SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. )
Filed by the Registrant (X)
Filed by a Party other than the Registrant ( )
Check the appropriate box:
( ) Preliminary Proxy Statement ( ) Confidential, for Use of the
Commission Only (as permitted
by Rule 14a-6(e)(2))
(X) Definitive Proxy Statement
( ) Definitive Additional Materials
( ) Soliciting Material Pursuant to Section 240.14a-11(c) or Section 240.14a-12
Culp, Inc.
(Name of Registrant as Specified in its Charter)
(Name of Person(s) Filing Proxy Statement, if other than Registrant)
Payment of Filing Fee (Check the appropriate box):
(X) No fee required
( ) Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
1) Title of each class of securities to which transaction applies:
2) Aggregate number of securities to which transaction applies:
3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the
filing fee is calculated and state how it was determined):
4) Proposed maximum aggregate value of transaction:
5) Total fee paid:
( ) Fee paid previously with preliminary materials.
( ) Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was
paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
1) Amount Previously Paid:
2) Form, Schedule, or Registration Statement No.:
3) Filing Party:
4) Date Filed:
(CULP LOGO APPEARS HERE)
CULP
101 South Main Street
Post Office Box 2686
High Point, North Carolina 27261-2686
Telephone (910) 889-5161
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS TO BE HELD
SEPTEMBER 16, 1997
TO OUR SHAREHOLDERS:
The Annual Meeting of Shareholders of Culp, Inc. (the "company") will
be held at the Radisson Hotel, 135 South Main Street, High Point, North Carolina
on Tuesday, September 16, 1997 at 9:00 a.m. local time, for the purpose of
considering and acting on the following matters:
(1) To ratify the appointment of KPMG Peat Marwick LLP as the
independent auditors of the company for the current fiscal
year; and
(2) To elect three (3) directors to serve until the 2000 Annual
Meeting,
(3) To approve the company's 1997 Performance-Based Option Plan;
(4) To transact such other business as may properly come before
the meeting, or any adjournment or adjournments thereof.
Only shareholders of record as of the close of business on July 8,
1997, are entitled to notice of and to vote at the Annual Meeting and any
adjournment or adjournments thereof.
WHETHER OR NOT YOU EXPECT TO BE PRESENT AT THE ANNUAL MEETING, PLEASE
COMPLETE, DATE AND SIGN THE ENCLOSED FORM OF PROXY AND RETURN IT PROMPTLY IN THE
ENCLOSED ENVELOPE. IF YOU ATTEND THE MEETING, YOUR PROXY WILL BE RETURNED TO YOU
UPON REQUEST.
The Proxy Statement accompanying this notice sets forth further
information concerning the items listed above and the use of the enclosed proxy.
You are urged to study this information carefully.
The Annual Report of the company also accompanies this notice.
BY ORDER OF THE BOARD OF DIRECTORS.
By:/s/ Franklin N. Saxon
FRANKLIN N. SAXON
Senior Vice President and Corporate Secretary
August 1, 1997
(CULP LOGO APPEARS HERE)
CULP
PROXY STATEMENT
INTRODUCTION
This Proxy Statement is furnished to the shareholders of Culp, Inc.
(hereinafter sometimes referred to as the "company") by the company's Board of
Directors in connection with the solicitation of proxies for use at the Annual
Meeting of Shareholders of the company to be held on Tuesday, September 16,
1997, at 9:00 a.m. at the Radisson Hotel, 135 South Main Street, High Point,
North Carolina, and at any adjournment or adjournments thereof. Action will be
taken at the Annual Meeting on the ratification of the appointment of
independent auditors, the election of certain directors, approval of the
company's 1997 Performance-Based Option Plan, and any other business that
properly comes before the meeting.
This Proxy Statement and accompanying form of proxy are first being
mailed to shareholders on or about August 1, 1997.
Whether or not you expect to attend the Annual Meeting, please
complete, date and sign the accompanying form of proxy and return it promptly to
ensure that your shares are voted at the meeting. Any shareholder giving a proxy
may revoke it at any time before a vote is taken: (i) by duly executing a proxy
bearing a later date; (ii) by executing a notice of revocation in a written
instrument filed with the secretary of the company; or (iii) by appearing at the
meeting and notifying the secretary of the intention to vote in person. Unless a
contrary choice is specified, all shares represented by valid proxies received
pursuant to this solicitation, and not revoked before they are exercised, will
be voted for the ratification of the appointment of KPMG Peat Marwick LLP as the
independent auditors of the company for the current fiscal year, for the
election of the three (3) directors named in this Proxy Statement, and for
approval of the 1997 Performance-Based Option Plan. The proxy also confers
discretionary authority upon the persons named therein, or their substitutes,
with respect to any other business that may properly come before the meeting.
Unless otherwise stated herein, each matter submitted to the shareholders
requires the affirmative vote of a majority of the votes cast at the Annual
Meeting for approval. A shareholder abstaining from the vote on a proposal will
be counted as present for purposes of determining whether a quorum is present,
but will be counted as not having voted on the proposal in question. This means
that in cases where a majority of the shares represented is required to approve
a proposal, an abstention will have the effect of a vote against the proposal in
question.
The company will bear the entire cost of preparing this Proxy Statement
and of soliciting proxies. Proxies may be solicited by employees of the company,
either personally, by special letter, or by telephone. The company also will
request brokers and others to send solicitation material to beneficial owners of
the company's stock and will reimburse them for this purpose upon request.
1
VOTING SECURITIES
Only shareholders of record at the close of business on July 8, 1997
will be entitled to vote at the Annual Meeting or any adjournment or
adjournments thereof. The number of outstanding shares entitled to vote at the
meeting is 12,643,728.
The following table lists the beneficial ownership of the company's
common stock ("Common Stock") with respect to: (i)each person known by the
company to be the beneficial owner of more than five percent of such Common
Stock; and (ii) all executive officers, directors and nominees of the company as
a group, a total of 10 persons, as of July 8, 1997.
