B.B.WALKER COMPANY THIS PROXY IS SOLICITED ON BEHALF OF THE
P 4l4 East Dixie Drive BOARD OF DIRECTORS
P.O.Drawer ll67
R Asheboro, N.C. 27204
The undersigned hereby appoints Dorothy W.
O Craven and Rebecca S. Rich or either of
them, as Proxies, each with the power to
X appoint a substitute and hereby authorizes
them to represent and to vote as designated
Y below, all of the shares of common stock of
B. B. Walker Company held of record by the
undersigned on February 26, 2001, at the
Annual Meeting of Shareholders to be held
at 7:00 p.m. EST on March 19, 2001 or any
adjournment thereof.
l. ELECTION OF FOR all nominees listed below WITHHOLD AUTHORITY
DIRECTORS (Except as marked to the to vote for all
contrary) nominees
K.T. Anderson; G.M. Ball; R. L. Donnell, Jr.; J. P.McDermott;
M. C. Miller; and E. A. Walker.
INSTRUCTION: To withhold authority to vote for one or more
individual nominees, write the name(s) of such
nominees(s) in the space provided below.
2. TO AUTHORIZE THE ATTORNEYS IN FACT TO VOTE IN ACCORDANCE WITH
THE RECOMMENDATIONS OF MANAGEMENT ON ANY OTHER MATTERS THAT MAY
BE SUBMITTED TO A VOTE OF THE SHAREHOLDERS.
3. WITH DISCRETIONARY AUTHORITY UPON SUCH OTHER MATTERS AS MAY
PROPERLY COME BEFORE THE MEETING OR ANY ADJOURNMENTS THEREOF.
YOUR PROXY MAY BE RESCINDED AT ANY TIME BEFORE IT IS EXERCISED AND
WILL BE RETURNED TO YOU ON REQUEST. THIS PROXY WILL BE VOTED AS
SPECIFIED AND IF NO SPECIFICATION IS MADE, SHALL BE VOTED IN FAVOR
OF THE AFOREMENTIONED PROPOSALS. PLEASE SIGN AND DATE THIS PROXY AND
RETURN AT ONCE IN THE ENCLOSED BUSINESS REPLY ENVELOPE. MANAGEMENT
RECOMMENDS A VOTE FOR EACH OF THE ABOVE PROPOSITIONS.
DATED
LABEL (SEAL)
Signature
(SEAL)
Signature
IMPORTANT: Please sign this Proxy exactly as your name appears
hereon. If shares are held jointly, both owners must
sign. Others signing in a representative capacity should
give their full titles.
B.B. WALKER COMPANY
414 East Dixie Drive, P.O.Drawer ll67,Asheboro, North Carolina 27204
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON MARCH 19, 2001
TO THE HOLDERS OF COMMON STOCK OF B.B.WALKER COMPANY
You are cordially invited to attend the Annual Meeting of the Share-
holders of B. B. Walker Company scheduled to be held on Monday,
March 19, 2001 at 7:00 p.m. EST in the executive offices of the
Company at 4l4 East Dixie Drive, Asheboro, North Carolina. The
purposes of the meeting are:
(l) To elect 6 Directors of the Company.
(2) To transact such other business as may properly be brought
before the meeting or any adjournment thereof.
Only holders of common stock of record at the close of
business on February 26, 2001 will be entitled to vote at
the meeting. The stock transfer books of the Company will
not be closed.
IMPORTANT - YOUR PROXY CARD IS ENCLOSED
WHETHER OR NOT YOU PLAN TO ATTEND THE MEETING, YOU ARE URGED TO
COMPLETE, SIGN, DATE AND RETURN THE ENCLOSED PROXY CARD PROMPTLY. THIS
WILL INSURE THAT YOUR VOTE IS COUNTED, WHETHER OR NOT YOU ARE ABLE TO
BE PRESENT. YOUR PROXY CARD WILL BE RETURNED TO YOU IF YOU ARE
PRESENT AT THE MEETING AND SO REQUEST. PLEASE USE THE ENCLOSED
POSTAGE PAID RETURN ENVELOPE FOR MAILING YOUR PROXY CARD.
Enclosed with this Proxy and Proxy Statement is a copy of the
Company's Annual Report including financial statements for the
fiscal year ended October 28, 2000.
By Order of the Board of Directors
DOROTHY W. CRAVEN, Secretary
----------------------------
Dorothy W. Craven, Secretary
Date of Mailing:
February 26, 2001
B.B.WALKER COMPANY
414 East Dixie Drive - P.O.Drawer ll67 - Asheboro, N. C. 27204
PROXY STATEMENT FOR ANNUAL MEETING OF SHAREHOLDERS
March 19, 2001 and Adjournments
SOLICITATION OF PROXY
The enclosed Proxy, mailed on February 26, 2001, is solicited by the
Board of Directors of B.B. WALKER COMPANY, (the Company), for use at
its Annual Meeting of Shareholders to be held in the executive offices
of the Company at 414 East Dixie Drive, Asheboro, North Carolina, at
7.00 p.m. EST on Monday, March 19, 2001 or any adjournments thereof.
The Company will bear the cost of solicitation of proxies, including
the charges and expenses of brokerage firms and others for forwarding
solicitation material to beneficial owners of stock. In addition to
the use of the mails, proxies may be solicited by personal interview
or by telephone, telegram and FAX, etc. Proxies and correspondence
should be addressed to Dorothy W. Craven, Corporate Secretary.
REVOCATION OF PROXY
Execution and return of a Proxy given in response to this
solicitation will not affect a Shareholder's right to attend the
meeting and vote in person. Any Shareholder signing and returning a
Proxy in the form enclosed with this statement may revoke it at any
time before it is exercised by giving notice thereof to the Company in
writing or in open meeting.
VOTING SECURITIES AND PRINCIPAL HOLDERS THEREOF
The Board of Directors has fixed the close of business on
February 26, 2001 as the record date for Shareholders entitled to
notice of and to vote at the meeting and any adjournment. On February
26, 2001, the Company had issued and outstanding l,735,114 shares of
common stock all of which were outstanding and entitled to vote. Each
share of common stock is entitled to one vote. As of January 8, 2001,
all Directors and Officers of the Company as a group (10 persons) owned
or controlled 717,626 shares or 41.4% of the Company's common stock.
Included in the solicitation of proxies is the solicitation of
discretionary authority to transact such other business as may
properly be brought before the meeting or any adjournments. The
presence, in person or by proxy, of the holders of a majority of the
outstanding shares of B. B. Walker Company common stock entitled to
vote, is necessary to constitute a quorum.
