SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only (as permitted by Rule 14a-
6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to 240.14a-11(c) or 240.14a-12
CAMPO ELECTRONICS, APPLIANCES AND COMPUTERS, INC.
(Name of Registrant as Specified In Its Charter)
Board of Directors of Campo Electronics, Appliances and Computers, Inc.
(Name of Person(s) Filing Proxy Statement if other than Registrant)
Payment of Filing Fee (Check 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 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 of Schedule and the date of its filing.
1) Amount Previously Paid:
2) Form, Schedule or Registration Statement No.:
3) Filing Party:
4) Date Filed:
[LOGO]
CAMPO ELECTRONICS, APPLIANCES AND COMPUTERS, INC.
109 Northpark Blvd., Covington, LA 70433
504-867-5000
August 29, 1997
TO OUR SHAREHOLDERS:
You are cordially invited to the annual meeting of shareholders of Campo
Electronics, Appliances and Computers, Inc. to be held at the Courtyard
Marriott, 101 Northpark Boulevard, Covington, Louisiana on Thursday, September
25, 1997 at 2:00 p.m., C.S.T.
The attached notice of meeting and proxy statement describe in detail
the matters proposed by your Board of Directors to be considered and voted
upon at the meeting.
It is important that your shares be represented at the meeting.
Accordingly, please read the attached notice of meeting and proxy statement
carefully and complete, date and sign the enclosed proxy and return it
promptly in the accompanying postpaid envelope. This will ensure that your
vote is counted. Furnishing the enclosed proxy will not prevent you from
voting in person at the meeting should you wish to do so.
Sincerely,
/s/ William E. Wulfers
William E. Wulfers
President and Chief Executive
Officer
SPECIALTY RETAILER OF NAME BRAND CONSUMER ELECTRONICS,
MAJOR APPLIANCES AND PERSONAL COMPUTERS
CAMPO ELECTRONICS, APPLIANCES AND COMPUTERS, INC.
109 Northpark Blvd., Covington, LA 70433
504-867-5000
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO THE SHAREHOLDERS OF CAMPO ELECTRONICS, APPLIANCES AND COMPUTERS, INC.:
The annual meeting of shareholders of Campo Electronics, Appliances and
Computers, Inc. (the "Annual Meeting") will be held at the Courtyard Marriott,
101 Northpark Boulevard, Covington, Louisiana on Thursday, September 25, 1997
at 2:00 p.m. for the following purposes:
1. To elect two directors to serve a three-year term of office
expiring at the 2000 annual meeting;
2. To approve an amendment to the 1992 Stock Incentive Plan to (a)
increase the number of shares of Common Stock that may be issued
under the plan to 850,000, and (b) permit the grant of stock
awards under the plan;
3. To approve the adoption of a Directors' Stock Option Plan; and
4. To transact such other business as may properly come before the
meeting or any adjournment thereof.
Only shareholders of record at the close of business on August 19, 1997
are entitled to notice of and to vote at the Annual Meeting.
All shareholders are invited to attend the meeting in person. However,
if you are unable to attend in person and wish to have your stock voted,
PLEASE COMPLETE, DATE AND SIGN THE ENCLOSED PROXY AND RETURN IT IN THE
ACCOMPANYING POSTPAID ENVELOPE AS PROMPTLY AS POSSIBLE. Your proxy may be
revoked by appropriate notice to the Company's Secretary at any time before it
is voted.
BY ORDER OF THE BOARD OF DIRECTORS
/s/ Michael G. Ware
Michael G. Ware
Secretary
Covington, Louisiana
August 29, 1997
CAMPO ELECTRONICS, APPLIANCES AND COMPUTERS, INC.
109 Northpark Blvd.
Covington, Louisiana 70433
August 29, 1997
__________________
PROXY STATEMENT
__________________
This proxy statement is being furnished in connection with the
solicitation of proxies on behalf of the Board of Directors of Campo
Electronics, Appliances and Computers, Inc. (the "Company") for use at the
annual meeting of shareholders of the Company (the "Annual Meeting") to be
held on Thursday, September 25, 1997 at the time and place set forth in the
accompanying notice and at any adjournment thereof. This Proxy Statement and
the accompanying form of proxy is first being mailed to shareholders on August
29, 1997.
Only shareholders of record at the close of business on August 19, 1997
(the "Record Date") are entitled to notice of and to vote at the Annual
Meeting. On that date, the Company had outstanding 5,766,906 shares of common
stock, $.10 par value per share (the "Common Stock"), each of which is
entitled to one vote.
The enclosed proxy may be revoked at any time prior to its exercise if
the shareholder files a written revocation or duly executed proxy bearing a
later date with the Secretary of the Company. A shareholder who votes in
person at the Annual Meeting will be deemed to have revoked a proxy previously
submitted on the shareholder's behalf.
The cost of soliciting proxies in the enclosed form will be borne by the
Company. In addition to the use of the mail, proxies may be solicited
personally, or by telephone and telegraph, by directors, officers and regular
employees of the Company who will not receive additional compensation
therefor. Banks, brokerage houses and other institutions, nominees and
fiduciaries will be requested to forward the soliciting material to their
principals and to obtain authorization for the execution of proxies. The
Company will, upon request, reimburse such institutions for their reasonable
expenses in forwarding proxy materials to their principals.
Quorum and Voting of Proxies
The presence, in person or by proxy, of a majority of the outstanding
shares of the Common Stock is necessary to constitute a quorum. Shareholders
voting, or abstaining from voting, by proxy, on any issue will be counted as
present for purposes of constituting a quorum. If a quorum is present, the
election of directors will be by plurality vote, and the affirmative vote of a
majority of the shares present in person or represented by proxy is required
to amend the 1992 Stock Incentive Plan (the "Stock Incentive Plan") and adopt
the Directors' Stock Option Plan (the "Directors' Plan"). Abstentions will
have the effect of a vote against the proposals to amend the Stock Incentive
Plan and adopt the Directors' Plan. If brokers who do not receive
instructions from beneficial owners as to granting or withholding of proxies
may not or do not exercise discretionary power to grant a proxy with respect
to such shares (a "broker non-vote") on a proposal, shares not voted on such
proposal as a result will be counted as not present with respect to the
proposal. Because the proposals to amend the Stock Incentive Plan and adopt
the Directors' Plan must be approved by the affirmative vote of a majority of
the voting power present at the Annual Meeting, the failure to deliver a proxy
to vote on either of those proposals will not affect the outcome of the vote.
All proxies received by the Company in the form enclosed will be voted
as specified and, in the absence of instructions to the contrary, will be
voted for the election of the nominees named herein and for the proposals to
amend the Stock Incentive Plan and approve the Directors' Plan.
ELECTION OF DIRECTORS
General
Although this Proxy Statement relates primarily to the Company's fiscal
year ended August 31, 1996, after that date there have been significant
changes to the Company's Board of Directors and senior management. In March
1997, Anthony Campo, the Company's Chairman of the Board and Chief Executive
Officer, resigned as an executive officer although he continues to be a
director. The Board then increased the size of the Board from six to nine and
appointed three new directors. Joining the Campo Board in March 1997 were:
Anthony J. Correro, III, David L. Ducote and Donald T. Bollinger.
During a transition period following Anthony Campo's resignation, Rex O.
Corley, Jr., who previously served as President and Chief Operating Officer of
the Company, served as Campo's acting chairman and chief executive officer
until a permanent replacement for Anthony Campo was appointed. In June,
William E. Wulfers was hired as the Company's President and Chief Executive
Officer and, upon Rex Corley's resignation, was appointed as a director.
In July 1997 the following resignations of executive officers were
received: John Ross-Vice President Marketing, James Warren-Vice President
Merchandising, Wayne J. Usie-Vice President-Information Systems, Chief
Financial Officer and Secretary and Charles S. Gibson, Jr.-Vice President
Logistics and Operations. In August 1997, John Watson and Malcolm Ballinger
joined the Company as Senior Vice President of Operations and Senior Vice
President-General Merchandise Manager and Advertising Director, respectively,
and Michael G. Ware joined the Company as Senior Vice President, Chief
Financial Officer and Secretary.
The Amended and Restated Articles of Incorporation (the "Articles") and
the By-laws of the Company divide the Board of Directors into three classes
serving three-year staggered terms, and the By-laws set the number of
directors at not less than three nor more than ten persons, as set by
resolution of the Board of Directors. The Board of Directors has currently
set the number of directors at eight. The term of office of two directors,
William E. Wulfers and Anthony J. Correro, III, will expire at the Annual
Meeting. Each of these directors is being nominated for re-election to the
Board for a three-year term expiring at the 2000 Annual Meeting and until
their successors are duly elected and qualified. The terms of office of the
other six directors will not expire until the 1998 or 1999 Annual Meetings.
Accordingly, proxies cannot be voted for more than two persons.
Unless authority to vote for the election of directors is withheld, all
shares represented by proxies on the enclosed form will be voted in favor of
the election of each of the two nominees listed below. Under the Company's
By-laws, directors are elected by plurality vote. William Wulfers and Anthony
Correro have informed the Company that they are willing to serve as directors;
however, if either of them becomes unavailable for election, proxies in the
enclosed form will be voted for such substitute nominee, if any, as may be
designated by the Board of Directors. Under the Company's By-laws, a
shareholder may nominate one or more persons for election as directors only if
written notice of such shareholder's intent to make such nomination, together
with certain other information, has been given to the Secretary of the Company
not less than 45 days in advance of the annual meeting. Because no
shareholder has given such notice to the Secretary, no other nominations may
be accepted at the Annual Meeting.
Information With Respect to Directors
Set forth below is information regarding the age and principal
occupation or employment of each director. Unless otherwise indicated, each
director has been engaged in the principal occupation shown for more than the
past five years.
Nominees for Election:
- ------------------------------------------------------------------------------
| |First |Nominated |
| | | |
| Name, Age, Principal Occupation and |Elected |for Term |
| | | |
| Directorships in Other Public Companies |Director |Expiring |
| | | |
- ------------------------------------------------------------------------------
|William E. Wulfers, 50, (1) |1997 |2000 |
| President and Chief Executive Officer | | |
- ------------------------------------------------------------------------------
|Anthony J. Correro, III, 55 (2) |1997 |2000 |
| Partner, Correro Fishman Haygood Phelps Weiss | | |
| Walmsley & Casteix, L.L.P. | | |
- ------------------------------------------------------------------------------
The Board of Directors recommends a vote FOR each of the two nominees
named above.
Continuing Directors:
- ------------------------------------------------------------------------------
| |First |Serving |
| Name, Age, Principal Occupation and |Elected | Term |
| Directorships in Other Public Companies |Director |Expiring |
| | | |
- ------------------------------------------------------------------------------
|Donald T. Bollinger, 47, (3) |1997 |1999 |
| Chairman and Chief Executive Officer Bollinger | | |
|Shipyards, Inc. | | |
- ------------------------------------------------------------------------------
|Anthony P. Campo, 41, (4)(5) |1991 |1998 |
| Private Investments | | |
- ------------------------------------------------------------------------------
|Joseph E. Campo, 42, (5)(6) |1991 |1998 |
| Private Investments | | |
- ------------------------------------------------------------------------------
|Barbara Treuting Casteix, 44, (7) |1992 |1998 |
| Managing Partner, Barrios, Kingsdorf & Casteix, | | |
|L.L.P. | | |
- ------------------------------------------------------------------------------
|David L. Ducote, 29 |1997 |1998 |
| President of Tchoupitoulas Partners, Inc. | | |
- ------------------------------------------------------------------------------
|L. Ronald Forman, 49 |1994 |1999 |
| President and Chief Executive Officer of the Audubon | | |
|Institute, Inc. | | |
- ------------------------------------------------------------------------------
_______________
(1) William Wulfers has served as President and Chief Executive Officer of
the Company since June 1997. For more than five years before then he
served as the Regional Vice President of Wal-Mart, Inc. for Louisiana,
Arkansas, Mississippi, Virginia, North Carolina, South Carolina, Georgia
and Florida.
(2) For more than five years before June 1994, Anthony Correro was a partner
in the law firm of Jones, Walker, Waechter, Poitevent, Carrere &
Denegre, L.L.P. He is also a director of Avondale Industries, Inc.
(3) Donald Bollinger has served as Chairman of Bollinger Shipyards, Inc.
since 1989 and as its Chief Executive Officer since 1985. He also
serves on the Boards of Directors of Tidewater, Inc., BancOne Louisiana
Corporation and Louisiana Worker's Compensation Corp.