Number of Shares Percent of
Title of Name and Address of Beneficially Outstanding
Class Beneficial Owner Owned Shares
Common Stock, Robert G. Culp, III 3,016,941 (1) 23.6%
par value, 903 Forrest Hill Drive
$.05 per share High Point, NC 27262
Winsal & Company 2,408,750 (2) 19.1%
c/o First Union Corporation
401 S. Tryon Street
Fiduciary Operations NC1151
Charlotte, NC 28288-1151
Dimensional Fund Advisors, Inc. 698,840 (3) 5.5%
Ocean Avenue, 11th Floor
Santa Monica, CA 90401
T. Rowe Price Associates, Inc. 913,000 (4) 7.2%
100 East Pratt Street
Baltimore, Maryland 21289-1009
All executive officers, 3,731,717 (5) 28.9%
directors and nominees
as a group (10) persons)
- --------------------------
(1) These shares include all of the shares listed below that also are
beneficially owned in the name of Winsal & Company as trustee of the
Robert G. Culp, Jr. Family Trust, all of which shares Robert G. Culp, III
has the right to vote and jointly (with Winsal & Company) has the right
to invest. (SEE NOTE (2) BELOW); also includes 63,338 shares held of
record by Susan B. Culp, the wife of Mr. Culp, the beneficial ownership
of which shares Mr. Culp disclaims, 1,218 shares owned by wife as
custodian for daughter, and 1,218 shares owned by son, and includes
117,500 shares subject to options owned by Mr. Culp that are immediately
exercisable.
(2) All of these shares also are included in the shares listed above for
Robert G. Culp, III (SEE NOTE (1) ABOVE). Includes 709,375 shares held of
record by Winsal & Company for the benefit of Judith C. Walker, sister of
Robert G. Culp, III; 505,000 shares held of record by Winsal & Company
for the benefit of Harry R. Culp, brother of Robert G. Culp, III, and
1,194,375 shares held of record by Winsal & Company for the benefit of
Robert G. Culp, III, all of which shares Robert G. Culp, III has the
right to vote and jointly (with Winsal & Company) has the right to
invest.
2
(3) Dimensional Fund Advisors Inc. ("Dimensional"), a registered investment
advisor, is deemed to have beneficial ownership of 698,840 shares of
Culp, Inc. stock as of December 31, 1996, all of which shares are held
in portfolios of DFA Investment Dimensions Group Inc., a registered
open-end investment company, or in series of the DFA Investment Trust
Company, a Delaware business trust, or the DFA Group Trust and DFA
Participation Group Trust, investment vehicles for qualified employee
benefit plans, all of which Dimensional Fund Advisors Inc. serves as
investment manager. Dimensional disclaims beneficial ownership of all
such shares.
(4) These securities are owned by various individual and institutional
investors as of December 31, 1996, which T. Rowe Price Associates, Inc.
(Price Associates) serves as investment adviser with power to direct
investments and/or sole power to vote the securities. For purposes of the
reporting requirements of the Securities Exchange Act of 1934, Price
Associates is deemed to be a beneficial owner of such securities;
however, Price Associates expressly disclaims that it is, in fact, the
beneficial owner of such securities.
(5) Includes 255,875 shares subject to options owned by certain officers and
directors that are immediately exercisable.
PROPOSAL 1: INDEPENDENT AUDITORS
The Board of Directors recommends that the shareholders ratify the
board's appointment of KPMG Peat Marwick LLP to serve as the auditors for the
company for the fiscal year ending May 3, 1998. The Audit Committee recommended
such appointment to the board. KPMG Peat Marwick LLP served as the independent
auditors for the company for the last seven fiscal years. Representatives of the
firm are expected to attend the Annual Meeting and will have the opportunity to
make any statements they consider appropriate and to respond to shareholders'
questions. The proposal to ratify the appointment will be approved upon the vote
of a majority of the votes cast on the proposal.
PROPOSAL 2: ELECTION OF DIRECTORS
The number of directors constituting the board has been fixed at ten by
the company's shareholders in accordance with the company's bylaws.
The company's bylaws provide that the Board of Directors shall be divided
into three classes of directors with staggered three-year terms, so that one
class or approximately one-third of the Board of Directors will be elected every
year. At the Annual Meeting the shareholders will elect three (3) directors and
each will serve for a term of three years (until the 2000 Annual Meeting of
Shareholders) or until his successor shall be elected and shall qualify. The
three directors whose terms expire at the 1997 Annual Meeting (Robert G. Culp,
III, Earl M. Honeycutt, and Patrick H.
Norton) have been nominated for re-election.
In the absence of specifications to the contrary, proxies will be voted
for the election of each of the three (3) nominees listed in the table below. An
equal number of votes will be cast for each nominee and the persons who receive
the highest number of votes for election at the Annual Meeting will be elected
as directors. If, at or before the time of the meeting, any of the nominees
becomes unavailable for any reason, the proxy holders have the discretion to
vote for a substitute nominee or nominees. The board currently knows of no
reason why any of the nominees listed below is likely to become unavailable.
3
Nominees, Directors and Executive Officers
The following table sets forth certain information with respect to the three (3)
nominees for election to the Board of Directors, the seven (7) other directors
and the executive officers of the company:
SHARES AND
PERCENT OF
COMMON STOCK
YEAR YEAR BENEFICIALLY
BECAME TERM OWNED AS OF
NAME AND AGE POSITION WITH COMPANY (1) DIRECTOR EXPIRES JULY 8, 1997 NOTES
- ------------ ------------------------- -------- ------- ------------ -----
NOMINEES
Robert G. Culp, III, 50 Chairman of the Board and 1972 1997 3,016,941 (5)
Chief Executive Officer; 23.6%
Director
Earl M. Honeycutt, 79 Director 1983 1997 8,440 (2)(7)
Patrick H. Norton, 75 Director 1987 1997 35,040 (2)(8)
DIRECTORS AND
EXECUTIVE OFFICERS
Harry R. Culp, 45 Director 1996 1999 1,875 (2)(12)
Howard L. Dunn, Jr., 59 President and Chief Operating 1972 1998 308,247 (6)
Officer; Director 2.4%
Baxter P. Freeze, 77 Director 1972 1999 274,063 (3)
2.2%
Earl N. Phillips, Jr., 57 Director 1992 1998 12,575 (2)(9)
Franklin N. Saxon, 44 Senior Vice President and Chief 1987 1999 42,099 (2)(4)
Financial Officer; Treasurer;
Secretary; Director
Bland W. Worley, 79 Director 1983 1998 10,437 (2)(10)
Kenneth M. Ludwig, 44 Senior Vice President - Human N/A N/A 22,000 (2)(11)
Resources; Assistant Secretary
- ------------------------------------------------------------------
(1) Officers of the company are elected by the Board of Directors each
year. The present officers were elected by the board on June 12, 1997.