All votes will be tabulated by the inspector of elections appointed
for the meeting, who will separately tabulate affirmative and negative
votes, abstentions and broker non-votes. Abstentions will be counted
towards the votes cast on proposals presented to the shareholders and
will have the same effect as negative votes. Abstentions and broker
non-votes are counted towards a quorum, but are not counted for any
purpose in determining whether a matter has been approved.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table shows information as to "beneficial
ownership" of the common stock of the Company as of January 8, 2001 by
each person, known by the Company, (i) to be the beneficial owner of
more than 5% of the outstanding common stock of the Company; (ii) by
each of the Company's directors and nominees for director owning
common stock in the Company; and (iii) by all directors and executive
officers as a group:
Name of Beneficial Number of shares Percent of
Owner Beneficially Beneficially Owned
owned (l) Shares
Kent T. Anderson (2) l82,927 l0.3%
414 East Dixie Dr.
Asheboro, NC 27203
James P. McDermott (3) 343,089 19.7%
414 East Dixie Dr.
Asheboro, NC 27203
Nellie Jean Richardson (4) l13,202 6.5%
4835 Zoo Parkway
Asheboro, NC 27203
Edna A. Walker (5) ll3,697 6.5%
414 East Dixie Dr.
Asheboro, NC 27203
George M. Ball(6) 6,000 .34%
212 S. Tryon St.
Charlotte, NC 28281
Robert L. Donnell, Jr.(4) 8,146 .47%
820 Kildare Road
Asheboro, NC 27203
Michael C. Miller(7) 7,621 .44%
P. O. Box 1328
Asheboro, NC 27203
All Directors and Executive
Officers as a Group, 717,626 41.4%
including stock options deemed
exercisable (10 persons)
(l) Except as otherwise noted, all persons have sole voting and
investment power with respect to their shares.
(2) Kent T. Anderson individually owns 85,202 shares directly
and holds 43,675 shares jointly with Mrs. Anderson. He is
deemed to own 38,750 shares by virtue of currently exercisable
stock option grants. The above total also includes l5,300 shares
of common stock owned by certain family members, some of which
shares are held in a fiduciary capacity.
(3) James P. McDermott individually owns 25,420 shares directly and
is deemed to own 6,000 shares under unexercised Directors
stock option grants. In addition, as Trustee of the Employee
Stock Ownership Plan of B.B. Walker Company (the ESOP), he is
authorized to vote all 311,669 shares held by the ESOP.
(4) Robert L. Donnell, Jr. holds 8,146 shares of which 2,041 shares
are held directly and 105 shares are held jointly with Mrs.
Donnell. 6,000 shares of the above stock were granted him under
a Stock Option Plan for non-employee Directors.
(5) Edna A. Walker individually owns 88,846 shares directly and is
deemed to own 6,000 shares under exercisable Directors stock
option grants. In addition Mrs. Walker holds joint ownership with
two members of her family of l,699 shares and is deemed to own
beneficially l7,l52 shares held by members of her family.
(6) George M. Ball holds 6,000 shares of stock granted him under a
Stock Option Plan for non-employee directors.
(7) Michael C. Miller holds voting control of 1,621 shares of common
stock as Executor of the Estate of his late mother, Mrs. Billie
U. Miller, in addition to the 6,000 shares of stock granted him
under a Stock Option Plan for non-employee directors.
l. ELECTION OF DIRECTORS
Six Directors are to be elected at the forthcoming Annual Meeting.
The recommendation of the Nominating Committee of the Board of
Directors was that the existing six member Board be reelected. This
was accepted and the Board at its January 2001 meeting directed that
the six persons be presented as its director nominees for
consideration by the shareholders. It is intended that the two
persons named in the accompanying Proxy will vote FOR all six director
nominees named on the following pages unless authority to vote is
directed otherwise. Directors shall be elected by a plurality of the
votes cast at the meeting.
A Director is elected to serve until the next Annual Meeting
of the Shareholders or until a successor shall be elected and shall
qualify. Each nominee for Director has agreed to serve and, so far
as the Board is aware, will serve if elected. If any nominee is
unable to serve, the proxies will be voted by those named therein for
the election of a substitute nominee selected by the Board of
Directors.
Of the six nominees for director, one is presently an
employee and three are retired employees. The Company provides
Directors and Officers Liability Insurance coverages. There are no
family relationships between any of the nominees and the executive
officers of the Company or its subsidiary.
BOARD MEETINGS AND DIRECTORS' ATTENDANCE
The Board of Directors meets on a quarterly basis. The Annual
Meeting of the Board of Directors is held immediately following the
Annual Meeting of the Shareholders. Special meetings of the Board may
be called at any time when necessary as provided in the By-Laws.
There were 5 Board meetings held in fiscal 2000. All except two Directors,
attended all five meetings of the Board and of the Committees on which
he or she served. The two Directors missed one meeting each.
BOARD COMMITTEES
The Board has 3 committees: an Audit Committee; a Compensation & Stock
Option Committee; and a Nominating Committee.
(l) The Audit Committee, which held l meeting in fiscal 2000, meets with
the independent public accountants and reviews the scope and results
of the audit by the independent auditing firm. The Committee makes
recommendations to the Board as to the selection of the independent
public accountants and as to services provided. In addition it
reviews the system of internal control and accounting policies. The
Audit Committee is composed entirely of Directors who are not
employees of the Company or of its subsidiary. The five Members of
the Audit Committee are: James P. McDermott, Chairman; George M.
Ball; Robert L. Donnell, Jr.; Michael C. Miller; and Edna A.
Walker. The Committee met with the independent public accountants on
January 2, 2001 and reviewed the audited financial statements presented for
the fiscal year ended October 28, 2000. The committee subsequently recommended
to the Board of Directors that the formal audit report be accepted as
presented, which recommendation was accepted.
(2) The Compensation & Stock Option Committee met once during the year
when the fiscal 2000 financial results were available for its review. The
Committee is directly responsible for determining the compensation of
the Chairman and Chief Executive Officer of the Company, relating his
compensation to an evaluation of his performance during the fiscal
year. The Committee presents its recommendations to the Board of
Directors for its consideration. The Committee is composed of the 5
outside non-employee directors. The Committee is responsible for the
establishment and oversight of executive compensation, benefit and
retirement plans of the Company. The Compensation Committee is
composed of George M. Ball, Chairman; Robert L. Donnell, Jr.;
James P. McDermott; Michael C. Miller; and Edna A. Walker.
The Compensation & Stock Option Committee also reviews the recommendations
of management for the issuance of Stock Option Grants under the l995
Incentive Stock Option Plan of the Company. After review the
Committee makes recommendations to the Board regarding the issuance of
the grants, the price at which the shares of stock are issued, and the
conditions of the grant.
(3) The Nominating Committee, composed of three non-employee directors
who are not officers of the Company or its subsidiary, held l meeting
in fiscal 2000. The Committee reviews information for the selection of
qualified candidates for director nominee and recommends to the Board
of Directors for its consideration the names of qualified director
nominees who are willing to serve if nominated and elected. This
Committee has no current plans to consider nominees recommended by
security holders. The 3 Members of the Nominating Committee are:
Michael C. Miller, Chairman; Edna A. Walker; and George M. Ball.
