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 (Amendment No. )
Filed by the registrant /X/
Filed by a party other than the registrant / /
Check the appropriate box:
/ / Preliminary proxy statement
/X/ Definitive proxy statement
/ / Definitive additional materials
/ / Soliciting material pursuant to Rule 14a-11(c) or Rule 14a-12
THE BOMBAY COMPANY, INC.
(Name of Registrant as Specified in Its Charter)
Michael J. Veitenheimer, Vice President, Secretary and General Counsel
(Name of Person(s) Filing Proxy Statement)
Payment of filing fee (Check the appropriate box):
/X/ $125 per Exchange Act Rule 0-11(c)(1)(ii), 14a-6(i)(1), or 14a-6(6(j)(2).
/ / $500 per each party to the controversy pursuant to Exchange Act
Rule 14a-6(i)(3).
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and
0-11.
(1) Title of each class of securities to which transaction applies:
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(2) Aggregate number of securities to which transactions applies:
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(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11:
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(4) Proposed maximum agregate value of transaction:
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/ / Check box if any part of the fee is offset as provided by Exchange
Rule 0-11(a)(2) and identify the filing for which the offsetting fee
was paid previously. Identify the previous filing by registration
statement number, or the form or schedule and the date of its filing.
(1) Amount previously paid:
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(2) Form, schedule or registration statement no.:
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(3) Filing party:
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(4) Date filed:
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THE BOMBAY COMPANY, INC.
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
MAY 16, 1996
To the Shareholders:
The Annual Meeting of Shareholders of The Bombay Company, Inc. will be held
at the Dorothea Leonhardt Lecture Hall at the Botanic Garden Center Complex,
3220 Botanic Garden Blvd., Fort Worth, Texas, on May 16, 1996 at 9:00 a.m.
(C.D.T.) for the following purposes:
1. To elect three directors in Class B to serve for three-year terms
expiring in 1999, or until their successors are elected and qualified;
2. To approve the adoption of The Bombay Company, Inc. 1996 Long-Term
Incentive Stock Plan; and
3. To transact such other business as may properly come before the
meeting or any adjournment(s) thereof.
By resolution of the Board of Directors, only shareholders of record as of
the close of business on March 18, 1996 are entitled to notice of, and to vote
at, the Annual Meeting. The transfer books will not be closed. The Annual
Report of the Company, including financial statements for the year ended
February 3, 1996, has been mailed to all shareholders.
By Order of the Board of Directors
MICHAEL J. VEITENHEIMER
Vice President, Secretary
and General Counsel
Fort Worth, Texas
April 3, 1996
IT IS IMPORTANT THAT YOUR SHARES BE REPRESENTED AT THIS MEETING. WHETHER OR
NOT YOU EXPECT TO ATTEND IN PERSON, PLEASE SIGN AND DATE THE ENCLOSED PROXY AND
RETURN IT IN THE ENCLOSED ENVELOPE, WHICH REQUIRES NO POSTAGE IF MAILED IN THE
UNITED STATES.
THE BOMBAY COMPANY, INC.
550 Bailey Avenue
Fort Worth, Texas 76107
(817) 347-8200
PROXY STATEMENT
ANNUAL MEETING OF SHAREHOLDERS
MAY 16, 1996
SOLICITATION AND REVOCABILITY OF PROXY
The accompanying Proxy, first mailed to shareholders on April 3, 1996, is
solicited by the Board of Directors of The Bombay Company, Inc. (the "Company")
for use at the annual meeting of shareholders for the fiscal year ended February
3, 1996, which meeting is to be held on May 16, 1996, (the "Annual Meeting") or
at any adjournment(s) thereof. Giving the Proxy will not in any way affect a
shareholder's right to attend the Annual Meeting and to vote in person. A Proxy
may be revoked at any time before it is exercised by requesting its return in
writing to the Secretary at the office of the Company prior to or at the Annual
Meeting, by the attendance and voting by a shareholder at the Annual Meeting or
by the execution and delivery to the Company of a proxy dated subsequent to a
prior proxy.
A Proxy in the accompanying form which is properly signed, dated, returned
and not revoked will be voted in accordance with the instructions contained
therein. Unless authority to vote for the election of directors (or for any one
or more nominees) is withheld, proxies will be voted for the slate of three
directors proposed by the Board, and, if no contrary instructions are given,
proxies will be voted for approval of any remaining item on the Proxy.
Discretionary authority is provided in the Proxy as to any matters not
specifically referred to therein. Management is not aware of any other matters
which are likely to be brought before the Annual Meeting. However, if any such
matters are properly raised, it is understood that the Proxy holder or holders
are fully authorized to vote thereon in accordance with his or their judgment
and discretion.
The cost of soliciting proxies in the accompanying form has been, or will
be, paid by the Company. In addition to the solicitation of proxies by use of
the mails, certain officers and regular employees (who will receive no
compensation therefore in addition to their regular salaries) may be used to
solicit proxies personally and by telephone. In addition, banks, brokers and
other custodians, nominees and fiduciaries will be requested to forward copies
of the Proxy material to their principals and to request authority for the
execution of proxies. The Company will reimburse such persons for their
expenses in so doing. To the extent necessary in order to assure sufficient
representation, a commercial proxy solicitation firm may be engaged to assist in
the solicitation of proxies. Whether such a measure will be necessary depends
entirely upon how promptly proxies are received. No outside proxy solicitation
firm has been selected or employed with respect to the Annual Meeting as of the
date of this Proxy Statement, and the costs of any such services cannot be
estimated at this time.
RECORD DATE AND VOTING SECURITIES
The Board of Directors has fixed the close of business on March 18, 1996 as
the record date for the determination of shareholders entitled to notice of, and
to vote at, the Annual Meeting. As of the record date for the Annual Meeting,
there were outstanding 37,391,202 shares of Common Stock. Each holder of Common
Stock is entitled to one vote for each share held by such person. All share
numbers contained in this Proxy Statement have been adjusted for all stock
splits unless otherwise noted.
SECURITY OWNERSHIP
PRINCIPAL SHAREHOLDERS
The following table sets forth information based upon the records of the
Company and filings with the Securities and Exchange Commission as of March 18,
1996, with respect to each person known to be the beneficial owner of more than
five percent (5%) of any class of the Company's voting securities.
<TABLE>
<CAPTION>
NAME AND ADDRESS OF AMOUNT AND NATURE OF PERCENT
TITLE OR CLASS BENEFICIAL OWNERSHIP BENEFICIAL OWNERSHIP (1) OF CLASS
- - -------------- -------------------- ------------------------ --------
<S> <C> <C> <C>
Common Stock State of Wisconsin Investment Board 3,643,100 shares (2) 9.8%
P.O. Box 7842
Madison, WI 53707
- - -------------------
</TABLE>
(l)Shares are deemed to be "beneficially owned" by a person if such person,
directly or indirectly, has or shares (i) the voting power thereof,
including the power to vote or to direct the voting of such shares, or (ii)
the investment power with respect thereto, including the power to dispose or
direct the disposition of such shares. In addition, a person is deemed to
beneficially own any shares of which such person has the right to acquire
beneficial ownership within 60 days.
(2)The State of Wisconsin Investment Board filed with the Securities and
Exchange Commission an Amended Schedule 13G dated February 1, 1996,
reporting ownership of 3,643,100 shares of Common Stock as of December 31,
1995.
SECURITIES OWNED BY MANAGEMENT
The table below sets forth as of March 18, 1996 the numbers of shares of
Common Stock beneficially owned by each of the directors of the Company, each
executive officer or former executive officer named in the Summary Compensation
Table and all directors and executive officers of the Company as a group.
<TABLE>
<CAPTION>
Amount and Nature Percent
Title of Name of Beneficial of Beneficial of
Class Ownership Ownership(1) Class
--------- --------------------- ----------------- -------
<S> <C> <C> <C>
Common Stock Barbara Bass 48,436(2) *
Common Stock Elaine D. Crowley 54,027(3) *
Common Stock Edmund H. Damon 49,186(4) *
Common Stock William S. Goodlatte 6,620(5) *
Common Stock James E. Herlihy 253,787(6) *
Common Stock Robert S. Jackson 32,397(7) *
Common Stock A. Roy Megarry 5,200(8) *
Common Stock Clayton E. Niles 77,624(9) *
Common Stock Alexandra M.T. Nourse 1,606,153(10) 4.2
Common Stock Robert E. M. Nourse 1,606,153(10) 4.2
Common Stock Robert E. Runice 25,312(11) *
Common Stock Carson R. Thompson 568,093(12) 1.5
Common Stock Michael J. Veitenheimer 109,737(13) *
Common Stock Shirley Young 25,400(14) *
Common Stock All present executive 2,855,352(15) 7.4
officers and
directors as a group
(13 persons)
</TABLE>
*Less than one percent (1%)
(1)Directors and executive officers have sole voting and investment powers of
the shares shown unless otherwise indicated below. Includes shares which
may be acquired by the exercise of options within sixty days after March 18,
1996. Does not include units under Director Stock Deferral Plan which may
not be acquired within 60 days.
(2)Includes 21,936 shares which may be acquired upon exercise of options. Ms.
Bass disclaims beneficial ownership of 20,000 shares listed above which are
owned by her spouse.
(3)Includes 31,623 shares which may be acquired upon exercise of options.
(4)Includes 37,124 shares which may be acquired upon exercise of options. Mr.
Damon disclaims beneficial ownership of 6,157 shares listed above which are
owned by his spouse and a trust for the benefit of his children.
(5)Includes 3,900 shares which may be acquired upon exercise of options.
(6)Includes 214,248 shares which may be acquired upon exercise of options. Mr.
Herlihy disclaims beneficial ownership of 1,405 shares listed above which
are owned by his spouse.
(7)Includes 21,935 shares which may be acquired upon exercise of options.
(8)Includes 2,700 shares which may be acquired upon exercise of options. Mr.
Megarry disclaims beneficial ownership of 2,500 shares listed above which
are owned by his spouse.
(9)Includes 6,750 shares which may be acquired upon exercise of options.
(10)Alexandra M.T. Nourse and Robert E. M. Nourse are married and are the
Executive Vice President, and President and Chief Executive Officer of the
Company, respectively. In the table above, the 1,606,153 shares
beneficially owned by Alexandra M.T. Nourse and Robert E. M. Nourse are
reflected as being beneficially owned by each of them; therefore, the number
of shares and percentage of the class reflected for each should not be added
in determining the actual number of shares or percentage owned by both of
them. Although included in the total number of shares above, each disclaims
beneficial ownership of shares owned and options exercisable by the other.
Ms. Nourse owns directly 343,371 shares and has beneficial ownership in
options covering 307,674 shares. Mr. Nourse owns directly 358,161 shares
and has beneficial ownership in options covering 431,947 shares. The
Nourses also hold beneficial ownership of 165,000 shares held by a family
limited partnership.
(11)Includes 11,812 shares which may be acquired upon exercise of options.
(12) Includes 6,750 shares which may be acquired upon exercise of options.
(13) Includes 21,288 shares which may be acquired upon exercise of options.
(14) Includes 5,400 shares which may be acquired upon exercise of options.
(15) Includes 1,125,087 shares which may be acquired upon exercise of options
held by executive officers and directors.
ELECTION OF DIRECTORS
(ITEM 1)
The Certificate of Incorporation of the Company provides that the members of
The Bombay Company, Inc. Board of Directors shall be divided into three classes,
as nearly equal in number as possible, each of which is to serve for three
years, with one class being elected each year. The terms of office of the
directors in Class B expire with this Annual Meeting.
To be elected as a director, each nominee must receive the favorable vote of
a plurality of the shares represented and entitled to be voted at the Annual
Meeting. The persons named in the enclosed form of Proxy, unless otherwise
directed, intend to vote such Proxy FOR the election of the nominees named below
as directors for the term specified. If any nominee becomes unavailable for any
reason, the persons named in the form of Proxy are expected to consult with
management in voting the shares represented by them. Management has no reason
to doubt the availability of any of the nominees to serve and no reason to
believe that any of the nominees will be unavailable or unwilling to serve if
elected to office. Except as limited by the Certificate of Incorporation or
bylaws, to the knowledge of management, the nominees intend to serve the term
for which election is sought. Cumulative voting is not permitted by the
Certificate of Incorporation.
The Board of Directors has nominated three persons for election as directors
in Class B at this Annual Meeting to serve for three-year terms expiring in
1999, or until their successors are elected and qualified. All nominees are
currently serving as directors and have consented to serve upon election.