(2) Less than one percent (1%)
4
(3) Includes 183,094 shares held of record by Anne C. Freeze, wife of Mr.
Freeze, the beneficial ownership of which shares Mr. Freeze disclaims,
and 7,500 shares subject to options owned by Mr. Freeze that are
immediately exercisable.
(4) Includes 22,000 shares subject to options owned by Mr. Saxon that are
immediately exercisable, and approximately 19,683 shares owned through
the company's 401(k) plan.
(5) Includes 2,048,750 shares held of record by Winsal & Company for the
benefit of Robert G. Culp, III, Judith C. Walker and Harry R. Culp, all
of which shares Robert G. Culp, III has the right to vote and jointly
(with Winsal & Company) has the right to invest; includes 63,338 shares
held of record by Susan B. Culp, wife of Robert G. Culp, III, the
beneficial ownership of which shares Mr. Culp, III disclaims, 1,218
owned by wife as custodian for daughter, and 1,218 owned by son, and
117,500 shares subject to options owned by Mr. Culp that are
immediately exercisable.
(6) Includes 66,715 shares owned by Patricia Dunn, wife of Mr. Dunn, and
64,375 shares subject to options owned by Mr. Dunn that are immediately
exercisable.
(7) Includes 940 shares held of record by Virginia Honeycutt, wife of Mr.
Honeycutt, the beneficial ownership of which Mr. Honeycutt disclaims;
and 3,750 shares subject to options owned by Mr. Honeycutt that are
immediately exercisable.
(8) Includes 7,500 shares subject to options owned by Mr. Norton that are
immediately exercisable.
(9) Includes 100 shares owned by Sally Phillips, wife of Mr. Phillips, and
7,500 shares subject to options owned by Mr. Phillips that are
immediately exercisable.
(10) Includes 500 shares owned by Ada Worley, wife of Mr. Worley, and 1,875
shares subject to options owned by Mr. Worley that are immediately
exercisable.
(11) Includes 22,000 shares subject to options owned by Mr. Ludwig that are
immediately exercisable.
(12) Includes 1,875 shares subject to options owned by Mr. Culp that are
immediately exercisable.
NOMINEES
ROBERT G. CULP, III is one of the founders of the company and was
executive vice president and secretary until 1981 when he was elected by the
board to serve as president. The board elected Mr. Culp chief operating officer
in 1985, and chief executive officer in 1988. In 1990, the Board of Directors
elected Mr. Culp chairman of the board. Mr. Culp serves as a member of the local
Board of Directors of First Union National Bank of North Carolina. He is the
brother of Harry R. Culp.
EARL M. HONEYCUTT served as president of Amoco Fabrics and Fibers
Company, a textile manufacturing subsidiary of Amoco Chemical Corporation,
Atlanta, Georgia, for 15 years until his retirement in 1983.
PATRICK H. NORTON has served since 1981 as senior vice president of
sales and marketing and a member of the Board of Directors of La-Z-Boy, Inc., a
furniture manufacturer in Monroe, Michigan. Mr. Norton currently serves as a
member of the board of directors of the American Furniture Manufacturers
Association.
5
OTHER OFFICERS AND DIRECTORS:
HARRY R. CULP has been practicing dentistry in High Point since July
1981. He is the brother of Robert G. Culp, III. He has served previously as a
director of the company from September 18, 1990 to September 28, 1993.
HOWARD L. DUNN, JR. is one of the founders of the company and served as
vice president of manufacturing and product development from 1972 until 1988,
when the board elected Mr. Dunn executive vice president. The board elected Mr.
Dunn president and chief operating officer in 1993.
BAXTER P. FREEZE, SR. served as president of Commonwealth Hosiery
Mills, Inc., a manufacturer of hosiery, in, Randleman, North Carolina, for 52
years until his retirement in 1996. He continues to serve as Chairman of the
Board of Commonwealth Hosiery Mills, Inc.
EARL N. PHILLIPS, JR. is co-founder and has served as president of
First Factors Corporation, an asset-based lending firm located in High Point,
North Carolina, since 1982. He also serves as a member of several Boards of
Directors, including First Union National Bank of North Carolina.
FRANKLIN N. SAXON joined the company in 1983 as its controller and
assistant secretary. Mr. Saxon served as controller until 1985, when the board
elected him vice president and chief financial officer. The board elected Mr.
Saxon treasurer in 1985, and he was elected as a director in 1987, and as
secretary in 1995. The board elected Mr. Saxon to the position of senior vice
president in June 1996.
BLAND W. WORLEY served as chief executive officer of
BarclaysAmericanCorporation, Charlotte, North Carolina from 1975 until 1982 and
as chairman of the board of that corporation until his retirement in 1985.
BarclaysAmericanCorporation is a financial services company.
KENNETH M. LUDWIG joined the company in 1985 as director of personnel.
The board elected Mr. Ludwig vice president-human resources in 1986, and
assistant secretary in 1995. The board elected Mr. Ludwig to the position of
senior vice president-human resources in June 1996.
BOARD COMMITTEES AND ATTENDANCE
There are four standing committees of the Board of Directors: Executive
Committee, Audit Committee, Compensation Committee, and Nominating Committee.
The Executive Committee, the members of which are Messrs. Culp, Dunn,
and Saxon, may exercise the full authority of the Board of Directors when the
board is not in session, except for certain powers related to borrowing,
electing certain officers, and other powers that may not lawfully be delegated
to board committees.
Messrs. Freeze, Honeycutt and Worley serve on the Audit Committee. The
function of the Audit Committee is to review the scope of the audits and the
findings of the independent auditors. The auditors meet with the Audit Committee
to discuss audit and financial reporting issues. The committee also reviews the
company's significant accounting policies, major internal accounting controls,
reports from the company's internal auditors, the Annual Report to shareholders,
and the Annual Report on Form 10-K filed with the Securities and Exchange
Commission.
The Compensation Committee approves matters relating to compensation,
including fringe benefits and benefit plans for management and directors of the
company, and reports to the Board of Directors from time to time as to its
recommendation on compensation and policies for both management and directors.
The committee also administers the company's stock option plans. The members of
this committee are Messrs. Freeze, Honeycutt and Worley.