The Committee also met on January 2, 2001 and unanimously recommended
to the Board of Directors the re-election of the existing Board of
Directors.
NOMINEES FOR ELECTION TO THE BOARD OF DIRECTORS
Name, Age & Year Equity Securities of
First Elected Principal Occupation Company,beneficially
a Director For Last Five Years owned on January 5, 2000(l)
Common Preferred
Shares(6) Shares
Kent T. Anderson Chairman of the Board l82,927 10
(58)(l985) (l992), President (l0.3%) (1.2%)
(l984) & Chief -
Executive
Officer (l986)(2)
George M. Ball Chairman, Philpott, 6,000 -
(66)(l993) Ball & Werner, Investment (.34%)
Bankers, Charlotte, N. C.(5)
Robert L. Donnell, Jr. Retired. Formerly 8,l46 -
(69)(l968) Executive Vice Presi- (.47%)
dent - Operations
l968-l99l (6)
James P. McDermott Retired. Formerly Vice 343,089 -
(80)(l986) President & General (19.7%)
Counsel l974-l992.
Formerly Corporate
Secretary l984-l993 (3)
Michael C. Miller President & Chief Executive 7,621 -
(49)(l993) Officer, First National (.44%)
Bank & Trust Co.,Asheboro, N.C.(4)
Edna A. Walker President ll3,697 35
(76)(l952) B. B. Walker Foundation (6.5%) (4.2%)
(l) The By-Laws and the Corporate Charter do not require Directors
to be Shareholders. The number of shares of common stock
shown includes shares held in the names of spouses, minor
children or certain relatives, as to which beneficial
ownership is disclaimed. The totals shown in the table
include shares subject to currently exercisable options
granted by the Company.
(2) Kent T. Anderson, currently holds exercisable stock option
grants for 38,750 shares. Under the l987 Incentive Stock
Option Plan of the Company, Mr. Anderson holds unexercised
stock option grants for 38,750 shares.
Reference is made to subparagraph (2) on page 2 of this Proxy
Statement under the heading, "SECURITY OWNERSHIP OF CERTAIN
BENEFICIAL OWNERS AND MANAGEMENT".
During fiscal 2000, Mr. Anderson purchased ten (10) shares of
the outstanding 828 shares of the $100 par value non-voting
Preferred Stock of the Company. The Preferred Stock certificate
provides for voting privileges in the event quarterly Preferred
dividend are not paid.
(3) The above set forth total of shares of common stock
beneficially owned by James P. McDermott includes the 311,669
shares of common stock or 18.0% of the total shares issued
and outstanding, held by him as Trustee of the Employee Stock
Ownership Plan and Trust of B.B. Walker Company for the
benefit of all Plan participants. Under the Plan,
participants exercise no voting control over shares of stock
allocated to their accounts so long as they are participants
in the Plan, unless required by North Carolina law. Shares
cannot be distributed to nor disposed of by participants while
employed. Equitable ownership by participants of shares
allocated to their accounts depends upon their being vested in
their accounts, which vesting is based upon their length of
service. Reference is made to subparagraph (3) on page 2 of
this Proxy Statement under the heading, "SECURITY OWNERSHIP OF
CERTAIN BENEFICIAL OWNERS AND MANAGEMENT".
James P. McDermott, subsequent to his retirement in February
l992 as Vice President, General Counsel & Secretary of the
Company, was retained by the Company as a Consultant to render
services in two specialized areas. (l) James P. McDermott
oversees the administration and prepares the filings
with the IRS/DOL of the Company's three ERISA qualified
employee benefit plans. Under the Consulting Agreement he
serves as Trustee and/or Plan Administrator for the three
qualified Plans. (2) In addition under the Consulting Agree-
memt, he is responsible for the preparation of the Proxy
Statement which Proxy Statement is sent to Shareholders
for the Annual Meeting of the Shareholders. James P.
McDermott was paid $33,916 during fiscal 2000 for services
rendered.
(4) Michael C. Miller has been President and Chief Executive
Officer of First National Bank & Trust Company, Asheboro, NC
since January 1994. He is also Chief Executive Officer of
FNB Corp., the parent company of the Bank. Mr. Miller serves
as a director of both First National Bank and of FNB Corpora-
tion. He holds voting control of 1,621 shares as Executor of
the Estate of his later mother, Mrs. Billie U. Miller, in
addition to the 6,000 shares granted him under a stock option
plan for non-employee directors.
First National Bank holds a first lien on the Company's
manufacturing facility in Somerset, Pennsylvania. First National
Bank is owed $175,612 under this loan.
(5) George M. Ball is Chairman of the Board of Philpott, Ball
& Werner, an investment banking firm in Charlotte, NC.
He is a director of Juno Lighting, Inc., a publicly held lighting
equipment company in Des Plaines, Illinois. George M. Ball, on
behalf of his employer Philpott, Ball & Werner, has served the
B. B. Walker Company as a management consultant for a number of
years advising management on various matters of corporate finance
and restructuring. Services provided by Philpott, Ball & Werner
totalled $37,615 during fiscal 2000. George M. Ball
holds 6,000 shares of stock granted him under a Stock Option Plan
for non-employee directors.
(6) Robert L. Donnell, Jr., until his disability retirement in
l99l, was Executive Vice President-Operations of the Company.
Mr. Donnell was hired on April l, l998 as a consultant to the
Company to advise management in the orderly transfer of
certain non-cement manufacturing operations from the Asheboro,
NC facility to the western boot manufacturing facility in
Somerset, PA. Mr. Donnell was paid $17,500 in fees for his
services during fiscal 2000.
THE BOARD OF DIRECTORS RECOMMENDS THAT SHAREHOLDERS VOTE FOR THE
PROPOSED NOMINEES. THE AFFIRMATIVE VOTE OF A PLURALITY OF THE VOTES
CAST BY THE SHARES ENTITLED TO VOTE ON EACH DIRECTOR IS NECESSARY
FOR HIS OR HER ELECTION.
BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Federal securities laws require the Company's directors and executive
officers to file with the Securities and Exchange Commission,
Washington, D. C. initial reports of ownership and reports of
changes in ownership of B.B. Walker Company common stock. The
Company is required to identify any officer, director or owner of more
than l0% of the Company's common stock who failed to timely file with
the Securities and Exchange Commission a required report relating to
beneficial ownership of common stock under Section l6(a) of the
Securities Exchange Act of l934. To the Company's knowledge and based
on Company records and other information, all parties subject to these
reporting requirements with respect to B.B. Walker Company's common
stock, filed the required reports on a timely basis during fiscal
year 2000.