PRESENT DIRECTORS WHO ARE NOMINATED FOR RE-ELECTION
<TABLE>
<CAPTION>
DIRECTOR TERM TO
DIRECTOR'S NAME AGE PRINCIPAL OCCUPATION SINCE EXPIRE
<S> <C> <C> <C> <C>
Clayton E. Niles 69 Private Investor 1982 1999
Carson R. Thompson 57 Chairman of the Board of the 1978 1999
Company; Chairman of the Board,
President & Chief Executive
Officer, The CRT Group, Inc.
Shirley Young 60 Vice President Consumer 1994 1999
Marketing Development, General
Motors Corporation
</TABLE>
CONTINUING DIRECTORS WHOSE TERMS ARE NOT EXPIRING
<TABLE>
<CAPTION>
DIRECTOR TERM TO
DIRECTOR'S NAME AGE PRINCIPAL OCCUPATION SINCE EXPIRE
<S> <C> <C> <C> <C>
Barbara Bass 45 Private Investor 1993 1998
Edmund H. Damon 66 Private Investor and former 1984 1997
President and Chief
Executive Officer,
Pantasote, Inc.
Robert S. Jackson 50 Private Investor, Business 1991 1998
Consultant and former
President and Chief
Executive Officer, USPCI,
Inc.
A. Roy Megarry 59 Chairman, The Globe and Mail 1994 1998
and Consultant to Thomson
Newspapers
Robert E. M. Nourse 57 President and Chief 1990 1997
Executive Officer of the
Company
Robert E. Runice 66 Private Investor and retired 1985 1997
Vice President and
President, Commercial
Development Division, US
West, Inc.
</TABLE>
Additional information regarding the three nominees for election as
directors and the continuing directors of the Company is as follows:
NOMINEES
Clayton E. Niles has been a member of the Board of Directors since 1982 and
has become a private investor since his retirement on May 1, 1986, as Chairman
of the Board of Communications Industries, Inc., a position held since January
1, 1980. Communications Industries, Inc., acquired by Pacific Telesis Group, is
a supplier of mobile telephone services. Mr. Niles served as Chief Executive
Officer of Communications Industries, Inc. from January 1, 1976 until July 1,
1982, and thereafter re-assumed the office of President and Chief Executive
Officer from July 1, 1983 until July 1, 1985. Mr. Niles also serves as Chairman
of the Board of Tandy Brands Accessories, Inc.
Carson R. Thompson continues to serve as Chairman of the Board of the
Company, a position held since November 1982. Mr. Thompson retired on June 30,
1991 after having served as Chief Executive Officer since July 1, 1982, and as
President from July 1, 1982 to June 20, 1990. Prior thereto, Mr. Thompson
served as President of Tex Tan Welhausen Co., a division of the Company, from
1974 until elected Vice President of the Company in May 1978 and thereafter
elected Executive Vice President in September 1980. Mr. Thompson served as
President and Chief Operating Officer of the Company from August 1981 to July
1982. Since his retirement, Mr. Thompson has acted as Chairman of the Board,
President and Chief Executive Officer of The CRT Group, Inc., engaged in the
business of software marketing and human resource consulting.
Shirley Young was elected to the Board of Directors on May 11, 1994. Ms.
Young has served as Vice President, Consumer Market Development for General
Motors Corporation since June 1, 1988, and for the previous five years was a
Marketing Consultant to General Motors. Prior thereto, Ms. Young spent over 25
years at Grey Advertising holding various positions including Executive Vice
President, a member of the Agency Policy Council and, in 1983, became President
of Grey Strategic Marketing. Ms. Young also serves on the Boards of Directors
of Promus Corporation and Bell Atlantic Corporation and is a Consultant Director
of the Dayton Hudson Corporation.
CONTINUING DIRECTORS
Ms. Barbara Bass has been a director of the Company since February 17, 1993.
She previously served as President and Chief Executive Officer of the Emporium
Weinstock division of Carter Hawley Hale Stores, Inc., a department store chain,
from 1989 to 1992. During 1987 and 1988, Ms. Bass served as Chairman of the
Board and Chief Executive Officer of I. Magnum, a division of Federated
Department Stores. Prior thereto, from 1980 until 1987, Ms. Bass was employed
by Bloomingdales, a division of Federated Department Stores, serving as
Executive Vice President from 1985 until 1987, Senior Vice President from 1983
until 1985, Merchandising Vice President from 1981 until 1983 and Operating Vice
President during 1980 and 1981. Prior to joining Bloomingdales, Ms. Bass spent
eight years in fashion retailing at Macy's California and Burdine's. Ms. Bass
also serves on the Board of Directors of Starbucks Corporation.
Edmund H. Damon joined the Board of Directors in 1984 and is a private
investor after having served as President and Chief Executive Officer of
Pantasote, Inc. from January 1, 1986 to September 22, 1989, and as President and
Chief Operating Officer from May 1983 through December 1985. Mr. Damon served
as Vice President of Mainstream Access, Inc. from September 1982 to May 1983,
and as Vice President and a member of the Management Committee of The Singer Co.
for more than three years prior to September 1982. Mr. Damon also serves on the
Board of Directors of Newflo Corporation.
Robert S. Jackson has been a member of the Board of Directors since 1991 and
is a private investor and business consultant after having served as President
and Chief Executive Officer of USPCI, Inc., a waste management subsidiary of
Union Pacific Corporation from May 1991 until December 1994. From December 1981
until May 1991, Mr. Jackson was employed by Union Pacific Resources, the oil and
gas and hard minerals subsidiary of Union Pacific Corporation, serving as its
Vice President of Finance and Administration from 1984 until 1988 and as its
Executive Vice President and Chief Financial Officer from 1988 until 1991.
A. Roy Megarry was elected to the Board on October 13, 1994. Since 1993, he
has served as Chairman of The Globe and Mail, a major Canadian newspaper
headquartered in Uxbridge, Ontario, and as a consultant to Thomson Newspapers.
Prior thereto, from 1978 to 1992, Mr. Megarry served as Publisher and Chief
Executive Officer of The Globe and Mail newspaper. Mr. Megarry also serves on
the Board of Directors of Hewlett-Packard (Canada) Ltd.
Robert E. M. Nourse has served as a director since 1990 and as President and
Chief Executive Officer of the Company since July 1, 1991. Prior thereto, Mr.
Nourse served as President and Chief Operating Officer since June 20, 1990, and
as Executive Vice President since 1986. He also acted as President of the
Company's specialty retail division, The Bombay Company, until June 30, 1991, a
position to which he was first appointed in February 1984. From January 1980 to
February 1984, Mr. Nourse was President of The Bombay Furniture Company of
Canada Inc., and was the majority shareholder of that company until its
acquisition as a wholly-owned subsidiary of the Company in August 1981. Mr.
Nourse also serves on the Board of Directors of Gadzook's, Inc.
Robert E. Runice joined the Board of Directors in 1985 and is a private
investor and business consultant. He has been associated with the
telecommunication industry for over forty years and from 1983 to 1991 was a Vice
President of US West, Inc. and President, Commercial Development Division of US
West, Inc. US West, Inc. is a telecommunications service corporation
headquartered in Englewood, Colorado. Mr. Runice also serves on the Boards of
Directors of Tandy Brands Accessories, Inc. and Utilx, Inc.
MEETINGS AND COMMITTEES OF THE BOARD
For the fiscal year ended February 3, 1996, the Board of Directors met four
times. No director who served the entire fiscal year attended less than
seventy-five percent (75%) of the meetings. The Board has three standing
Committees, described below. Committee appointments are reviewed by the Board
at its meeting following each annual meeting of shareholders.
The Board of Directors has an Audit and Finance Committee currently composed
of the following directors: Clayton E. Niles (Chairman), Robert S. Jackson,
Barbara Bass and A. Roy Megarry. The Audit and Finance Committee is primarily
concerned with the effectiveness of the Company's accounting policies and
practices, financial reporting, and internal controls. Specifically, the
Committee reviews and approves the scope of the annual examination of the books
and records of the Company and reviews the findings and recommendations of the
outside auditors on completion of the audit; considers the organization, scope
and adequacy of the Company's internal controls function; monitors the extent to
which the Company has implemented changes recommended by the independent
auditors to the Committee; and provides oversight with respect to accounting
principles employed in the Company's financial reporting. The Committee,
comprised entirely of non-employee directors, met three times during the fiscal
year.
The Board of Directors has a Compensation and Human Resources Committee
currently composed of the following directors: Robert E. Runice (Chairman),
Edmund H. Damon and Shirley Young. The Compensation and Human Resources
Committee is primarily concerned with the Company's organization, salary and
non-salary compensation and benefit programs, succession planning and related
human resources matters. The Committee also recommends to the Board of
Directors annual salaries, bonus programs and administers certain retirement,
stock option and other plans covering executive officers. The Committee,
comprised entirely of non-employee directors, met six times during the fiscal
year.
The Board of Directors has an Executive Committee currently composed of the
following directors: Edmund H. Damon (Chairman), Clayton E. Niles, Robert E. M.
Nourse, Robert E. Runice and Carson R. Thompson. The Executive Committee is
primarily concerned with the Company's strategic planning and also has the
responsibility for director affairs, including the recommendation of nominees
for new or vacant Board positions. The Committee will consider persons brought
to its attention by shareholders. The names of the proposed nominees should be
sent to the President of the Company at the address shown on the cover of this
Proxy Statement. The Committee met twice during the fiscal year.
COMPENSATION OF DIRECTORS
A. Cash Compensation. A director who is an employee of the Company is not
compensated for service as a member of the Board of Directors or any committee
of the Board. For the fiscal year ended February 3, 1996, non-employee
directors received cash compensation consisting of an annual retainer of
$17,500, and an $1,000 fee for each Board meeting and each committee meeting
attended. Committee chairmen received an additional annual retainer of $3,500
for committee work. Carson R. Thompson was paid an annual retainer of $35,000
for serving as Chairman of the Board. These amounts reflect no change in
director cash compensation from that paid in the prior fiscal year. The Company
also reimburses its directors for travel, lodging and related expenses incurred
in attending Board and committee meetings, and provides each director with
travel accident and directors' and officers' liability insurance.
B. Director Stock Option Plan. The 1991 Director Stock Option Plan (the
"Director Plan") was adopted by the Board of Directors on August 14, 1991 and
approved by the Company's shareholders on November 12, 1991. The Director Plan
provides for the granting of non-qualified stock options to members of the Board
of Directors who are not employees of the Company or any of its subsidiaries
(the "Non-Employee Directors"). The Director Plan is designed to promote the
interests of the Company by providing an increased opportunity for existing and
potential new directors to acquire an investment in the Company, thereby
maintaining and strengthening their desire to remain with or join the Company's
Board of Directors and align their interests and efforts with those of the
shareholders.
As amended in 1993, the Director Plan provides for an initial grant of an
option to purchase the lesser of 2,250 shares or that number of shares equal to
$75,000 at face value to each Non-Employee Director upon the date of his or her
election or appointment (the "Initial Option"); and an annual grant of an option
to purchase the same number of shares of Common Stock on the third business day
after the Company issues its press release summarizing the Company's performance
for the prior fiscal year (the "Annual Option").
The exercise price of the options under the Director Plan is equal to the
closing price of the Company's Common Stock on the date of grant. The Initial
Option becomes exercisable at the rate of twenty percent (20%) per year
commencing one year after the date of grant. Each Annual Option grant is
exercisable in full six months following the date of grant. Payment for shares
upon exercise shall be in cash. Options become fully exercisable upon the death
or disability of an optionee or upon an optionee ceasing to be a director of the
Company, provided the director has served at least five years on the Board and
in the event of a change in control of the Company, as defined in the
Director Plan. All options granted prior to 1994 expired three months from
the date the optionee terminated his or her performance of services for the
Company except in the cases of deathor disability. An amendment covering
all options granted after 1994 extended the exercise period from three months
to thirty-six months upon death, disability or a director's retirement from
the Board, provided such departing director has at least ten years of service
or if such retirement is due to the Company's mandatory retirement age for
directors.
C. Director Stock Deferral Plan. The 1993 Stock Deferral Plan for Non-
Employee Directors (the "Director Deferral Plan") was adopted by the Board of
Directors on June 24, 1993 and approved by shareholders on October 13, 1993.
Under the Director Deferral Plan, non-employee directors are given an election
to defer the receipt of annual and Committee chair retainers, which are then
credited in stock units equivalent to Common Stock and held by the Company in an
account for the benefit of each participating director. The stock units, which
at all times are fully vested, become payable in the form of Common Stock upon
retirement from the Board or otherwise as specified in the director's election
notice. The stock units are adjusted for stock dividends, stock splits,
combinations, reclassifications, recapitalizations or other capital adjustments.
