to one-fourth of the grant on
each of the first, second, third, and fourth anniversary of
the date of grant.
Compensation Committee Interlocks and Insider Participation
Until August 1995, Mr. Hruby, the Companys Chief Executive
Officer, approved the terms of the compensation of the Companys
executive officers. In August 1995, the Companys Board of
Directors formed a Compensation Committee, which is
currently comprised of Messrs. Hruby and Brown and chaired by
Mr. Pierce, which determines the compensation of the
Companys executive officers in the future.
William G. Brown, a director of the Company, is a partner
of the law firm of Bell, Boyd & Lloyd. The Company has
utilized, and anticipates that it will continue to utilize, the
services of such firm.
In accordance with rules promulgated by the Securities
and Exchange Commission, the information included under the
captions Report of the Compensation Committee and Performance
Graph will not be deemed to be filed or to be proxy soliciting
material or incorporated by reference in any prior or future
filings by the Company under the Securities Act of 1933 as
amended, or the Securities Exchange Act of 1934, as amended
(the Exchange Act).
REPORT OF THE COMPENSATION COMMITTEE
The compensation of the Companys executive officers
is
generally determined by the Compensation Committee of the
Board of Directors. The Compensation Committee currently
consists of three directors of whom a majority are not
officers or employees of the Company. The following report
with respect to certain compensation paid or awarded to the
Companys executive officers during 1996 is furnished by the
directors who then comprised the Compensation Committee.
General Policies
The Companys compensation program is intended to enable
to the Company to attract, motivate, reward, and retain
the management talent required to achieve corporate objectives
in a highly competitive industry, and thereby increase
stockholder value. It is the Companys policy to provide
incentives to its senior management to achieve both short-
term and long-term objectives. To attain these objectives,
the Companys executive compensation program is composed of a
base salary and stock option grants.
Section 162(m) of the Internal Revenue Code of 1986,
as amended, limits the deduction for federal income tax
purposes of
certain compensation paid by any publicly held corporation to
its chief executive officer and its four other highest
compensated officers to $1 million per each such executive
(the $1 million cap). The compensation currently paid
to the Companys executive officers, including pursuant to
the Employee Plans, is not expected to exceed the $1 million
cap. See Base Salary.
Base Salary
Base salaries for executive officers are determined by
a subjective assessment of the executive officers
responsibilities and position within the Company, and the
performance of the executive officer. Base salaries are
reviewed annually and from time to
time by the Compensation Committee and adjusted
appropriately. Prior to the creation of the
Compensation Committee, Mr. Hruby reviewed base salaries
annually and adjusted them as appropriate.
Stock Options
Options may be granted to executive officers, as well as
other employees of the Company, upon joining the Company and
each year thereafter under the Employee Plans. Options are
granted to executive officers taking into account factors
including salary, position, and responsibilities. In
1996, the Stock Option Committee granted options to
purchase 77,673 shares of Common Stock pursuant to the
Stock Option Plan and options to purchase 14,114 shares of
Common Stock pursuant to the Stock Purchase Plan.
Chief Executive Officer Compensation
During 1996, the Companys most highly compensated
executive officer was Roger F. Hruby, Chairman and Chief
Executive Officer of the Company since the date of its
incorporation. Prior to the creation of the Compensation
Committee, Mr. Hruby determined his annual compensation using
the same criteria used to determine compensation levels for
other corporate officers and was based on his assessment of
his overall performance and on information regarding awards
made by similar companies. Following the creation
of the Compensation Committee, the Compensation
Committee reviewed Mr. Hrubys compensation arrangements
using the same criteria that it uses to determine compensation
levels for other corporate officers. No specific weighting was
assigned to these factors. Based on its review, the
Compensation Committee believes that Mr. Hrubys experience,
dedication and knowledge have been of vital importance to
the successful and ongoing growth of the administration
and operations of the Company. In the Compensation
Committees view, Mr. Hrubys
fiscal 1996 compensation package reflects an appropriate
balance of (i) the Companys performance in fiscal 1996, (ii)
Mr. Hrubys own performance level, and (iii) competitive
standards. Mr.