6
The members of the Nominating Committee, which recommends nominees for
election to the Board of Directors, are Messrs. Culp, Norton, and Worley. The
nominees for election to the Board of Directors contained in this Proxy
Statement have been chosen by the Nominating Committee. Recommendations from
shareholders for nominees to the Board of Directors will be considered by the
Nominating Committee if made in writing addressed to any member of the
Nominating Committee at the company's main office. In order to be considered,
such recommendations must be received at least 120 days prior to the date of the
meeting at which directors are to be elected.
During the fiscal year ended April 27, 1997, the Board of Directors had
six (6) meetings; the Audit Committee, four (4) meetings; the Compensation
Committee two (2) meetings, and the Nominating Committee, one (1) meeting. Each
board member attended at least 75% of the aggregate number of the meetings of
the Board of Directors and of the committees on which he served. Under current
management practices, the Executive Committee exists mainly to act in place of
the board in cases where time constraints or other considerations make it
impractical to convene a meeting of the entire board or to obtain written
consents from all board members. The Executive Committee held several informal
meetings during fiscal 1997, and took action on one (1) occasion by written
consent. All significant management decisions requiring action by the Board of
Directors were considered and acted upon by the full board.
7
EXECUTIVE COMPENSATION
SUMMARY COMPENSATION TABLE. The following table sets forth
compensation paid by the company in the forms specified therein for the years
ended April 27, 1997, April 28, 1996 and April 30, 1995 to (i) the chief
executive officer of the company and (ii) the company's four other most highly
compensated executive officers.
SUMMARY COMPENSATION TABLE
=========================================================================================================================
Annual Compensation Long Term Compensation All Other
--------------------- ----------------------
Name and Salary Bonus Option Grants Compensation
Principal Position Year $ $ # $(1)
- -------------------------- ---- ------- ------- ---------------------- -------------
Robert G. Culp, III 1997 250,000 250,000 12,000 51,192(2)(3)
CHAIRMAN OF THE BOARD; 1996 210,000 210,000 12,000 16,920
CHIEF EXECUTIVE OFFICER 1995 204,000 204,000 37,000 15,989
Howard L. Dunn 1997 210,000 210,000 8,000 43,146(2)(3)
PRESIDENT AND 1996 175,000 175,000 8,000 22,640
CHIEF OPERATING OFFICER 1995 169,000 169,000 25,000 10,420
Andrew W. Adams(4) 1997 145,600 109,200 5,000 3,000
FORMERLY SENIOR VICE 1996 140,000 105,000 5,000 2,980
PRESIDENT, CORPORATE 1995 135,000 101,250 14,000 4,596
DEVELOPMENT
Franklin N. Saxon 1997 140,000 70,000 5,000 11,496(3)
SENIOR VICE PRESIDENT AND 1996 111,000 66,600 5,000 10,383
CHIEF FINANCIAL OFFICER; 1995 107,000 64,200 13,000 8,530
TREASURER; SECRETARY
Kenneth M. Ludwig 1997 117,000 58,500 5,000 3,599(3)
SENIOR VICE PRESIDENT - 1996 96,800 58,080 5,000 3,448
HUMAN RESOURCES; 1995 93,100 55,860 13,000 2,584
ASSISTANT SECRETARY
(1) Includes the company's matching contribution to such officers' accounts
under the Employee Retirement Builder 401(k) Plan.
(2) Includes annual premiums of $40,000 paid by the company for split-dollar
life insurance on the life of Mr. Culp, and $30,000 for split-dollar life
insurance on the life of Mr. Dunn.
(3) Includes reportable interest on deferred compensation of $8,192 for Mr.
Culp; $10,146 for Mr. Dunn; $8,496 for Mr. Saxon; and $599 for Mr. Ludwig.
(4) Mr. Adams was not an executive officer of the company on April 27, 1997.
================================================================================
8
OPTION GRANTS TABLE. The following table sets forth certain
information concerning grants of stock options to the executive officers named
in the Summary Compensation Table during the year ended April 27, 1997.
STOCK OPTION GRANTS IN FISCAL 1997
===============================================================================================================================
% of Total Potential Realizable Value at
Options Market Assumed Annual Rates of
Granted to Exercise or Price on Stock Price Appreciation
Options Employees in Base Price Date of Expiration for Option Term (1)
Name Granted Fiscal Year (%) ($/Share) Grant Date 5%($) 10%($)
------- --------------- --------- ----- ---- ------- ---------
Robert G. Culp, III 12,000 6.4 13.34 12.13 7-18-01 25,670 74,285
25,000(2) 13.3 1.00 17.00 12-31-06 658,910 1,051,455
Howard L. Dunn, Jr. 8,000 4.2 12.13 12.13 7-18-06 61,007 154,591
18,000(2) 9.6 1.00 17.00 12-31-06 474,415 757,048
Franklin N. Saxon 5,000 2.7 12.13 12.13 7-18-06 38,129 96,619
10,000(2) 5.3 1.00 17.00 12-31-06 263,564 420,582
Kenneth M. Ludwig 5,000 2.7 12.13 12.13 7-18-06 38,129 96,619
10,000(2) 5.3 1.00 17.00 12-31-06 263,564 420,582
Andrew W. Adams(3) 5,000 2.7 12.13 12.13 7-18-06 38,129 96,619
(1) Rounded to nearest thousand.
(2) Options granted under the company's 1997 Performance-Based Option Plan.
These options will be void if the 1997 Performance-Based Option Plan is not
approved by the company's shareholders at the 1997 Annual Meeting of
Shareholders. In addition, these options will not become exercisable unless
(a) the company meets certain earnings levels by fiscal 1999, or (b) the
option-holder remains employed by the company until 2006.
(3) Mr. Adams was not an executive officer of the company at the end of Fiscal
1997.
================================================================================
OPTION EXERCISES AND YEAR-END VALUE TABLE. The following table sets
forth certain information concerning exercises of stock options during fiscal
1997 by the executive officers named in the Summary Compensation Table, and
options held by such officers at the end of fiscal 1997.