EXECUTIVE COMPENSATION AND RELATED INFORMATION
The following table sets forth information concerning the annual
compensation for services in all capacities to the Corporation for the
fiscal years ended in October 2000, 1999, and 1998, of those
persons who were, at October 28, 2000 (i) the chief executive
officer and (ii) the other four most highly compensated executive
officers of the Corporation, ("The Named Officers") who were paid
compensation of $l00,000 or more per year:
Summary Compensation Table
Annual Compensation
(a) (b) (c) (d) (e) (g)
(i)
Long Term
Other Compensation
Name and Annual Awards All Other
Principal Compen- Options/ Compensation
Position Year Salary (1) Bonus sation SAR(#) (l) (2) (3) (4)
Kent T. Anderson 2000 $247,927 $ -0- $ - -0- $6,199
Chief Executive l999 $225,156 $ -0- $ - -0- $5,745
Officer l998 $223,958 $ -0- $ - -0- $5,787
"NO EXECUTIVE OFFICER OTHER THAN THE CHIEF EXECUTIVE
OFFICER EARNED $l00,000.00 OR MORE IN BASE SALARY AND
INCENTIVE COMPENSATION DURING FISCAL 2000."
(1) Salary data shown for the Named Officer is prior to any deduction
or offset for participation in the Company's Thrift Plan, a
Section 40l(k) Plan. Since January l, l989, the Company has
sponsored for the benefit of all employees, including the Named
Officer Kent T. Anderson, the Retirement Savings Plan of B.B.
Walker Company, (the Section 40l(k) Plan). Participants may
contribute through payroll deduction each month on a pre-tax
basis. The Board of Directors authorized a matching contribu-
tion to the Plan for fiscal 2000 of ten (l0%) percent of actual
payroll deductions made during the year by active participants in
the Plan who were employed as of December 3l, 2000. The Named
Officer received a matching contribution of $1,002 to his Section
40l(k) Plan account for fiscal 2000. Such amount is included in
column (i) All Other Compensation above. In addition, the Named
Officer is provided with a leased vehicle for use on Company
business. The vehicle is used from time to time for his personal
use. The value of such personal usage is determined and is
included on his W-2 form as taxable income to him. Such amount
is not included in the above table.
(2) The Named Officer is a participant in the Employee Stock
Ownership Plan of B.B. Walker Company (the ESOP).
This Plan, which has been in effect since l96l, is a defined
contribution Plan under the Employee Retirement Income
Security Act of l974, (ERISA), and has accumulated for the
exclusive benefit of employee participants just under 18.0% of
the issued and outstanding common stock of the Company. The
employees do not contribute to the ESOP and participation is
mandatory. The contribution is allocated to individual
participant accounts by a formula under which all participants
receive the same percentage of their fiscal year compensation
contributed to their accounts. The "Named Officer" was allocated
$3,156 from the $65,000 contribution for fiscal 2000 as
authorized by the Board of Directors which amount is included in
column (i) All Other Compensation above.
(3) The Named Officer has borrowed funds from the Company under the
l989 Plan for the lending of Company funds to officers, directors
and key employees for the purchase of B.B. Walker Company stock.
Full data on the Named Officer's participation in the Company's
Loan Program to Officers and Directors for the purchase of the
B.B. Walker Company common stock, is set forth in sub-paragraph
(2) under the "CERTAIN TRANSACTIONS" section hereinafter. During
Fiscal 2000, the Named Officer is deemed to have benefited in the
amount of $l,057 in having a contract rate provided under the
Plan that was 2% below the prime rate in effect at two regional
banks. Such amount is included in the above table under column
(i) All Other Compensation.
(4) The Company provides a special life insurance program of various
amounts for Officers, Directors, salesmen and
other key employees of the Company and its subsidiary, with the
Company and the employees sharing the premium cost. A total of
41 employees are insured of which 8 are Officers and Directors of
the Company and its subsidiary and 33 are salesmen, supervisors,
and other key employees. In fiscal 2000 the Company and its sub-
sidiary's share of the premium cost amounted to $15,313. The
Company share during fiscal 2000 of the total cost of the special
life insurance coverage for all 8 executive officers and directors
as a group was $5,589 or 36.5% of the total Company cost. The
portion of such cost applying to the director nominees amounted to
$2,637 or l7% of the total Company cost. The cost for the Named
Officer for 2000 was $984 which amount is included in column (i)
All Other Compensation above.
OPTION/SAR GRANTS IN LAST FISCAL YEAR
No SAR's were granted by the Board of Directors to any key employee during
the fiscal 2000 year. No stock options were granted to a any employees in
fiscal 2000.
The Company maintains the "l995 Incentive Stock Option Plan for Key Employees
and Non-Employee Directors" which Plan was approved by the Shareholders at
the Annual Meeting on March 20, l995. Under Part II of the Plan - the
Automatic Option Grant Program, applying only to non-employee Directors,
automatic grants for l,000 shares each were made to all five non-employee
Directors following the close of the Annual Shareholders Meeting on March 20,
2000. No outstanding options granted to Non-Employee Directors were
exercised in fiscal 2000.
Aggregated Option/SAR Exercises in Last Fiscal Year
and FY-End Option/SAR Values
The following table shows stock options exercised by Named
Officers during fiscal 2000, including the aggregate value of
gains on the date of exercise. In addition, this table includes
the number of shares covered by both exercisable and non-
exercisable stock options as of October 28, 2000. Also reported
are the values for "in-the-money" options which represent the
positive spread between the exercise price of any such existing
stock options and the year-end price of Common Stock.
(a) (b) (c) (d)
(e)
Value of
Number of Unexercised
Unexercised In-the-Money
Shares Options/SARs at Options/SARs at
Acquired on Value FY-End(#)(2) FY-End($)(3)
Name Exercise(#)(l) Realized($)(3) Exercisable Unexercisable Exercisable Unexercisable
Kent T. Anderson -0- -0- 38,750 -0- ( 0-) $ -0-
* Fair Market Value at Fiscal Year End l0/28/00 was $.56 per share
based on the Bid Price of $.25 per share and the Ask Price of
$.87 per share as published in the Over the Counter Section of
the financial pages of local and regional newspapers. The market
value at fiscal year end is less than stock exercise price.
(l) Upon exercise of an option grant, the optionee must pay the
exercise price in cash.
(2) Options shown in column (d) were made under the l987 & l995 Incentive
Stock Option Plans. All grants provide that only one-half of the number
of shares granted may be exercised at time of grant and the other half
after l2 months. Shares purchased at exercise of grant may not be sold
without penalty for a period of two years. Under the ISO Plans any
profit or gain realized is not taxable to the grantee at time of
exercise of the grant, but is taxable to the grantee at time of sale
of the stock.
(3) Represents the difference between the fair market value of the
common stock underlying option and the exercise price at exercise
or fiscal year end, respectively.