In the event of a change in control, as defined in the Director Deferral Plan,
all units are immediately payable.
The Board of Directors may terminate, suspend or amend the Director Deferral
Plan, provided that certain material amendments must be submitted for
shareholder approval to the extent necessary for the Director Deferral Plan to
satisfy the requirements of the exemption from the short-swing profits rules
under Section 16 of the Securities Exchange Act of 1934, as amended.
D. Director Stock Ownership Guidelines. On June 24, 1993, the Board of
Directors approved stock ownership guidelines for the Company's non-employee
directors. The guidelines provide that each outside director is expected to
achieve a stock ownership position equal to five times annual cash compensation
no later than the completion of such director's fifth year of service on the
Board. For purposes of the guidelines, annual cash compensation is defined as
the annual retainer plus meeting fees, assuming attendance at four Board
meetings and three Committee meetings. Stock beneficially owned by the
directors and stock units held pursuant to the Director Deferral Plan count
toward the satisfaction of the guidelines, but stock options, even if vested,
are not considered owned for such purposes. The Executive Committee reviews
compliance and progress toward satisfaction of the guidelines annually.
EXECUTIVE OFFICERS OF THE COMPANY
CURRENT EXECUTIVE OFFICERS
The executive officers of the Company, their respective ages, positions held
and tenure as officers are as follows:
<TABLE>
<CAPTION>
POSITION(S) HELD WITH OFFICER OF THE
NAME AGE THE COMPANY COMPANY SINCE
--------- ---- -------------------- --------------
<S> <C> <C> <C>
Robert E. M. Nourse 57 President and Chief Executive 1986
Officer
James E. Herlihy 53 Executive Vice President and 1991
Chief Financial Officer
Alexandra M. T. Nourse 53 Executive Vice President, 1990
Marketing
Michael J. Veitenheimer 39 Vice President, Secretary and 1985
General Counsel
Elaine D. Crowley 37 Vice President, Finance and 1996
Treasurer
</TABLE>
BUSINESS EXPERIENCE
Information concerning the business experience of Mr. Nourse is provided
under the section entitled "Election of Directors."
Mr. James E. Herlihy has served as Executive Vice President and Chief
Financial Officer since March 16, 1995, as Executive Vice President, Treasurer
and Chief Financial Officer of the Company since June 29, 1992 and as Vice
President, Treasurer and Chief Financial Officer since July 15, 1991. From
October 1988 until April 1991, Mr. Herlihy was Senior Vice President and Chief
Financial Officer and a member of the Board of Directors of the S.E. Nichols
Company, Inc., a regional discount department store chain which was converted
into a deep discount drug and general merchandise retail store chain. From June
1987 until September 1988, he was Executive Vice President of The Odd Lot
Trading Company, Inc., a chain of closeout retail stores. Prior thereto, from
1981 until 1986, Mr. Herlihy served as Vice President and Controller, and later
as Senior Vice President, Chief Financial Officer and a member of the Board of
Directors of The Grand Union Company, a food retail chain based in the
Northeastern United States.
Ms. Alexandra M.T. Nourse has served as Executive Vice President of the
Company since June 19, 1991, after previously being appointed Vice President of
Marketing on June 20, 1990. Ms. Nourse also served as Executive Vice President
of The Bombay Company division, a position to which she was appointed in 1987.
Prior thereto, Ms. Nourse was Vice President of The Bombay Company division from
1984 to 1987 and Vice President of The Bombay Furniture Company of Canada Inc.
from 1983 to 1984.
Mr. Michael J. Veitenheimer was named Vice President effective August 4,
1994 and has served as Secretary of the Company since July l, 1985, and General
Counsel since December 1983. From 1983 to 1985, he was Assistant Secretary of
the Company. Prior thereto, Mr. Veitenheimer was in private practice of law in
Fort Worth, Texas.
Ms. Elaine D. Crowley was named Vice President, Finance and Treasurer
effective January 25, 1996 after having served as Corporate Controller since
January 1995. Prior thereto, Ms. Crowley acted as Executive Vice President,
Operations of The Bombay Company division from January 1994 to January 1995,
Vice President and Controller from January 1991 to December 1994 and Controller
from August 1990 to December 1990. Prior thereto, Ms. Crowley was with Price
Waterhouse from 1981 to 1990.
TERMS OF OFFICE; RELATIONSHIPS
The officers of the Company are elected annually by the Board of Directors
at a meeting held immediately following each Annual Meeting of Shareholders, or
as soon thereafter as necessary and convenient in order to fill vacancies or
newly created offices. Each officer holds office until his or her successor is
duly elected and qualified or until his or her death, resignation or removal, if
earlier. Any officer or agent elected or appointed by the Board of Directors
may be removed by the Board of Directors whenever in its judgment the best
interests of the Company will be served thereby, but such removal shall be
without prejudice to the contractual rights, if any, of the person so removed.
There are no family relationships among the executive officers, except that
Mr. Robert Nourse and Ms. Alexandra Nourse are married. There are no
arrangements or understandings between any officer and any other person pursuant
to which that officer was selected.
EXECUTIVE COMPENSATION
COMPENSATION AND HUMAN RESOURCES COMMITTEE REPORT
The Compensation and Human Resources Committee of the Board of Directors
(the "Committee") is responsible for reviewing and approving the Company's
compensation policies and the compensation paid to executive officers. The
Committee consists of three independent, non-employee directors.
Compensation Philosophy. The Company's long-standing compensation
philosophy is one of heavily emphasizing performance-based compensation
incentives which create a strong focus on growth in earnings per share and the
enhancement of shareholder value. This focus is maintained through a program of
competitive base salaries, a highly leveraged bonus program based on
successfully achieving predetermined financial performance goals and a heavy
emphasis on executive equity ownership. These compensation elements address
both short-term and long-term performance goals and serve as the primary
vehicles to attract and retain executives with abilities to further the growth
and success of the Company. Total annual compensation (base salary plus target
bonus) is targeted at the 75th percentile of comparable positions in other
retailing companies of comparable size, i.e., the Comparative Group referred to
below.
The Company has elected to use the Standard & Poors Retail Stores Composite
Index to compare the performance of the Company to that of a broad index of
other retailers for purposes of the Shareholders' Total Return Graph presented
elsewhere in this Proxy Statement. However, in reviewing compensation issues,
the Committee focused on a narrower, more analogous group of retailers (the
"Comparative Group"), along with national survey data. The Comparative Group is
reviewed by the Committee annually with the assistance of an outside
compensation consultant, and changes to the group are made as necessary for
comparability purposes. For fiscal year 1995, the Comparative Group consisted
of 13 companies (an increase from 10 in the prior year), the majority of which
were not in the Retail Stores Composite Index; Blockbuster Entertainment, CML
Group, Claire's Stores, Consolidated Stores, Dress Barn, Heilig-Meyers,
Lechter's, Office Depot, Pier 1 Imports, Williams-Sonoma, Natural Wonders, Bed
Bath and Beyond and Value Merchants. In the opinion of the Committee, these
retailers were a more representative sampling of comparable companies for
purposes of comparing CEO and executive officer compensation packages than the
Standard & Poors Retail Stores Composite Index, which is made up of
substantially larger companies.
Compensation Results. On January 12, 1995, the Company changed the date of
its fiscal year end from the end of June to the Saturday closest to the end of
January of each year. As a result, compensation results for fiscal year 1994
(noted as "1994(a)" in the Summary Compensation Table) represented the seven
month period from July 4, 1994 to January 28, 1995. When establishing the
compensation plan for fiscal 1995, the Committee and the Board determined that
the executive officers should not benefit from the change in the date of the
fiscal year end by commencing a new fiscal year compensation plan and therefore,
the executive officers did not receive base salary adjustments and were not
eligible to receive any bonuses which may otherwise have been earned for the
first five months of the 1995 fiscal year which commenced January 29, 1995.
Officer base salary adjustments for fiscal 1995 were effective July 2, 1995 and
the annual incentive bonus plan was formulated so as to cover only operational
results for the period July 2, 1995 through February 3, 1996. The Company's
performance for the period ended February 3, 1996 did not reach target levels of
profitability, return on assets and earnings per share as established in March
1995. Since the minimum thresholds of these three compensation criteria were
not achieved, the executive officers were not paid bonuses for the fiscal
period, except as noted in the Summary Compensation Table.
Base Salaries. The Committee reviews and approves salaries for the CEO and
the other executive officers on an annual basis. Recommended base salaries are
reviewed and set based on information derived from the Comparative Group and
national surveys of compensation data, as well as evaluations of the individual
executives' positions and expected future performance. In making salary
decisions, the Committee exercises its discretion and judgment with no specific
formula being applied to determine salary levels. Base salaries for fiscal 1995
were set at median competitive base salary levels in relation to the Comparative
Group. In prior years, salaries were generally set at or below median levels.
The Committee determined, after a review of the comparative data, that the
salary levels were not at competitive levels, which placed the Company at risk
of losing executive management talent. In the executive officer group, salaries
for the fiscal year commencing January 29, 1995, which took effect July 2, 1995,
represented a range of 60% to 70% of projected total annual compensation with
bonuses at target level.
Annual Incentive Bonus. Annual incentive bonuses for executive officers are
designed to satisfy the Committee's belief that a significant portion of the
annual compensation of each executive officer should be contingent upon Company
performance. To carry out this philosophy, the Company implemented the
Executive Management Incentive Compensation Plan (the "Incentive Plan")
effective July 4, 1994. The Incentive Plan, approved by shareholders on
October 13, 1994, is a pay-for-performance plan intended to motivate and reward
executive officers by directly linking cash bonuses to specific corporate
financial targets relating to pre-tax profits, return on assets and growth in
earnings per share.
Under the Incentive Plan, bonus pools are created based upon profitability
and return on assets. The bonus pool based upon profitability is derived by
setting aside a fixed percentage of pre-tax profits, with the percentage
leveraged upward as the level of profitability substantially exceeds the prior
year. This leverage is intended to encourage management to achieve greater
profitability. The plan contains a profit threshold that must be met for the
payment of any bonus based on profitability. Recognizing that the base salary
increases discussed above lessened the percentage of at-risk incentive
compensation as a percentage of total target compensation, the Committee raised
the profit threshold for fiscal 1995 such that a higher level of performance was
required for the payment of any bonus based on profitability. The bonus pool
based upon return on assets is derived by allocating a pre-set amount of bonus
dollars for each percentage increase in the calculated return on assets above an
established minimum. If the year-end return on assets is less than the minimum,
no bonus dollars for return on assets are payable. The return on assets bonus
is also leveraged such that the higher the return on assets percentage achieved,
the higher the bonus dollars paid. The profit percentage and return on assets
schedule related to the Incentive Plan are established by the Committee and
approved annually by the Board of Directors. Individual target bonuses are
determined based upon pre-established allocations of the aggregate bonus pool.
If the threshold levels for profits and return on assets are met, which did
not occur for the fiscal year ended February 3, 1996, the Incentive Plan directs
that the bonus results are adjusted through the application of a "growth factor"
based upon earnings per share compared to the prior year. The growth factor
leverages the bonus program such that, with superior financial performance,
bonuses may be increased up to 50%, and if the minimum established earnings
threshold is not achieved, bonuses are reduced to 50% of the earned amounts. In
the opinion of the Board of Directors, this focus on growth in earnings per
share most closely aligns executive officers' perspectives with that of
shareholders and drives the enhancement of shareholder value.
Pursuant to the terms of the Incentive Plan, the financial objectives and
bonus results are based entirely on financial measures and discretion is not
used to modify bonus amounts. Further, bonus payments that exceed certain
target levels may, in the discretion of the Committee, be paid in the form of
Company Common Stock.
Stock Options/Equity Ownership. The Company's compensation program is also
intended to create long-term incentives for executives to act in ways that will
create long-term growth in shareholder value. In 1992, to achieve a median long-
term pay practice, both front-loaded and premium priced options were granted to
the Company's CEO and Executive Vice Presidents with the expectation that no
additional options would be granted for the following two years. No option
grants were made to the CEO and Executive Vice Presidents during fiscal 1993 or
fiscal 1994, although grants were made to other officers. No options were
granted to any of the executive officers during the seven month period ended
January 28, 1995. On February 22, 1995, nonqualified stock options were granted
to each named executive officer as reflected in the Summary Compensation Table,
as well as to other officers and employees, at an exercise price of $9.25, which
was the closing price of the Company's Common Stock on that date. Also during
1995, the 1986 Stock Option Plan was amended to add a replacement option feature
designed to encourage early exercise of options and retention of the issued
stock. The replacement option feature provides for a new option for each share
of Company stock tendered to satisfy an option exercise price. The replacement
option, granted at an exercise price equal to the then current market price, is
for the number of shares exchanged to exercise the original options, excluding
shares withheld for taxes, and is exercisable 12 months after the date of grant
for the remainder of the original option term. As a result of this design,
early exercise and continuing equity ownership is encouraged.