AGGREGATED OPTION EXERCISES IN FISCAL 1997
AND FISCAL YEAR OPTION VALUES
Number of Value of Unexercised
Unexercised Options In-the-Money Options
Shares Acquired Value at Fiscal Year-End(#) at Fiscal Year-End($)(1)
on Exercise (#) Realized ($) Exercisable Unexercisable Exercisable Unexercisable
(2) (2)
Robert G. Culp, III -0- -0- 92,500 62,000 905,497 844,420
Howard L. Dunn, Jr. 12,188 133,215 46,375 44,000 467,668 615,560
Franklin N. Saxon -0- -0- 13,000 24,000 90,375 327,900
Kenneth M. Ludwig -0- -0- 13,000 24,000 90,375 327,900
Andrew W. Adams(3) 13,000 88,298 -0- 15,000 -0- 188,225
- ----------------------------------------------
(1) Closing price of company stock at April 27, 1997 was $16.63.
9
(2) Includes options granted under the company's 1997 Performance-Based Option
Plan, which options will be void if the 1997 Performance-Based Option Plan
is not approved by the company's shareholders at the 1997 Annual Meeting of
Shareholders, and which options will not become exercisable unless (a) the
company meets certain earnings levels by Fiscal 1999, or (b) the
option-holder remains employed by the company until 2006.
(3) Mr. Adams was not an executive officer of the company at the end of Fiscal
1997
================================================================================
PERFORMANCE COMPARISON
The following graph shows changes over the five-year period ending
April 27, 1997 in the value of $100 invested in (1) the Common Stock of the
company, (2) the New York Stock Exchange Market Index, (3) the NASDAQ Market
Index; and (4) the Textile Manufacturing Index reported by Media General
Financial Services, Richmond, Virginia, consisting of twenty-three companies
(including the company) in the textile industry. The company's Common Stock was
listed on the NASDAQ National Market System until December 31, 1996, and since
that date the Common Stock has been listed on the New York Stock Exchange. The
graph shows year-end values for an investment in each of the four investments
described, assuming the reinvestment of all dividends and excluding any trading
commissions or taxes.
(A graph appears below with the following plot points:)
CULP, INC.
COMPARISON OF TOTAL RETURNS TO SHAREHOLDERS
MAY 3, 1992 TO APRIL 27, 1997
1992 1993 1994 1995 1996 1997
Culp 100 139 227 192 257 357
Textile Mfg. 100 108 99 96 97 119
NYSE 100 111 119 133 172 207
NASDAQ 100 115 128 149 213 225
10
SEVERANCE PROTECTION PLAN. In September 1989, the company adopted a
Severance Protection Plan, which covers officers and key management associates
("Executives") of the company. The Severance Protection Plan provides for the
company and covered Executives to enter into written agreements that do not
become effective except upon a change in control (as defined in such agreements)
of the company. If a change in control occurs, the agreements provide that the
Executive will be entitled to continued employment with the company with the
same basic responsibilities and compensation as before the change in control for
a period of one year. If the Executive is terminated, demoted or has his pay or
benefits reduced for reasons other than good cause, or if the Executive
terminates his employment voluntarily after serving nine months of the one-year
employment period, the Executive is entitled to a lump sum payment equal to the
Executive's base salary plus bonus during the twelve months immediately
preceding the termination of employment. The plan does not prevent the company
from terminating the Executive for cause at any time. The purpose of the
Severance Protection Plan is to ensure the company continuity of management and
the Executive continuity of employment in the event of any actual or threatened
change in control of the company. The plan is not intended to alter materially
the compensation and benefits a covered Executive could reasonably expect in the
absence of such a change in control. As of April 27, 1997, the company's
potential obligation pursuant to the Severance Protection Plan was $1,375,480,
which is the amount that would be expended by the company under the Plan if all
of the designated executives were terminated or otherwise entitled to benefits
after a change in control of the company.
COMPENSATION OF DIRECTORS. Directors who are also officers of the
company do not receive additional compensation for service as directors.
Non-employee directors receive $10,000 per year for participation as a member of
the Board of Directors, $2,000 per year for each committee on which they serve,
and an annual stock option grant of 1,875 shares.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION. The
members of the Compensation Committee are Baxter P. Freeze, Earl M. Honeycutt
and Bland W. Worley, all of whom are non-employee directors. No member of the
committee serves on the Compensation Committee of another corporation that has a
business relationship with the company.
COMPENSATION COMMITTEE REPORT. The following is a report of the
Compensation Committee on compensation of executive officers for the fiscal year
ended April 27, 1997.
The Compensation Committee has based compensation for the company's
executive officers on three primary factors: (1) compensation paid to executive
officers at comparable firms in the company's industry, (2) the individual
executive's performance and contribution to the company, and (3) the financial
performance of the company. In general, the committee has set base salaries for
executives relying most heavily on the first two factors mentioned above, and
has linked executive compensation to the third factor, the company's financial
performance, through incentive cash bonuses that are based solely on the annual
financial results of the company and periodic grants of stock options to
executive officers.
After reviewing published compensation surveys and proxy information
from firms in the company's industry, including many of the companies included
in the Performance Comparison data, and based on general knowledge of the
industry, the committee believes that the base salaries paid to the company's
executive officers are at or below than those generally prevailing in the
company's industry and for other manufacturing companies of similar size. For
this reason, a larger portion of the compensation paid to the company's
executives is based on incentive compensation (cash bonuses and stock options)
that is dependent upon the company's financial results. Even after including
incentive compensation, the committee believes that total cash compensation paid
to the company's executives is generally lower than comparable compensation paid
to executives in the company's industry. This is especially true of the
company's Chief Executive Officer.
Under the company's Management Incentive Plan, certain executive
officers are selected by the Compensation Committee (based on management
recommendations) to receive annual cash bonuses based on the company's financial
11
results. The Compensation Committee sets performance targets for the company in
terms of financial measurements judged by the committee to be relevant
indicators of management and corporate performance. Cash bonuses are then
awarded to the executives participating in the plan pursuant to a formula that
pays a percentage of the maximum bonus award established by the committee for
each participating executive based upon the percentages of the performance
targets the company achieves in a fiscal year. The cash bonuses shown in the
Summary Compensation Table were paid under this plan.
The committee maintains a policy of encouraging executives to make
significant investments in the company's stock, so that executive officers'
long-term interests will be aligned with those of the company's shareholders. To
that end, the committee periodically approves the grant of stock options to
executive officers under the company's stock option plans.
Periodic grants of incentive stock options are made to the executive
officers and selected other employees under the company's Incentive Stock Option
Plan, which was adopted by the company and approved by the company's
shareholders in 1993. These options are granted at exercise prices equal to the
fair market value of the underlying shares at the time the option is granted.