EMPLOYMENT CONTRACT AND TERMINATION OF EMPLOYMENT
AND CHANGE IN CONTROL ARRANGEMENTS
Kent T. Anderson, as President and Chief Executive Officer, and the
Company entered into an Employment Agreement on October 2, l989, five
years after the Chief Executive Officer was employed. The initial
term was for three years starting November l, l989 with an automatic
annual extension provision providing for the Agreement to be for no
less than three years at all times. The Agreement provided for the
Chief Executive Officer's employment at a minimum base salary of
$l25,000 per year and for an annual increase on January l of each year
thereafter, of at least five (5%) percent of his current base salary.
The Agreement provides that the Board of Directors may, in its
discretion, grant merit increases to the Chief Executive Officer from
time to time. The Chief Executive Officer's salary for fiscal year
2000 was $247,927. Effective January l, 2001, the Chief Executive Officer
notified the Compensation Committee of the Board of Directors, that he was
waiving the contractual 5% annual increase in pay for the 2001 fiscal year.
This Agreement with the Chief Executive Officer may not be terminated
by the Company for any reason whatsoever without penalty, other than
for cause. It may be terminated with three years prior written notice
of termination. However, the Board may exercise its statutory
authority to remove the Chief Executive Officer from his present
elected office and function at any time. This would require immediate
payment of the three year compensation amount provided for in the
Agreement. By Amendment No. l dated July 6, l990, the Employment
Agreement was modified to comply with certain tax provisions of the
Internal Revenue Code. The Chief Executive Officer may, at his
option, elect to reduce the total amount due him under the Agreement
so that no portion of the amounts received by him will be subject to
the excise tax imposed by the Internal Revenue Code on some severance
payments.
The Chief Executive Officer may terminate his employment under
the Agreement in the event: (i) The Company merges or consolidates
with another person or group or undertakes any other reorganization
where the Company is not the Surviving Entity; or (ii) the Company
sells or transfers substantially all of its business or assets to
another person; or (iii) 50% or more of the capital stock of the
Company presently outstanding is acquired by a person or group at any
time after the date of this Agreement. In the event of such
termination, the Chief Executive Officer is entitled to receive
immediately the full amount of his current base salary for three
years. Subject to the above mentioned Amendment, unless the Chief
Executive Officer elects to reduce the total amount to be paid to him,
the three years pay following the end of fiscal 2001 would be
$743,781. Such payment,if made, is to be made in full in cash and
without limitation. The Board of Directors, with the exception of
Kent T. Anderson who was not present, was unanimous in authorizing
the execution of this Employment Agreement.
COMPENSATION OF OUTSIDE DIRECTORS
Five of the six Directors are non-employees of the Company.
The Company provides Directors and Officers Liability Insurance coverage.
Non-employee outside Directors receive a meeting fee of $l,200 for each
Board or Board Committee Meeting, unless the Board and Committee meetings are
held on the same day. Directors who are full time employees of the
Company or of its subsidiary, namely Kent T. Anderson, do not receive any
additional compensation by reason of membership on or attendance at
meetings of the Board of Directors or Board Committees. Four quarterly Board
Meetings are scheduled each fiscal year in addition to the Annual
Meeting of the Board of Directors held immediately following the Annual
Meeting of the Shareholders.
All five Non-Employee Directors benefit from Part II of the "l995
Incentive Stock Option Plan for Key Employees (Part I) and (Part II)
Non-Employee Directors". Part II is a Non-Qualified Plan. This Plan
was approved by the Shareholders at the Annual Meeting on March 20,
l995. Under Part II, Non-Employee Directors who are elected at the
Shareholders Meeting receive an automatic grant of l,000 shares each
of B. B. Walker Company common stock under the Plan, with the Board of
Directors establishing the option price. The Plan is for a 10 year term.
Presently each Non-Employee Director holds unexercised options under
Part II of the l995 Plan of 6,000 shares. No such stock options have
been exercised to date. No Pension or Retirement benefits are provided
to non-employee Directors for serving on the Board.
THE REPORT OF THE AUDIT COMMITTEE, THE REPORT OF THE COMPENSATION &
STOCK OPTION COMMITTEE AND THE PERFORMANCE GRAPH THAT FOLLOW SHALL
NOT BE DEEMED INCORPORATED BY REFERENCE BY ANY GENERAL STATEMENT
INCORPORATED BY REFERENCE THIS PROXY STATEMENT OR FUTURE FILINGS INTO
ANY FILING UNDER THE SECURITIES ACT OF 1933 OR UNDER THE SECURITIES
EXCHANGE ACT OF 1934, EXCEPT TO THE EXTENT THAT THE COMPANY SPECIFICALLY
INCORPORATES THE INFORMATION BY REFERENCE, AND SHALL NOT OTHERWISE BE
DEEMED FILED UNDER SUCH ACTS.
* * * * * * * * * * * * * *
AUDIT COMMITTEE REPORT
The Audit Commitee of the Board is responsible for providing independent
objective oversight and review of the Company's accounting functions and
internal controls. The Audit Committee is comprised of independent
directors, and is governed by a written charter adopted and approved by
the Board of Directors in January 2001. A copy of the Audit Committee
Charter is attached to this Proxy Statement as Appendix A.
The responsibilities of the Audit Committee include recommending to the
Board an accounting firm to serve as the Company's independent accountants.
The Audit Committee also, as appropriate, reviews and evalutes, discusses
and consults with the Company management, the Company internal audit
personnel and the independent accountants regarding the following:
the plan for, and the independent accountants' report on each
audit of the Company's financial statements;
the Company's financial disclosure documents, including all
financial statements and reports filed with the SEC or sent to
shareholders, as well as the adequacy of the Company's internal
accounting controls, and its accounting, financial and auditing
personnel;
changes in the Company's accounting practices, principles,
controls or methodologies or in the Company's financial statements
and recent developments in accounting rules; and the establishment
and maintenance of an environment of the Company that promotes
ethical behavior.
The Audit Committee has reviewed the Audit Committee Charter and after
appropriate review and discussion, the Audit Committee has determined that
the Committee has fulfilled its responsibilities under the Audit Committee
Charter.
The Audit Commitee is responsible for recommending to the Board that the
Company's financial statements be included in the Company's annual report.
The Audit Committee discussed with PricewaterhouseCoopers, LLP, the scope
and results of the fiscal year 2000 audit. The Audit Committee also
discussed PricewaterhouseCoopers,LLP independence and received a letter
regarding independence under applicable independence standards for auditors.
The Audit Committee evaluated the information furnished and was satisfied
with PricewaterhouseCoopers, LLP independence. Finally, the Audit
Committee reviewed and discussed the Company management and
PricewaterhouseCoopers, LLP representatives the audited consolidated
financial statements as of October 28, 2000.
Based on the discussions with PricewaterhouseCoopers, LLP, concerning
the audit, the independence discussions and the financial statement
review and additional matters deemed relevant and appropriate by the
Audit Committee, the Audit Committee recommended to the Board that the
Company's Annual Report on Form 10-K to the SEC include the audited
financial statements for the fiscal year ended October 28, 2000.
AUDIT COMMITTEE:
James P. McDermott, Chairman,
George M. Ball
Robert L. Donnell, Jr.
