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SCHEDULE 14A
(RULE 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE SECURITIES
EXCHANGE ACT OF 1934
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
[ ] Confidential, for use of the Commission only (as permitted by Rule 14a-6(e)(2))
GERBER CHILDRENSWEAR, INC.
- - --------------------------------------------------------------------------------
(Name of Registrant as Specified in Its Charter)
- - --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if Other Than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No Fee Required
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
------------------------------------------------------------------------
(2) Aggregate number of securities to which transaction applies:
------------------------------------------------------------------------
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which the
filing fee is calculated and state how it was determined):
------------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
------------------------------------------------------------------------
(5) Total fee paid:
------------------------------------------------------------------------
[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the form or schedule and the date of its filing.
(1) Amount previously paid:
------------------------------------------------------------------------
(2) Form, Schedule or Registration Statement no.:
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(3) Filing Party:
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(4) Date Filed:
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GERBER CHILDRENSWEAR Letterhead
April 16, 1999
Dear Stockholder:
You are cordially invited to attend the Annual Meeting of Stockholders (the
"Annual Meeting") to be held at The Chase Manhattan Bank, 270 Park Avenue,
11(th) Floor, Conference Room C, New York, New York, on Tuesday, May 18, 1999,
at 9:00 a.m., local time. Information about the Annual Meeting, nominees for
directors and the proposals to be considered is presented in the Notice of
Annual Meeting and the Proxy Statement on the following pages. Additionally, a
proxy card is included.
At this year's Annual Meeting, you will be asked to (i) elect directors and
(ii) ratify and approve the appointment of Ernst & Young LLP as the Company's
independent auditors. Additionally, during the Annual Meeting, you will be asked
to vote on such other matters as may properly come before the Annual Meeting.
Your proxy is revocable, and in the event you find it convenient to attend
the Annual Meeting, you may, if you wish, withdraw your proxy and vote in
person.
Your participation in our Company's affairs is important regardless of the
number of shares you hold. To ensure your representation, even if you cannot
attend the Annual Meeting, please mark, sign, date and return the enclosed proxy
card promptly.
We look forward to seeing you at the Annual Meeting.
Sincerely,
/s/ Edward Kittredge
Edward Kittredge
Chairman, Chief Executive
Officer and
President
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GERBER CHILDRENSWEAR, INC.
7005 PELHAM ROAD, SUITE D
GREENVILLE, SOUTH CAROLINA 29615
------------------------
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
To be Held Tuesday, May 18, 1999
------------------------
NOTICE IS HEREBY GIVEN that the Annual Meeting of Stockholders (the "Annual
Meeting") of Gerber Childrenswear, Inc., a Delaware corporation (the "Company"),
will be held at The Chase Manhattan Bank, 270 Park Avenue, 11(th) Floor,
Conference Room C, New York, New York, on Tuesday, May 18, 1999, at 9:00 a.m.,
for the following purposes:
1. To elect seven (7) nominees to be directors of the Company, to
serve until the next annual meeting of stockholders of the Company and
until their successors have been duly elected and qualified;
2. To act upon a proposal to ratify the appointment of Ernst & Young
LLP as the Company's independent auditors for the year ending December 31,
1999; and
3. To transact such other business as may properly come before the
Annual Meeting or any postponements or adjournments thereof.
Holders of record of the Company's Common Stock at the close of business on
March 31, 1999 shall be entitled to notice of, and to vote at, the Annual
Meeting or any and all postponements or adjournments thereof. A complete list of
such stockholders, arranged in alphabetical order and showing the address of
each stockholder and the number of shares registered in the name of each
stockholder, will be available at the Annual Meeting and will be available for
examination by any stockholder for any purpose germane to the Annual Meeting,
during ordinary business hours for a period of ten days prior to the Annual
Meeting at the offices of the Company, 7005 Pelham Road, Suite D, Greenville,
South Carolina 29615.
By Order of the Board of Directors,
/s/ David E. Uren
David E. Uren
Secretary
April 16, 1999
Greenville, South Carolina
IMPORTANT:
WHETHER OR NOT YOU PLAN TO ATTEND THE ANNUAL MEETING, YOU ARE REQUESTED TO FILL
IN AND SIGN THE ENCLOSED PROXY CARD AND RETURN IT PROMPTLY IN THE ACCOMPANYING
SELF-ADDRESSED ENVELOPE FOR WHICH NO POSTAGE IS REQUIRED.
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GERBER CHILDRENSWEAR, INC.
7005 Pelham Road, Suite D
Greenville, South Carolina 29615
------------------------
PROXY STATEMENT
------------------------
ANNUAL MEETING OF STOCKHOLDERS
Tuesday, May 18, 1999
------------------------
GENERAL INFORMATION
This Proxy Statement is furnished in connection with the solicitation by
Gerber Childrenswear, Inc., a Delaware corporation (the "Company"), of proxies
to be voted at the Annual Meeting of Stockholders (the "Annual Meeting") to be
held at The Chase Manhattan Bank, 270 Park Avenue, 11(th) Floor, Conference Room
C, New York, New York, on Tuesday, May 18, 1999, at 9:00 a.m., or any and all
postponements or adjournments thereof, for the purposes set forth in the
accompanying Notice of Annual Meeting. On or about April 16, 1999, this Proxy
Statement, the Notice of Annual Meeting and the accompanying proxy card are
being mailed to stockholders of record at the close of business on March 31,
1999.
Holders of record of Common Stock, par value $.01 per share, of the Company
(the "Common Stock") at the close of business on March 31, 1999, will be
entitled to notice of and to vote at the Annual Meeting and any and all
postponements or adjournments thereof. On that date, 8,352,949 shares of Common
Stock were issued and outstanding.