In addition to the Incentive Stock Option Plan, the company has
adopted two Performance-Based Option plans under which options are granted to
senior management with exercise prices significantly below fair market value of
the underlying shares, but which will not become exercisable unless the company
achieves certain growth rates in its earnings or for a period of nine to ten
years after grant. The purpose of these plans is to provide incentive to senior
management to maximize the company's earnings potential and to make a
significant portion of executive compensation contingent on meeting earnings
targets.
In June, 1994, the company adopted (and the shareholders subsequently
approved) the 1994 Performance-Based Option Plan, which provided for the
one-time grant to executives of options that could become exercisable after the
announcement of earnings for fiscal 1997 only if the company met a targeted
compound growth rate of 13% over that three-year period (otherwise these options
would not become exercisable until January 1, 2003). The company's reported
earnings for fiscal 1997 were at a level that allowed the options to become
exercisable in May of 1997, and represented a compound growth rate of 20% for
the three years which ended April 27, 1997.
The Compensation Committee believes that the company's option plans
have been successful in helping the company attract and retain skilled
management to focus on efforts to increase the company's earnings and returns
for its shareholders. For this reason, the Committee approved and the Board of
Directors adopted, subject to shareholder approval, the 1997 Performance-Based
Option Plan which is being submitted to the shareholders for their approval at
the 1997 Annual Meeting of Shareholders. The 1997 Performance-Based option Plan
is summarized and discussed elsewhere in this Proxy Statement.
The base salaries for all executive officers, including the Chief
Executive Officer, were increased for fiscal 1997 at rates that were designed to
move these salaries closer to those prevailing in the industry. Additionally,
increases in overall compensation for executive officers were a reflection of
the improved operating results achieved by the company for fiscal 1997. The
company's net income for the year (the measure used for the performance target
for fiscal 1997) was at a level that allowed maximum bonus awards to be paid
pursuant to the Management Incentive Plan. While the committee expects that
total cash compensation for the company's executives will remain at or below
industry averages, the committee also recognizes that compensation will need to
be increased in future years for the company to attract and retain quality
management.
The Compensation Committee approved grants of stock options to certain
officers and employees during fiscal 1997 to increase the opportunity of these
employees to participate in the growth of the company and the value of its
stock. The specific levels of options granted generally reflected the level of
responsibility of the employees and officers receiving
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the option awards and the committee's judgment about the direct link between the
employee's performance and decisions and the company's financial results. For
that reason, more senior officers received larger awards, and the Chief
Executive Officer received a significantly larger award than other officers. A
significant portion of the total compensation of executive officers and other
senior management is linked directly to the company's financial performance
through options granted under the performance-based option plans.
The compensation for the Chief Executive Officer is determined under
the same policies and practices used for all of the company's executive
officers, as discussed above. In addition, the company has provided a split
dollar life insurance plan for the Chief Executive Officer for many years; this
program was continued in fiscal 1997 and now includes a split-dollar life
insurance plan for the President. The committee believes this type of plan
provides a cost effective means of providing this benefit, since the company
expects to recover the cost of premium payments on the plan from the cash value
of the insurance policy.
The foregoing report has been furnished by the members of the
Compensation Committee:
Baxter P. Freeze, Chairman
Earl M. Honeycutt
Bland W. Worley
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CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
LEASE TRANSACTIONS. The company leases three (3) industrial facilities
from partnerships owned by certain of the company's executive officers,
directors, principal shareholders and members of their immediate families.
Principals of these related entities include Esther R. Culp (mother of Robert G.
Culp, III), Robert G. Culp, III, Judith C. Walker (sister of Robert G. Culp,
III), and Harry R. Culp (brother of Robert G. Culp, III and director). These
facilities contain a total of 375,000 square feet of floor space. The company
also leases its headquarters office space (33,440 square feet) from Phillips
Interests, Inc. Earl N. Phillips, Jr. is the president and a director of
Phillips Interests, Inc. and a director of the company. (See "Certain Business
Relationships").
The initial terms of the leases described above generally range from
five to ten years, with one or more five-year renewal options. Base rent per
year for the leased industrial facilities ranges from $1.95 to $2.05 per square
foot. The leases typically prohibit assignment or subletting without the
lessor's consent but such consent may not be unreasonably withheld. The lessor
is generally responsible for maintenance only of roof and structural portions of
the leased facilities. The industrial facilities are leased on a "triple net"
basis, with the company responsible for payment of all property taxes, insurance
premiums and maintenance, other than structural maintenance. The company
believes that at the time the leases and any lease renewals were executed the
terms of all such leases were no less favorable to the company than could have
been obtained in arms-length transactions with unaffiliated persons. The company
received independent appraisals to this effect with respect to the industrial
facility leases. At the time the company entered into the lease with Phillips
Interests, Inc. (January 19, 1990), Mr. Phillips was not a director of the
company. Related party leases and amendments thereto are approved by the Audit
Committee and are reviewed annually by the Audit Committee. The total amounts of
rent paid by the company under the industrial facilities and office leases
during fiscal 1997 were approximately $680,000 and $436,000, respectively.
CERTAIN BUSINESS RELATIONSHIPS. The company had sales of approximately
$27.5 million, 6.9% of the company's net sales, to La-Z-Boy, Inc. in fiscal
1997. Patrick H. Norton, a director, is that company's senior vice president of
sales and marketing and also serves on its Board of Directors.
Earl N. Phillips, Jr., a director of the company, is also a director
of a subsidiary of one of the company's banks. The amount of interest and other
fees paid to this bank was approximately $2.2 million in fiscal 1997 and the
loans payable to the bank and amounts guaranteed through letters of credit by
the bank at April 27, 1997 aggregated $28.7 million.
PROPOSAL 3: APPROVAL OF THE COMPANY'S 1997 PERFORMANCE-BASED OPTION PLAN
BACKGROUND
The Board of Directors is submitting to the shareholders, for their
approval, the company's 1997 Performance-Based Option Plan (the "Plan"). The
Plan has been adopted by the company's Board of Directors (the "Board"), but
unless the Plan is approved by the shareholders, the Plan will cease to be
effective and all options granted pursuant to the Plan will be void. The Plan
provides for a one-time grant of options to the company's officers and certain
of the senior managers. The Board believes that option plans have proved to be
an important means of attracting, retaining and motivating key employees and
that the Plan will continue to serve these purposes for the company's officers
and key senior managers.