Michael C. Miller
Edna A. Walker
COMPENSATION & STOCK OPTION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
The Compensation & Stock Option Committee of the Board of Directors,
("the Committee"), is composed of the five outside non-employee
directors and is responsible for the establishment and oversight of
the Company's policies for executive compensation as well as benefit
and retirement plans of the Company. The Committee is responsible for
the initiation and operation of the Company's incentive stock option
plans. The Committee recommends to the Board, on an annual basis, the
compensation of the Chief Executive Officer relating his compensation
to performance. The Board, (other than the Chief Executive Officer),
must approve all compensation actions affecting the Chief Executive
Officer. The Company does not utilize outside compensation
consultants, but does have available to it independent compensation
data of other companies. The Committee has prepared the following
report for inclusion in this Proxy Statement.
COMPENSATION PHILOSOPHY
From the Company's inception its corporate philosophy concerning
employee compensation as established by the Board of Directors has
been for the Board to delegate to the Chief Executive Officer, subject
to review by the Board, the responsibility for establishing rates of
pay and bonus allocations for all employees, with the exception of his
own compensation (salary and bonus). The Chief Executive Officer, in
his determinations, follows the philosophy of compensation as
determined by the Committee and approved by the Board, as well as the
requirements set forth in the l995 Incentive Stock Option Plan and
the l992 Incentive Compensation (Bonus) Plan.
The Company's executive compensation policies have two primary goals:
(l) to attract and retain the highest quality executive officers and
(2) to reward those officers for superior corporate performance
measured by the Company's financial results and strategic
achievements.
The Compensation Committee, in the interests of employee morale and
motivation, plans to continue supporting and recommending to the Board
of Directors and to the Chief Executive Officer, improvements in and
to, simple and plain incentive compensation plans for management
personnel in the areas of:
(1) Merit salary increases based on the individual's level of
responsibility and on above average individual work
performance and goal achievement.
(2) The l995 Incentive Stock Option Plan for key management
employees and executive officers, is based on merit,
above average performance and goal achievement. This ISO Plan
is intended to motivate a key management employee, who holds a
stock option grant, to work for long term Company growth and
profitability. Such will benefit key employee shareholders, as
well as benefit all other shareholders.
(3) The 1992 Incentive Compensation (Bonus) Plan was established
to provide a fair and equitable formula for the sharing of
Company profits with those management employees who help
make profits possible. If there is a loss or if profits
are minimal no bonus awards will be made. When the Company is
adequately profitable, graduated awards are made based on the
individual's level of responsibility and his/her performance
thereunder. The more responsible a key management employee's
function is, the greater the reward when pre-established goals
are met or exceeded.
Cash awards under the two-part Bonus Plan are based on the
Company meeting or exceeding during the fiscal year specified
income levels for each part. This two part Plan is designed
to share the Company profit on a merit and performance basis,
first with all management personnel and second with key
executive management. Payments under both parts being geared
to individuals achieving budgets and/or meeting specific
performance goals. In certain instances sharing is among
several individuals where group effort is to be rewarded.
CHIEF EXECUTIVE OFFICER COMPENSATION PROGRAM
The Chief Executive Officer's compensation program is comprised of
base salary, annual performance compensation and long-term
incentive compensation in the form of stock options. In addition the
Committee believes that basic management compensation should be
adequate, but not excessive and should be coupled with incentive
compensation awards based on the individual's performance and his/her
contribution to the overall Company effort and results.
The Chief Executive Officer was a Certified Public Accountant who had
worked for a number of years in the management services division of a
world renowned public accounting firm. He is a hands on executive and
knowledgeable about all aspects of footwear manufacturing, marketing
and distribution activities, including compensation and affordable
employee benefits in those areas. The Chief Executive Officer has a
broad general knowledge of compensation levels in other footwear
manufacturing concerns and in communities wherein such are located.
The Committee believes the Chief Executive Officer is best qualified
to judge the merits of employee compensation requests and
recommendations for compensation levels for individual management
employees. Due to the size of the Company, the Chief Executive
Officer, who is also the Chief Operating Officer, is familiar with and
works with all such management personnel on a day to day basis.
Delegation of authority on a report back basis is widely used by him.
The Company, with its flexible internal communications relationship
in management and its open door policy for questions, suggestions and
complaints, etc., is not staffed as and does not operate as a
bureaucracy. Salary increases and bonus allocation amounts are based
on merit and are generally made by the Chief Executive Officer in
conjunction with input from the Department Heads and other senior
supervisors and are subject to review by the Compensation Committee.
The Compensation Committee reviews the base salary and the annual
incentive compensation of the Chief Executive Officer following the
close of each fiscal year. The Committee meets without the Chief
Executive Officer present. This review is made in light of his
handling of his responsibilities, his performance during the year and
the financial results for the fiscal year.
Base Salary
The Chief Executive Officer's base salary through fiscal 2000 was
$247,927. The Compensation Committee, based on fiscal 2000
operations, decided not to grant any merit increase to the CEO's base
salary for fiscal 2001.
The Chief Executive Officer's 3 year continuing Employment Contract
provides for an automatic increase of 5% of base salary on January
l following the close of each fiscal year. The Chief Executive Officer
notified the Compensation Committee that in light of business conditons
he was waiving the Contractual automatic increase of 5% of his base pay
effective January 1, 2001 for the fiscal year 2001. The base salary by
contract thus provides a floor from which merit increases based
on performance may be made. The Compensation Committee independently
determines merit increases in the base salary for the Chief Executive
Officer by evaluating the Company's performance against its pre-set
goals; examining the Company's performance within the industry and
evaluating the overall performance of the Chief Executive Officer in
operating the Company during the fiscal year.
The Company suffered a net loss of $1,771,000 in fiscal 2000 compared
to a net loss of $592,000 in fiscal 1999. The Committee believes the
footwear market and other factors faced by the Company in fiscal 2000 were
extremely difficult. There were continuing major marketing factors beyond
the control of the Chief Executive Officer such as the continuing decline
in shipments by the Company due to over-production by other suppliers and
continually rising footwear imports. These factors caused overstocked
inventory conditions at dealers and retailers and affected the Company's
shipments and profit margins. We experienced severe price competition from
low priced work shoe imports in the marketplace. Imports presently account
for more than 90% of all non-rubber footwear sold in the United States.
The Committee believes the Chief Executive Officer handled his
responsibilities well during fiscal 2000 despite adverse market conditions.
The Chief Executive Officer has in place substantial changes to improve
the financial results for fiscal year 2001.
Annual Incentive Compensation
Since fiscal 2000 generated a loss for the year, no provision was made for
the payment of any bonuses under the l992 Incentive Compensation (Bonus)
Plan.
Stock Option Grants
No stock options were granted to a key employee during fiscal 2000.
THE COMPENSATION & STOCK OPTION COMMITTEE
George M. Ball, Chairman
Robert L. Donnell, Jr.