Each proxy granted may be revoked by the stockholder giving such proxy at
any time before it is exercised by filing with the Secretary of the Company, at
the address set forth above, a revoking instrument or a duly executed proxy
bearing a later date. The powers of any proxy holder will be suspended if the
person who executed the proxy held by such proxy holder attends the Annual
Meeting in person and so requests. Attendance at the Annual Meeting will not in
itself constitute revocation of the proxy.
If the accompanying proxy card is properly signed and returned to the
Company and not revoked, it will be voted in accordance with the instructions
contained therein. Unless contrary instructions are given, the persons
designated as proxy holders in the accompanying proxy card will vote (i) to
elect the seven (7) nominees for the Company's Board of Directors (the "Board of
Directors") to serve until the next Annual Meeting and until their successors
have been duly elected and qualified, (ii) to ratify the appointment of Ernst &
Young LLP as the Company's independent auditors for the year ending December 31,
1999 and (iii) to transact such other business as may properly come before the
Annual Meeting or any and all postponements or adjournments thereof as such
proxy holders shall determine in their judgment.
The presence, in person or by proxy, of a majority of the shares of Common
Stock of the Company issued and outstanding, and entitled to vote at the Annual
Meeting constitutes a quorum for the transaction of business thereat. Each share
of Common Stock entitles a stockholder to one vote on all proposals except with
respect to the election of directors. The affirmative vote of a majority of the
shares of Common Stock represented at the Annual Meeting in person or by proxy
and entitled to vote thereat is required to ratify, approve or transact all
business at the Annual Meeting, other than the election of directors. In
electing directors, each share of Common Stock entitles a stockholder to a
number of votes equal to the number of directors to be elected. The seven (7)
nominees receiving the highest number of votes cast for the election of
directors at the Annual Meeting will be elected as directors.
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Assuming the presence of a quorum at the Annual Meeting, the following
items will be voted upon:
1. To elect seven (7) nominees to be directors of the Company;
2. To ratify the appointment of Ernst & Young LLP as the Company's
independent auditors for the year ending December 31, 1999; and
3. To transact such other business as may properly come before the
Annual Meeting or any postponements or adjournments thereof.
With regard to the election of directors, votes may be cast in favor or
withheld, and votes withheld will have no effect on the outcome of the election.
With respect to any proposal, other than the election of directors, stockholders
may vote for, against or abstain. Abstentions will be included in the
determination of shares present for quorum purposes. Because abstentions
represent shares eligible to vote, the effect of an abstention will be the same
as a vote against a proposal. If shares are held in "street name" through a
broker or other nominee, the broker or nominee may not be permitted to execute
voting discretion with respect to certain matters to be acted upon. Shares
represented by such broker "non-votes" will only be counted for purposes of
determining the presence or absence of a quorum, and will not affect the outcome
of those matters.
The Board of Directors knows of no other business to come before the
meeting, but if other matters come before the meeting, the persons named in the
proxy will vote thereon in accordance with their best judgment.
The cost of soliciting proxies in the enclosed form will be borne by the
Company. The Company will, upon request, reimburse brokerage firms and others
for their reasonable expenses in forwarding solicitation material to the
beneficial owners of Common Stock.
The principal executive offices of the Company are located at 7005 Pelham
Road, Suite D, Greenville, South Carolina 29615 (telephone 864-987-5200).
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PROPOSAL 1
ELECTION OF DIRECTORS
Directors will be elected according to the principle of cumulative voting.
Each stockholder may divide and distribute such stockholder's votes among one or
more nominees for the directorships to be filled. The seven nominees receiving
the highest number of votes cast will stand elected. An absolute majority of
votes cast is not a prerequisite to the election of any nominee.
In accordance with the recommendation of its Nominating Committee, the
Board of Directors has selected the seven current directors listed below as the
nominees entitled to be elected by the holders of Common Stock at the Annual
Meeting. Proxies will be voted, unless authority is withheld, FOR electing the
nominees listed below as directors to serve until the next annual meeting of
stockholders and until their respective successors shall be elected and
qualified. The Board of Directors has no reason to believe that any of the
listed nominees will not serve if elected, but if any of them should become
unavailable to serve as a director or be withdrawn from nomination, and if the
Board of Directors shall designate a substitute nominee, the persons named as
proxy holders will vote for the substitute nominee.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS
A VOTE "FOR" EACH OF THE NOMINEES LISTED BELOW.
NOMINEES FOR ELECTION
The following table sets forth certain information with respect to the
nominees:
NAME AGE PRINCIPAL OCCUPATION AND OTHER INFORMATION
---- --- ------------------------------------------
Edward Kittredge............. 60 Mr. Kittredge led a group of investors in the purchase of
the Company from Gerber Products Company ("GPC") in January
1996 and has served as Chairman, President and Chief
Executive Officer of the Company since that time. From 1990
to 1996 Mr. Kittredge was a consultant with EKI Investments,
Inc. Mr. Kittredge served as Chairman and Chief Executive
Officer of Denton Mills, manufacturer of Dr. Denton
children's pajamas, from 1984 to 1990. From 1980 to 1984, he
was President of Royal Manufacturing Company, a privately
owned men's underwear and active sportswear company. Prior
to that, he held a variety of senior sales and marketing
management positions at Union Underwear Company (Fruit of
the Loom), including national director of all Branded and
Private Label Sales and as head of its BVD Division.
Richard L. Solar............. 59 Mr. Solar has been Senior Vice President, Chief Financial
Officer and Assistant Secretary of the Company and a
director since January 1996. Prior to joining the Company,
Mr. Solar held various positions at Bankers Trust Company,
including managing director positions. From 1971 to 1975, he
served as Treasurer of Val D'Or Industries Inc., a publicly
held apparel company, and Diamondhead Corporation, a
publicly held real estate development company. He is also a
director of Concord Fabrics, Inc.