SUMMARY OF THE PLAN
The Plan is summarized below. However, this summary is qualified in
its entirety by reference to the text of the Plan, a copy of which is attached
hereto as Annex A.
GENERAL. The Plan provides for a one-time grant of options ("Options")
to purchase the company's common stock ("Common Stock") at a par value of $1.00
per share to the company's officers and certain key senior managers. The purpose
of the Plan is to increase the incentive for participants to contribute to the
company's success and to reward them for those contributions.
14
The maximum number of shares that may be issued pursuant to the Plan
is 106,000. The Plan provides that the number of shares that may be issued under
the Plan and the number of shares and exercise prices of outstanding Options
would be adjusted to reflect any stock dividends, stock splits, or similar
changes in the capitalization of the company that may occur subsequently. On
April 27, 1997, the closing sales price for the company's Common Stock as
reported on the New York Stock Exchange was $16.63 per share.
ADMINISTRATION. The Plan is administered by the Compensation Committee
of the Board of Directors (the "Committee") composed solely of members who are
"disinterested persons" (persons not eligible to receive Options). The Committee
has complete authority to: (a) determine the officers and key senior managers
who will receive Options, and other terms of such Options, subject to the terms
of the Plan; (b) make and amend rules governing the administration of the Plan;
(c) construe and interpret the Plan; (d) take actions necessary to keep the Plan
in compliance with securities, tax and other laws: and (e) to make other
necessary determinations in connection with the administration of the Plan.
The Committee may designate selected Committee members or certain
employees of the company to assist the Board or Committee in the administration
of the Plan and may grant authority to such persons to execute documents,
including Options, on behalf of the Committee. The Plan provides that no member
of the Committee or employee of the company assisting the Board or Committee in
connection with the Plan shall be liable for any action taken or determination
made in good faith.
ELIGIBILITY AND CRITERIA FOR GRANTS. The Plan provides that Options
may be granted to officers and key senior managers of the company. As of April
27, 1997, the company had approximately 25 employees eligible under these
criteria. In making the determination as to the employees who will be granted
Options, the Committee is to consider the duties of the employee, the employee's
present and potential contributions to the success of the company, and such
other factors as the Committee deems relevant in connection with accomplishing
the purposes of the Plan.
TERMS AND CONDITIONS OF OPTIONS. The Plan provides for a one-time
grant of Options for all 106,000 shares to the company's officers and key senior
managers.
All of the Options have an exercise price of $1.00 per share. None of
the Options are exercisable when granted. The Options will not become
exercisable until the earlier of January 1, 2006, or after the end of fiscal
1999 if the company's reported audited earnings for fiscal 1999 equal or exceed
$1.50 per share (subject to adjustment for certain corporate transactions) If an
optionee's employment terminates on account of death, disability or retirement
after reaching age 65, his options will become exercisable immediately. If the
employee's employment is terminated for cause, the Option expires upon
termination; otherwise, the Option expires three (3) months after termination of
employment. If the Option expires before it has become exercisable, then the
optionee will never receive any benefit or value from the Option. Thus, an
employee can benefit from the Options only by remaining an employee through the
date when the company achieves the performance target described above (reported
audited earnings for any fiscal year 1997 through 1999 of $1.50 per share) or
through December 31, 2005. The Options will terminate December 31, 2006.
The exercise price is payable in full upon the exercise of the
Options. Payment may be made in cash or with shares of Common Stock, valued at
the fair market value on the date of exercise, delivered to or withheld by the
company at the time of exercise.
In general, Options granted under the Plan may not be transferred
other than by will or the laws of descent and distribution and during the
optionee's lifetime may be exercised only by the optionee. In general,
outstanding Options terminate within three months of the death, disability or
termination of service (other than for cause, in which case the Options
terminate immediately), of the participant holding such Option. If an optionee
dies without having exercised an Option, the Option may be exercised by the
optionee's estate or by a person who acquired the right to exercise the Option
by bequest or inheritance.
15
GRANT OF OPTIONS UNDER PLAN
As of April 1, 1997, the Committee granted options, subject to
shareholder approval, under the Plan as follows:
Name and Title Shares
Robert G. Culp, III 25,000
Chairman of the Board
Chief Executive Officer
Howard L. Dunn 18,000
President and Chief Operating Officer
Franklin N. Saxon 10,000
Senior Vice President and
Chief Financial Officer; Treasurer
and Secretary
Kenneth M. Ludwig 10,000
Senior Vice President - Human Resources
Assistant Secretary
All executive officers as a group 63,000
Non-executive officer employees as a group 43,000
AMENDMENT OF PLAN AND OPTIONS. The Plan may be amended, altered or
discontinued by the Board of Directors at any time, but no such termination or
amendment shall materially and adversely affect the rights and obligations of a
holder of an Option theretofore granted without such holder's consent. The
Committee may also amend the terms and conditions of any outstanding Option.
However, no action may be taken that would alter or impair any rights or
obligations under any outstanding Option without the consent of the holder of
the Option. Certain amendments to the Plan would require shareholder approval
under the current rules of the Securities and Exchange Commission and the rules
of the New York Stock Exchange. The company intends to seek shareholder approval
for an amendment to the Plan whenever such approval is required by any of these
rules.
FEDERAL INCOME TAX CONSEQUENCES. The grant of an Option under the Plan
is not a taxable event; the recipient of the Option does not recognize income
for federal income tax purposes, and the company does not receive a tax
deduction. The Options will be treated as "non-qualified" options under the
Internal Revenue Code. When an optionee exercises an Option, he will recognize
taxable income in the amount by which the fair market value of the shares at the
date of exercise exceeds the exercise price, and the company will be entitled to
a tax deduction at the same time and in the same amount.
The affirmative vote of a majority of the shares present or
represented at the Annual Meeting is required for approval of the Plan.
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934 requires the
company's directors, its executive officers, any persons who hold more than ten
percent of the company's common stock and certain trusts (collectively,
"insiders") to report their holdings of and transactions in the company's Common
Stock to the Securities and Exchange Commission (the "SEC").