Pursuant to the Company's 1986 Stock Option Plan, options are granted at the
discretion of the Committee, usually once per year. The number of option shares
covered by such grants are determined based upon assessment of the individuals'
performance. The Committee considers the recommendation of and relies on
information provided by the CEO in determining the number of option shares to be
granted to the non-CEO executive officers. When granted, stock options are
issued with an exercise price equal to the fair market value of the Company's
Common Stock on the date of grant. Options typically vest over a five-year
period (20% per year) and are not dependent on further performance criteria.
The Committee believes that the periodic grant of time-vested stock options
provides an incentive that focuses the executives' attention on managing the
business from the perspective of owners with an equity stake in the Company. It
further motivates executives to maximize long-term growth and profitability
because value is created in the options only as the Company's stock price
increases after the option is granted.
The 1986 Stock Option Plan expires on its own terms during 1996. As a
result, the Committee, with the assistance of an outside compensation
consultant, has directed the design of a new long-term incentive stock plan,
which is being submitted for shareholder approval as a part of this Proxy
Statement. See "Proposal Two: Approval of Adoption of 1996 Long-Term
Incentive Stock Plan." This new plan will provide the Committee with a
flexible vehicle to structure future long-term incentive compensation
arrangements tied directly to the creation of shareholder value. In recent
years, innovative and sophisticated types of incentive awards have been created
and utilized by other companies to enhance the effectiveness of their
compensation programs. The proposed plan will provide the Company with the
ability to devise incentive programs which are responsive to the demands of the
marketplace without unduly diluting shareholder interests.
Consistent with the Committee's equity ownership philosophy, in fiscal 1993
stock ownership guidelines were implemented. Over a period of five years
following adoption of the guidelines, executive officers are expected to
accumulate and hold Company stock equal to the following values (excluding the
value of any unexercised stock options): Chief Executive Officer - five times
annual cash compensation (i.e., base salary and target annual bonus); Executive
Vice Presidents - four times annual cash compensation; and other corporate
officers - three times annual cash compensation. Executives have the
opportunity to acquire stock through several Company sponsored stock plans. The
Company's matching contribution under the 401(k) Savings Plan is generally paid
in Common Stock. Under the Company's Stock Purchase Program executives may
contribute up to 10% of compensation, with a 50% matching Company contribution,
to the purchase of Common Stock. The Supplemental Stock Program provides for
the purchase of Common Stock with contributions which exceed IRS limitations
relating to the 401(k) Savings Plan and, at the Committee's discretion, for a
preset percentage of earned bonuses in excess of 200% of target levels.
Additional stock ownership may be achieved through the exercise of vested stock
options or open market purchases. The Committee reviews annually the status of
each officer's position with respect to the guidelines and is satisfied with the
progress being made toward satisfaction of the ownership standards.
CEO Compensation. Similar to the other executive officers, the compensation
of the Chief Executive Officer was comprised of base salary, annual incentive
bonus and long-term incentives through stock options. His base salary for the
fiscal year was set at $440,000, although this new salary level did not take
effect until July 2, 1995. In prior years, the CEO base salary level was
established with reference to, but well below the median salary of the CEO
position of the Comparative Group. For fiscal 1995, the Committee determined
that it was in the best interests of the Company for a more competitive level of
base salary to be paid. Mr. Nourse's projected total compensation, based upon
targeted levels of Company profitability, return on assets and earnings per
share growth was $735,000, equal to approximately the 75th percentile of
comparable positions. The Company's performance for the fiscal year ended
February 3, 1996 fell below target levels of profitability, return on assets and
earnings per share and, as a result, Mr. Nourse was paid no bonus for the fiscal
year. Mr. Nourse was granted nonqualified stock options covering 75,000 shares
on February 22, 1995, priced at $9.25 per share and which will vest over a five
year period.
Impact of Section 162(m) of the Internal Revenue Code. The Committee has
considered the potential impact of Section 162(m) of the Internal Revenue Code,
which imposes a $1 million limit per year on the corporation tax deduction for
compensation (including stock-based compensation such as stock options) paid
with respect to the top five executive officers of publicly-held corporations,
unless, in general, such compensation is performance-based and approved by
shareholders. It is the Company's present intention that all amounts paid to
its executives be fully deductible under the applicable tax laws. To maintain
this deductibility, the Committee adopted and the Board of Directors and
shareholders approved the Incentive Plan, which, along with the 1986 Stock
Option Plan, satisfy the requirements of Section 162(m). The newly proposed
1996 Long-Term Incentive Stock Plan is also designed to satisfy Section 162(m)
provided shareholders approve the plan as proposed in this Proxy Statement.
The Committee believes that the quality and motivation of management makes a
significant difference in the performance of the Company, and that a
compensation program which is tied to performance is in the best interests of
shareholders. The Committee is of the opinion that the Company's compensation
plans meet these important requirements.
Robert E. Runice, Chairman
Edmund H. Damon
Shirley Young
1991 - 1996 SHAREHOLDERS' TOTAL RETURN GRAPH
The following graph compares the Company's cumulative shareholder return to
the returns for all the companies in the S&P 500 Index and those companies
comprising the S&P Retail Stock Composite Index for the five year period ended
January 1996. The return values are based on an assumed investment of $100, as
of the close of business on the last day of January 1991, in the Company's
Common Stock and in each of the two comparator groups, with all dividends
treated as reinvested and each comparator group weighted by each component
company's market capitalization on the last day of January for each subsequent
year through January 1995.
<TABLE>
<CAPTION>
BOMBAY COMPARISON OF
FIVE-YEAR CUMULATIVE TOTAL RETURN AMONG BOMBAY,
S&P 500 AND S&P RETAIL COMPOSITE
Jan-91 Jan-92 Jan-93 Jan-94 Jan-95 Jan-96
<S> <C> <C> <C> <C> <C> <C>
BOMBAY $100.0 $236.8 $566.8 $1,046.0 $339.1 $219.7
S&P 500 $100.0 $122.6 $135.6 $153.0 $153.8 $213.2
S&P RETAIL $100.0 $139.7 $166.7 $160.9 $149.0 $160.6
COMPOSITE
</TABLE>
NOTE: Assumes an initial investment of $100 on 1/31, 1991. Total return
includes reinvestment of dividends.
SUMMARY COMPENSATION TABLE
The Summary Compensation Table includes individual compensation information
on the Chief Executive Officer, the four other most highly paid executive
officers as of February 3, 1996 and a former executive officer who would have
been included in the table but for the fact that the individual was not serving
as an executive officer at the end of the last completed fiscal year. For
purposes of this table only, 1994(a) represents the seven month fiscal period
ended January 29, 1995. The other two fiscal years shown are the full fiscal
years ended February 3, 1996 and July 3, 1994.
<TABLE>
<CAPTION>
SUMMARY COMPENSATION TABLE
Long-
Term
Compensa
tion
Annual -------
Compensation Other Stock
Annual Option All
Name and Compen- Awards Other
Principal Fiscal Salary Bonus sation (Shares) Compensation
Position Year ($) ($) (1)($) (2) (3)($)
<S> <C> <C> <C> <C> <C> <C>
Robert E. M. 1995 392,308 0 - 75,000 51,484 (3)
Nourse, 1994(a) 173,077 0 - 0 23,023
President and 1994 280,000 709,297 - 0 126,055
Chief 1993 265,000 810,445 - 0 139,079
Executive
Officer
James E. 1995 194,135 0 - 46,896 26,656 (3)
Herlihy, 1994(a) 89,423 0 - 0 12,487
Executive Vice 1994 147,000 353,445 - 0 64,814
President & 1993 142,692 405,222 - 0 70,364
Chief
Financial
Officer
Alexandra M.T. 1995 266,539 0 - 50,000 35,762 (3)
Nourse, 1994(a) 124,039 0 - 0 16,883
Executive Vice 1994 205,000 493,006 - 0 89,643
President 1993 198,750 570,932 - 0 99,124
Michael J. 1995 131,481 0 - 15,374 18,402 (3)
Veitenheimer, 1994(a) 65,192 0 - 0 9,212
Vice 1994 104,471 149,185 - 4,500 33,982
President, 1993 108,000 133,002 - 9,000 32,479
General
Counsel &
Secretary
Elaine D. 1995 108,846 15,945(4) - 7,000 15,189 (3)
Crowley, Vice 1994(a) N/A N/A - N/A N/A
President & 1994 N/A N/A - N/A N/A
Treasurer (4)
William S. 1995 130,096 16,827 - 7,000 199,272 (3)(5)
Goodlatte, 1994(a) 63,462 20,192 - 0 9,069
Former Vice 1994 75,000 180,466 - 4,500 10,374
President (5)
</TABLE>
(1) "Other Annual Compensation" is intended to cover forms of annual compensa-
tion not properly categorized as salary or bonus, including perquisites.
No named executive received such compensation or perquisites which exceeded
a threshold level for disclosure purposes.
(2) The 1986 Stock Option Plan contains a replacement option feature providing
for additional options to restore the potential future appreciation of any
outstanding shares actually used to exercise a previously granted option.
Replacement options are granted only in connection with stock-for-stock
exchanges where an optionee exercises vested stock options with already
owned stock of the Company. The replacement option which is received by
the optionee is equal to the number of shares used to exercise the original
options but excludes any shares forfeited for tax withholding. Replacement
options have terms substantially similar to the original option, including
the same expiration date, except they have an exercise price per share
equal to the fair market value of a share of Common Stock on the date the
replacement option is granted. Replacement options are exercisable 12
months from the date of the grant.
(3) The totals in this column reflect the aggregate value of the Company
contributions to each named executive under the Stock Purchase Program,
401(k) Savings Plan, Supplemental Stock Program, Executive Disability Plan
and life insurance. For fiscal period ended February 3, 1996, these
amounts were as follows: Robert E. M. Nourse: $19,616; $7,702; $21,721;
$1,305 and $1,140. James E. Herlihy: $9,707; $6,961; $7,599; $1,305 and
$1,084. Alexandra M.T. Nourse: $13,327; $6,894; $13,096; $1,305 and
$1,140. Michael J. Veitenheimer: $6,574; $9,861; $0; $1,305 and $662.
Elaine D. Crowley: $5,442, $8,162, $0, $1,100 and $483. William S.
Goodlatte: $6,505; $9,757; $0; $1,305 and $705.
(4) Ms. Crowley was appointed Vice President, Finance and Treasurer on January
25, 1996. Bonus paid for fiscal 1995 reflects bonus earned prior to
becoming an executive officer.
(5) Mr. Goodlatte separated from the Company on January 29, 1996. His
compensation for fiscal 1994 represents a partial fiscal year, and bonus
amounts for 1994(a) and 1995 reflect guaranteed bonuses for such periods.
Includes, in addition to the amounts reflected in Note 3, above, severance
related compensation in the amount of $181,000.
STOCK OPTION GRANTS
The following table provides information, with respect to individual grants
under the 1986 Stock Option Plan or otherwise to the executive officers named in
the Summary Compensation Table, during the fiscal year ended February 3, 1996.
<TABLE>
<CAPTION>
OPTION GRANTS IN LAST FISCAL YEAR
Per-
cent of
total Potential
options Exer- Realizable Value at
granted cise or Assumed Annual
to em- base Rates of Stock
ployees price Price Appreciation
Options in ($ Expir- for the Option Term
Granted fiscal share) ation ($)(3)
Name (#)(1) year (2) Date 5% 10%
<S> <C> <C> <C> <C> <C>
Robert E. M. Nourse 75,000 24% 9.25 2/22/05 436,500 1,106,250
James E. Herlihy 40,000 13% 9.25 2/22/05 232,800 590,000
6,896(4) 2% 6.88 7/15/01 13,102 29,032
Alexandra M.T. Nourse 50,000 16% 9.25 2/22/05 291,000 737,500
Michael J. 7,000 2% 9.25 2/22/05 40,740 103,250
Veitenheimer 3,183(4) 1% 5.75 9/7/00 3,947 8,530
5,191(4) 2% 5.75 2/27/01 8,254 18,272
Elaine D. Crowley 7,000 2% 9.25 2/22/05 40,740 103,250
William S. Goodlatte 7,000 2% 9.25 4/25/96 N/A N/A
</TABLE>
(1) Grants of options to purchase shares of Common Stock under the 1986 Stock
Option Plan generally vest from the date of grant at a rate of 20% per year
for five years and expire on the tenth anniversary of the date of grant.