James P. McDermott
Michael C. Miller
Edna A. Walker
CERTAIN TRANSACTIONS
(l) MAE, Inc. ("MAE" hereinafter), of Asheboro, North Carolina, is an
advertising agency and public relations firm owned by Maggie Anderson
and her husband Kent T. Anderson, Chairman and Chief Executive
Officer of B. B. Walker Company, ("Walker" hereinafter). During
fiscal 2000, Maggie Anderson, as the only active principal and owner,
rendered technical and creative services to Walker in the areas of
design, layout, color separation, photography and other services,
including the placement of Walker advertisements and ad copy in trade
publications, footwear consumer magazines and other related media
means. Other services rendered include assistance in producing
printed material; coordinating public relations events,preparing press
releases and press conferences for the Company; the Co-operative
Advertising Program, the development and handling of direct mailings
to customers and prospects; footwear market promotions and Internet
activities including the development of WEB pages on the Internet for the
various footwear brands sold by Walker.
In August l997, the Company created an in-house advertising agency to
provide more focus to its advertising programs. Maggie Anderson was
retained as a consultant to manage the operations of the in-house
advertising agency and to provide consultation and direction
regarding Walker's advertising programs. Maggie Anderson still manages
MAE, Inc. which continues to provide services to its clients,
including Walker, although on a reduced scale. Maggie Anderson as the
non-employee manager of the in-house agency works with and is super-
vised by French P. Humphries, Executive Vice President of Marketing.
During fiscal 2000, Walker paid MAE, Inc. total of $91,600 for
services rendered and for use of their facility and equipment. This
relationship was disclosed to and approved by the Board of Directors
at its inception in l989. The Chief Executive Officer updated the
Board again in March 2000. The Board believes the services rendered
to Walker by MAE and paid for are competitive as to price and are
equal to or superior in quality to others available in this area.
(2) Key employees and Directors, including the Named Officer, Kent T.
Anderson, have borrowed Company funds for the purchase of B. B.
Walker Company stock through the exercise of stock options. Such
loans were made under the "l989 Plan For The Lending of Company Funds
To Officers and Directors For The Purchase of B. B. Walker Company
Stock", (the Loan Program). The lending of B. B. Walker Company
funds to officers, directors and other key employees in management, as
authorized under North Carolina law, was instituted initially by
shareholder approval granted in l966. In l989 the loan program was
updated and was approved by the Shareholders at the Annual Meeting
held on March l3, l989. The Loan Program is in accord with a long
standing Company policy of encouraging officers and directors and
other key employees in management to become shareholders.
All loans are made in the sole and absolute discretion of the Board of
Directors. All borrowings are made solely to enable the employee to
purchase B. B Walker Company stock from various sources, including
the exercise of all or part of any outstanding stock option grant.
Loans are made for a period of up to l0 years and are repayable
through payroll deduction. Interest is charged at 2% below the lower
of the prime rate charged by the First National Bank and Trust
Company, Asheboro, N.C. or by the Bank of America of Charlotte, N.C.
as determined by the Board of Directors. Each loan is made under a
negotiable promissory note and is secured or collateralized by the
pledge of all shares purchased with the loan proceeds. All three
loans presently outstanding, as of l0/28/00 totaling $57,744, are at
4% per annum, the original contract rate, which rate is charged monthly
on the outstanding unpaid balance. No executive officer owes $60,000 or
more to the Company under the Loan Program. All loans in the aggregate
cannot and have not exceeded $350,000 at any time.
(3) Michael C. Miller, a Director of the Company since l993, is
President and Chief Executive Officer of First National Bank and Trust
Company, Asheboro, N. C. ("the Bank"). For many years the Company has
operated a western boot manufacturing facility in Somerset, Pa. In l994
the Company purchased a larger manufacturing facility in Somerset, Pa.
borrowing funds from three sources, one of which was the Bank. The Bank
holds a first lien on the Somerset, Pa. property as security for its March
1995 Loan on which $175,612 is still owed.
In l995 the Company entered into a major refinancing agreement with
Mellon Bank of Philadelphia, Pa. As part of its refinancing, the
Company received a separate term loan from Mellon of $3 Million.
Proceeds from this loan were used to pay off the First Deed of Trust
held by First National Bank on the Company's Asheboro manufacturing
facility.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
No member of the Compensation Committee is an officer or an employee
of the Company. As reported elsewhere under Nominees for Election to
the Board of Directors on page 5, James P. McDermott, until February
l992 a former executive officer of the Company and a Director Nominee,
renders services to the Company as a Consultant for which he is
compensated. Similarly, George M. Ball, a Director Nominee, renders
services to the Company as Chairman of Philpott, Ball & Werner, for
which his Company is compensated. Also Michael C. Miller, a Director
Nominee, is President of First National Bank and Trust Company. The
Bank as reported elsewhere herein, under Certain Transactions,
holds a security interest in the real estate owned by the Company
in Somerset, PA.
SHAREHOLDER RETURN PERFORMANCE PRESENTATION
Set forth below is a line graph comparing the annual percentage change
in the Company's common stock with the percentage change in the NASDAQ
Composite Index and an index of peer companies ("Peer Group") selected
by the Company.
COMPARISON OF FIVE YEAR CUMULATIVE TOTAL RETURN
(B.B.Walker Company, NASDAQ Composite Index, Peer Group)
NASDAQ
Measurement Period B.B.Walker Composite Peer
(Fiscal Year) Company Index Group
- ------------------ ---------- --------- -----
Measurement Point -
November 2, 1996 $ 108 $ 117 $ 132
November 1, 1997 $ 108 $ 153 $ 183
October 31, 1998 $ 67 $ 170 $ 142
October 30, 1999 $ 67 $ 285 $ 186
October 27, 2000 $ 17 $ 315 $ 146
This graph depicts the total cumulative appreciation of a $l00
investment made on October 28, l995 through October 27, 2000,
in B. B. Walker Company, the NASDAQ Composite Index and the
Peer Group.
The Peer Group is comprised of the following public companies:
Brown Group, Genesco, McRae Industries, Wolverine World Wide,
Rocky Shoes & Boots, Timberland, Wellco Enterprises, and Weyco
Group. These companies operate in the same or similar markets
and produce the same or similar products. The Peer Group
the average total appreciation of the companies within the group.
2. APPOINTMENT OF INDEPENDENT PUBLIC ACCOUNTANTS
The Board of Directors of the Company at its January 2, 2001 meeting,
on the recommendation of the Audit Committee, again selected the firm
of PricewaterhouseCoopers, LLP, Greensboro, North Carolina, to continue
as independent public accountants of B. B. Walker Company and its
subsidiary for the fiscal year ending November 3, 2001, to audit the
books and accounts of the Company for the 2001 fiscal year and until
their successors are selected. PricewaterhouseCoopers, LLP has acted
in such capacity since April l973.