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NAME AGE PRINCIPAL OCCUPATION AND OTHER INFORMATION
---- --- ------------------------------------------
Richard M. Cashin, Jr........ 46 Mr. Cashin has been a director since January 1996. He has
been President of Citicorp Venture Capital, Ltd. ("CVC")
since 1994. Prior to being appointed President, Mr. Cashin
served as a managing director of CVC for more than four
years. He is also a director of Levitz Furniture Inc., Delco
Remy International, Inc., Life Style Furnishings
International Ltd., Fairchild Semiconductor Corporation, FFC
Holdings, Inc., Cable Systems International, Euramax
International, Plc., Titan Wheel International, Inc., Hoover
Group Inc., Thermal Engineering, JAC Holding Corporation,
GVC Holdings, Ballantrae Corporation and Delta Commodities,
Inc.
Lawrence R. Glenn............ 60 Mr. Glenn has been a director since January 1996. He was a
senior corporate officer of Citicorp from 1963 until 1995.
Currently Mr. Glenn is the Chairman of J.W. Goddard and
Company, a private investment bank.
James P. Manning............. 72 Mr. Manning has been a director since December 1997. He was
formerly the Chairman, President and Chief Executive Officer
of Auburn Hosiery Mills, Inc., a subsidiary of the Company,
where he had been employed from 1965 to 1997.
Joseph Medalie............... 76 Mr. Medalie has been a director since February 1997. He
retired as Vice Chairman of Fruit of the Loom in December
1993, and was a director of Transfinancial Bank from 1994
until 1998. Mr. Medalie also served as a director of the
Commonwealth Health Corporation.
John D. Weber................ 35 Mr. Weber has been a director since January 1996. He has
been a Vice President of CVC since 1994, and worked at
Putnam Investments from 1992 through 1994. Mr. Weber is a
director of Advanced Cast Products, Inc., Anvil Knitwear,
Inc., Electrocal Designs, Inc., FFC Holding, Inc., Graphic
Design Technologies, Marine Optical, Inc., Neenah Foundry
Company, Plainwell Paper Company, Sleepmaster, LLC and Smith
Alarm.
BOARD COMMITTEES AND MEETINGS
The Board of Directors has an Audit Committee, a Compensation Committee and
a Nominating Committee.
Audit Committee. The Audit Committee currently is composed of Messrs.
Glenn, Manning and Medalie. The duties of the Audit Committee include meeting
with the independent auditors and certain personnel of the Company to discuss
the planned scope of their audits and the adequacy of internal controls and
financial reporting, reviewing the results of the annual audit of the
consolidated financial statements and periodic internal audit examinations,
reviewing the services and fees of the Company's independent auditors,
authorizing special investigations and studies, and performing any other duties
or functions deemed appropriate by the Board of Directors. The Audit Committee
met two times during 1998.
Compensation Committee. The Compensation Committee currently is composed
of Messrs. Glenn, Manning and Medalie. The Compensation Committee has overall
responsibility for compensation actions affecting the Company's executive
officers. The Compensation Committee's responsibilities include approving base
salaries, setting incentive targets and administering and granting awards to
executive officers under all executive compensation plans. During 1998,
compensation matters were decided by the entire Board of Directors; the
Compensation Committee therefore did not meet during 1998. See "Report of the
Compensation Committee of the Board of Directors."
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Nominating Committee. The Nominating Committee currently is composed of
Messrs. Glenn, Kittredge and Weber. The Nominating Committee recommends to the
Board of Directors the individuals to be elected as directors to fill any
vacancies or additional directorships which may arise from time to time on the
Board of Directors. The Nominating Committee considers nominations made in
accordance with the procedures provided in the Delaware General Corporate Law
and in the Company's Certificate of Incorporation and Bylaws, a copy of which
may be obtained from the Secretary of the Company. The Nominating Committee did
not meet during 1998.
During 1998, the Board of Directors met three times. In 1998, each
incumbent director served on the Board of Directors and attended at least 75% of
the total number of Board of Directors meetings and the total number of meetings
held by all committees of the Board of Directors on which each served during
such period, except that Messrs. Cashin and Glenn each attended two board
meetings.
DIRECTOR COMPENSATION
Messrs. Glenn, Manning and Medalie are the only members of the Board of
Directors who currently receive compensation for their services as directors.
Beginning in 1999, Messrs. Glenn, Manning and Medalie are entitled to receive
$20,000 annually for attendance at meetings of the Board of Directors and
reimbursement for their reasonable out-of-pocket expenses incurred in connection
with board meetings. During 1998, each of Messrs. Glenn, Manning and Medalie
received $5,000, $2,500 and $7,500, respectively, for their services as
directors of the Company.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
In 1998, Messrs. Kittredge, Cashin and Medalie served as members of the
Compensation Committee of the Board of Directors. During the same period, Mr.
Kittredge served as the Company's Chairman, President and Chief Executive
Officer. Mr. Cashin also serves as the President of CVC, the holder of 385,966
shares of Common Stock and 7,511,883 shares of Class B Common Stock, par value
$.01 per share (the "Class B Common Stock"), of the Company. In addition,
Messrs. Kittredge, Cashin and Medalie owned shares of the Company in 1998. Other
than compensation received by Mr. Medalie for serving as a director and
attending board meetings, he received no additional compensation from the
Company in 1998. See "Certain Relationships and Related
Transactions -- Transactions With Management and Directors" and "Principal
Stockholders and Share Ownership by Management."
EXECUTIVE OFFICERS
The name and business experience of each of the executive officers of the
Company as of April 16, 1999 is set forth below to the extent not provided
above.
David L. Gold
Senior Vice President of Sales and Marketing, Apparel Division
Age: 35
Mr. Gold has been Senior Vice President of Sales and Marketing of the
Company's Apparel Division since November 1998. Prior to joining the Company, he
was a Senior Vice President of Burlington Industries, Menswear Division where he
was employed since 1989.