The Plan contains a provision which provides that, in the event of a change
in control, as defined therein, all options granted under the plan
immediately vest and become exercisable for a period of 60 days after the
effective date of such change in control.
(2) Exercise price is equal to the closing price of the Common Stock on the New
York Stock Exchange Composite Tape on the date of the grant.
(3) These amounts represent assumed rates of stock price appreciation of 5% and
10% which are specified in applicable federal securities regulations.
Actual gains, if any, on stock option exercises and Common Stock holdings
are dependent on the future performance of the Common Stock and overall
stock market conditions. There can be no assurances that the amounts
reflected in the table will be achieved or maintained through the life of
the option. The amounts shown represent the assumed value of the stock
options, less the exercise price, at the end of the ten-year period,
beginning on the date of grant and ending on the option expiration date.
Based upon a ten-year period beginning on the date of grant on February 22,
1995, with a price of the Common Stock of $9.25, a share of Common Stock
would have a value on February 22, 2005 of approximately $15.07 at an
assumed appreciation rate of 5% and approximately $24.00 at an assumed
appreciation rate of 10%.
(4) By amendment dated December 5, 1995, a replacement stock option feature was
added to the Plan whereby a new option is granted upon exercise of a prior
grant if the payment of the exercise price is by tendering previously-owned
shares. See Note 2 to Summary Compensation Table.
STOCK OPTION EXERCISES AND HOLDINGS
The following table provides information with respect to the exercise of
options by the individuals named in the Summary Compensation Table during the
last fiscal year and the value of unexercised options held as of February 3,
1996.
<TABLE>
<CAPTION>
AGGREGATED OPTION EXERCISES IN FISCAL YEAR AND YEAR END OPTION VALUES
Shares Value of
Ac- Unexercised
quired Number of In-the-Money
on Unexercised Options at
Exer- Value Options at 2/3/96 2/3/96 ($)
cise Realized Exercisable/ Exercisable/
Name (#) ($) Unexercisable Unexercisable
<S> <C> <C> <C> <C>
Robert E. M. Nourse 0 0 403,783 / 391,914 252,457 / 222,290
James E. Herlihy 30,000 133,930 206,248 / 207,212 205,138 / 149,318
Alexandra M.T. Nourse 0 0 286,535 / 263,639 211,694 / 186,168
Michael J. 15,030 38,270 14,541 / 34,671 11,686 / 3,560
Veitenheimer
Elaine D. Crowley 0 0 5,609 / 25,640 34,803 / 27,838
William S. Goodlatte 0 0 3,900 / 15,100 0 / 0
</TABLE>
TERMINATION ARRANGEMENTS
On December 8, 1992, the Company entered into Executive Severance and Non-
Competition Agreements (the "Agreements") with Robert E. M. Nourse, Alexandra
M.T. Nourse and James E. Herlihy. The Agreements are intended to provide non-
competition protection to the Company for a two year period following
termination of employment and prohibit at any time the unauthorized disclosure
or use of trademarks, trade secrets or other proprietary information or property
of the Company other than in the service of the Company. In exchange, the
officers are entitled to certain severance benefits in the event of the
termination of employment including the payment of base salary and bonus
prorated through the date of termination. These Agreements have three year
terms with automatic annual one year extensions unless otherwise elected by the
Company. In the event the officer is terminated without cause or following an
involuntary reduction of his or her responsibilities, position or compensation,
such officer will be entitled to receive his or her base salary, projected bonus
and health benefits for up to a two year period following termination. Further,
the officer will be entitled to immediate vesting of all or a part of any stock
options granted to the officer more than 12 months prior to the termination
date. To the extent certain of such stock options are exercised during the
three months following termination of employment, the officer is also entitled
to receive stock appreciation rights that are exercisable for a 21 month period
thereafter for cash in an amount equal to the stock appreciation experienced
from the date of exercise of the underlying option to the date of exercise of
the stock appreciation right. The exercise of such stock appreciation rights,
or measures taken by the Company to offset the costs of the rights should an
exercise occur, would likely constitute an expense to the Company and a charge
to earnings in the period exercised.
APPROVAL OF 1996 LONG-TERM INCENTIVE STOCK PLAN
Item 2
The 1996 Long-Term Incentive Stock Plan (the "Plan") was adopted, subject
to shareholder approval, by the Board of Directors on March 6, 1996. The
purpose of the Plan is to replace the Company's 1986 Stock Option Plan, which
expires in 1996, with a flexible, long-term vehicle to attract, retain and
motivate officers and employees. By providing equity ownership opportunities
and performance based incentives, the Plan is intended to better align the
interests of officers and employees with those of shareholders and thereby
enhance the performance and profitability of the Company. The Plan authorizes
the grant of incentive or nonqualified stock options, stock appreciation rights
and stock awards (collectively referred to as "Awards") any of which may be
granted on a stand alone, combination or tandem basis. AN AFFIRMATIVE VOTE OF A
MAJORITY OF THE SHARES OF COMMON STOCK REPRESENTED AT THE ANNUAL MEETING IN
PERSON OR BY PROXY AND ENTITLED TO VOTE ON THE PROPOSAL WILL CONSTITUTE
APPROVAL.
The following is a summary of the proposed features of the Plan, which is
qualified in its entirety by reference to the Plan, a copy of which is attached
as Exhibit "A" to this Proxy Statement.
ADMINISTRATION.
The Plan will be administered by a Committee (the "Committee") designated
by the Board of Directors, which will consist of directors who qualify as
"disinterested persons" as defined in Rule 16b-3 of the Securities Exchange
Act of 1934, as amended (the "Exchange Act"), and who meet or are deemed to
meet the "outside director" requirement of Section 162(m) of the Code. The
Committee will determine the individuals to whom Awards are to be made, the
number of shares to be covered by each Award, the term of the Award, its
vesting, exercise period or settlement, the effect of a participant's
termination of employment or service with the Company, the type of consideration
to be paid to the Company upon exercise of an Award, the method of satisfaction
of any tax withholding obligation arising in connection with any Award,
including by withholding or delivery of shares of stock, and all other terms and
conditions of the Awards. Determinations of the Committee on all matters
relating to the Plan or any specific Award shall be final and binding on all
persons affected by such decision.
SHARES RESERVED.
The number of shares of common stock available for delivery under the Plan
(the "Common Stock") shall consist of an initial allocation of 1,400,000
shares plus 321,232 which remain available and not subject to existing grants
under the 1986 Stock Option Plan. Additionally, beginning with the 1997 fiscal
year and during each fiscal year following, one and one-fourth percent (1.25%)
of the total number of issued shares of Common Stock at the end of the prior
fiscal year shall be added to the number of shares reserved for delivery under
the Plan. Any shares represented by Awards under the Plan or the 1986 Stock
Option Plan which are forfeited, canceled or expire without the delivery of
shares, any shares tendered as payment in connection with the exercise of an
Award under the Plan or the 1986 Stock Option Plan and any carryover shares
available and not used during a prior fiscal year shall become available for
delivery as future Awards under the Plan. Finally, any shares reacquired by the
Company, in which fair market value is paid for such shares, up to the extent
that the aggregate purchase price of such shares does not exceed the cumulative
amount of cash proceeds received by the Company from the
exercise of stock options occurring after the Plan is approved by shareholders,
shall be added to the number of shares available for Awards under the Plan.
Shares delivered under the Plan may be either authorized and unissued shares,
treasury shares, reacquired shares or any combination thereof.
LIMITATIONS ON AWARDS.
The Plan limits the number of shares of Common Stock that can be
represented by Awards to any employee during any single fiscal year to no more
than 525,000. It further limits the aggregate number of shares of Common Stock
that may be covered by Awards of incentive stock options intended to comply with
Section 422 of the Internal Revenue Code (`Code') to a maximum 1,500,000
shares during the life of the Plan. As a further limitation, the total number
of shares of Common Stock available for delivery as Awards of other than stock
options or stock appreciation rights shall not exceed 25% of the number of
shares of Common Stock available for delivery under the Plan.
PARTICIPATION.
Awards under the Plan may be made to any employee of the Company or its
affiliates designated by the Committee. Historically, options have been granted
to approximately 150 employees in any given year.
TYPES OF GRANTS.
OPTIONS. The Plan provides for the Award of options which may be either
incentive stock options or nonqualified options. For both incentive and
nonqualified options, the exercise price will be not less than 100 percent
of the fair market value of a share of Common Stock at the time the option
is granted. Any option intended to qualify as an incentive stock option
must meet all requirements of Section 422 of the Code.
Each option becomes exercisable on terms and conditions as determined by
the Committee. The Plan permits payment of the purchase price to be made:
(i) in cash; (ii) in shares of Common Stock owned by the optionee as the
Committee may prescribe; (iii) through the simultaneous sale through a
third party of shares of unrestricted Common Stock acquired on exercise; or
(iv) any combination of the foregoing. If an option holder exercises
vested options by tendering currently owned shares as payment of the
exercise price, the Plan provides for restoration options, if approved by
the Committee, equal in number to the amount of shares tendered as payment.
The new options are priced at current market price, and have a term equal
to the remaining term of the options exercised.
STOCK APPRECIATION RIGHTS. The Committee may grant stock appreciation
rights to any eligible employee on such terms as the Committee may
determine. A stock appreciation right entitles a grantee to receive an
amount equal to the appreciation in the fair market value of a share of
Common Stock from the date the right (or tandem or replaced award) is
granted until the date of exercise. The benefit upon the exercise of a
right shall be payable in cash, shares of Common Stock or a combination
thereof as determined by the Committee.
STOCK AWARDS. The Committee may grant shares of Common Stock subject to
such conditions and restrictions as the Committee may determine. Stock
Awards may be made alone or in tandem with other Awards. The vesting of a
stock Award may be conditioned upon the completion of a specified period
of employment with the Company, the attainment of specified performance
goals during a performance period or such other conditions as the
Committee may determine. The criteria for suchperformance goals are
limited to earnings or earnings growth; return on equity, assets or
investment; revenues; expense control; total shareholder return; cash
flow or assets.
TRANSFERABILITY.
No Award under the Plan may be assigned or transferred by the grantee other
than by will or the laws of descent and distribution, pursuant to a qualified
domestic relations order (as defined by the Code) or as may otherwise be
permitted by the Committee. In the absence of the first two exceptions, all
rights may be exercised during the grantee's lifetime only by the grantee.
NO REPRICING.
The Committee may not grant an option or stock appreciation right in
substitution for a previously granted option or right if the new option or right
would have a lower per share exercise price or base amount than the Award it
replaces.
ADJUSTMENTS OF COMMON STOCK.
The Committee is authorized to make equitable adjustments to the maximum
number of shares of Common Stock that may be issued under the Plan, the maximum
number of shares that may be covered by Awards made to any one person in any
fiscal year, the number of shares subject to Awards and the exercise price or
base amount of Awards for any change in the number of issued shares of Common
Stock resulting from any stock dividend, stock split, combination, exchange,
merger, consolidation, recapitalization, spin-off or other distribution (except
cash dividends) or other capital adjustments or other change in such shares of
Common Stock effected without receipt of consideration by the Company.
Fractional shares resulting from any such adjustment shall be eliminated.
AMENDMENT AND TERMINATION.
The Board may from time to time, at its discretion, amend or terminate the
Plan, except that no such amendment or termination shall impair any rights under
any Award made prior to the amendment's effective date without the consent of
the grantee, and provided that no such amendment shall increase the number of
shares available to the Plan or change the price at which stock options or stock
appreciation rights may be granted unless approved by shareholders in accordance
with applicable laws and regulations. The Plan shall terminate on March 6, 2006
or on such earlier date as the Board may determine.
FEDERAL INCOME TAX CONSEQUENCES.
The following is a brief summary of the principal United States Federal
income tax consequences under current tax laws related to stock options under
the Plan. This summary is not intended to be exhaustive and does not describe
state or local tax consequences.