Hrubys compensation consists of base salary and bonus.
Compensation Committee
Members
Richard Pierce
William G. Brown
Roger F. Hruby
PERFORMANCE GRAPH
The following graph compares the percentage change in
the cumulative total returns on the Companys Common Stock,
the Nasdaq Composite Index, and the S&P Chemical Composite
Index (assuming reinvestment of any dividends) for the period
beginning on November 16, 1995, the effective date of the
registration of the Common Stock under Section 12 of the
Exchange Act, and ending on December 31, 1996, the last day of
the Companys 1996 fiscal year.
GRAPH SHOWING PERFORMANCE OF COMMON STOCK
Company/Index Name*
11/16/9512/29/9512/31/96
CFC International, Inc. $100.00 $90.79$118.42
Nasdaq Composite Index 100.00 100.73 123.60
S&P Chemical Composite Index 100.00 105.55 127.68
___________
* Assumes $100 invested on November 16, 1995 in the
Companys
Common Stock, the Nasdaq Composite Index, and the S&P
Chemical Composite Index. Historical results are not
necessarily indicative of future performance.
CERTAIN TRANSACTIONS
In connection with Mr. DuPriests exercise of options
covering 31,414 shares of Common Stock on November 24, 1995,
the Company loaned him $81,838 for the payment of a portion
of the taxes on the gain realized upon the exercise of
those options. Additionally, on January 15, 1996, the
Company loaned Mr. DuPriest an additional $28,715 for the
payment of the remainder of the taxes on the gain realized
upon the exercise of those options. In the
event Mr. DuPriest sells any shares of Common
Stock received pursuant to the exercise of those options prior
to the maturity of these loans, he will be obligated to repay
the loans from the proceeds, net of applicable taxes, received
from such sale. No interest accrues under either loan and both
mature on January 31, 2001.
APPOINTMENT OF INDEPENDENT ACCOUNTANTS
The Board of Directors, pursuant to the recommendation of the
Audit Committee, has selected the accounting firm of
Price Waterhouse LLP to serve as the independent accountants
of the Company for its current fiscal year ending December
31, 1997. Price Waterhouse LLP has served as the Companys
independent auditors since 1986. Representatives of Price
Waterhouse LLP are expected to be present at the annual
meeting, and they will have an opportunity to make a
statement if they so desire and will be available to respond to
appropriate questions from stockholders.
SOLICITATION OF PROXIES
Proxies will be solicited by the Board of Directors through
the use of the mail. Proxies may also be solicited by
directors, officers, and a small number of other employees of
the Company personally, or by mail, telephone, facsimile, or
otherwise, but such persons will not be compensated for
such services.
Brokerage firms, banks, fiduciaries, voting trustees, or
other nominees will be requested to forward the soliciting
material to the beneficial owners of stock held of record by
them, and the Company has hired Proxy Services Corporation
to coordinate the solicitation of proxies by and through such
holders for a fee of approximately $1,000 plus expenses. The
entire cost of the Board of Directors solicitation will be
borne by the Company.
SUBMISSION OF STOCKHOLDER PROPOSALS FOR THE 1998 ANNUAL
MEETING In accordance with rules promulgated by the
Securities and
Exchange Commission, any stockholder who wishes to submit
a proposal for inclusion in the proxy material to be
distributed by the Company in connection with the 1998 Annual
Meeting must do so no later than February 9, 1998. Any such
proposal should be submitted in writing to the Secretary
of the Company at is principal executive offices. Upon
submitting a proposal, the stockholder shall provide the
Company with a written notice which includes the stockholders
name and address, the number of shares of Common Stock that
such stockholder holds of record or beneficially, the
dates upon which such shares were acquired, and documentary
support for a claim of beneficial ownership.
GENERAL
It is important that proxies be returned promptly. If you
are unable to attend the meeting, you are urged, regardless
of the number of shares owned, to date, sign, and return
without delay your proxy card in the enclosed addressed
envelope.
By Order of the Board of
Directors
Dennis W. Lakomy
Vice President, Chief
Financial Officer
Treasurer and Secretary