(4) Since March 1997 Anthony Campo has managed certain family investments
and properties. He served as Chairman of the Board and Chief Executive
Officer of the Company from May 1992 until March 1997. He also served
as President from September 1991 until August 1996, and as Senior Vice
President of the Company from 1984 to 1991.
(5) Anthony P. Campo and Joseph E. Campo are brothers.
(6) Since December 1995, Joseph Campo has managed certain family investments
and properties. For more than five years prior to December 1995, he
served as Director-New Market Development for the Company.
(7) Barbara Casteix has served in this position since October 1, 1995. For
more than five years prior to October 1, 1995, she served as managing
partner of Cleveland, Barrios, Kingsdorf & Casteix, L.L.P.
During the fiscal year ended August 31, 1996, the Board held ten
meetings. Each director of the Company attended at least 75% of the meetings
of the Board and any Committees thereof of which he or she was a member. The
Board does not have a nominating committee. The Board has an Audit Committee
on which, prior to March 1997, Barbara Casteix, Ronald Forman and Mervin L.
Trail served. Since March 1997 the members of the Audit Committee have been
Donald Bollinger, Anthony Correro and Ronald Forman. The Audit Committee,
which met nine times during fiscal 1996, is generally responsible for meeting
periodically with representatives of the Company's independent public
accountants to review the general scope of audit coverage, including
consideration of the Company's accounting practices and procedures and system
of internal accounting controls, and to report to the Board with respect
thereto. The Audit Committee also recommends to the Board of Directors the
appointment of the Company's independent auditors.
The Board of Directors also has a Compensation Committee, on which,
prior to March 1997, Ronald Forman and Mervin Trail served. Since March 1997
the members of the Compensation Committee have been Donald Bollinger, Ronald
Forman and David Ducote. The Compensation Committee, which met ten times
during fiscal 1996, is responsible for the administration of, and grant of
awards under, the 1992 Stock Incentive Plan and for approving the compensation
for those of the Company's officers who are expected to earn more than
$100,000 per year.
Compensation of Directors
Each member of the Board of Directors who is not a full-time employee of
the Company is paid $1,000 per month, and is reimbursed for all ordinary and
necessary expenses incurred in attending any meeting of the Board or any
committee. Beginning in March 1997, each non-employee director also receives
$1,000 for each meeting attended and each Chairman of a Board Committee also
receives $3,000 per year. Assuming the Directors' Plan is approved by the
shareholders at the Annual Meeting, each non-employee director will also
receive options to acquire 2,000 shares of Common Stock on October 1, 1997 and
on January 2 of each year thereafter, in each case at a per share exercise
price equal to the fair market value of a share of Common Stock on the date of
grant. Ronald Forman will also receive an option to acquire up to 100,000
shares of Common Stock on October 1, 1997, in an amount and at an exercise
price (which may be below the fair market value) as determined by the
Compensation Committee. The grant to Mr. Forman is in consideration of his
past and future service as Chairman of the Board's Management Committee since
March 1997 and the expansion of his responsibilities following the resignation
of Rex Corley to include the duties of Chairman of the Board. See "Proposal
to Adopt the Directors' Stock Option Plan."
SECURITY HOLDINGS OF DIRECTORS, EXECUTIVE OFFICERS AND
CERTAIN BENEFICIAL OWNERS
Security Holdings of Directors and Executive Officers
The following table sets forth certain information concerning the
beneficial ownership of the Common Stock of the Company by (i) each director
and director nominee, (ii) each executive officer named in the Summary
Compensation Table and (iii) all directors and executive officers of the
Company as a group, as of August 19, 1997, determined in accordance with Rule
13d-3 of the Securities and Exchange Commission (the "SEC"). Unless otherwise
indicated, all shares shown as beneficially owned are held with sole voting
and investment power.
Number of Percent
Name of Beneficial Owner Shares of Class
------------------------------------------------------------------------------------------
William E. Wulfers 100,000 1.73%
Anthony P. Campo(1) 362,953.75(2) 6.29%
Joseph E. Campo 313,508.75(3) 5.44%
Rex O. Corley, Jr.(4) 2,000 *
Barbara Treuting Casteix 3,850(5) *
Mervin L. Trail, M.D. 0 0
L. Ronald Forman 0 0
Donald T. Bollinger 58,500 1.01%
David L. Ducote 97,300(6) 1.69%
Anthony J. Correro, III 0 0
Charles S. Gibson (7) 0 0
John Ross(8) 800 *
Donald E. Galloway(9) 0 0
William M. Golden, Jr.(9) 0 0
All directors and executive officers as a group (20 persons) 1,098,912.50(10) 18.86%(11)
------------------------------------------------------------------------------------------
__________
* Less than 1%
(1) Effective March 1997, Anthony Campo resigned as Chairman and Chief
Executive Officer of the Company, although he continues to be a
director.
(2) Includes 107,142.9 shares held by trusts for the benefit of Anthony
Campo's children of which he serves as trustee, and 25,998 shares held
by a partnership of which he is a partner. Also includes 6,572.82
shares, representing his interest in shares held by an LLC, of which he
serves as a manager (the "Campo Family LLC"), and 2,577.93 shares,
representing the interest held by a trust for the benefit of his
children, of which he serves as trustee, in shares held by the Campo
Family LLC.
(3) Includes 107,142.9 shares held by trusts for the benefit of Joseph
Campo's children of which he serves as trustee. Also includes 6,572.82
shares, representing his interest in shares held by the Campo Family
LLC, of which he serves as a manager, and 2,577.93 shares, representing
the interest held by a trust for the benefit of his children, of which
he serves as trustee, in shares held by the Campo Family LLC.
(4) Rex Corley resigned as an executive officer and director of the Company
in June 1997.
(5) Includes 2,500 shares owned by Barbara Casteix's husband, of which she
disclaims beneficial ownership.
(6) Includes 26,800 shares held by a family corporation of which David
Ducote serves as President.
(7) Charles Gibson resigned as an executive officer of the Company effective
in August 1997.
(8) John Ross resigned as an executive officer of the Company in July 1997.
(9) Donald Galloway and William Golden resigned as executive officers and
members of the Board of Directors of the Company in July 1996.
(10) Includes 60,000 shares that such persons have the right to acquire
through the exercise of stock options that are exercisable within 60
days.
(11) Calculated on the basis of 5,766,906 shares outstanding at August 19,
1997 and 60,000 shares that all directors and executive officers as a
group have the right to acquire through the exercise of stock options
that are exercisable within 60 days.
Security Holdings of Certain Beneficial Owners
The following table lists those persons other than executive officers or
directors of the Company who are known by the Company to own beneficially more
than 5% of its outstanding Common Stock as of August 19, 1997. The
information set forth below is based upon information furnished by the persons
listed. Unless otherwise indicated, all shares shown as beneficially owned
are held with sole voting and investment power.
Name and Address of Beneficial Owner Number of Percent
Shares of Class
- -------------------------------------------------------------------------------
|Gina Campo Morgan | 342,008.76(1)| 5.93% |
| 214 Monsanto | | |
| Luling, LA 70070 | | |
- -------------------------------------------------------------------------------
|Paul M. Campo | 302,858(2) | 5.25% |
| 300 Clearview Pkwy. | | |
| Metairie, LA 70006 | | |
- -------------------------------------------------------------------------------
|Dimensional Fund Advisors, Inc.. | 314,800(3) | 5.46% |
| 1299 Ocean Avenue, 11th Fl. | | |
| Santa Monica, CA 90401 | | |
- -------------------------------------------------------------------------------
__________
(1) Includes 71,428.6 shares held by trusts for the benefit of Gina Morgan's
children of which she serves as trustee. Also includes 7,432.32 shares,
representing her interest in shares held by the Campo Family LLC, of
which she serves as a manager, and 1,718.44 shares, representing the
interest held by a trust for the benefit of her children, of which she
serves as trustee, in shares held by the Campo Family LLC.
(2) Includes 35,714.3 shares held by a trust for the benefit of Paul Campo's
child of which he serves as trustee.
(3) Held as of December 31, 1996 in portfolios of DFA Investment Dimensions
Group Inc. (the "Fund"), a registered open-end investment company, in
series of The DFA Investment Trust Company (the "Trust"), a Delaware
business trust, or the DFA Group Trust and the DFA Participating Group
Trust, investment vehicles for qualified employee benefit plans, for all
of which Dimensional Fund Advisors Inc. ("Dimensional") serves as
investment manager. Dimensional disclaims beneficial ownership of all
such shares. Includes 94,800 shares as to which Dimensional shares
voting power with certain officers of Dimensional who also serve as
officers of the Fund and the Trust.
Section 16(a) Beneficial Ownership Reporting Compliance
Section 16(a) of the Securities Exchange Act of 1934 requires the
Company's directors, executive officers and 10% shareholders to file with the
SEC reports of beneficial ownership, and changes in beneficial ownership of
the Common Stock of the Company. Each of Anthony and Joseph Campo failed to
timely file a Statement of Changes in Beneficial Ownership (Form 4) to report
transactions that occurred in December 1995 involving transfers to the Campo
Family L.L.C., and each reported their respective transaction on a Form 4 in
September 1996.
EXECUTIVE COMPENSATION
Summary of Executive Compensation
The following table sets forth information with respect to compensation
paid by the Company for services rendered in all capacities during the fiscal
years ended August 31, 1996, 1995 and 1994 to the Chief Executive Officer and
to each of the four most highly compensated executive officers of the Company
whose annual compensation exceeded $100,000.
SUMMARY COMPENSATION TABLE
Annual Compensation
Long-Term
Compensation All Other
Awards Compensation
--------------------------------------------------------------------------------
Other
Annual Number
Names and Compen- of
Principal Position Year Salary Bonus sation Options
--------------------------------------------------------------------------------
Anthony P. Campo, 1996 $351,581 $53,311 $13,503 ------ $-----
Chairman of the 1995 318,467 53,300 ------ 50,000(2) ------
Board and Chief 1994 256,949 183,500 ------ 70,000(3) ------
Executive
Officer(1)
Rex O. Corley, Jr., 1996 163,737 ------ 10,000 ------ ------
President and 1995 155,082 ------ ------ ------ ------
Chief 1994 147,930 25,000 ------ 10,000(2) ------
Operating
Officer(1)
Charles S. Gibson, 1996 129,816 25,000 5,000 ------ ------
Vice President- 1995(4) 96,154 15,000 ------ 10,000(2) ------
Logistics and
Operations(1)
John Ross, 1996 102,497 25,000 5,000 ------ 19,100(5)
Vice President- 1995(6) 72,308 ------ ------ 5,000(2) ------
Marketing(1)
Donald E. Galloway, 1996 280,295 45,609 11,250 ------ 302,561(8)
Former Senior 1995 265,385 ------ ------ 25,000(2) ------
Vice 1994 220,423 66,800 25,032(7) 35,000(2) ------
President-
Marketing and
Sales(1)
William M. Golden, 1996 148,002 ------ ------ ------ 49,621(8)
Jr., 1995 140,385 67,000 ------ ------ ------
Former Vice 1994 16,828(9) 10,000 ------ 10,000(2) ------
President,
Chief Financial
Officer
and Secretary(1)
__________
(1) Donald Galloway and William Golden resigned from the Company in July
1996. Anthony Campo resigned in March 1997. Rex Corley resigned in
June 1997. John Ross resigned in July 1997. Charles Gibson resigned in
August 1997.
(2) These options automatically terminated upon the resignation of the
officer.
(3) These options were canceled on October 4, 1996 for no value.
(4) Charles Gibson joined the Company in fiscal 1995.
(5) Tuition reimbursement for Tulane MBA program.
(6) John Ross became an executive officer of the Company in December 1994.
(7) Tax benefit right granted to cover Donald Galloway's income tax
obligation in connection with the vesting of restricted stock.
(8) Amount paid or accrued as severance upon resignation of the officer in
July 1996.
(9) William Golden joined the Company in fiscal 1994.
____________________
Option Holdings
The following table provides information concerning unexercised options
held by the named executive officers at August 31, 1996.