An optionee who is granted an incentive stock option does not realize any
taxable income at the time of the grant or at the time of exercise. Similarly,
the Company is not entitled to any deduction. If
the optionee makes no disposition of the shares acquired pursuant to an
incentive stock option before the latter of two years from the date of Award of
such option or one year from the exercise of such option, any gain or loss
realized on a subsequent disposition of the shares will be treated as a long-
term capital gain or loss. Under such circumstances, the Company will not be
entitled to any deduction for Federal income tax purposes. If an optionee
disposes of shares within two years after the date of grant or within one year
from the date of exercise (a "disqualifying disposition"), the difference
between the fair market value of the shares on the date of exercise and the
option exercise price (not to exceed the gain realized on the sale if the
disposition is a transaction with respect to which a loss, if sustained, would
be recognized) will be taxed as ordinary income at the time of disposition. Any
gain in excess of that amount will be a capital gain. If a loss is recognized,
there will be no ordinary income, and such loss will be a capital loss. A
capital gain or loss will be long-term if the optionee's holding period is more
than 12 months.
The Award of a non-qualified stock option does not have taxable income at
the time of grant, but does have taxable income at the time of exercise equal to
the difference between the exercise price of the shares covered by the option
and the market value of the shares of Common Stock on the date of exercise.
LIMITATION ON INCOME TAX DEDUCTION.
Under Section 162(m) of the Code, the Company may be limited as to Federal
income tax deductions to the extent that total compensation paid to any one
"covered employee" exceeds $1,000,000 in any one year. The Company can
preserve the deductibility of such compensation, however, provided it complies
with the conditions imposed by Section 162(m) of the Code, including the payment
of "Performance-based compensation" pursuant to a plan approved by the
shareholders. The Plan has been designed to enable Awards made by the Committee
in the form of stock options, stock appreciation rights and stock Awards subject
to performance restrictions to qualify as "Performance-based compensation."
Subject to Plan limitations, other stock Awards may not be performance-based and
will be subject to the limitations on deductibility in Section 162(m) of the
Code.
EFFECT ON 1986 STOCK OPTION PLAN.
Contingent on shareholder approval of the Plan, the 1986 Stock Option Plan
was suspended by the Board of Directors effective March 6, 1996. Outstanding
Awards under the 1986 Stock Option Plan will remain in effect under the terms of
their respective grants.
BENEFITS UNDER THE PLAN.
In connection with the development of the new plan for long-term incentives,
the Committee reviewed competitive long-term compensation practices of
comparative companies. It was the opinion of the Committee and the Company's
outside compensation consultant that strong long-term incentives in the form of
stock options were most likely to drive material improvements in Company
performance since executives holding the options only benefit through increase
stock prices which represent enhanced shareholder value. As a result, normal
annual grants of options were made to approximately 150 employees, including
officers and executive officers of the Company. To further leverage
management's motivation and shareholder focus to drive significant improvements
in performance, the Committee also granted front-loaded, premium priced options
to selected senior executives. The aggregate grants to
these individuals represented an equivalent to three times a normal annual
grant, with the expectation that no further options would be granted to such
executives until 1999. A similar approach using front-loading was used in 1992,
and executive officers who received such options did not receive option grants
in 1993 and 1994. Further, the front-loaded, premium priced options carry a
longer vesting period (six and seven years rather than the normal five year
vesting schedule) and have exercise prices representing premiums over fair
market value at grant equal to 15% and 32% respectively.
The following table sets forth the Awards made to (i) each of the named
executives, (ii) all current executive officers as a group, (iii) all current
Directors who are not executive officers as a group, and (iv) all employees,
including all current officers who are not executive officers, as a group. Such
grants are subject to shareholder approval of the Plan at the Annual Meeting.
Option grants followed by the (P) symbol represent front-loaded, premium
priced options.
<TABLE>
<CAPTION>
1996 LONG-TERM INCENTIVE STOCK PLAN
Name and Position Shares Exercise Uncondi- Expiration
Covered Price tional Date
by Vesting
Options Date
<S> <C> <C> <C> <C>
Robert E. M. Nourse, 175,000 $6.75 3/6/01 3/6/06
President & CEO 175,000(P) $7.76 3/6/02 3/6/06
175,000(P) $8.93 3/6/03 3/6/06
James E. Herlihy, 60,000 $6.75 3/6/01 3/6/06
Executive Vice President & CFO 60,000(P) $7.76 3/6/02 3/6/06
60,000(P) $8.93 3/6/03 3/6/06
Alexandra M.T. Nourse, 75,000 $6.75 3/6/01 3/6/06
Executive Vice President 75,000(P) $7.76 3/6/02 3/6/06
75,000(P) $8.93 3/6/03 3/6/06
Michael J. Veitenheimer, 20,000 $6.75 3/6/01 3/6/06
Vice President, Secretary
& General Counsel
Elaine D. Crowley, Vice 20,000 $6.75 3/6/01 3/6/06
President & Treasurer -
Executive Officer Group 460,000 $6.75 3/6/01 3/6/06
400,000(P) $7.76 3/6/02 3/6/06
400,000(P) $8.93 3/6/03 3/6/06
Non-Executive Officer - - - -
Director Group
Non-Executive Officer 171,000 $6.75 3/6/01 3/6/06
Employee Group
</TABLE>
RECOMMENDATION.
The Board of Directors believes that approval of the 1996 Long-Term
Incentive Stock Plan is in the best interests of the Company and its
shareholders because the Plan will enable the Company to attract and retain
officers and key management employees and provide these employees with
competitive incentives, which also align their interests with those of the
Company shareholders.
THE BOARD OF DIRECTORS RECOMMENDS THAT THE SHAREHOLDERS VOTE "FOR" THE
APPROVAL OF THE 1996 LONG-TERM INCENTIVE STOCK PLAN.
COMPLIANCE WITH SECTION 16(A) OF THE SECURITIES EXCHANGE ACT OF 1934
Section 16(a) of the Securities Exchange Act of 1934 requires executive
officers and directors, and persons who beneficially own more than ten percent
(10%) of the Company's stock, to file initial reports of ownership and reports
of changes in ownership with the Securities and Exchange Commission and the
applicable national stock exchange. Executive officers, directors and
beneficial owners in excess of ten percent (10%) of the Company's Common Stock
are required by Securities and Exchange Commission regulations to furnish the
Company with copies of all Section 16(a) forms they file.
Based solely on a review of the copies of such forms furnished to the
Company and written representations from the executive officers and directors,
the Company believes that all Section 16(a) filing requirements applicable to
its executive officers, directors and beneficial owners in excess of ten percent
(10%) were complied with during the fiscal year ended February 3, 1996.
CERTAIN TRANSACTIONS
On July 1, 1991, Mr. Carson R. Thompson retired from his position as Chief
Executive Officer of the Company. In connection therewith, the Company entered
into a five year non-compete and consulting agreement with Mr. Thompson,
commencing July 1, 1991. Under the terms of the consulting agreement, Mr.
Thompson will be paid $75,000 per year in consulting fees and an additional
$25,000 (increased to $35,000 in fiscal 1994) per year during such periods as he
continues to serve as Chairman of the Board. In addition, Mr. Thompson will be
entitled to continued eligibility for health care coverage under the Company's
group medical plan and reimbursement for travel and related business expenses
incurred in connection with his activities as a consultant for the Company.
RELATIONSHIP WITH INDEPENDENT PUBLIC ACCOUNTANTS
The Board of Directors has selected Price Waterhouse LLP as independent
accountants to audit the books, records and accounts of the Company for fiscal
year 1996. Price Waterhouse LLP has served as the Company's independent
accountants since 1975, and is, therefore, familiar with the affairs and
financial procedures of the Company. To the knowledge of management, neither
such firm nor any of its members has any direct or material indirect financial
interest in the Company nor any connection with the Company in any capacity
otherwise than as independent accountants.
Audit and audit related services performed by Price Waterhouse LLP during
the fiscal period ended February 3, 1996 included the audit of the financial
statements of the Company.
A representative of Price Waterhouse LLP is expected to be present at the
Annual Meeting on May 16, 1996 to answer questions and, if necessary, will be
afforded an opportunity to make a statement regarding the financial statements.
PROPOSALS OF SHAREHOLDERS
The Annual Meeting of Shareholders for the 1996 fiscal year is expected to
be held on or about May 21, 1997, with the mailing of Proxy materials for such
Meeting to be made on or about April 4, 1997. If a shareholder intends to
submit a proper proposal for presentation at such Annual Meeting, the proposal
must be received by the Company at its principal executive offices on or before
December 6, 1996, in order to be considered for inclusion in the Proxy Statement
and Proxy relating to such Meeting.
GENERAL
The Company will furnish without charge to each person whose Proxy is being
solicited, upon request of any such person, a copy of the Annual Report of the
Company on Form 10-K for the fiscal year ended February 3, 1996, as filed with
the Securities and Exchange Commission, including the financial statements and
schedules. Such report will be filed with the Securities and Exchange
Commission on or before May 3, 1996. Requests for copies of such report should
be directed to Michael J. Veitenheimer, Vice President, Secretary and General
Counsel, The Bombay Company, Inc., 550 Bailey Avenue, Suite 700, Fort Worth,
Texas 76107.
REPORT TO SHAREHOLDERS
The Report to Shareholders of the Company for the fiscal year ended February
3, 1996 has been forwarded to all shareholders. The Report, which includes
audited financial statements, does not form any part of the material for the
solicitation of Proxies.
Please date, sign and return the enclosed Proxy at your earliest convenience
in the enclosed envelope. No postage is required for mailing in the United
States. A prompt return of your Proxy will be appreciated as it will save the
expense of further mailings.
By Order of the Board of Directors
MICHAEL J. VEITENHEIMER
Vice President, Secretary
and General Counsel
EXHIBIT A
THE BOMBAY COMPANY, INC.
1996 LONG-TERM INCENTIVE PLAN
THE BOMBAY COMPANY, INC.
1996 LONG-TERM INCENTIVE STOCK PLAN
TABLE OF CONTENTS
SECTION 1 Purposes of the Plan ............................1
SECTION 2 Definitions .....................................1
SECTION 3 Effective Date of Plan and Duration of Plan .....2
SECTION 4 Plan Administration .............................2
a) Committee ...................................2
b) Committee Authority .........................2
c) Cancellation and Reissuance .................3
d) Delegation ..................................3
e) Limitation of Liability .....................3
SECTION 5 Participation ...................................3
SECTION 6 Available Shares of Common Stock ................3
a) Available Shares ............................3
b) Limitations .................................4
c) Non-Share Usage .............................4
d) Adjustments .................................4
SECTION 7 Awards ..........................................5
a) General .....................................5
b) Foreign Jurisdiction ........................5
c) Stock Options ...............................5
d) Stock Appreciation Rights ...................6
e) Stock Awards ................................6
SECTION 8 Dividends and Dividend Equivalents ..............6
SECTION 9 Payments and Payment Deferrals ..................6
SECTION 10 Transferability .................................7
SECTION 11 Change-of-Control ...............................7
SECTION 12 Award Agreements ................................9
SECTION 13 Termination and Amendment of the Plan ...........9
SECTION 14 Tax Withholding .................................9
SECTION 15 Other Benefit and Compensation Programs .........10
SECTION 16 Unfunded Plan ...................................10
SECTION 17 Use of Proceeds .................................10
SECTION 18 Regulatory Approvals ............................10
SECTION 19 Future Rights ...................................10
SECTION 20 Governing Law ...................................11
SECTION 21 Successors and Assigns ..........................11
THE BOMBAY COMPANY, INC.
1996 LONG-TERM INCENTIVE STOCK PLAN
1. PURPOSES OF THE PLAN
The purpose of the 1996 Long-Term Incentive Stock Plan of The Bombay
Company, Inc. is to provide incentives and rewards for employees so as to
promote the interests of the Company and its shareholders by (i) strengthening
the Company's ability to attract and retain highly competent officers and other
key employees; (ii) permit the awarding of opportunities for plan participants
to be rewarded using stock based incentives; (iii) to provide a means to
encourage stock ownership and proprietary interest in the Company by the
recipients of awards made under the Plan; and (iv) to provide equity ownership
opportunities and performance based incentives to better align the interests of
officers and key employees with those of shareholders.
2. DEFINITIONS
"Award" includes, without limitation, stock options (including incentive
stock options under Section 422 of the Code), stock appreciation rights, stock
awards made in restricted and performance shares or denominated in units
equivalent in value to shares or other awards that are valued in whole or in
part by reference to, or are otherwise based on, the Common Stock, all on a
stand alone, combination or tandem basis, as described in or granted under this
Plan.
"Award Agreement" means a written agreement entered into between the
Company and a Participant setting forth the terms and conditions of an Award
made to such Participant under this Plan, in the form prescribed by the
Committee.
"Board" means the Board of Directors of the Company.
"Change of Control" shall have the meaning specified in Section 11.