David E. Uren
Vice President of Finance, Secretary and Treasurer
Age: 55
Mr. Uren has been Vice President of Finance of the Company and its
predecessor since 1987. He has been Secretary and Treasurer of the Company since
1990. Prior to joining the Company, he was Chief Financial Officer of Borg
Textile Corporation and also held various senior financial positions at Buster
Brown
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Apparel, Inc. between 1972 and 1987. Mr. Uren worked at Ernst & Young LLP from
1967 to 1971, including as a certified public accountant from 1969 to 1971.
EXECUTIVE COMPENSATION
The following table summarizes the compensation of the Company's Chief
Executive Officer (who also serves as Chairman and President), and three other
executive officers as of December 31, 1998 for services rendered in all
capacities to the Company during 1998 and 1997, as applicable. The foregoing
four individuals are referred to herein as the "Named Executive Officers."
ANNUAL COMPENSATION LONG-TERM COMPENSATION
-------------------------------- ---------------------------------------------
AWARDS PAYOUTS
----------------------------------- -------
OTHER ANNUAL VESTED RESTRICTED SECURITIES LTIP ALL OTHER
NAME AND SALARY BONUS COMPENSATION STOCK AWARDS UNDERLYING PAYOUTS COMPENSATION
PRINCIPAL POSITION YEAR ($) ($) ($)(a) ($)(b) OPTIONS/SARS(#) ($)(c) ($)(d)
- - ------------------ ---- ------- ------- ------------ ----------------- --------------- ------- ------------
Edward Kittredge,......... 1998 373,000 0 18,436 0 0 286,000 26,589
Chairman, President 1997 225,000 776,100 0 0 0 0 6,403,098
and CEO
Richard L. Solar,......... 1998 225,000 0 1,577 0 0 182,000 7,250
Senior Vice President, 1997 150,000 455,286 0 0 0 0 2,399,301
CFO and Assistant
Secretary
David E. Uren,............ 1998 175,450 0 8,873 0 0 52,000 6,210
Vice President of
Finance, 1997 150,450 158,614 6,000 0 0 0 5,614
Secretary and Treasurer
David L. Gold,(e)......... 1998 35,814 0 0 0 15,000(f) 0 106
Senior Vice President of
Sales and Marketing,
Apparel Division
- - ---------------
(a) For each Named Executive Officer such amounts consist of interest earned by
such officers on compensation voluntarily deferred by each Named Executive
Officer pursuant to the Executive Deferral Plan. See "Executive
Compensation -- Executive Deferral Plan." Additionally, Mr. Uren's amounts
include car allowances in 1997 and 1998.
(b) Represents the value of each Named Executive Officer's Executive Shares (as
defined below) which vested in each of 1997 and 1998, net of the
consideration paid by each such Named Executive Officer for such Executive
Shares. In 1996, each such executive purchased these shares at book value.
See "Certain Relationships and Related Transactions -- Transactions with
Management and Directors." As of December 31, 1998, Messrs. Kittredge, Solar
and Uren had 127,144, 111,251 and 79,465 unvested shares of Common Stock,
respectively, which had a fair market value equal to $1,104,571, $966,498
and $690,357, respectively, as of December 31, 1998. As of December 31,
1997, Messrs. Kittredge Solar and Uren had 189,022, 165,393 and 118,138
unvested shares of Common Stock, respectively, which had a fair market value
of $2,137,838, $1,870,594 and $1,336,140, respectively, as of December 31,
1997. The fair market value of the shares as of December 31, 1997 was
determined pursuant to independent valuations which priced the shares at
approximately $11.31 per share. See "Certain Relationships and Related
Transactions -- Transactions with Management and Directors."
(c) Reflects Incentive Plan cash bonuses paid during 1998. See "Report of the
Compensation Committee of the Board of Directors -- Annual
Compensation -- Long-Term Bonus Plan."
(d) Reflects life insurance premiums and 401(k) contributions paid on behalf of
each Named Executive Officer. The amounts set forth for 1997 reflect
expenses related to stock compensation incurred by the Company in connection
with the sale of capital stock below fair market value to the Named
Executive Officers and the Company's payment of withholding and other
related payroll taxes associated with such 1997 stock compensation, which,
in the aggregate, amounted to $6,379,468 for Mr. Kittredge and $2,392,301
for Mr. Solar. See "Certain Relationships and Related
Transactions -- Transactions With Management and Directors."
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(e) Mr. Gold commenced his employment with the Company on October 26, 1998. His
annual base salary is $185,000.
(f) Reflects options granted as part of Mr. Gold's Incentive Plan compensation
which are subject to vesting over a five year period.
OPTION GRANTS IN THE LAST FISCAL YEAR
The following table sets forth the grants of options on Common Stock to the
Named Executive Officers during 1998:
INDIVIDUAL GRANTS POTENTIAL REALIZABLE
-------------------------------------------------- VALUE AT ASSUMED
% OF TOTAL ANNUAL RATES OF STOCK
OPTIONS PRICE APPRECIATION
GRANTED TO EXERCISE OR FOR OPTION TERM
OPTIONS EMPLOYEES BASE PRICE EXPIRATION ---------------------
NAME GRANTED IN 1998 PER SHARE DATE 5% 10%
- - ---- ------- ---------- ----------- ---------- -------- ---------
David L. Gold 15,000 44.12% $8.375 10/26/08 $79,005 $200,214
AGGREGATE OPTION EXERCISES IN 1998 AND DECEMBER 31, 1998 OPTION VALUES
The following table sets forth information with respect to the exercise of
options on Common Stock by the Named Executive Officers during 1998 and the
value of unexercised options on Common Stock held by the Named Executive
Officers as of December 31, 1998:
VALUE OF
SHARES OF COMMON UNEXERCISED IN-THE-
VALUE REALIZED ($) STOCK UNDERLYING MONEY OPTIONS AT
SHARES OF COMMON (MARKET PRICE AT OPTIONS AT 12/31/98 12/31/98
STOCK ACQUIRED ON EXERCISE LESS ----------------------------- -----------------------------
NAME EXERCISE (#) EXERCISE PRICE) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- - ---- ----------------- ------------------ ------------ -------------- ------------ --------------
David L. Gold 0 0 0 15,000 $0 $4,688
EMPLOYMENT AGREEMENTS
In connection with the purchase of Gerber Childrenswear, Inc. from GPC in
January 1996, the Company entered into employment agreements with Messrs.