FISCAL YEAR END OPTION VALUES
- -----------------------------------------------------------------------------
| | Number of Securities | Value of Unexercised |
| | Underlying Unexercised | In-The-Money Options |
| | Stock Options at August | at August 31, 1996 |
| | 31, 1996 | |
- -----------------------------------------------------------------------------
| | Exercisable|Unexercisable|Exercisable|Unexercisable|
- -----------------------------------------------------------------------------
|Anthony P. Campo(1) |120,000 | 0 | 0 | 0 |
- -----------------------------------------------------------------------------
|Rex O. Corley, Jr.(1) | 6,000 | 4,000 | 0 | 0 |
- -----------------------------------------------------------------------------
|Charles S. | 4,000 | 6,000 | 0 | 0 |
| Gibson, Jr.(1) | | | | |
- -----------------------------------------------------------------------------
|John Ross(1) | 5,000 | 5,000 | 0 | 0 |
- -----------------------------------------------------------------------------
|Donald E. Galloway | 0 | 0 | 0 | 0 |
- -----------------------------------------------------------------------------
|William M. Golden, Jr.| 0 | 0 | 0 | 0 |
- -----------------------------------------------------------------------------
____________________
(1) The options held by this officer automatically terminated upon his
resignation during fiscal 1997.
____________________
Employment and Severance Agreements and Arrangements
General
Until March 1997, the Company had employment agreements only with its
two most senior executives, Anthony Campo and Donald Galloway. Donald
Galloway resigned in July 1996 and Anthony Campo resigned in March 1997, and
both received severance benefits in accordance with their employment
agreements as described below. At the time of Anthony Campo's resignation,
the Board was also in the process of reorganizing the Company's operations and
it engaged Hewitt Associates LLC to make recommendations regarding appropriate
executive retention and severance arrangements and director compensation
packages that could be implemented by the Company in order to attract new
board members and retain members of its executive management team during the
reorganization period. After reviewing Hewitt's recommendations, the Board
determined to increase the amount of its director compensation as noted under
"Compensation of Directors" and to adopt a Directors' Stock Option Plan, as
described under "Proposal to Adopt the Directors' Stock Option Plan." The
Board also decided to enter into employment agreements with its five most
senior executives, as described below. All five of these executives have now
resigned from the Company and two were paid the severance benefits described
below. The Company currently has only a personal service and non-competition
agreement with Anthony Campo, as described below, and an employment agreement
with William Wulfers, the Company's new President and Chief Executive Officer,
as described below.
Employment Agreements
Anthony P. Campo. The Company had an employment agreement with Anthony
Campo pursuant to which the Company agreed, among other things, to pay an
annual base salary of $300,000, $330,000 and $363,000 for the 1994, 1995 and
1996 calender years, respectively. On May 16, 1996 the employment agreement
was amended to extend the initial term of the agreement through December 31,
1997 and to provide that Mr. Campo's compensation for calendar year 1997 would
remain the same as that provided in the agreement for calendar year 1996.
Anthony Campo's employment agreement also provided for payment of an
annual cash bonus of $50,000 and an annual incentive bonus of 2% of the
Company's net income before taxes, and provided that if his employment were
terminated during the initial term of the agreement by the Company for any
reason other than cause (as defined in the agreement) or by him for good
reason (as defined in the agreement), he would be paid an amount equal to his
then current base salary multiplied by the number of years remaining in such
initial term, but in no event less than one full year's base salary.
Effective August 29, 1996, the Company also entered into a Change of
Control Agreement with Anthony Campo which provided for the payment of certain
benefits upon an involuntary or constructive termination of his employment,
except for cause, within two years following a change of control. Benefits
payable under the change in control agreement included a cash payment in an
amount equal to two times salary plus bonus and continued health and life
insurance benefits for two years after termination. To the extent payments
would be made under this change in control agreement, no severance payments
would be made under Anthony Campo's employment agreement.
Effective March 19, 1997, Anthony Campo resigned as an executive officer
of the Company and entered into an agreement with the Company that provides
for the continuation of certain benefits for twelve months following
resignation and provides for a lump sum payment in the amount of $363,000.
The Company also agreed to continue making the lease payments on his Company
car for the duration of its term which is approximately 18 months from the
date of his resignation. The Company also entered into a personal services
contract and non-competition agreement with Anthony Campo pursuant to which he
has agreed to render consultant services to the Company and not to compete
with the Company for two years, for which agreements he is to be paid a fee
of $5,000 per month.
Donald C. Galloway. The Company also had an employment agreement with
Donald Galloway which provided for an annual base salary of $250,000, 275,000
and $302,500, for the 1994, 1995 and 1996 calendar years, respectively, and
for the payment of an annual incentive bonus of 1% of the Company's net income
before taxes. On May 16, 1996, his employment agreement was amended to extend
the initial term of the agreement through December 31, 1997, and to provide
that his compensation for calendar 1997 would remain the same as that provided
in the agreement for calendar year 1996. The amendment also provided that if
his employment were terminated during the initial term of the agreement (as so
extended by the amendment) by the Company for any reason other than cause (as
defined in the amendment) or by him for good reason (as defined in the
amendment), he would be paid an amount equal to his then current base salary
multiplied by the number of years remaining in such initial term, but in no
event less than one full year's base salary. Effective July 12, 1996, Donald
Galloway resigned as an officer and director of the Company and entered into
an agreement with the Company that provided for the continuation of his salary
for twelve months following resignation and the release of the restrictions on
5,000 shares of restricted stock held by him, and also provided that he would
not compete with the Company for a period of one year following his
resignation.
Rex O. Corley, Jr. Upon Anthony Campo's resignation, the Company
entered into an employment agreement dated March 21, 1997 with Rex O. Corley,
Jr. pursuant to which he was employed as Acting Chairman of the Board and
Chief Executive Officer of the Company until a permanent replacement for
Anthony Campo was appointed. Pursuant to this Agreement, which had a two-year
term, the Company agreed to pay Rex Corley an annual base salary of $200,000
for the first year and $210,000 for the second year. The Agreement also
provided for the payment of a one-time performance bonus upon execution of the
agreement of $25,000 and a stay bonus of $200,000 due 15 days after the
occurrence of certain events provided that he was still a full time employee
of the Company on such date. The agreement also provided for the payment of
severance benefits equal to the amount he would have received had his
employment terminated (a) by reason of death or Disability (as defined in the
agreement and including the payment of the stay bonus in accordance with the
calculation described therein) and (b) (i) at the first anniversary of the
agreement or (ii) six months from the actual termination date, if his
employment was terminated for any reason other than cause (as defined in the
agreement) or by him for good reason (as defined in the agreement), but any
such severance would be reduced by any amount he had previously been paid and
by any severance benefits payable under the Company's severance plan
(discussed below). Effective June 19, 1997, Rex Corley resigned as an
executive officer and director of the Company and agreed to accept a lump sum
severance payment of $75,000.
Charles S. Gibson, Jr. and Wayne J. Usie. The Company also entered into
two-year employment agreements, dated March 21, 1997, with Charles S. Gibson,
Jr. and Wayne J. Usie, which each provided for (i) a base salary of $150,000
for the first year and $157,500 for the second year, (ii) a one-time
performance bonus payable upon execution of the agreement of $25,000 and (iii)
a stay bonus of $150,000 payable within 15 days after the occurrence of
certain events. These agreements also provided for the payment of severance
benefits on substantially the same terms as provided in Rex Corley's
agreement. Both officers resigned effective August 29, 1997, and no severance
benefits were paid to either of these officers.
John K. Ross and James B. Warren. The Company also entered into one-
year employment agreements, dated April 14 and April 23, 1997, with John K.
Ross and James B. Warren, respectively. The agreement with John Ross provided
for a base salary of $125,000, a one-time performance bonus of $25,000 payable
upon execution of the agreement and an incentive bonus of up to $25,000
payable 15 days after the first anniversary of the agreement provided certain
performance criteria were met. The agreement with James Warren provided for a
base salary of $150,000, a one time performance bonus payable upon execution
of the agreement of $25,000 and an incentive bonus of up to $100,000 payable
within 15 days after the first anniversary of the agreement provided certain
performance criteria were met. Both agreements provided for a six month
severance benefit if the officer's employment were terminated for any reason
other than cause or by the executive with good reason, such amount to be
reduced by any amounts previously paid and by any severance benefits payable
under the Company's severance plan. John Ross and Jim Warren resigned
effective July 18 and August 29, 1997, respectively. No severance payments
were made to John Ross; however, the Company agreed to pay as severance to
James Warren the amount of $37,500, payable over three months.
William Wulfers. Effective June 15, 1997, William E. Wulfers became the
Company's President and Chief Executive Officer and a director. The Company
entered into an employment agreement with William Wulfers, dated as of June
15, 1997, which has a term expiring on August 31, 2000, providing for an
annual base salary of $300,000, bonuses of $20,833 for the fiscal year ended
August 31, 1997, and $100,000 for the fiscal year ended August 31, 1998, and
an incentive bonus equal to $500 per basis point of pre-tax net profit margin
achieved by the Company for each of the fiscal years ended August 31, 1999 and
2000.
The agreement also provides for six months severance benefits if he is
terminated without cause or he terminates his employment for good reason.
Pursuant to the agreement, the Company also awarded William Wulfers 100,000
shares of restricted stock, the restrictions on which lapsed on July 15, 1997
and non-qualified stock options for 100,000 shares, which become exercisable
on June 15, 2000. The agreement also provides for additional grants of non-
qualified stock options for 100,000 shares each on June 15, 1998 and 1999,
which will become exercisable on June 15, 2000.
Severance Plan and Agreements.
Effective August 29, 1996, the Company adopted a Severance Plan for its
executive officers which provides for the payment of certain benefits upon an
involuntary or constructive termination of an officer's employment, except for
cause, within one year following a change of control. Benefits payable under
the plan include a cash payment in an amount equal to six month's salary and
continued health and life insurance benefits for six months after termination.
The Company has also agreed to provide each of Malcolm Ballinger,
Michael Ware and John Watson with a severance payment of $37,500 if such
officer's employment is terminated by the Company without cause.
Compensation Committee Interlocks and Insider Participation
For fiscal 1996, the members of the Company's Compensation Committee
were L. Ronald Forman and Mervin L. Trail, M.D., neither of whom has ever been
an officer or employee of the Company, nor has or has had any other
significant relationship with the Company. No executive officer of the
Company served in the last fiscal year as a director or member of the
compensation committee of another entity, one of whose executive officers
served as a director or on the Compensation Committee of the Company.
Compensation Committee's Report on Executive Compensation
General
The Compensation Committee of the Board of Directors (the "Committee")
reviews all compensation arrangements for the executive officers of the
Company. During fiscal 1996, the Committee was composed of two Board members
who are not employees of the Company. The Committee gives final approval with
respect to the compensation of the Company's most highly compensated executive
officers who are expected to earn more than $100,000 per year, including the
chief executive officer, and generally reviews the compensation packages of
the other executive officers, and makes all decisions about stock based awards
under the Company's 1992 Stock Incentive Plan.
The executive compensation programs of the Company are designed to (i)
provide a competitive total compensation package that enables the Company to
hire, develop, reward and retain key executives, (ii) link executive behavior
to the Company's annual, intermediate-term and long-term business objectives
and strategy, and (iii) provide variable total reward opportunities that are
directly tied to increases in shareholder value. These objectives are
generally sought to be met with base salaries that are within competitive
ranges of similar companies, annual incentive bonuses keyed primarily to
annual increases in earnings and stock awards that are focused on increases in
stock values over a longer term.
Base Salary and Annual Incentive Compensation
Management determines the amounts of the base salary and annual
incentive bonus of each executive officer and the Committee reviews these
determinations generally and, with respect to the two most highly compensated
executive officers, gives final approval of such amounts.
Base Salary. For all executive officers other than Anthony Campo and
Donald Galloway, management has established the amount of compensation for
each position primarily based on subjective factors, including the executive's
level of responsibility and experience and his or her contributions to the
Company. Individual base pay is also determined on the basis of the Company's
performance as well as individual performance evaluations conducted by
management. The performance evaluations generally use financial performance
and subjective factors indicative of the executive's organizational skills and
adherence to overall corporate policies and goals.
For fiscal 1996 Anthony Campo, the Chief Executive Officer, and until
July 1996 Donald Galloway, the Senior Vice President - Sales and Marketing,
were compensated pursuant to three-year employment agreements entered into as
of January 1, 1994. These agreements were entered into following management's
review of compensation information regarding similar-sized local public
companies. Management determined the amounts of base salary and incentive
bonus contained in each of the agreements subject to the review and approval
of the Committee. The agreements provide for 10% increases in each executive's
base salary in each of the three years during the term of the agreements. The
agreements were to terminate in December 1996 but Anthony Campo's agreement
was extended through December 31, 1997. In light of the financial performance
of the Company generally in the last fiscal year, the amendment to Anthony
Campo's agreement did not provide for an increase in base salary and instead
provided that his compensation for calendar year 1997 would remain the same as
that provided in the agreement for calendar year 1996.