"Code" means the Internal Revenue Code of 1986, as amended from time to
time.
"Committee" means the body appointed by the Board, which shall be
comprised in such a manner as to comply with the requirements, if any, of Rule
16b-3 (or any successor rule) under the Exchange Act and of Section 162 of the
Code.
"Common Stock" means the common stock of the Company, $1.00 par value per
share.
"Company" means The Bombay Company, Inc., a Delaware corporation and
shall include any entity that is directly or indirectly controlled by the
Company or any entity, including an acquired entity, in which the Company has a
significant equity interest, as determined by the Committee.
"Employee" means an employee of the Company.
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"Fair Market Value" means the closing price of the Common Stock as
reported on the New York Stock Exchange Composite Transactions Tape on the
relevant valuation date or, if there were no Common Stock transactions on the
valuation date, on the next preceding date on which there were Common Stock
transactions.
"Participant" means an Employee who has been granted an Award under this
Plan.
"Performance Goals" means, with respect to any Performance Period, goals
based on any of the following criteria established by the Committee and set
forth in the applicable Award Agreement(s): earnings or earnings growth; return
on equity, assets or investment; revenues; expense control; total shareholder
return; cash flow; or assets. Such Performance Goals may be particular to an
Employee or the division, department, branch, line of business, subsidiary or
other unit in which the Employee works, or may be based on the performance of
the Company generally.
"Performance Period" means the period of time designated by the Committee
applicable to a stock Award during which the Performance Goals shall be
measured.
"Plan" means this 1996 Long-Term Incentive Stock Plan.
"Reporting Person" means an officer or director of the Corporation
subject to the reporting requirements of Section 16 of the Exchange Act.
3. EFFECTIVE DATE OF PLAN AND DURATION OF PLAN
The effective date of this Plan is March 6, 1996 subject to its approval by
the shareholders of the Company at the next annual meeting or any adjournment
thereof. Any grant of any Award under the Plan prior to such approval shall be
deemed to be null and void if such approval is not obtained within one year of
its approval by the Board. No Award shall be granted pursuant to the Plan on or
after the tenth anniversary date of the effective date, but any Award granted
prior to such tenth anniversary may extend beyond that date to the date(s)
specified in the Award Agreement.
4. PLAN ADMINISTRATION
a) Committee. The Committee shall be responsible for administering the
Plan. Each member of the Committee shall serve for such term as the Board may
determine, subject to removal by the Board at any time.
b) Committee Authority. The Committee shall have full and exclusive power
to interpret the Plan and to adopt such rules, regulations and guidelines for
carrying out the Plan as it may deem necessary or proper, all of which power
shall be executed in the best interests of the Company and in keeping with the
provisions and objectives of the Plan. This power includes, but is not limited
to, selecting Participants, establishing all Award terms and conditions,
adopting procedures and regulations governing Awards, and making all other
determinations necessary or advisable for the administration of this Plan,
including the authority in the event of a spin-off or other corporate
transaction to permit substitution of an Award granted under the Plan with an
award from another company or an award denominated in other than shares of
Common Stock. All decisions made by the Committee shall be final and binding on
all persons affected by such decisions.
c) Cancellation and Reissuance. The Committee shall not have the right
to cancel outstanding stock options or stock appreciation rights for the purpose
of replacing or regranting such options or rights with a purchase price that is
less than the purchase price of the original option or right.
d) Delegation. Except as required by Rule 16b-3 (or any successor rule)
under the Exchange Act with respect to grants of options, stock appreciation
rights, other stock awards, or other benefits to Participants who are subject to
Section 16 of the Exchange Act, or as otherwise required for compliance with
such Rule 16b-3 or other applicable law, the Committee may delegate all or any
part of its authority under the Plan to any officer of the Company.
e) Limitation of Liability. No member of the Committee shall be liable
for any action, failure to act, determination or interpretation made in good
faith with respect to this Plan or any transaction hereunder, except for
liability arising from his or her own willful misfeasance, gross negligence or
reckless disregard of his or her duties. The Company shall indemnify each
member of the Committee for all costs and expenses and, to the extent permitted
by applicable law, any liability incurred in connection with defending against,
responding to, negotiation for the settlement of or otherwise dealing with any
claim, cause of action or dispute of any kind arising in connection with any
actions in administering this Plan or in authorizing or denying authorization to
any transaction hereunder.
5. PARTICIPATION
Awards may be granted under the Plan to those Employees of the Company as
the Committee may from time to time select, including any Employee of an entity
acquired by or merged into the Company pursuant to the assumption, replacement
or substitution of awards previously issued by such entity. In no event may an
Award be granted under the Plan to any person who is not an Employee, except in
circumstances involving the grant of an Award made in tandem with or replacement
of an earlier Award made under the Plan to a former Employee.
6. AVAILABLE SHARES OF COMMON STOCK
a) Available Shares. There shall be an initial allocation of 1,400,000 shares
of Common Stock to the Plan, plus any shares of Common Stock available for
delivery under the 1986 Stock Option Plan (the "Prior Plan") which have not
been committed for delivery by grants made under the Prior Plan. Additionally,
and subject to the provisions of Section 6(d) of the Plan, the aggregate number
of shares of Common Stock which shall be available for delivery to Participants
under the Plan shall be increased each fiscal year following the fiscal year in
which the Plan is adopted by an amount equal to one and one-fourth percent
(1.25%) of the total number of issued shares of Common Stock as reported in the
Company's Consolidated Balance Sheet in the Annual Report on Form 10-K for the
immediately preceding fiscal year end. Any shares of Common Stock which are
represented by Awards or portions of Awards made under the Plan or the Prior
Plan which are settled, forfeited, expire or are canceled without the delivery
of shares, and any shares of Common Stock which may be tendered, either actually
or by attestation, by a person as full or partial payment made to the Company in
connection with the exercise of any stock option under the Plan or the Prior
Plan shall be available for Awards under the Plan. Any shares of Common Stock
available pursuant to this Section 6 which were available and not used for
Awards in any prior fiscal year shall be carried forward and be available for
Awards in succeeding fiscal years, as well as any shares reacquired by the
Company in the open market or in a private transaction, in which Fair Market
Value is paid for such shares, up to the extent that the aggregate purchase
price of such shares does not exceed the cumulative amount of cash proceeds
received by the Company after the effective date of the Plan from the exercise
of stock options granted under the Plan or the Prior Plan. The stock subject to
the provisions of this Plan shall either be shares of authorized but unissued
Common Stock, shares of Common Stock held as treasury stock or previously issued
shares of Common Stock reacquired by the Company, including shares purchased on
the open market.
b) Limitations. The aggregate number of shares of Common Stock that may
be represented by Awards granted to any single Participant under Sections 7(c),
7(d) and 7(e) of the Plan shall not exceed 525,000 for any fiscal year during
which the Plan is in effect. The aggregate number of shares of Common Stock
that may be delivered in settlement of Awards granted pursuant to Section 7(e)
of the Plan shall not exceed 25% of the aggregate number of shares available for
delivery at any time under the Plan under Section 6(a). Further, the aggregate
number of shares of Common Stock that may be covered by Awards made in the form
of incentive stock options intended to comply with Section 422 of the Code shall
not exceed 1,500,000 during the life of the Plan.
c) Non-Share Usage. Cash dividends, dividend equivalents paid in cash in
conjunction with outstanding Awards, and stock-denominated Awards which are
settled in cash shall not reduce the number of shares available for delivery
under the Plan. Further, any shares that are issued by the Company, and any
Awards that are granted through the assumption of, or in substitution for,
outstanding awards previously granted by an acquired entity shall not reduce the
number of shares available for Awards under the Plan. No fractional shares of
Common Stock shall be delivered under the Plan. Cash may be paid in lieu of any
fractional shares in settlements of Awards under the Plan.
d) Adjustments. In the event of any stock dividend, stock split,
combination or exchange of equity securities, merger, consolidation,
recapitalization, spin-off or other distribution (other than normal cash
dividends) of the Company's assets to shareholders, or any other change
affecting shares of Common Stock or share price, the Committee shall make
appropriate adjustments to reflect such change with respect to: (i) the number
of shares of Common Stock that may be available and delivered as set forth in
Section 6(a) and the limitations on such Awards as set forth in Section 6(b);
(ii) the number of shares of Common Stock covered by each outstanding Award made
under the Plan; and (iii) the exercise price per share of Common Stock for any
outstanding stock options, stock appreciation rights or similar Awards under the
Plan.
7. AWARDS
a) General. The Committee shall determine the type or types of Award(s)
set forth below to be made to each Participant. Awards may be granted singly,
in combination or in tandem. Awards also may be made, subject to the provision
of Section 4(c), in replacement of or as alternatives to other Awards or rights
under the Plan or any other employee compensation plan of the Company, including
the plan of any acquired entity.
b) Foreign Jurisdiction. Awards may be granted, without amending the
Plan, to Participants who are foreign nationals or employed outside the United
States or both, on such terms and conditions different from those specified in
the Plan as may, in the judgment of the Committee, be necessary or desirable to
further the purposes of the Plan or to accommodate differences in local law, tax
policy or custom. Moreover, the Committee may approve such supplements to or
alternative versions of the Plan as it may consider necessary or appropriate for
such purposes without thereby affecting the terms of the Plan as in effect for
any other purpose; provided, however, no such supplement or alternative version
shall: (a) increase the number of available shares of Common Stock under
Section 6(a); or (b) increase the limitations contained in Section 6(b).
c) Stock Options. A stock option represents a right to purchase a
specified number of shares of Common Stock during a specified period as
determined by the Committee. The purchase price per share for each stock option
shall be not less than 100% of the Fair Market Value on the date of grant. A
stock option may be in the form of an incentive stock option which, in addition
to being subject to the
applicable terms, conditions and limitations established by the Committee,
complies with Section 422 of the Code. The shares of Common Stock covered by a
stock option may be exercised only by written notice to the Secretary of the
Company, in accordance with the applicable Award Agreement, accompanied by cash
payment or such other payment method permitted by the Committee, including (i)
tendering (either actually or by attestation) shares of Common Stock valued at
Fair Market Value on the date of exercise; (ii) authorizing a third party to
sell the shares (or a sufficient portion thereof) acquired upon exercise of a
stock option, and assigning the delivery to the Company of a sufficient amount
of the sale proceeds to pay for all the shares acquired through such exercise
and any tax withholding obligations resulting from such exercise; or (iii) any
combination of the above. The Committee may grant stock options that provide
for the grant of a subsequent restoration stock option if the exercise price has
been paid for by tendering shares to the Company. Any restoration stock option
shall be for the number of shares tendered in exercising the predecessor option.
The restoration stock option exercise price shall be the then-current Fair
Market Value, and the term of such restoration option may not extend beyond the
remaining term of the original option.
d) Stock Appreciation Rights. A stock appreciation right represents a
right to receive a payment, in cash, shares of Common Stock or a combination,
equal to the excess of the Fair Market Value of a specified number of shares on
the date the right is exercised over (a) the Fair Market Value on the date the
right was granted as set forth in the applicable Award Agreement or (b), in the
case of a stock appreciation right granted in tandem with or substitution for a
stock option, the purchase price per share of such stock option.
e) Stock Awards. A stock Award represents an Award made in shares of
Common Stock or denominated in units equivalent in value to shares of Common
Stock. All or part of any stock Award shall be subject to conditions and
restrictions established by the Committee and set forth in the Award Agreement,
which may include, but not be limited to, continuous service with the Company
and/or the achievement of Performance Goals over a specified Performance Period.
The Committee may select one criterion or multiple criteria for measuring
performance, and the measurement may be based on total Company or business unit
performance or based on comparative performance with other companies.
8. DIVIDENDS AND DIVIDEND EQUIVALENTS
The Committee may provide that any Awards under the Plan earn dividends or
dividend equivalents. Such dividends or dividend equivalents may be paid
currently or may be credited to a Participant's account. Any crediting of
dividends or dividend equivalents may be subject to such restrictions and
conditions as the Committee may establish, including reinvestment in additional
shares of Common Stock or share equivalents. Payment of credited or deferred
dividends shall be made upon the lapsing of any restrictions imposed on the
Award in respect of which the deferred dividends were paid, and any dividends
deferred in respect to an Award shall be forfeited upon the forfeiture of such
Award. The total number of shares of Common Stock available for grant under
Section 6(a) shall not be reduced to reflect any dividends or dividend
equivalents that are reinvested into additional shares or credited as units
equivalent to shares.