Kittredge, Solar and Uren (such agreements are collectively referred to herein
as the "Executive Agreements") pursuant to which the Company agreed to employ
each of them through January 22, 2001. Mr. Gold agreed to the terms of his
employment when he joined the Company in 1998.
The Executive Agreements currently provide Messrs. Kittredge, Solar and
Uren with annual compensation of $373,000, $225,000 and $175,450, respectively.
Mr. Gold receives an annual base salary of $185,000. In each case, these
executive officers may receive annual incentive bonuses based upon the
achievement of pre-determined objectives tied to the performance of the Company,
including criteria related to growth and profitability. See "Executive
Compensation" and "Report of the Compensation Committee of the Board of
Directors." In the event that the Company terminates the employment of Messrs.
Kittredge, Solar or Uren for cause, they are not entitled to any further
compensation. In the event of Messrs. Kittredge, Solar or Uren's death,
disability or termination without cause, each of them (or their estate) is
entitled to receive his base salary for eighteen months thereafter, and a pro
rata bonus based upon the actual number of days employed during the termination
year. Each of them will also be restricted from competing with the Company or
soliciting any of its employees for the eighteen-month period during which
severance payments are received.
Each of Messrs. Kittredge, Solar and Uren also purchased shares of the
Company pursuant to certain Executive Stock Purchase Agreements (such agreements
are collectively referred to herein as the "Stock Purchase Agreements"). These
shares were converted into Common Stock of the Company as part of the
transactions related to the initial public offering of the Company in June 1998
(the "Offering"). See "Certain Relationships and Related
Transactions -- Transactions With Management and Directors" and "Principal
Stockholders and Share Ownership By Management."
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LONG-TERM PERFORMANCE INCENTIVE PLAN
In connection with the Offering, the Company adopted the Long-Term
Performance Incentive Plan (the "Incentive Plan"). Participants in the Incentive
Plan ("Participants") may be granted stock options, stock appreciation rights
("SARs"), restricted stock, performance units, performance grants and other
types of awards that the Compensation Committee deems to be consistent with the
purposes of the Incentive Plan. See "Report of the Compensation Committee of the
Board of Directors." An aggregate of 750,000 shares of Common Stock have been
reserved for issuance under the Incentive Plan. No more than 25,000 shares may
be issued to any single Participant in any calendar year. In 1998, the Company
granted options to purchase 34,000 shares of Common Stock under the Incentive
Plan.
The Compensation Committee may select Participants, determine the type,
size and terms of each award, modify the terms of awards, determine when awards
will be granted and paid and make all other determinations which it deems
necessary or desirable in the interpretation and administration of the Incentive
Plan. See "Report of the Compensation Committee of the Board of Directors." The
Incentive Plan is scheduled to terminate in June 2008, unless it is extended for
up to an additional five years by action of the Board of Directors. Rights to
contingent compensation granted under the Incentive Plan will vest in equal
amounts on each anniversary of the initial grant date over a five year period.
EXECUTIVE DEFERRAL PLAN
The Executive Deferral Plan is an unfunded, nonqualified deferred
compensation plan that provides deferred compensation to selected members of
management and certain other highly-compensated employees. The Executive
Deferral Plan allows employees to voluntarily defer from 5% to 50% of their
salary and/or bonus compensation until termination, retirement or the occurrence
of certain specific future events. Compensation which is deferred under this
plan bears interest at a rate specified in the Executive Deferral Plan.
LONG-TERM BONUS PLAN
Pursuant to the Long-Term Bonus Plan, the Compensation Committee may set
aside amounts to be paid as bonuses during future years. In 1998, Messrs.
Kittredge, Solar and Uren were awarded $520,000, in the aggregate, under this
plan for bonuses set aside in 1996, principally to reward their efforts with
respect to the Offering. See "Executive Compensation." During 1997 and 1998, the
Company set aside $515,000 and $500,000, respectively, for future awards to
non-specified executives. Under the terms of the Long-Term Bonus Plan, these
amounts accrue interest until they are paid. Payment criteria for those awards
will be established by the Compensation Committee.
PENSION PLAN
The Retirement Plan for Gerber Childrenswear, Inc. (the "Retirement Plan")
is a defined benefit pension plan qualified pursuant to Section 401(a) of the
Internal Revenue Code. The Retirement Plan covers all salaried employees of the
Company in its apparel division and the sales organization of its hosiery
division (the "Eligible Salaried Employees") and its full-time hourly employees
in its apparel division.