Incentive Bonuses. Anthony Campo's employment agreement provided for
the payment of an annual cash bonus to him of $50,000. The employment
agreements for Anthony Campo and Donald Galloway also provided for the payment
of incentive bonuses each year in an amount that is a percentage of the
Company's net income before taxes for such year. Through the annual incentive
bonus, a sizeable portion of the potential compensation for these officers was
tied to Company performance. For fiscal 1995 and 1996, neither executive
received incentive bonuses. Four executive officers received bonuses for
fiscal 1996 to help assure the retention of the senior management team and to
recognize the increased responsibilities held by those individuals following
the resignations of Donald Galloway and William Golden.
Stock Incentive Plan
The purpose of the 1992 Stock Incentive Plan is to align a significant
portion of the executive compensation program with shareholder interests,
focus on intermediate and long-term results and maximize shareholder returns.
The Committee has sought to accomplish these objectives, primarily through
grants of stock options. Stock options have value to the employee only if
there is a corresponding value to shareholders. The Committee did not grant
any stock options to executive officers during fiscal 1996.
Policy on Deductibility of Compensation
Section 162(m) of the Internal Revenue Code limits to $1 million the
Company's tax deduction for compensation paid to each of the Company's most
highly paid executive officers, unless certain requirements are met. The 1992
Stock Incentive Plan was reapproved by the shareholders at last year's annual
meeting so that the plan meets the requirements of Section 162(m) such that
stock options and, subject to certain conditions, restricted stock granted
under the plan qualify as performance based compensation and can be excluded
from the $1 million limit. The Committee's present intention is to structure
executive compensation so that it will be fully deductible provided that such
continues to be in the best interest of the Company and its shareholders.
Submitted by the Compensation Committee of the Board of Directors
Mervin L. Trail, M.D. L. Ronald Forman
Performance Graph
The following chart compares the cumulative total shareholder return on
the Company's Common Stock with the S&P 500 Index and the S&P 500 Retail
Specialty Index from February 23, 1993 (the date of the Company's initial
public offering) through August 31, 1996. The return values are based on an
assumed investment of $100 on February 23, 1993, and include the reinvestment
of dividends.
COMPARISON OF CUMULATIVE TOTAL RETURN
[chart to go here]
- ------------------------------------------------------------------------------
| | | Total Return for the Year |
| | | August 31, |
| | February 23,| |
| | 1993 | 1993 1994 1995 1996 |
|-------------------------------------------------------------------------- |
|Campo | $100 | $ 88 $ 99 $ 59 $ 20 |
|S&P 500 | 100 | 108 113 138 164 |
|S&P RSI | 100 | 97 101 94 115 |
- ----------------------------------------------------------------------------
____________________
CERTAIN TRANSACTIONS
Prior to September 1991, the Company was controlled by Tony Campo, late
father of Anthony P. Campo and Joseph E. Campo, and his seven children (the
"Campo Family"). From September 1991 until the Company's initial public
offering on February 23, 1993, the Company was controlled by the Campo Family.
On September 1, 1991, the Company and Tony Campo entered into certain
agreements pursuant to which (i) Tony Campo canceled $4,676,520 of Company
indebtedness to him, (ii) the Company redeemed all of Tony Campo's stock in
the Company for its $5,611,144 promissory note (the "Note") and (iii) Tony
Campo entered into a non-competition and personal services agreement with the
Company providing for aggregate monthly payments of approximately $11,690 to
him over ten years. On April 29, 1994, the Company paid $2,769,678 to Tony
Campo with proceeds from the Company's secondary offering to pay off the
remaining balance of the Note, and upon Tony Campo's death in December 1996,
all further obligations of the Company under the agreement were extinguished.
The Company leases one store from the Campo Family LLC and it subleases
one store from Campo Appliance Co. of Clearview, Inc. ("Clearview"), a
corporation wholly-owned by Tony Campo's estate. The Company believes that
its lease payments under the lease and sublease are at fair market rental
rates. The sublease requires lease payments identical to the payments
required by the underlying lease which is with an unrelated third party
lessor. For fiscal 1996, the Company paid aggregate rental payments under
this lease and sublease of approximately $161,000.
Prior to October 1, 1995, Barbara Casteix was the managing partner of
Cleveland, Barrios, Kingsdorf & Casteix, which served as general counsel to
the Company, and since October 1, 1995, she has been the managing partner of
Barrios, Kingsdorf & Casteix, which serves as general counsel to the Company.
The Company paid an aggregate of $173,000 during fiscal 1996 to these two
firms for legal services rendered.
PROPOSAL TO AMEND THE 1992 STOCK INCENTIVE PLAN
General
The Board of Directors continues to believe that the success of the
Company depends upon the efforts of its officers and key employees and that
they are best motivated to put forth maximum effort on behalf of the Company
if they own an equity interest in the Company. In accordance with this
philosophy, the Stock Incentive Plan was adopted by the Board of Directors in
1992 and approved by the shareholders. Key employees of the Company
(including officers and directors who are also full-time employees of the
Company) are currently eligible to receive non-qualified stock options,
incentive stock options and restricted stock ("Incentives") under the Stock
Incentive Plan when designated by the Compensation Committee. There are
approximately 60 officers and key employees of the Company who may expect to
participate in the Stock Incentive Plan. Prior to the Amendment discussed
below, non-qualified stock options and shares of restricted stock have been
granted through the Stock Incentive Plan.
The Proposed Amendment
The Board has amended the Stock Incentive Plan, subject to shareholder
approval at the Annual Meeting, to increase the number of shares of Common
Stock that may be issued under the Stock Incentive Plan from 550,000 shares to
850,000 shares and to permit the grant of stock awards in lieu of salary or
bonus, including a bonus to be paid in connection with a person accepting
employment with the Company (the "Amendment"). The Board believes that the
additional shares covered by the Amendment are necessary to provide the
Company with the ability to continue to attract, retain and motivate key
personnel in a manner that is in the best interest of shareholders. As of
June 15, 1997 Incentives covering 542,500 of the 550,000 authorized shares had
been granted under the Stock Incentive Plan. Upon the resignations of certain
executive officers in July and August discussed under "Election of Directors-
General," Incentives covering 315,000 shares were canceled and, under the
terms of the Stock Incentive Plan, are available for re-issuance. The
Compensation Committee has awarded, subject to approval of the Amendment by
the shareholders, non-qualified stock options, shares of restricted stock and
stock awards covering in the aggregate 350,000 shares as described under
"Awards to be Granted." The Company is also obliged under its employment
agreement with William Wulfers to grant non-qualified stock options for
100,000 shares on each of June 15, 1998 and 1999. The Board recommends that
the shareholders approve the Amendment.
Terms of the Stock Incentive Plan
Shares Issuable through the Stock Incentive Plan
The 850,000 shares of Common Stock authorized to be issued under the
Stock Incentive Plan pursuant to the Amendment represent approximately 14.9%
of the outstanding shares of Common Stock as of August 19, 1997. Incentives
with respect to no more than 200,000 shares of Common Stock may be granted to
a single participant in any calendar year.
The Compensation Committee will make proportionate adjustments to the
number of shares of Common Stock subject to the Stock Incentive Plan for any
recapitalization, stock dividend, stock split, combination of shares or other
change in the Common Stock. The Compensation Committee may also amend the
terms of any Incentive to the extent appropriate to provide participants with
the same relative rights before and after such an event. Shares of Common
Stock subject to options that are canceled or terminated or, under some
circumstances, shares of restricted stock that are forfeited or reacquired by
the Company will again be available for issuance under the Stock Incentive
Plan. Shares of Common Stock that are delivered to pay the exercise price of
stock options will also be added to the number of shares available for
issuance under the Stock Incentive Plan.
The closing sale price of a share of Common Stock as quoted on the
Nasdaq National Market on August 19, 1997 was $1.25.
Administration of the Stock Incentive Plan
The Compensation Committee administers the Stock Incentive Plan and has
authority to award Incentives under the Stock Incentive Plan, to interpret the
Stock Incentive Plan, to establish rules or regulations relating to the Stock
Incentive Plan, and to make any other determination that it believes necessary
or advisable for the proper administration of the Stock Incentive Plan.
Amendments to the Stock Incentive Plan
The Board may amend or discontinue the Stock Incentive Plan at any time.
Except in very limited circumstances, no amendment or discontinuance may
change or impair, without the consent of the recipient thereof, an Incentive
previously granted.
Stock Incentive Plan Incentives
Stock Options. The Compensation Committee may grant non-qualified stock
options or incentive stock options ("ISO") to purchase shares of Common Stock.
The Compensation Committee will determine the number and purchase price of the
shares subject to options, the term of the options and the time or times that
the options become exercisable, provided that the option exercise price may
not be less than the fair market value of the Common Stock on the date of
grant. The term of an option will be determined by the Compensation
Committee, provided that the term of an ISO may not exceed 10 years. The
Compensation Committee may accelerate the exercisability of any option or may
determine to cancel any option in order to make a participant eligible for the
grant of an option at a lower price. The Compensation Committee may approve
the purchase by the Company of an unexercised stock option for the difference
between the exercise price and the fair market value of the shares covered by
such option.
The option exercise price may be paid in cash, in shares of Common Stock
held for six months, in a combination of cash and shares of Common Stock held
for six months or through a broker assisted exercise arrangement approved in
advance by the Compensation Committee. The Compensation Committee will
determine at what time or times during its term a stock option is exercisable.
If an optionee ceases to be an employee of the Company for any reason,
including death, disability or retirement at normal retirement age, any stock
option or unexercised portion thereof that was otherwise exercisable on the
date of termination of employment will expire at the time or times established
by the Compensation Committee.
Restricted Stock. Shares of Common Stock may be granted to an eligible
employee for services provided to the Company. Shares of restricted stock
will be subject to restrictions on sale, pledge or other transfer by the
employee for a certain period and such other restrictions as the Compensation
Committee may provide in an agreement with the employee including, among other
things, that the shares are required to be forfeited or resold to the Company
in the event of termination of employment. Subject to the restrictions
provided in the agreement and the Stock Incentive Plan, a participant
receiving restricted stock has all of the rights of a shareholder as to the
shares. The Compensation Committee may in its discretion cause the
restrictions on the shares of restricted stock to lapse at any time.
Certificates representing restricted stock are held by the Company in escrow
until all restrictions lapse.
Stock Awards. Under the Amendment, the Compensation Committee may grant
awards of shares of Common Stock, without other payment therefor, in lieu of
salary or bonus, including a bonus to be paid in connection with a person
accepting employment with the Company. The Compensation Committee will
determine the number of shares to be awarded to a participant.
Tax Benefit Rights.
The Stock Incentive Plan permits the Company to make a cash payment to a
Stock Incentive Plan participant to cover the participant's income tax
obligation in connection with the granting or vesting of restricted stock and
the exercise of stock options ("Tax Benefit Rights"). A Tax Benefit Right
must relate to an Incentive granted under the Stock Incentive Plan and may be
granted concurrently with the Incentive or at a later time. The terms of the
Tax Benefit Right will be determined by the Compensation Committee, but the
cash value of the Tax Benefit Right may not exceed the highest federal and
state income tax rates multiplied by the ordinary income that the participant
may realize upon the exercise of an option or the grant or vesting of
restricted stock, including any income realized as a result of the related Tax
Benefit Right.
Change of Control
Pursuant to the Stock Incentive Plan if (a) the Company is not the
surviving entity in a merger, consolidation or other reorganization, (b) the
Company sells, leases or exchanges all or substantially all of its assets, (c)
the Company is to be dissolved or liquidated, (d) any person or entity, other
than an employee benefit plan of the Company or a related trust, acquires or
gains control of more than 30% of the outstanding shares of the Company's
voting stock or (e) in connection with a contested election of directors, the
persons who were directors of the Company before the election no longer
constitute a majority of the Board (collectively, "corporate changes"), all
outstanding Incentives will automatically become exercisable and vested and
all performance criteria will be waived. In addition, the Compensation
Committee may (i) require that all outstanding stock options remain
exercisable only for a limited time, after which time all such stock options
will terminate, (ii) require the surrender to the Company of some or all
outstanding options in exchange for a cash or Common Stock payment for each
option equal in value to the per share change of control value, calculated as
described in the Stock Incentive Plan, over the exercise price, (iii) make any
equitable adjustment to outstanding Incentives as the Compensation Committee
deems necessary to reflect the corporate change or (iv) provide that an option
shall become an option relating to the number and class of shares of stock or
other securities or property (including cash) to which the participant would
have been entitled in connection with the corporate change if the participant
had been the holder of record of the number of shares of Common Stock then
covered by such options.