9. PAYMENTS AND PAYMENT DEFERRALS
Payment of Awards may be in the form of cash, shares of Common Stock, other
Awards or combinations thereof as the Committee shall determine, and with such
restrictions as it may impose. The Committee also may require or permit
participants to elect to defer the delivery of shares or the settlement of
Awards in cash under such rules and procedures as it may establish under the
Plan. It also
may provide that deferred settlements include the payment or crediting of
interest on the deferral amounts, or the payment or crediting of dividend
equivalents where the deferral amounts are denominated in share equivalents. In
addition, the Committee may stipulate in an Award Agreement, either at the time
of grant or by subsequent amendment, that a payment or portion of a payment of
an Award be delayed in the event that Section 162(m) of the Code (or any
successor or similar provision of the Code affecting tax deductibility) would
operate to disallow a tax deduction by the Company for all or a portion of such
payment. The period of any such delay in payment shall be until the payment or
portion thereof, is tax deductible, or such earlier date as the Committee shall
determine.
10. TRANSFERABILITY
No Award shall be assignable or transferable except by will, by the laws of
descent and distribution or pursuant to a qualified domestic relations order as
defined by the Code or as otherwise may be permitted by the Committee. During
the lifetime of a Participant, an Award shall be exercisable only by such
Participant or such Participant's guardian, legal representative or assignee
pursuant to a qualified domestic relations order.
11. CHANGE-OF-CONTROL
(a) Notwithstanding anything contained in this Plan or any Award Agreement
to the contrary, in the event of a Change of Control, as defined
below, any of the following may, in the sole discretion of the
Committee, occur with respect to any Employee Awards outstanding as of
such Change of Control:
(i) the time periods for exercising or realizing and vesting periods
of Awards will be accelerated, restrictions will lapse and
performance standards will be deemed to have been attained so
that such Awards may be immediately exercised, realized or vested
in full on or before the relevant date fixed in the Award
Agreement;
(ii) outstanding stock Awards granted pursuant to Section 7(a) shall
be settled in cash;
(iii) upon exercise of a stock option or an incentive stock option
(collectively, an "Option") during the 60-day period from and
after the date of a Change of Control, the Participant exercising
the Option may in lieu of the receipt of Common Stock upon the
exercise of the Option, elect by written notice to the
Corporation to receive an amount in cash equal to the excess of
the aggregate value (as defined below) of the shares of Common
Stock covered by the Option or portion thereof surrendered
determined on the date the Option is exercised, over the
aggregate exercise price of the Option (such excess is referred
to herein as the "Aggregate Spread"); provided, however, and
notwithstanding any other provision of this Plan, if the end of
such 60-day period from and after the date of a Change of Control
is within six months of the date of grant of an Option held by a
Participant who is a Reporting Person, such Option shall be
canceled in exchange for a cash payment to the Participant equal
to the Aggregate Spread on the day which is six months and one
day after the date of grant of such Option. As used in this
Section 11(a)(iii) the term "Value" means the higher of (i) the
highest Fair Market Value during the 60-day period from and
after the date of a Change of Control and (ii) if the Change
of Control is the result of a transaction or series of
transactions described in paragraphs (i) or (iii) of the
definition of Change of Control, the highest price per share
of the Common Stock paid in such transaction or series of
transactions (which in the case of paragraph (i) shall be the
highest price per share of the Common Stock as reflected in a
Schedule 13D filed by the person having made the acquisition);
(iv) if a Participant's employment terminates for any reason other
than retirement or death following a Change of Control, any
options held by such Participant may be exercised by such
Participant until the earlier of three months after the
termination of employment or the expiration date of such options;
and
(v) all outstanding Awards shall become non-cancelable.
(b) A "Change of Control" of the Company, unless otherwise determined by
the Board, shall be deemed to have occurred upon the happening of any
of the following events:
(i) the acquisition, other than from the Company, by any individual,
entity or group (within the meaning of Section 13(d)(3) or
14(d)(2) of the Exchange Act) of beneficial ownership of 20% or
more of either the then outstanding shares of Common Stock of the
Company or the combined voting power of the then outstanding
voting securities of the Company entitled to vote generally in
the election of directors; provided, however, that any
acquisition by the Company or any of its subsidiaries, or any
employee benefit plan (or related trust) of the Company or its
subsidiaries, or any corporation with respect to which following
such acquisition, more than 50% of, respectively, the then
outstanding shares of common stock of such corporation and the
combined voting power of the then outstanding voting securities
of such corporation entitled to vote generally in the election of
directors is then beneficially owned, directly or indirectly, by
all or substantially all of the individuals and entities who were
the beneficial owners, respectively, of the Common Stock and
voting securities of the Company immediately prior to such
acquisition in substantially the same proportion as their
ownership, immediately prior to such acquisition, of the then
outstanding shares of Common Stock of the Company or the combined
voting power of the then outstanding voting securities of the
Company entitled to vote generally in the election of directors,
as the case may be, shall not constitute a Change of Control;
(ii) individuals who, as of January 1, 1996, constitute the Board
(the "Incumbent Board") cease for any reason to constitute at
least a majority of the Board, provided that any individual
becoming a director subsequent to such date whose election, or
nomination for election by the Company's shareholders, was
approved by a vote of at least a majority of the directors then
comprising the Incumbent Board shall be considered as though such
individual were a member of the Incumbent Board, but excluding,
for this purpose, any such individual whose initial assumption of
office is in connection with an actual or threatened election
contest relating to the election of the directors of the Company
(as such terms are used in rule 14a-11 of Regulation 14A
promulgated under the Exchange Act); or
(iii) approval by the shareholders of the Company of a
reorganization, merger or consolidation of the Company, in each
case, with respect to which the individuals and entities who were
the respective beneficial owners of the Common Stock and voting
securities of the Company immediately prior to such
reorganization, merger or consolidation do not, following such
reorganization, merger or consolidation, beneficially own,
directly or indirectly, more than 50% of, respectively, the then
outstanding shares of Common Stock and the combined voting power
of the then outstanding voting securities entitled to vote
generally in the election of directors, as the case may be, of
the corporation resulting from such reorganization, merger or
consolidation, or a complete liquidation or dissolution of the
Company or of the sale or other disposition of all or
substantially all of the assets of the Company.
12. AWARD AGREEMENTS
Awards under the Plan shall be evidenced by Award Agreements that set forth
the terms, conditions and limitations for each Award, including the term of the
Award (except that in no event shall the term of any incentive stock option
exceed a period of ten years from the date of its grant), the provisions
applicable in the event the Participant's employment terminates, and the
Company's authority to unilaterally or bilaterally amend, modify, suspend,
cancel or rescind any Award. The granting of an Award shall be subject to, and
conditioned upon, the execution of any such Award Agreement by the Participant.
13. TERMINATION AND AMENDMENT OF THE PLAN
The Plan shall terminate no later than March 5, 2006. The Board may sooner
terminate the Plan and may at any time and from time to time amend, modify or
suspend the Plan; provided, however, that no amendment that increases the
amounts of shares specified in Sections 6(a) and 6(b) or the price per share
specified in Sections 7(c) and 7(d) shall be effective unless approved by the
shareholders of the Company in accordance with applicable law and regulations.
14. TAX WITHHOLDING
The Company shall have the right to deduct from any settlement of an Award
made under the Plan, including the delivery or vesting of shares of Common
Stock, a sufficient amount to cover withholding of any federal, state or local
taxes required by law or such greater amount of withholding as the Committee
shall determine from time to time, or to take such other action as may be
necessary to satisfy any such withholding obligations. If the Committee permits
or requires shares of Common Stock to be used to satisfy required tax
withholding, such shares shall be valued at the Fair Market Value as of the tax
recognition date for such Award.
15. OTHER BENEFIT AND COMPENSATION PROGRAMS
Unless otherwise specifically determined by the Committee, settlements of
Awards received by Participants under the Plan shall not be deemed a part of a
Participant's regular, recurring compensation for purposes of calculating
payments or benefits from any Company benefit plan or severance program.
Further, the Company may adopt other compensation programs, plans or
arrangements as it deems appropriate or necessary.
16. UNFUNDED PLAN
Unless otherwise determined by the Board, the Plan shall be unfunded and
shall not create (or be construed to create) a trust or a separate fund or
funds. The Plan shall not establish any fiduciary relationship between the
Company and any Participant or other person. To the extent any person holds any
rights by virtue of an Award granted under the Plan, such rights shall
constitute, general unsecured liabilities of the Company and shall not confer
upon any Participant any right, title or interest in any assets of the Company.
17. USE OF PROCEEDS
The cash proceeds received by the Company from the delivery of shares of
Common Stock pursuant to the exercise of stock options or the settlement of
other Awards under the Plan shall be used for general corporate purposes,
including the acquisition of shares to be used in settlement of other Awards.
18. REGULATORY APPROVALS
The implementation of the Plan, the granting of any Award under the Plan,
and the delivery of shares of Common Stock upon the exercise or settlement of
any Award shall be subject to the Company's procurement of all approvals and
permits required by regulatory authorities having jurisdiction over the Plan,
the Awards granted under it or the shares issued pursuant to it.
19. FUTURE RIGHTS
No person shall have any claim or rights to be granted an Award under the
Plan, and no Participant shall have any rights under the Plan to be retained in
the employ of the Company. Likewise, participation in the Plan will not in any
way affect the Company's right to terminate the employment of the Participant at
any time with or without cause.
20. GOVERNING LAW
The validity, construction and effect of the Plan and any actions taken or
relating to the Plan shall be determined in accordance with the laws of the
State of Delaware and applicable federal law.
21. SUCCESSORS AND ASSIGNS
The Plan shall be binding on all successors and assigns of a Participant,
including, without limitation, the estate of such Participant and the executor,
administrator or trustee of such estate, or any receiver or trustee in
bankruptcy or representative of the Participant's creditors. However, no award
or other interest in the Plan may be assigned, pledged or otherwise alienated,
except to the extent permitted in accordance with Section 10 of the Plan and the
applicable Award Agreement.
THE BOMBAY COMPANY, INC.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned security holder of The Bombay Company, Inc., a Delaware
Corporation, hereby appoints James E. Herlihy and Alexandra M.T. Nourse,
and each of them with the full power of substitution, to represent and to
vote on behalf of the undersigned all securities which the undersigned is
entitled to cast at the Annual Meeting of Shareholders scheduled to be held
on Thursday, May 16, 1996, at 9:00 a.m., local time, at the Botanic Garden
Center Complex, 3220 Botanic Garden Boulevard, Fort Worth, Texas 76107, and
at any adjournment or adjournments thereof, hereby revoking all proxies
heretofore given with respect to such securities upon the matters described
in the Notice of Annual Meeting and Proxy Statement (receipt of which is hereby
acknowledged), and upon any other business that may properly come before
such Annual Meeting.
THE SECURITIES REPRESENTED BY THIS PROXY WILL BE VOTED AS SPECIFIED ON THE
REVERSE SIDE, BUT IF NO SPECIFICATION IS MADE, THE PROXIES NAMED ABOVE INTEND
TO VOTE THE SECURITIES AT THEIR DISCRETION FOR THE ELECTION OF THE NOMINEES
LISTED IN PROPOSAL 1, FOR THE APPROVAL OF THE ADOPTION OF THE BOMBAY COMPANY,
INC. 1996 LONG TERM INCENTIVE STOCK PLAN IN PROPOSAL 2 AND OTHERWISE AT THE
DISCRETION OF THE PROXIES.
(Continued and to be dated on the reverse side)
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE ELECTION OF THE NOMINEES
LISTED BELOW AS DIRECTORS AND FOR ADOPTION OF THE 1996 LONG TERM INCENTIVE
PLAN.
1. To elect Class B Directors:
Nominees: Clayton E. Niles, Carson R. Thompson and Shirley Young
For Withheld
/ / / /
/ /--------------------------------------
For all nominees except as noted above
2. To approve the adoption of the 1996 Long Term Incentive Stock Plan.
For Against Abstain
/ / / / / /
3. In their discretion upon such other matters as may properly come
before the meeting.
/ / Mark here for address change and note at left
/ / Mark here if you plan to attend the meeting
IF YOU RECEIVE MORE THAN ONE PROXY CARD, PLEASE DATE,
SIGN AND RETURN ALL CARDS IN THE ACCOMPANYING ENVELOPE.
Please sign exactly as name appears hereon. When signing as attorney,
executor, administrator, trustee or guardian, please give full title
as such. If a corporation, please sign in partnership name by authorized
person. (Only one signature is required in the case of securities
registered in the name of two or more persons).
Signature:--------------------------- Date:--------------------
Signature:----------------------------Date:--------------------