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The following table indicates monthly estimated amounts to be paid to
Eligible Salaried Employees for the Retirement Plan, based upon years of service
and Final Average Pay (as defined in the Retirement Plan):
YEARS OF SERVICE
-------------------------------------------------------------
FINAL AVERAGE PAY 15 20 25 30 35
- - ----------------- --------- --------- --------- --------- ---------
$125,000.......................... $2,096.70 $2,795.60 $3,494.50 $4,193.40 $4,892.30
150,000.......................... 2,565.45 3,420.60 4,275.75 5,130.90 5,986.05
175,000.......................... 3,034.20 4,045.60 5,057.00 6,068.40 7,079.80
200,000.......................... 3,502.95 4,670.60 5,838.25 7,005.90 8,173.55
225,000.......................... 3,502.95 4,670.60 5,838.25 7,005.90 8,173.55
250,000.......................... 3,502.95 4,670.60 5,838.25 7,005.90 8,173.55
275,000 or more.................. 3,502.95 4,670.60 5,838.25 7,005.90 8,173.55
Generally, an Eligible Salaried Employee in the Retirement Plan is eligible
to receive benefits upon "Normal Retirement Age", which is the later of the
Social Security retirement age or the fifth anniversary of the date that
employee commenced participation in the Retirement Plan. An Eligible Salaried
Employee may elect an early retirement benefit at "Early Retirement Age", which
is the later of ten years prior to the Eligible Salaried Employee's Social
Security retirement age and the fifth anniversary of the date the Eligible
Salaried Employee commenced participation in the Retirement Plan. Early
retirement benefits are reduced for those Eligible Salaried Employees who retire
more than three years prior to their Normal Retirement Age according to a
formula established in the Retirement Plan. If a vested Eligible Salaried
Employee terminates his or her employment, the employee is entitled to a
deferred, unreduced benefit if requested within three years of such employee's
Normal Retirement Age, or a reduced benefit, if requested earlier.
The amount of an Eligible Salaried Employee's Retirement Plan benefit is
based upon the employee's Final Average Pay and Years of Participation (each
defined in the Retirement Plan). Payments to Eligible Salaried Employees under
the Retirement Plan are made in equal monthly installments for the remainder of
the employee's life, although married Eligible Salaried Employees may elect to
receive a 50% joint and survivor benefit providing a reduced monthly benefit to
the employee during his or her lifetime, with 50% of that benefit to the
employee's spouse for his or her lifetime following the employee's death. Other
optional forms of payment include a 100% survivorship annuity, a 50%
survivorship annuity and a life and period certain annuity option. An Eligible
Salaried Employee's benefits may be offset by the amount of any workers'
compensation or similar benefits payable because of an employment related injury
or illness.
The Retirement Plan is funded entirely by voluntary Company contributions
that are held in trust for the benefit of the salaried employees. Although the
Company intends to continue the Retirement Plan indefinitely, it can terminate
the plan at any time, upon which all salaried employees will become 100% vested
in any benefit accrued to the extent funds are available in trust.
The years of accredited service for each of the Named Executive Officers
under the Retirement Plan as of December 31, 1998 are: Mr. Kittredge, 3 years;
Mr. Solar, 3 years; Mr. Uren, 12 years; and Mr. Gold, zero years.
REPORT OF THE COMPENSATION COMMITTEE OF
THE BOARD OF DIRECTORS
OVERVIEW
The Company's compensation plans under which its executive officers were
compensated for services rendered during 1998 were in place at the time of the
Offering. These policies had been established by the Board of Directors during
the period that the Company operated as a private company.
During 1998, the Compensation Committee consisted of Messrs. Cashin,
Kittredge and Medalie. Matters concerning executive compensation, including
bonus awards and stock option grants under the Incentive Plan,
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were reviewed and approved by the Board of Directors. Accordingly, the
Compensation Committee did not meet in 1998 to review its compensation
philosophy or policy.
Mr. Kittredge's compensation for 1998 was established in 1996, prior to the
Offering when the Company was private. Mr. Kittredge's compensation levels were
a result of discussions and negotiations with the Company's controlling
shareholder at that time.
A new Compensation Committee was established in March 1999, comprised of
Mr. Manning (Chairman) and Messrs. Glenn and Medalie, each of whom is an
independent director of the Company. This Compensation Committee expects to be
guided by a philosophy which will have as its objectives: to provide the
Company's executives with competitive levels of compensation, to integrate
management pay with the achievement of the Company's annual and long-term
performance goals, to reward above-average corporate performance, to recognize
individual initiative and achievement and to assist the Company in attracting
and maintaining qualified management. In addition, the Compensation Committee
views stock-based compensation as an important element in any compensation
package, as it aligns the interests of the executives with those of the
stockholders and provides a balance between short-term and long-term
perspectives.
It is expected that management compensation will be set at levels that the
Compensation Committee believes are consistent with those of other leading
branded consumer apparel companies. In determining competitive levels of
compensation, the Compensation Committee will review salary and bonus levels, as
well as long-term compensation elements, of other publicly-traded apparel
companies which it considers comparable to the Company. The Compensation
Committee expects to retain the services of independent compensation consultants
to aid in its work.
ANNUAL COMPENSATION
Executive Salaries. The Committee will review and approve base salaries
annually for the Company's executive officers, considering the responsibilities
of their positions, their individual performances and their competitive
positions relative to comparable companies. The 1998 salaries of Messrs.
Kittredge, Solar and Uren were established in 1996 and were the result of
discussions and negotiations with the Company's controlling shareholder at that
time. Mr. Gold's compensation was established when he joined the Company in
1998.
Annual Cash Incentive Bonuses. The Long-Term Bonus Plan in effect for 1998
provided for a bonus pool for the executive officers equal to a percentage of
the amount by which EBITDA exceeded 110% of EBITDA for the previous year (before
deducting stock compensation). Under this plan, no incentive bonuses were earned
or paid for 1998 performance. The Compensation Committee will, however, review
this plan in light of the philosophy described above under "Overview".
The Compensation Committee, in consultation with Mr. Kittredge, expects to
establish annual performance goals for each executive relating to various
categories of individual and Company performance. The Compensation Committee
expects that target award levels will be established for each executive, and
incentive awards will be paid based upon the relative achievements of the
executive for the year in question against the stated criteria.
Long-Term Bonus Plan. In 1998, Messrs. Kittredge, Solar and Uren were
awarded an aggregate amount of $520,000 which constituted bonuses set aside in
1996, principally to reward their efforts with respect to the Offering. See
"Executive Compensation." During 1997 and 1998, the Company accrued $515,000 and
$500,000, respectively, for future awards to non-specified executives. Payment
criteria for those awards will be established by the Compensation Committee.