The Board of Directors and the Audit Committee are satisfied as to the
professional competence and standing of PricewaterhouseCoopers, LLP.
The Audit Committee meets with representatives of Pricewaterhouse-
Coopers, LLP to review the audit scope and estimated fees for the coming
year and to review the results of the audit of the prior fiscal year.
AUDIT FEES
Fes for the fiscal year 2000 audit and the reviews of Forms 10-Q are
$73,240. Such charges have been billed the company by Pricewaterhouse-
Coopers, LLP through December 31, 2000.
FINANCIAL INFORMATION SYSTEMS DESIGN AND IMPLEMENTATION FEES
There are no fees related to financial information systems design and
implementation services for fiscal 2000.
ALL OTHER FEES
Fees for all other professional services rendered by PricewaterhouseCoopers
LLP in fiscal 2000 total $24,600. The Audit Committee deems the professional
services rendered the Company by PricewaterhouseCoopers, LLP to be
compatible with its Statement of Independence in its letter dated December
28, 2000.
PricewaterhouseCoopers, LLP plans to have one or more representatives
present at the Annual Meeting who will have the opportunity to make a
statement if desired and to respond to appropriate questions which any
Shareholders may have. Management knows of no direct or indirect
material financial interests or relationships that any members of such
firm have with B. B. Walker Company.
3. SHAREHOLDER PROPOSALS
Proposals from Shareholders for inclusion in the Proxy Statement of
B. B. Walker Company relating to the Year 2002 Annual Meeting of the
Shareholders, must be directed to the Secretary of the Company at the
principal office of B. B. Walker Company for consideration no later
than October 29, 2001. All such proposals must meet the requirements
set forth in the rules and regulations of the Securities and Exchange
Commission, in order to be eligible for inclusion in the Company's
year 2002 Proxy Statement.
If a Shareholder fails to notify the Company by January 16, 2002 of a
non-Rule 14a-8 shareholder proposal which it intends to submit at the
Company's 2002 Annual Meeting of Shareholders, the proxy solicited by
the Board of Directors with respect to such meeting may grant
discretionary authority to the proxies named therein to vote with
respect to such matter.
4. OTHER MATTERS
The management of the Company knows of no other matters which
may come before this meeting. However, if any matters other than
those referred to above should come before the meeting, it is the
intention of the persons named in the enclosed Proxy to vote such
proxy in accordance with their best judgment.
BY ORDER OF THE BOARD OF DIRECTORS, THIS 26TH DAY OF FEBRUARY,
2001.
DOROTHY W. CRAVEN
----------------------------
Dorothy W. Craven, Secretary
YOUR VOTE IS IMPORTANT. PLEASE COMPLETE AND SIGN THE
ENCLOSED PROXY CARD. RETURN THE CARD PROMPTLY IN THE
ACCOMPANYING POSTPAID PRE-ADDRESSED ENVELOPE. THANK YOU.
APPENDIX A
CHARTER OF THE AUDIT COMMITTEE OF THE BOARD OF DIRECTORS
OF B. B. WALKER COMPANY
I. Purpose
The primary purpose of the Audit Committee (the "Committee") is to
assist th Board of Directors (the "Board") in fulfilling its responsibility
to oversee management's conduct of the Company's financial reporting process,
including overviewing the financial reports and other financial information
provided by the Company to any governmental or regulatory body, the public
or other users therof; the Company's system of internal accounting and
financial controls; the annual independent audit of the Company's financial
statements; and the Company's legal compliance and ethics programs as
established by management and the Board.
In discharging its oversight role, the Committee is empowered to
investigate any matter brought to its attention with full access to all
books, records, facilities and personnel of the Company and the power to
retain outside counsel, auditors or other experts for this purpose. The
Board and the Committee are in place to represent the Company's shareholders;
accordingly, the outside auditor is ultimately accountable to the Board
and the Committee.
The Committee shall review the adequacy of this Charter on an annual
basis.
II. Membership
The Committee shall be comprised of not less than three members of
the Board and the Committee's composition shall follow the requirements
of the Audit Committee Policy of the NASD.
Accordingly, all of the members will be directors:
1. Who have no relationship to the Company that may interfere with the
exercise of their independence from management and the Company; and
2. Who are financially literate or who become financially literate
within a reasonable period of time after appointment to the
Committee. In addition, at least one member of the Committee
will have accounting or related financial management expertise.
3. The Board may in its discretion determine that a Director who has
a direct business relationship with the Company through the
rendering of services (i.e. consultant), may serve on the Audit
Committee if the Board determines in its business judgment that the
relationship does not interfere with the Directors exercise of
independent judgment.
III. Key Responsibilities
The Committee's job is one of oversight and it recognizes that the
Company's management is responsible for preparing the Company's financial
statements and that the outside auditors are responsible for auditing those
financial statements. Additionally, the Committee recognizes that financial
management, including any internal audit staff, as well as the outside
auditors have more time, knowledge and more detailed information on the
Company than do Committee members; consequently, in carrying out its over
sight responsibilities, the Committee is not providing any expert or special
assurance as to the Company's financial statements or any professional
certification as to the outside auditor's work.
The following functions shall be the common recurring activities of
the Committee in carrying out its oversight function. These functions are
set forth as a guide with the understanding that the Committee may diverge
from this guide as appropriate, given the circumstances.
1. The Committee shall review with management and the outside
auditors the audited financial statements to be included in the
Company's Annual report on Form 10-K (or the Annual Report to
Shareholders if distributed prior to the filing of Form 10-K) and
review and consider with the outside auditors the matters required
to be discussed by Statement of Auditing Standards ('SAS' No. 61,
as amended.
2. As a whole, including telephone, fax and mail, and/or through
the Committee chair, the Committee shall review with the
outside auditors the Company's interim financial results to be
included in the Company's quarterly reports to be filed with
Securities and Exchange Commission and the matters required to be
discussed by SAS No. 61, as amended; this review will occur prior
to the Company's filing of the Fomr 10-Q.
3. The Committee shall discuss with management and the outside
auditors the quality and adequacy of the Company's internal controls.
4. The Committee shall:
a. request from the outside auditors annually, a formal
written statement delineating all relationships between
the auditor and the Company consistent with Independence
Standards Board, Standard No. 1;
b. discuss with the outside auditors any such disclosed
relationships and their impact on the outside auditor's
independence; and
c. recommend that the Board take appropriate action to
oversee the independence of the outside auditor.
5. The Committee, subject to any action that may be taken by the
full Board, shall have the ultimate authority and responsibility
to select, evaluate and, where appropriate, replace the outside
auditor.
THIS CHARTER WAS ADOPTED BY THE BOARD OF DIRECTORS OF B. B. WALKER COMPANY
AS OF JANUARY 2, 2001.
B.B.WALKER COMPANY
Proxy Statement for
Annual Meeting of
Shareholders
Annual Meeting of Shareholders
March 19, 2001