The Board of Directors believes that providing the Compensation
Committee with the choices outlined above will permit the Committee to review
all relevant tax, accounting and other issues relating to the treatment of
outstanding Incentives at the time of the corporate change, and thereby enable
the Committee to choose the treatment that will best serve the participants
and the Company. Although the automatic vesting of Incentives and other
certain actions permitted to be taken by the Compensation Committee in the
event of a change of control could discourage a takeover of the Company, these
provisions have not been included for the purpose of making the Company a less
attractive takeover target.
Awards to be Granted
Since the Amendment was adopted by the Board of Directors, Incentives
have been granted to the persons and group described in the table below,
subject to approval of the Amendment by the shareholders at the Annual
Meeting.
New Plan Benefits
Under the Stock Incentive Plan
as Amended
- --------------------------------------------------------------------------
| Name | Type of Incentive(1) |Number of |
| | |Shares |
- --------------------------------------------------------------------------
|William E. Wulfers |Non-qualified stock | 100,000 |
| President and Chief |options(2) | |
| Executive Officer | | |
- --------------------------------------------------------------------------
|Michael G. Ware |Non-qualified stock options | 25,000 |
| Senior Vice President, |Stock award | 25,000 |
| Chief Financial Officer | | |
| and Secretary | | |
- --------------------------------------------------------------------------
|John Watson |Non-qualified stock options | 25,000 |
| Senior Vice President- |Stock award | 25,000 |
| Operations | | |
- --------------------------------------------------------------------------
|Malcolm Ballinger |Non-qualified stock options | 25,000 |
| Senior Vice President- |Stock award | 25,000 |
| General | | |
| Merchandise Manager and | | |
| Advertising Director | | |
- --------------------------------------------------------------------------
|Dean Hanby |Non-qualified stock options | 25,000 |
| Regional Vice President |Restricted stock | 25,000 |
| and | | |
| General Manager | | |
- --------------------------------------------------------------------------
|James M. Rogan |Non-qualified stock options | 25,000 |
| Regional Vice President |Restricted stock | 25,000 |
| and | | |
| General Manager | | |
- --------------------------------------------------------------------------
|All executive officers as a |Non-qualified stock options | 225,000 |
| group |Stock awards | 75,000 |
| (6 persons) |Restricted stock | 50,000 |
- --------------------------------------------------------------------------
|All employees other than |None | 0 |
| executive | | |
| officers as a group | | |
- --------------------------------------------------------------------------
________________
(1) The restrictions on shares of restricted stock lapse one month from the
date of grant. All of the options, other than those granted to Mr.
Wulfers, vest 60% immediately and 40% on the first anniversary of the
date of grant.
(2) All of the options become exercisable on June 15, 2000. In connection
with his acceptance of employment, William Wulfers also received an
award of 100,000 shares of restricted stock under the Stock Incentive
Plan prior to the Amendment.
Federal Income Tax Consequences
Under existing federal income tax provisions, a participant who receives
stock options or receives shares of restricted stock under the Stock Incentive
Plan that are subject to restrictions that create a "substantial risk of
forfeiture" (within the meaning of Section 83 of the Internal Revenue Code of
1986, as amended (the "Code")) will not normally realize any income, nor will
the Company normally receive any deduction for federal income tax purposes, in
the year such Incentive is granted.
An employee generally will not recognize any income upon the exercise of
an ISO, but the excess of the fair market value of the shares at the time of
exercise over the exercise price will be an item of tax preference, which may,
depending on particular factors relating to the employee, subject the employee
to the alternative minimum tax imposed by Section 55 of the Code. An employee
will recognize capital gain or loss on the sale or exchange of stock acquired
pursuant to the exercise of an ISO provided the employee does not dispose of
such stock within two years from the date of grant and one year from the date
of exercise of the ISO ("the required holding periods"). An employee
disposing of such shares before the expiration of the required holding periods
will recognize ordinary income generally equal to the difference between the
exercise price and the fair market value of the stock on the date of exercise.
The remaining gain, if any, will be capital gain. The Company will not be
entitled to a federal income tax deduction in connection with the exercise of
an ISO, except where the employee disposes of Common Stock before the
expiration of the required holding period.
When a non-qualified stock option is exercised, the participant will
realize ordinary income measured by the difference between the aggregate
exercise price of the option and the aggregate fair market value of the shares
of Common Stock on the exercise date and, subject to Section 162(m) of the
Code, the Company will be entitled to a deduction in the year the option is
exercised equal to the amount the participant is required to treat as ordinary
income.
An employee who receives restricted stock subject to restrictions that
create a "substantial risk of forfeiture" (within the meaning of Section 83 of
the Code) will normally realize taxable income on the date the shares become
transferable or are no longer subject to a substantial risk of forfeiture or
on the date of their earlier disposition. The amount of such taxable income
will be equal to the amount by which the fair market value of the shares of
Common Stock on the date such restrictions lapse (or any earlier date on which
a disposition of the shares occurs) exceeds their purchase price, if any. An
employee may elect, however, to include in income in the year of purchase or
grant the excess of the fair market value of the shares of Common Stock
(without regard to any restrictions) on the date of purchase or grant over its
purchase price. Subject to Section 162(m), the Company will be entitled to a
deduction for compensation paid in the same year and in the same amount as
income is realized by the employee.
A participant who receives a stock award under the Stock Incentive Plan
consisting of shares of Common Stock will realize ordinary income in the year
of the award equal to the fair market value of the shares of Common Stock
covered by the award on the date it is made and, subject to Section 162(m) of
the Code, the Company will be entitled to a deduction equal to the amount the
employee is required to treat as ordinary income.
Participants may also be granted Tax Benefit Rights to pay their tax
obligations with respect to the exercise of stock options or the grant of or
lapse of restrictions on restricted stock. A participant who receives a Tax
Benefit Right will realize ordinary income in the year the award is paid in
the amount thereof and the Company will receive a corresponding deduction.
If, upon a change in control of the Company, any options that are not
yet exercisable become exercisable ("Accelerated Options"), or restrictions on
outstanding restricted shares terminate ("Accelerated Restricted Shares"), any
excess of the fair market value on the date of the change in control of the
shares issuable upon exercise of the Accelerated Options or Accelerated
Restricted Shares on such date over and above the purchase price of such
shares, may be characterized as Parachute Payments (within the meaning of
Section 280G of the Code) if the sums of such amounts and any other such
contingent payments received by the employee exceeds an amount equal to three
times the "Base Amount" for such employee. The Base Amount generally is the
average of the annual compensation of such employee for the five years
preceding such change in ownership or control. An Excess Parachute Payment,
with respect to any employee, is the excess of the Parachute Payments to such
person, in the aggregate, over and above such person's Base Amount. If the
amounts received by an employee upon a change in control are characterized as
Parachute Payments, such employee will be subject to a 20% excise tax on the
Excess Parachute Payment and the Company will be denied any deduction with
respect to such Excess Parachute Payment.
This summary of federal income tax consequences of the Incentives that
may be awarded through the Stock Incentive Plan does not purport to be
complete. In addition to federal tax consequences, there may be state and
local income tax consequences applicable to Incentives acquired through the
Stock Incentive Plan.
Vote Required
Approval of the Amendment by the shareholders requires the affirmative
vote of the holders of a majority of the shares present or represented by
proxy and entitled to vote at the Annual Meeting.
The Board of Directors recommends that shareholders vote FOR the
proposal to approve the Amendment to the 1992 Stock Incentive Plan.
PROPOSAL TO ADOPT THE
DIRECTORS' STOCK OPTION PLAN
General
The Directors' Stock Option Plan was approved by the Board effective
August 8, 1997, subject to the approval of the shareholders at the Annual
Meeting. The Board believes that the Directors' Plan promotes the interests
of the Company and its shareholders by strengthening the Company's ability to
attract, motivate and retain directors of experience and ability, and by
encouraging the highest level of performance by providing directors with a
proprietary interest in the Company's financial success. If the Directors'
Plan is not approved by the shareholders at the Annual Meeting, the options
granted under the Directors' Plan will be forfeited. The primary features of
the Directors' Plan are summarized below.
Eligibility and Grants
Only non-employee directors of the Company are eligible to participate
in the Directors' Plan, and the Company currently has seven non-employee
directors who will be participants. The Directors' Plan provides for the
automatic grant on October 1, 1997 and on January 2 of each year beginning
January 2, 1998 to participants of an option to acquire 2,000 shares of the
Company's Common Stock at a per share exercise price equal to the fair market
value of a share of Common Stock on the date of grant. Under the Directors'
Plan, Ronald E. Forman will also be granted an option for up to 100,000 shares
on October 1, 1997, in an amount and at an exercise price (which may be below
fair market value) as determined by the Compensation Committee. The grant to
Mr. Forman is in consideration of his past and future service as Chairman of
the Board's Management Committee since March 1997 and the expansion of his
responsibilities following the resignation of Rex Corley to include the duties
of Chairman of the Board. Subject to certain adjustment provisions described
in the Directors' Plan, the aggregate number of shares of Common Stock that
may be acquired upon the exercise of options under the Directors' Plan is
150,000. On August 19, 1997, the closing sale price of a share of Common
Stock, as reported on the Nasdaq National Market, was $1.25.
Option Terms and Conditions
The options granted to non-employee directors are exercisable
immediately. If a non-employee director ceases to serve on the Board of
Directors for any reason, exercisable options granted under the Directors'
Plan must be exercised within two years from the date of termination of Board
service. The options expire and may not be exercised after 10 years from the
date of grant.
The exercise price will be the fair market value of a share of Common
Stock on the date of grant, except that the exercise price of the additional
options granted to Ronald Forman may be less than the fair market value of a
share of Common Stock on the date of grant. The exercise price may be paid
(i) in cash; (ii) by check; (iii) by delivery of shares of Common Stock,
which, unless otherwise determined by the Compensation Committee, shall have
been held by the participant for at least six months; (iv) by simultaneously
exercising options and selling the shares of Common Stock acquired pursuant to
a brokerage or similar arrangement and using the proceeds from such sale as
payment of the exercise price, or (v) in such other manner as may be
authorized from time to time by the Compensation Committee.
No option or right under the Directors' Plan will be assignable or
subject to any encumbrance, pledge or charge of any nature. Furthermore, no
option under the Directors' Plan is transferable by a holder other than (i) by
will, (ii) by the laws of descent and distribution, (iii) pursuant to a
domestic relations order, as defined by the Code, if permitted by the
Compensation Committee and so provided in the option agreement or an amendment
thereto or (iv) to family members, a family partnership or limited liability
company or a trust for family members, if permitted by the Committee and so
provided in the option agreement or an amendment thereto.
Adjustment
In the event of any recapitalization, stock dividend, stock split,
combination of shares or other change in the Common Stock, the number of
shares of Common Stock then subject to the Directors' Plan, including shares
subject to options and the option exercise price, will be adjusted in
proportion to the change in outstanding shares of Common Stock. Participants
will be provided with the same relative rights before and after such
adjustments.
Administration
The Directors' Plan is administered by the Compensation Committee, which
is composed of non-employee directors who are eligible to participate in the
Directors' Plan. The Compensation Committee has the power to interpret the
Plan and to make all other determinations necessary for the Directors' Plan
administrations.
The Board will have the power, in its discretion, to amend, suspend or
terminate the Directors' Plan at any time. No amendment, suspension or
termination of the Directors' Plan may alter, terminate, impair or adversely
affect any rights or obligations under any option previously granted without
the consent of the holders thereof.
Awards to be Granted
Non-qualified stock options will be granted to the persons and group
described in the table below on October 1, 1997, if the Directors' Plan is
adopted by the shareholders at the Annual Meeting. On each January 2
thereafter each non-employee director will also receive an option to purchase
2,000 shares under the Directors' Plan to the extent shares remain available
for issuance through the Directors' Plan and the Directors' Plan remains in
effect.