LONG-TERM COMPENSATION
The Compensation Committee administers the Incentive Plan. These
compensation awards directly relate the amounts earned by the executives to the
amount of appreciation realized by the Company's stockholders over comparable
periods. Stock options also provide executives with the opportunity to acquire
and build a meaningful ownership interest in the Company. While the Company
encourages stock ownership
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by executives, it has not established any target levels for executive stock
holdings. Awards will generally be made at a level calculated to be competitive.
See "Executive Compensation -- Long-Term Performance Incentive Plan."
The Compensation Committee will consider stock option awards on an annual
basis or on such other basis as it deems appropriate. In determining the amount
of options awarded, the Compensation Committee will establish a level of award
based on the position held by the individual and his or her level of
responsibility, both of which reflect the executive's ability to influence the
Company's long-term performance. The number of options previously awarded to and
held by executives will also be reviewed but will not be an important factor in
determining the size of the current award. The number of options actually
awarded in any year will be based on an evaluation of the individual's
performance.
OTHER BENEFIT PROGRAMS
The executive officers participate in various health, life and disability
insurance programs, a pension plan and a 401(k) plan that are generally made
available to all salaried employees. Executive officers also receive certain
perquisites that are customary for their positions. See "Executive
Compensation."
COMPANY POLICY ON QUALIFYING COMPENSATION
Section 162(m) of the Internal Revenue Code provides that publicly-held
companies may not deduct in any taxable year compensation in excess of
$1,000,000 paid to executive officers which is not "performance based" as
defined in Section 162(m). The Compensation Committee intends generally to
comply with the requirements of Section 162(m) so that compensation is
deductible, unless the Compensation Committee determines that it is not
appropriate to do so.
James P. Manning
Lawrence R. Glenn
Joseph Medalie
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PERFORMANCE COMPARISON
STOCK PRICE PERFORMANCE GRAPH
The following graph shows a comparison of cumulative total returns for the
Common Stock of the Company against the cumulative total returns of the Russell
2000 Index and the Dow Jones Clothing & Fabrics Index during the period
commencing on June 11, 1998, the date on which the Common Stock commenced
trading on the New York Stock Exchange, and ending on December 31, 1998. The
comparison assumes $100 was invested on June 11, 1998 in the Common Stock of the
Company, the Russell 2000 Index and the Dow Jones Clothing & Fabrics Index, and
assumes the reinvestment of all dividends, if any.
Gerber Childrensware Graph
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
THE OFFERING
In June 1998, in connection with the Offering, GCIH, Inc. ("GCIH") was
reorganized, recapitalized and merged with and into Gerber Childrenswear, Inc.
to form the Company. GCIH remained as the surviving entity and was subsequently
renamed "Gerber Childrenswear, Inc."
As part of the Offering and other related transactions, the Company amended
its certificate of incorporation to provide for two classes of stock, the Common
Stock and the Class B Common Stock. Each share of Common Stock has one vote per
share and each share of Class B Common Stock has no voting rights. One share of
Class B Common Stock is convertible, at the option of the holder at any time,
into one share of Common Stock. Stockholders who own shares of Class B Common
Stock also may at any time and at their option convert shares of Common Stock
they hold into shares of Class B Common Stock on a one-for-one basis.
TRANSACTIONS WITH MANAGEMENT AND DIRECTORS
Prior to the Offering, Edward Kittredge, Richard L. Solar and David E. Uren
acquired shares of the Company as part of their compensation and pursuant to
purchases by them at book value on January 22, 1996. Some of these shares are
subject to a vesting period (over five years), and the rest were fully vested at
the time
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of purchase. Additionally, as part of their 1997 compensation, Messrs. Kittredge
and Solar acquired, at below fair market value, shares of the Company which were
fully vested upon purchase. See "Executive Compensation" and "Principal
Stockholders and Share Ownership by Management." Upon consummation of the
Offering and other related transactions, these shares were exchanged for Common
Stock (collectively, the "Executive Shares"), but remain subject to the vesting
period (if applicable) and repurchase rights described below.
As of April 3, 1999, of the Executive Shares, 1,144,138 shares held by Mr.
Kittredge, 338,188 shares held by Mr. Solar and 159,976 shares held by Mr. Uren
were fully vested; and 111,378 shares held by Mr. Kittredge, 97,456 shares held
by Mr. Solar and 69,611 shares held by Mr. Uren had not vested. For further
information concerning shares beneficially owned by these individuals, see
"Executive Compensation" and "Principal Stockholders and Share Ownership By
Management."
Messrs. Lawrence R. Glenn and Joseph Medalie also purchased shares of the
Company in 1996 and 1997, respectively. All of the shares purchased by Messrs.
Glenn and Medalie were fully vested upon purchase and were exchanged for Common
Stock upon consummation of the Offering and other related transactions. 38,673
shares were held by Mr. Glenn and 38,673 shares were held by Mr. Medalie as of
April 3, 1999. See "Principal Stockholders and Share Ownership by Management."
Executive Shares may be repurchased by the Company (and, if not repurchased
by the Company, by CVC) if the employee terminates his employment for any
reason. In the case of an early termination of employment (other than for
"cause"), the purchase price for unvested Executive Shares will be equal to the
Original Cost (as defined in the Stock Purchase Agreements) and the purchase
price for fully vested Executive Shares will be equal to the Market Value (as
defined in the Stock Purchase Agreements). In the case of a termination for
"cause," the purchase price for vested and unvested Executive Shares will be
equal to the Original Cost (as defined in the Stock Purchase Agreements).