16
Specific due dates for these reports have been established, and the company is
required to disclose in this proxy statement any late filings and any failures
to file that have occurred since April 26, 1996. Insiders must file three types
of ownership reports with the SEC: initial ownership reports,
change-in-ownership reports and year-end reports. Under the SEC's rules,
insiders must furnish the company with copies of all Section 16(a) reports that
they file. Based solely on a review of copies of these reports and on written
representations the company has received, the company believes that since April
26, 1996, its insiders have complied with all applicable Section 16(a) reporting
requirements, except that a change-in-ownership filing with regard to a gift of
100 shares by Baxter P. Freeze was made after the required filing date.
================================================================================
YOUR DIRECTORS RECOMMEND VOTES "FOR"
O THE RATIFICATION OF KPMG PEAT MARWICK LLP AS THE COMPANY'S INDEPENDENT
AUDITORS FOR FISCAL 1998
O THE THREE NOMINEES FOR DIRECTOR
0 THE ADOPTION OF THE COMPANY'S 1997 PERFORMANCE-BASED OPTION PLAN
================================================================================
17
SHAREHOLDER PROPOSALS FOR 1998 MEETING
Shareholders may submit proposals appropriate for shareholder action
at the company's Annual Meeting consistent with the regulations of the
Securities and Exchange Commission and the company's bylaws. The nominees named
in this Proxy Statement are those chosen by the Nominating Committee of the
Board of Directors. Nominations may also be made by shareholders in accordance
with the company's bylaws. The bylaws require that such nominations must be
received by the company at least 120 days prior to the Annual Meeting and shall
include certain biographical and other information about the persons nominated
as specified in the bylaws. For shareholder proposals and nominations for
director to be considered for inclusion in the Proxy Statement for the 1998
Annual Meeting, they must be received by the company no later than May 3, 1998.
Such proposals should be directed to Culp, Inc., Attention: Franklin N. Saxon,
Senior Vice President and Chief Financial Officer, 101 South Main Street, Post
Office Box 2686, High Point, North Carolina 27261.
OTHER MATTERS
The company's management is not aware of any matter which may be
presented for action at the Annual Meeting other than the matters set forth
herein. Should any matters requiring a vote of the shareholders arise, it is
intended that the accompanying proxy will be voted in respect thereof in
accordance with the best judgment of the person or persons voting the proxy,
discretionary authority to do so being included in the proxy.
By Order of the Board of Directors,
By: /s/ Franklin N. Saxon
FRANKLIN N. SAXON
SENIOR VICE PRESIDENT AND CHIEF FINANCIAL OFFICER
- --------------------------------------------------------------------------------
THE COMPANY WILL FURNISH WITHOUT CHARGE TO EACH PERSON WHOSE PROXY IS
SOLICITED, AND TO EACH PERSON REPRESENTING THAT AS OF THE RECORD DATE FOR THE
ANNUAL MEETING HE OR SHE WAS A BENEFICIAL OWNER OF SHARES OF THE COMPANY, ON
WRITTEN REQUEST, A COPY OF THE COMPANY'S 1997 ANNUAL REPORT ON FORM 10-K TO THE
SECURITIES AND EXCHANGE COMMISSION, INCLUDING THE CONSOLIDATED FINANCIAL
STATEMENTS AND SCHEDULES THERETO. SUCH WRITTEN REQUEST SHOULD BE DIRECTED TO
CULP, INC., ATTENTION: FRANKLIN N. SAXON, SENIOR VICE PRESIDENT AND CHIEF
FINANCIAL OFFICER, 101 SOUTH MAIN STREET, P. O. BOX 2686, HIGH POINT, NORTH
CAROLINA 27261.
18
*******************************************************************************
APPENDIX
P R O X Y CULP, INC.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby appoints Robert G. Culp, III and Franklin N. Saxon, and
each of them, attorneys and proxies with full power of substitution, to act and
vote as designated below the shares of common stock of Culp, Inc. held of record
by the undersigned on July 8, 1997, at the Annual Meeting of Shareholders to be
held on September 16, 1997, or any adjournment or adjournments thereof.
1. PROPOSAL TO RATIFY THE APPOINTMENT OF KPMG PEAT MARWICK LLP AS THE
COMPANY'S INDEPENDENT AUDITORS FOR FISCAL 1998.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
2. ELECTION OF DIRECTORS:
[ ] FOR the 3 nominees listed below [ ] WITHHOLD AUTHORITY to vote
(except as marked to the contrary) for the 3 nominees
listed below.
(INSTRUCTION: TO WITHHOLD AUTHORITY TO VOTE FOR ANY INDIVIDUAL NOMINEE, STRIKE A
LINE THROUGH THE NOMINEE'S NAME IN THE LIST BELOW.)
Robert G. Culp, III, Earl M. Honeycutt, Patrick H. Norton
3. PROPOSAL TO APPROVE THE COMPANY'S 1997 PERFORMANCE -BASED OPTION PLAN.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
4. IN THEIR DISCRETION, THE PROXIES ARE AUTHORIZED TO VOTE UPON ANY OTHER
BUSINESS THAT MAY PROPERLY COME BEFORE THE MEETING.
(continued on other side)
(continued from other side)
THIS PROXY WILL BE VOTED AS DIRECTED HEREIN. IF NO DIRECTION IS MADE, THIS
PROXY WILL BE VOTED FOR THE RATIFICATION OF KPMG PEAT MARWICK LLP AS INDEPENDENT
AUDITORS IN PROPOSAL 1, FOR THE NOMINEES LISTED IN PROPOSAL 2, AND FOR THE
APPROVAL OF THE 1997 PERFORMANCE-BASED OPTION PLAN IN PROPOSAL 3. IF, AT OR
BEFORE THE TIME OF THE MEETING, ANY OF THE NOMINEES LISTED ABOVE HAS BECOME
UNAVAILABLE FOR ANY REASON, THE PROXIES HAVE THE DISCRETION TO VOTE FOR A
SUBSTITUTE NOMINEE OR NOMINEES.
Dated:_________________________, 1997 ________________________________ (SEAL)
Signature
________________________________ (SEAL)
Signature
(PLEASE SIGN EXACTLY AS NAME APPEARS ON
THIS CARD. IF SIGNING AS ATTORNEY,
ADMINISTRATOR, EXECUTOR, GUARDIAN, OR
TRUSTEE, PLEASE GIVE SUCH TITLE. IF
SIGNING ON BEHALF OF A CORPORATION,
PLEASE GIVE NAME AND TITLE OF AUTHORIZED
OFFICER SIGNING.)
19