New Plan Benefits Under the
Directors' Stock Option Plan
- --------------------------------------------------------------
| Number of|
|Name Options |
- --------------------------------------------------------------
|Donald T. Bollinger 2,000|
- --------------------------------------------------------------
|Anthony P. Campo 2,000|
- --------------------------------------------------------------
|Joseph E. Campo 2,000|
- --------------------------------------------------------------
|Barbara Treuting Casteix 2,000|
- --------------------------------------------------------------
|Anthony J. Correro, III 2,000|
- --------------------------------------------------------------
|David L. Ducote 2,000|
- --------------------------------------------------------------
|L. Ronald Forman 2,000,|
| plus up to an|
| additional 100,000|
- --------------------------------------------------------------
|All current directors who are not executive 14,000,|
|officers as a group plus up to an|
| additional 100,000|
- --------------------------------------------------------------
Federal Tax Consequences
A non-employee director who receives an option under the Directors' Plan
will not recognize any income, nor will the Company be entitled to any tax
deduction, in the year of the grant. At the time that an option is exercised,
the non-employee director will recognize ordinary income in an amount equal to
the excess of (i) the fair market value of the shares purchased over (ii) the
exercise price paid for such shares. The Company will be entitled to a
deduction in an amount equal to the amount includable in the income of the
non-employee director, in the taxable year in which the non-employee director
is required to recognize the income.
Vote Required
Approval of the Directors' Plan by the shareholders requires the
affirmative vote of the holders of a majority of the shares present or
represented by proxy and entitled to vote at the Annual Meeting.
The Board of Directors unanimously recommends that shareholders vote FOR
the proposal to adopt the Directors' Stock Option Plan.
RELATIONSHIP WITH INDEPENDENT
PUBLIC ACCOUNTANTS
The Company's financial statements for the year ended August 31, 1996
were audited by the firm of Coopers & Lybrand L.L.P., which firm will remain
as the Company's auditors until replaced by the Board upon the recommendation
of the Audit Committee. Representatives of Coopers & Lybrand L.L.P. are
expected to be present at the Annual Meeting, with the opportunity to make any
statement they desire at that time, and will be available to respond to
appropriate questions.
OTHER MATTERS
The Company does not know of any matters to be presented at the Annual
Meeting other than those described herein. However, if any other matters
properly come before the Annual Meeting or any adjournments thereof, it is the
intention of the persons named in the enclosed proxy to vote the shares
represented by them in accordance with their best judgment.
Shareholder Proposals
Eligible shareholders who desire to present a proposal qualified for
inclusion in the proxy materials relating to the 1998 Annual Meeting of the
Company must forward the proposal in writing to the Secretary of the Company
at the address listed on the first page of this Proxy Statement in time to
arrive at the Company no later than October 31, 1997. All shareholder
proposals must comply with Rule 14a-8 under the Securities Exchange Act of
1934.
By Order of the Board of Directors
/s/ Michael G. Ware
Michael G. Ware
Secretary
Covington, Louisiana
August 29, 1997
PROXY
CAMPO ELECTRONICS, APPLIANCES AND COMPUTERS, INC.
THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS
FOR THE ANNUAL MEETING OF SHAREHOLDERS ON SEPTEMBER 25, 1997
The undersigned hereby appoints Michael G. Ware and John Watson, or either of
them, proxies with full power of substitution, to vote all shares of Campo
Electronics, Appliances and Computers, Inc. (the "Company") that the
undersigned is entitled to vote at the Annual Meeting of Shareholders of the
Company to be held on September 25, 1997 at 2:00 p.m., local time, at the
Courtyard Marriott, 101 Northpark Boulevard, Covington, Louisiana, and at any
adjournments thereof, with respect to:
The Company's Board of Directors recommends a vote FOR proposals 1, 2 and 3.
(1) Election of directors to serve a term of office expiring at the Annual
Meeting of Shareholders in 2000 and until their successors shall have
been elected and qualified:
[ ] FOR all nominees listed below (except as marked to the contrary
below)
[ ] WITHHOLD AUTHORITY to vote for all nominees listed below
William E. Wulfers Anthony J. Correro III
(INSTRUCTION: To withhold authority to vote for any individual nominee write
the name of the nominee in the space provided below.)
(2) Proposal to approve an amendment to the 1992 Stock Incentive Plan to (a)
increase the number of shares that may be issued under the plan to
850,000, and (b) permit the grant of stock awards under the plan.
* For * Against * Abstain
(3) Proposal to approve the adoption of a Directors' Stock Option Plan.
* For * Against * Abstain
(Continued on Reverse Side)
(Continued from Reverse Side)
(4) In their discretion, to transact such other business as may properly
come before the meeting and any adjournments thereof.
Dated: ____________________, 1997
- ------------------------------------------------------------------------------
Signature if Held Jointly Signature of Shareholder
Please sign exactly as your name appears hereon. If
stock is held jointly, each joint owner should sign.
When signing as an executor, administrator, trustee or
guardian, please give full title. If a corporation,
please sign full corporate name by president or other
authorized officer. If a partnership, please sign
partnership name by authorized person.
- ------------------------------------------------------------------------------
This Proxy when properly executed will be voted in the manner directed. If no
direction is made, this Proxy will be voted "FOR" each of the nominees for
director and "FOR" Proposals 2 and 3.
Please Mark and Return Your Proxy Promptly Using the Enclosed Envelope.
Exhibit A
CAMPO ELECTRONICS, APPLIANCES AND COMPUTERS, INC.
DIRECTORS' STOCK OPTION PLAN
1. Purpose of the Plan.
The purpose of the Directors' Stock Option Plan of Campo
Electronics, Appliances and Computers, Inc. is to promote the
interests of the Company and its shareholders by strengthening
the Company's ability to attract, motivate and retain directors
of experience and ability, and to encourage the highest level of
directors' performance by providing directors with a proprietary
interest in the Company's financial success and growth.
2. Definitions.
2.1 "Board" means the Board of Directors of the Company.
2.2 "Committee" means the Compensation Committee of the
Board or a subcommittee thereof as shall be appointed by the
Board from time to time.
2.3 "Common Stock" means the common stock of the Company,
$.10 par value per share.
2.4 "Company" means Campo Electronics, Appliances and
Computers, Inc., a Louisiana corporation.
2.5 "Eligible Director" means a member of the Board who
is not an Employee.
2.6 "Employee" means any full-time or part-time employee
of the Company, or any of its present or future parent or
subsidiary corporations.
2.7 "Fair Market Value" means (i) if the Common Stock is
listed on an established stock exchange or any automated
quotation system that provides sale quotations, the closing sale
price for a share of the Common Stock on such exchange or
quotation system on the applicable date, or if no sale of the
Common Stock shall have been made on that day, on the next
preceding day on which there was a sale of the Common Stock; (ii)
if the Common Stock is not listed on any exchange or quotation
system, but bid and asked prices are quoted and published, the
mean between the quoted bid and asked prices on the applicable
date, and if bid and asked prices are not available on such day,
on the next preceding day on which such prices were available;
and (iii) if the Common Stock is not regularly quoted, the fair
market value of a share of Common Stock on the applicable date as
established by the Committee in good faith.
2.8 "Participant" means each Eligible Director who holds
Options granted through the Plan.
2.9 "Option" means a non-qualified stock option that is
not intended to satisfy the requirements of Section 422 of the
Internal Revenue Code of 1986, as amended (the "Code").
2.10 "Plan" means the Campo Electronics, Appliances and
Computers, Inc. Directors' Stock Option Plan as set forth herein
and as amended from time to time.
3. Shares of Common Stock Subject to the Plan.
Subject to the provisions of Section 7, the aggregate number
of shares of Common Stock that may be issued pursuant to the
exercise of Options under the Plan is 150,000 shares of Common
Stock. Such shares may be either authorized but unissued shares
or shares issued and thereafter acquired by the Company.
4. Administration of the Plan.
4.1 The Plan shall be administered by the Committee,
which shall have the power to interpret the Plan and, subject to
its provisions, to prescribe, amend and rescind rules and to make
all other determinations necessary for the Plan's administration.
4.2 All action taken by the Committee in the
administration and interpretation of the Plan shall be final and
binding upon all parties. No member of the Committee will be
liable for any action or determination made in good faith by the
Committee with respect to the Plan or any Option.
5. Grant of Options.
5.1 Each Eligible Director shall be automatically granted
an Option to acquire 2,000 shares of Common Stock on October 1,
1997 and on January 2, 1998 and January 2 of each subsequent year
in which shares of Common Stock remain available for issuance
hereunder, subject to approval of the Plan by the shareholders of
the Company at the 1997 Annual Meeting of Shareholders.
5.2 The Chairman of the Board shall be granted an Option
to acquire up to 100,000 shares of Common Stock on October 1,
1997, the exact number of shares to be set by the Committee,
subject to approval of the Plan by the shareholders of the
Company at the 1997 Annual Meeting of Shareholders.
6. Terms and Conditions of Options.
6.1 The Options granted to Eligible Directors under the
Plan shall be exercisable immediately.
6.2 No Option granted to an Eligible Director under the
terms of the Plan may be exercised later than ten years following
the date of grant.
6.3 The exercise price of Options granted to Eligible
Directors under Section 5.1 hereof shall be equal to the Fair
Market Value of a share of Common Stock on the date of grant.
The exercise price of Options granted to the Chairman of the
Board under Section 5.2 hereof shall be the price set by the
Committee, which price may be less than the Fair Market Value of
a share of Common Stock on the date of grant.
6.4 In the event a Director ceases to serve on the Board
of Directors of the Company for any reason, the Options granted
hereunder must be exercised, to the extent otherwise exercisable
at the time of termination of Board service, within two years
from the date of termination of Board service.
6.5 An Option may be exercised, in whole or in part, by
giving written notice to the Company, specifying the number of
shares of Common Stock to be purchased. The exercise notice
shall be accompanied by the full purchase price for such shares.
The option price shall be payable in United States dollars and
may be paid (a) in cash; (b) by uncertified or certified check;
(c) by delivery of shares of Common Stock, which shares shall be
valued for this purpose at their Fair Market Value on the date
such option is exercised, and, unless otherwise determined by the
Committee, shall have been held by the Participant for at least
six months; or (d) in such other manner as may be authorized from
time to time by the Committee. The Committee may also permit
Participants, either on a selective or aggregate basis,
simultaneously to exercise options and sell the shares of Common
Stock acquired pursuant to a brokerage or similar arrangement,
approved in advance by the Committee, and use the proceeds from
such sale as payment of the exercise price. In the case of
delivery of an uncertified check upon exercise of a stock option,
no shares shall be issued until the check has been paid in full.
Prior to the issuance of shares of Common Stock upon the exercise
of an Option, a Participant shall have no rights as a
shareholder.
7. Adjustment Provisions.
In the event of any recapitalization, stock dividend, stock
split, combination of shares or other change in the Common Stock,
the number of shares of Common Stock then subject to the Plan,
including shares subject to Options, shall be adjusted in
proportion to the change in outstanding shares of Common Stock.
In the event of any such adjustments, the purchase price of any
Option shall be adjusted as and to the extent appropriate, in the
reasonable discretion of the Committee, to provide Participants
with the same relative rights before and after such adjustment.
8. General Provisions.
8.1 Nothing in the Plan or in any instrument executed
pursuant to the Plan will confer upon any Participant any right
to continue as a director of the Company or affect the right of
the Company to terminate the services of any Participant.
8.2 No shares of Common Stock will be issued or
transferred pursuant to an Option unless and until all then-
applicable requirements imposed by federal and state securities
and other laws, rules and regulations and by any regulatory
agencies having jurisdiction, and by any stock exchanges upon
which the Common Stock may be listed, have been fully met. As a
condition precedent to the issuance of shares pursuant to the
exercise of an Option, the Company may require the Participant to
take any reasonable action to meet such requirements.
8.3 No Participant and no beneficiary or other person
claiming under or through such Participant will have any right,
title or interest in or to any shares of Common Stock allocated
or reserved under the Plan or subject to any Option except as to
such shares of Common Stock, if any, that have been issued or
transferred to such Participant.
8.4 Options granted under the Plan shall not be
transferrable except: (a) by will, (b) by the laws of descent or
distribution; (c) pursuant to a domestic relations order, as
defined in the Code, if permitted by the Committee and so
provided in the Option Agreement or an amendment thereto; or (d)
if permitted by the Committee and so provided in the Option
Agreement or an amendment thereto, (i) to Immediate Family
Members, (ii) to a partnership in which Immediate Family Members,
or entities in which Immediate Family Members are the sole
owners, members or beneficiaries, as appropriate, are the sole
partners, (iii) to a limited liability company in which Immediate
Family Members, or entities in which Immediate Family Members are
the sole owners, members or beneficiaries, as appropriate, are
the sole members, or (iv) to a trust for the sole benefit of
Immediate Family Members. "Immediate Family Members" shall be
defined as the spouse and natural or adopted children or
grandchildren of the Participant and their spouses. Any attempt
at assignment, transfer, pledge, hypothecation or other
disposition of an Option, or levy of attachment or similar
process upon the Option not specifically permitted herein or in
the Option Agreement, shall be null and void and without effect.
8.5 Each Option shall be evidenced by a written
instrument, including terms and conditions consistent with the
Plan, as the Committee may determine.
9. Amendment and Termination.
9.1 The Board will have the power, in its discretion, to
amend, suspend or terminate the Plan at any time, subject, in the
case of amendments, to approval of the shareholders of the
Company if and to the extent necessary under applicable laws and
regulations.
9.2 No amendment, suspension or termination of the Plan
will, without the consent of the holder, alter, terminate, impair
or adversely affect any right or obligation under any Option
previously granted under the Plan.
10. Effective Date of Plan.
This Plan shall become effective upon adoption by the Board,
subject to approval by the holders of a majority of the shares of
Common Stock represented in person or by proxy and entitled to
vote on the subject at the 1997 Annual Meeting of Shareholders of
the Company.
Exhibit B
THIRD AMENDED AND RESTATED
CAMPO ELECTRONICS, APPLIANCES AND COMPUTERS, INC.
1992 STOCK INCENTIVE PLAN
Section 1. Purpose. The purpose of the Campo Electronics,
Appliances and Computers, Inc. 1992 Stock Incentive Plan (the
"Plan") is to increase shareholder value and to advance the
interests of Campo Electronics, Appliances and Computers, Inc.
("Campo") and its subsidiaries (collectively, the "Company") by
granting stock options and restricted stock (the "Incentives") to
key employees of the Company in order to attract, retain and
motivate these employees. The Board of Directors of Campo hereby
approves and adopts the Plan, subject to approval of the
shareholders of Campo.
Section 2. Administration.
Section 2.1 Composition. The Plan shall be
administered by the Compensation Committee (the "Committee")
of the Board of Directors of Campo. The Committee shall
consist of not fewer than two members of the Board of
Directors, all of whom shall, to the extent required,
qualify to administer the Plan under Rule 16b-3 under the
Securities Exchange Act of 1934 (the "Exchange Act") as
currently in effect or any successor rule.
Section 2.2 Authority. The Committee shall have
plenary authority to award Incentives under the Plan, to set
the terms of such Incentives, to interpret the Plan, to
establish any rules or regulations relating to the Plan that
it determines to be appropriate, and to make any other
determination that it believes necessary or advisable for
the proper administration of the Plan. Its decisions in
matters relating to the Plan shall be final and conclusive
on the Company and participants.
Section 3. Eligible Participants. Key employees of the
Company (including officers and directors, but excluding
directors who are not also full-time employees of the Company)
who, in the opinion of the Committee have significant
responsibility for the continued growth, development and
financial success of the Company shall become eligible to receive
Incentives under the Plan when designated by the Committee.
Participants may be designated individually or by groups or
categories as the Committee deems appropriate.
Section 4. Types of Incentives. Incentives under the Plan
may be granted in any one or a combination of the following
forms: (a) incentive stock options or non-qualified stock
options, (b) shares of restricted stock and (c) stock awards.
Section 5. Shares Subject to the Plan.
Section 5.1 Number of Shares. Subject to adjustment
as provided in Section 9.5, a total of 850,000 shares of
Campo common stock, $.10 par value per share (the "Common
Stock"), may be issued under the Plan. Incentives with
respect to no more than 200,000 shares of Common Stock may
be granted under the Plan to a single participant in any
calendar year.
Section 5.2 Calculation of Shares Available for
Issuance and Cancellation of Options. If a stock option
granted hereunder expires or is terminated or cancelled as
to any shares of Common Stock, such shares may again be
issued under the Plan either pursuant to stock options or as
restricted stock. If shares of Common Stock are issued as
restricted stock and thereafter are forfeited or reacquired
by the Company pursuant to rights reserved upon issuance
thereof, such forfeited and reacquired shares may again be
issued under the Plan, either as restricted stock or
pursuant to a stock option, if such issuance does not result
in a violation of Rule 16b-3 under the Exchange Act or any
successor rule. Shares of Common Stock otherwise issuable
under the Plan and used for the payment of withholding taxes
shall again be available for issuance under the Plan.
Shares of Common Stock delivered to pay the exercise price
of stock options shall be added to the number of shares
available for issuance through the Plan. The Committee may
also determine to cancel, and agree to the cancellation of,
stock options in order to grant new stock options to the
same participant at a lower price than the options to be
cancelled.
Section 5.3 Type of Common Stock. Common Stock
issued under the Plan in connection with Incentives may be
authorized and unissued shares or issued shares held as
treasury shares.
Section 5.4 Reinvestment of Dividends. Shares of
Common Stock that are delivered to a participant in the Plan
as a result of the reinvestment of dividends in conjunction
with restricted stock shall be applied against the maximum
number of shares provided in Section 5.1.
Section 6. Stock Options. A stock option is a right to
purchase shares of Common Stock from the Company. Stock options
granted under this Plan may be incentive stock options or non-
qualified stock options. Any option that is designated as a non-
qualified stock option shall not be treated as an incentive stock
option. Each stock option granted by the Committee under the
Plan shall be subject to the following terms and conditions:
Section 6.1 Price. The option price per share shall
be determined by the Committee, subject to adjustment under
Section 9.5; provided that in no event shall the option
price be less than the Fair Market Value (as defined in
Section 9.11) of a share of Common Stock on the date of
grant.
Section 6.2 Number. The number of shares of Common
Stock subject to the option shall be determined by the
Committee, subject to adjustment as provided in Section 9.5.
Section 6.3 Duration and Time for Exercise. The term
of each option shall be determined by the Committee. Each
option shall become exercisable at such time or times during
its term as shall be determined by the Committee and as
provided in Section 9.10; provided, however, that unless
otherwise provided in the stock option agreement and unless
the options are incentive stock options, with respect to
which other restrictions apply, all stock options shall
expire (a) 12 months from the date of termination of
employment as the result of death or disability, (b) six
months and one day after termination of employment as a
result of retirement and (c) immediately if employment
terminates for any other reason, including resignation and
termination by the Company. The Committee may in its
discretion extend the term of options which would otherwise
expire as a result of resignation or termination by the
Company. The Committee may also impose such terms and
conditions to the exercise of each option as it deems
advisable and may accelerate the exercisability of any
outstanding option at any time in its sole discretion.
Section 6.4 Repurchase. Upon approval of the
Committee, the Company may repurchase a previously granted
stock option from a participant by mutual agreement before
such option has been exercised by payment to the participant
of the amount per share by which: (a) the Fair Market Value
of the Common Stock subject to the option on the date of
purchase exceeds (b) the option price.
Section 6.5 Manner of Exercise. A stock option may
be exercised, in whole or in part, by giving written notice
to the Company, specifying the number of shares of Common
Stock to be purchased. The exercise notice shall be
accompanied by the full purchase price for such shares. The
option price shall be payable in United States dollars and
may be paid (a) by cash, uncertified or certified check or
bank draft, (b) if the Committee permits, by delivery of
shares of Common Stock held by the optionee for at least six
months in payment of all or any part of the option price,
which shares shall be valued for this purpose at the Fair
Market Value on the date such option is exercised, (c) by
delivering a properly executed exercise notice together with
irrevocable instructions to a broker approved by the Company
(with a copy to the Company) to promptly deliver to the
Company the amount of sale or loan proceeds to pay the
exercise price or (d) in such other manner as may be
authorized from time to time by the Committee. Shares of
Common Stock delivered in payment of the exercise price that
were acquired upon the exercise of a stock option are deemed
to have been held from the date of grant of the stock
option. In the case of delivery of an uncertified check or
bank draft upon exercise of a stock option, no shares shall
be issued until the check or draft has been paid in full.
Prior to the issuance of shares of Common Stock upon the
exercise of a stock option, a participant shall have no
rights as a stockholder.
Section 6.6 Incentive Stock Options. Notwithstanding
anything in the Plan to the contrary, the following
additional provisions shall apply to the grant of stock
options that are intended to qualify as incentive stock
options (as such term is defined in Section 422 of the
Internal Revenue Code of 1986, as amended (the "Code"):
(a) Any incentive stock option authorized under
the Plan shall contain such other provisions as the
Committee shall deem advisable, but shall in all events
be consistent with and contain or be deemed to contain
all provisions required in order to qualify the options
as incentive stock options;
(b) All incentive stock options must be granted
within ten years from the date on which this Plan was
adopted by the Board of Directors;
(c) Unless sooner exercised, all incentive stock
options shall expire no later than ten years after the
date of grant;
(d) No incentive stock option shall be granted to
any participant who, at the time such option is
granted, would own (within the meaning of Section 422
of the Code) stock possessing more than 10% of the
total combined voting power of all classes of stock of
the employer corporation or of its parent or subsidiary
corporation; and
(e) The aggregate Fair Market Value (determined
with respect to each incentive stock option as of the
time such incentive stock option is granted) of the
Common Stock with respect to which incentive stock
options are exercisable for the first time by a
participant during any calendar year (under the Plan or
any other plan of the Company) shall not exceed
$100,000. To the extent that such limitation is
exceeded, such options shall not be treated, for
federal income tax purposes, as incentive stock
options.
Section 6.7 Non-Transferability of Options. No stock
option granted hereunder may be transferred, pledged,
assigned or otherwise encumbered by the holder thereof
except:
(a) by will;
(b) by the laws of descent and distribution; or
(c) in the case of non-qualified stock options
only, pursuant to a domestic relations order, as
defined in the Code, to family members, to a family
partnership, to a family limited liability company, to
a trust for the benefit of family members or to
charitable institutions, if permitted by the Committee
and so provided in the option agreement or an amendment
thereto.
Any attempted assignment, transfer, pledge,
hypothecation or other disposition of a stock option or
levy of attachment or similar process upon a stock
option not specifically permitted herein, shall be null
and void and without effect.
Section 7. Restricted Stock
Section 7.1 Grant of Restricted Stock. The Committee
may award shares of restricted stock to such key employees
as the Committee determines to be eligible pursuant to the
terms of Section 3. An award of restricted stock may be
subject to the attainment of specified performance goals or
targets, restrictions on transfer, forfeitability provisions
and on such other terms and conditions as the Committee may
determine, subject to the provisions of the Plan.
Section 7.2 Award and Delivery of Restricted Stock. At
the time an award of restricted stock is made, the Committee
shall establish a period of time (the "Restricted Period")
applicable to such an award. Each award of restricted stock
may have a different Restricted Period. The Committee may,
in its sole discretion, prescribe conditions for the lapse
of restrictions upon death, disability, retirement or other
termination of employment or for the lapse or termination of
restrictions upon the satisfaction of other conditions in
addition to or other than the expiration of the Restricted
Period with respect to all or any portion of the shares of
restricted stock. The Committee shall have the power to
accelerate the expiration of the Restricted Period with
respect to all or any part of the shares awarded to a
participant and the expiration of the Restricted Period
shall automatically occur under the conditions described in
Section 9.10 hereof.
Section 7.3 Escrow. In order to enforce the
restrictions imposed by the Committee pursuant to this
Section 7, the participant receiving restricted stock shall
enter into an agreement with the Company setting forth the
conditions of the grant. Certificates representing shares
of restricted stock shall be registered in the name of the
participant and deposited with the Company, together with a
stock power endorsed in blank by the participant. Each such
certificate shall bear a legend in substantially the
following form:
The transferability of this certificate and the
shares of Common Stock represented by it are
subject to the terms and conditions (including
conditions of forfeiture) contained in the Campo
Electronics, Appliances and Computers, Inc.
Amended and Restated 1992 Stock Incentive Plan
(the "Plan"), and an agreement entered into
between the registered owner and Campo
Electronics, Appliances and Computers, Inc.
Copies of the Plan and the agreement are on file
at the principal office of the Company.
Section 7.4 Dividends on Restricted Stock. Any and
all cash and stock dividends paid with respect to the shares
of restricted stock shall be subject to any restrictions on
transfer, forfeitability provisions or reinvestment
requirements as the Committee may, in its discretion,
determine.
Section 7.5 Forfeiture. Upon the forfeiture of any
restricted stock (including any additional shares of
restricted stock that may result from the reinvestment of
cash and stock dividends in accordance with such rules as
the Committee may establish pursuant to Section 7.4), such
forfeited shares shall be surrendered. The participants
shall have the same rights and privileges, and be subject to
the same forfeiture provisions with respect to any
additional shares received pursuant to Section 9.5 due to a
recapitalization, merger or other change in capitalization.
Section 7.6 Expiration of Restricted Period. Upon the
expiration or termination of the Restricted Period and the
satisfaction of any other conditions prescribed by the
Committee or at such earlier time as provided for in Section
7.2 and in the restricted stock agreement, the restrictions
applicable to the restricted stock shall lapse and a stock
certificate for the number of shares of restricted stock
with respect to which the restrictions have lapsed shall be
delivered, free of all such restrictions, except any that
may be imposed by law, to the participant or the
participant's estate, as the case may be.
Section 7.7 Rights as a Stockholder. Subject to the
terms and conditions of the Plan and subject to any
restrictions on the receipt of dividends that may be imposed
by the Committee, each participant receiving restricted
stock shall have all the rights of a stockholder with
respect to shares of stock during any period in which such
shares are subject to forfeiture and restrictions on
transfer, including without limitation, the right to vote
such shares. Unless otherwise restricted by the Committee,
dividends paid in cash or property, other than Common Stock
with respect to shares of restricted stock, shall be paid to
the participant currently.
Section 8. Stock Awards. A stock award consists of the
transfer by the Company to a participant of shares of Common
Stock, without other payment therefor, in lieu of salary or
bonus, including a bonus to be paid in connection with a person
accepting employment with the Company. The number of shares to
be transferred by the Company to a participant pursuant to a
stock award shall be determined by the Committee. To the extent
a stock award is intended to qualify as performance based
compensation under Section 162(m) it must meet the additional
requirements imposed thereby.
Section 9. General.
Section 9.1 Duration. The Plan shall remain in
effect until all stock options granted under the Plan have
either been satisfied by the issuance of shares of Common
Stock or been terminated under the terms of the Plan and all
restrictions imposed on shares of restricted stock in
connection with their issuance under the Plan have lapsed.
Section 9.2 Effect of Termination of Employment or
Death. If a participant ceases to be an employee of the
Company for any reason, including death, any stock options
may be exercised or shall expire as provided in Section 6.3
hereof and shares of restricted stock shall be forfeited or
restrictions thereon shall lapse at such times as may be
determined by the Committee.
Section 9.3 Legal and Other Requirements. The
obligation of the Company to sell and deliver Common Stock
under the Plan shall be subject to all applicable laws,
regulations, rules and approvals, including, but not by way
of limitation, the effectiveness of a registration statement
under the Securities Act of 1933 if deemed necessary or
appropriate by the Company.
Section 9.4 Effective Date. The Plan shall become
effective upon the later of (a) the date of approval of the
Plan by Campo's shareholders or (b) the closing of the sale
of Common Stock to the underwriters of a public offering of
the Common Stock registered under the Securities Act of
1933.
Section 9.5 Adjustment. In the event of any
reorganization, recapitalization, stock dividend, stock
split, reverse stock split, combination of shares or other
change in the Common Stock, the number of shares of Common
Stock then subject to the Plan, including outstanding shares
of restricted stock and options shall be adjusted in
proportion to the change in outstanding shares of Common
Stock. In the event of any such adjustments, the exercise
price of any option, the performance objectives of any
Incentive, and the number of shares of Common Stock issuable
pursuant to any stock option shall be adjusted as and to the
extent appropriate, in the reasonable discretion of the
Committee, to provide participants with the same relative
rights before and after such adjustment.
Section 9.6 Incentive Agreements. The terms of each
Incentive shall be stated in an agreement approved by the
Committee. The Committee may also determine to enter into
agreements with holders of options to reclassify or convert
certain outstanding options, within the terms of the Plan,
as incentive stock options or as non-qualified stock options
with respect to all or part of such options and any other
previously issued options. Notwithstanding anything to the
contrary contained in the Plan, the Company is under no
obligation to grant an Incentive to a participant or
continue an Incentive in force unless the participant
executes all appropriate agreements with respect to such
Incentives in such form as the Committee may determine from
time to time.
Section 9.7 Withholding. The Company shall have the
right to withhold from any payments made under the Plan or
to collect as a condition of payment, any taxes required by
law to be withheld. At any time that a participant is
required to pay to the Company an amount required to be
withheld under the applicable income tax laws in connection
with the issuance of shares of Common Stock upon exercise of
an option or upon the lapse of restrictions on shares of
restricted stock, the participant may, subject to the
Committee's right of disapproval, satisfy this obligation in
whole or in part by electing (the "Election") to have the
Company withhold from the distribution shares of Common
Stock having a value equal to the amount required to be
withheld. The value of the shares to be withheld shall be
based on the Fair Market Value of the Common Stock on the
date that the amount of tax to be withheld shall be
determined (the "Tax Date").
Each Election must be made prior to the Tax Date.
The Committee may disapprove of any Election or may
suspend or terminate the right to make Elections. If a
participant makes an election under Section 83(b) of
the Internal Revenue Code with respect to shares of
restricted stock, an Election is not permitted to be
made.
Section 9.8 No Continued Employment. No participant
in the Plan shall have any right, because of his or her
participation, to continue in the employ of the Company for
any period of time or to any right to continue his or her
present or any other rate of compensation.
Section 9.9 Amendment of the Plan. The Board may
amend or discontinue the Plan at any time; provided,
however, that no such amendment or discontinuance shall
change or impair, without the consent of the recipient, an
Incentive previously granted and; further provided that if
any such amendment requires shareholder approval to meet the
requirements of Rule 16b-3 under the Exchange Act or any
successor rule such amendment shall be subject to the
approval of the shareholders of Campo.
Section 9.10 Immediate Acceleration of Incentives.
Notwithstanding any provision in this Plan or in any
Incentive Agreement to the contrary, the Committee, in its
sole discretion shall have the power to cause at any time
(a) the restrictions on all shares of restricted stock
awarded to lapse immediately and (b) all outstanding options
to become exercisable immediately.
Section 9.11 Definition of Fair Market Value. "Fair
Market Value" of the Common Stock on any date shall be
deemed to be the final closing sale price per share of
Common Stock on the trading day immediately prior to such
date. If the Common Stock is listed upon an established
stock exchange or exchanges or any automated quotation
system that provides sale quotations, such Fair Market Value
shall be deemed to be the closing price of the Common Stock
on such exchange or quotation system, or if no sale of the
Common Stock shall have been made on that day, on the next
preceding day on which there was a sale of such stock. If
the Common Stock is not listed on any exchange or quotation
system, but bid and asked prices are quoted and published,
such Fair Market Value shall be the mean between the quoted
bid and asked price on the day the option is granted, and if
bid and asked quotations are not available on such day, on
the latest preceding day on which such prices were
available. If the Common Stock is not actively traded, or
quoted, such Fair Market Value shall be established by the
Committee based upon a good faith effort to value the Common
Stock.
Section 9.12 Compliance with Section 16. With
respect to persons subject to Section 16 of the Exchange
Act, transactions under the Plan are intended to comply with
all applicable conditions of Rule 16b-3 or its successors
under the Exchange Act. To the extent any provision of the
Plan or action by the Committee is deemed not to comply with
any applicable condition of Rule 16b-3, it shall be deemed
null and void to the extent permitted by law and deemed
advisable by the Committee.
Section 9.13 Tax Benefits Rights. The Committee may
grant a tax benefit right ("TBR") to a participant in the
Plan on such terms as the Committee in its discretion shall
determine. A TBR may be granted only with respect to an
Incentive granted under the Plan and may be granted
concurrently with or after the grant of the Incentive. A
TBR shall entitle a participant to receive from the Company
an amount in cash not to exceed the product of the ordinary
income, if any, which the participant may realize as the
result of the exercise of an option or the grant or vesting
of restricted stock (including any income realized as a
result of the related TBR) multiplied by the then applicable
highest stated federal and state income tax rate for
individuals. The Committee shall determine all terms and
provisions of the TBR granted hereunder.
Section 9.14 Change of Control. (a) Notwithstanding
anything to the contrary in the Plan or any related
Incentive Agreement, if
(1) Campo shall not be the surviving entity in any
merger, consolidation or other reorganization (or
survives only as a subsidiary of an entity other than a
previously wholly-owned subsidiary of Campo),
(2) Campo sells, leases or exchanges all or
substantially all of its assets to any other person or
entity (other than a wholly-owned subsidiary of Campo),
(3) Campo is to be dissolved or liquidated,
(4) any person or entity, including a "group" as
contemplated by Section 13(d)(3) of the Exchange Act,
other than an employee benefit plan of the Company or a
related trust, acquires or gains ownership or control
(including, without limitation, power to vote) of more
than 30% of the outstanding shares of the Common Stock,
or
(5) as a result of or in connection with a
contested election of directors, the persons who were
directors of Campo before such election shall cease to
constitute a majority of the Board of Directors of
Campo (each such event is referred to herein as a
"Corporate Change"),
then upon the approval by the Board of Directors of Campo of
any Corporate Change of the type described in clause (1),
(2) or (3), or upon a Corporate Change described in clause
(4) or (5), all outstanding options shall automatically
become fully exercisable, all restrictions or limitations on
any Incentives shall lapse and all performance criteria and
other conditions relating to the payment of Incentives shall
be deemed to be achieved or waived by the Company, without
the necessity of any action by any person.
(b) In addition, no later than
(i) 30 days after the approval by the Board of
Directors of Campo of any Corporate Change of the type
described in clauses (1), (2) or (3) of Section 9.14(a)
or
(ii) 30 days after a Corporate Change of the type
described in clause (4) or (5) of Section 9.14(a),
the Committee, acting in its sole discretion without the
consent or approval of any participant (and notwithstanding
any removal or attempted removal of some or all of the
members thereof as directors or committee members), may act
to effect one or more of the following alternatives, which
may vary among individual participants and which may vary
among Incentives held by any individual participant:
(1) require that all outstanding options be
exercised on or before a specified date (before or
after such Corporate Change) fixed by the Committee,
after which specified date all unexercised options and
all rights of participants thereunder shall terminate,
(2) provide for mandatory conversion of some or
all of the outstanding options held by some or all
participants as of a date, before or after such
Corporate Change, specified by the Committee, in which
event such options shall be deemed automatically
cancelled and the Company shall pay, or cause to be
paid, to each such participant an amount of cash per
share equal to the excess, if any, of the Change of
Control Value of the shares subject to such option, as
defined and calculated below, over the exercise
price(s) of such options, or, in lieu of such cash
payment, the issuance of Common Stock having a Fair
Market Value equal to such excess,
(3) make such equitable adjustments to Incentives
then outstanding as the Committee deems appropriate to
reflect such Corporate Change (provided, however, that
the Committee may determine in its sole discretion that
no adjustment is necessary to Incentives then
outstanding), or
(4) provide that thereafter upon any exercise of
an option theretofore granted the participant shall be
entitled to purchase under such option, in lieu of the
number of shares of Common Stock then covered by such
option, the number and class of shares of stock or
other securities or property (including, without
limitation, cash) to which the participant would have
been entitled pursuant to the terms of the agreement
providing for the merger, consolidation, asset sale,
dissolution or other Corporate Change of the type
described in clause (1), (2) or (3) above, if,
immediately prior to such Corporate Change, the
participant had been the holder of record of the number
of shares of Common Stock then covered by such options.
(c) For the purposes of clause (2) of Section 9.14(b)
the "Change of Control Value" shall equal the amount
determined by whichever of the following items is
applicable:
(1) the per share price offered to shareholders of
the Company in any such merger, consolidation or other
reorganization, determined as of the date of the
definitive agreement providing for such transaction,
(2) the price per share offered to shareholders of
the Company in any tender offer or exchange offer
whereby a Corporate Change takes place, or
(3) in all other events, the Fair Market Value per
share of Common Stock into which such options being
converted are exercisable, as determined by the
Committee as of the date determined by the Committee to
be the date of conversion of such options.
(d) In the event that the consideration offered to
shareholders of the Company in any transaction described
herein consists of anything other than cash, the Committee
shall determine the fair cash equivalent of the portion of
the consideration offered that is other than cash.
Adopted by the Board of
Directors on August 8,
1997 [and approved by the
shareholders on September
25, 1997]