TRANSACTIONS WITH CVC AND ITS AFFILIATES
In connection with the original acquisition of the Company's predecessor in
January 1996 from GPC, CVC and its affiliates received shares of that
predecessor. In order to finance that acquisition, the Company obtained $22.5
million in senior subordinated financing (the "Financing") from Citicorp
Mezzanine Partners ("CMP"), whose general partner is an affiliate of CVC and, in
return, CMP received a warrant exercisable for shares of the Company. During the
Offering and other related transactions, those shares held by CVC and its
affiliates were converted into Common Stock and Class B Common Stock; and the
warrant held by CMP was exchanged for a warrant exercisable for shares of Class
B Common Stock at any time on or before January 22, 2006. All amounts owed to
CMP with respect to the Financing were repaid with the proceeds of the Offering.
For further information concerning the current beneficial ownership of shares by
CVC and its affiliates, see "Principal Stockholders and Share Ownership By
Management."
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PRINCIPAL STOCKHOLDERS AND SHARE OWNERSHIP BY MANAGEMENT
The table below sets forth certain information regarding beneficial
ownership of Common Stock and Class B Common Stock as of April 3, 1999 by (i)
each person or entity who owns of record or beneficially 5% or more of any class
of the Company's voting securities, (ii) each director, nominee and named
executive officer and (iii) all executive officers and directors as a group.
NUMBER OF
SHARES OF PERCENTAGE
COMMON OF COMMON
NAME AND ADDRESS OF BENEFICIAL OWNER STOCK(a) STOCK(b)
------------------------------------ ---------- ----------
5% HOLDERS
Citicorp Venture Capital, Ltd.(c)........................... 12,596,651 62.97
CCT III, L.P.(c)............................................ 12,596,651 62.97
Citicorp Mezzanine Partners, L.P.(c)........................ 12,596,651 62.97
Lord, Abbett & Co.(d)....................................... 1,121,005 13.42
DIRECTORS, EXECUTIVE OFFICERS AND NOMINEES(E)
Edward Kittredge(f)......................................... 1,487,556 17.81
Richard L. Solar(g)......................................... 482,051 5.77
Richard M. Cashin, Jr.(h)................................... 12,553,330 62.75
Lawrence R. Glenn........................................... 38,673 *
David L. Gold............................................... 0 *
James P. Manning............................................ 5,000 *
Joseph Medalie(i)........................................... 38,673 *
David E. Uren............................................... 229,587 2.75
John D. Weber(j)............................................ 12,293,394 61.46
Executive officers and directors as a group (9 persons)..... 14,878,191 74.38
- - ---------------
* Less than one percent.
(a) Beneficial ownership is determined in accordance with the rules of the
Securities and Exchange Commission (the "Commission"). As of April 3, 1999,
(a) 8,352,949 shares of Common Stock and 8,692,315 shares of Class B Common
Stock were issued and outstanding; and (b) a warrant to purchase 2,958,503
shares of Class B Common Stock was outstanding. Except as otherwise set
forth below, each named owner has the sole voting power and investment
power over the shares indicated.
(b) For purposes of computing the percentage of outstanding shares held by each
person or group of persons named above, shares of Common Stock that such
person or group of persons has the right to acquire within 60 days are
deemed to be outstanding with respect to that person or group of persons,
but are not deemed to be outstanding with respect to any other person or
group of persons.
(c) The address of each of these entities is 399 Park Avenue, New York, New
York 10022. Each entity's beneficial ownership consists of 385,966 shares
of Common Stock and 7,511,883 shares of Class B Common Stock held by CVC;
213,289 shares of Common Stock and 1,180,432 shares of Class B Common Stock
held by CCT III, L.P.; a warrant to purchase 2,958,503 shares of Class B
Common Stock held by CMP; 303,257 shares of Common Stock held by Richard M.
Cashin; and 43,321 shares of Common Stock held by John D. Weber. See
"Certain Relationships and Related Transactions -- Transactions with CVC
and its Affiliates."
(d) The address of Lord Abbett & Co. is 767 Fifth Avenue, New York, New York
10153. Lord, Abbett & Co. has reported (in a Schedule 13G dated February 12,
1999 and filed with the Commission) that, as of that date, it had sole
voting power with respect to 1,121,005 of Common Stock and sole dispositive
power with respect to 1,121,005 shares of Common Stock.
(e) The address of each of the directors and executive officers is c/o Gerber
Childrenswear, Inc., 7005 Pelham Road, Suite D, Greenville, South Carolina
29615.
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(f) 232,039 of Mr. Kittredge's shares of Common Stock are held in a family
trust. Mr. Kittredge disclaims beneficial ownership of such shares.
(g) 46,407 of Mr. Solar's shares of Common Stock are held by his immediate
family members. Mr. Solar disclaims beneficial ownership of such shares.
(h) Consists of the ownership described in footnote (c) hereto, excluding the
43,321 shares of Common Stock held by Mr. Weber.
(i) All of Mr. Medalie's shares are held in a family trust.
(j) Consists of the ownership described in footnote (c) hereto, excluding the
303,257 shares held by Mr. Cashin.
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PROPOSAL 2
RATIFICATION OF APPOINTMENT OF INDEPENDENT AUDITORS
In ratifying the appointment of Ernst & Young LLP, the affirmative vote of
a majority of the votes cast in person or by proxy at the Annual Meeting by the
holders of Common Stock is required. With regard to the ratification of the
appointment of Ernst & Young LLP, votes may be cast for or against or
abstentions may be specified.
The Board of Directors of the Company has appointed Ernst & Young LLP as
the Company's independent auditors for the year ending December 31, 1999,
subject to ratification by the stockholders of the Company. Ernst & Young LLP
has served as the Company's independent auditors since January 1996.
Representatives of Ernst & Young LLP will be present at the Annual Meeting
to respond to appropriate questions and to make such statements as they may
desire.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE "FOR" THE
RATIFICATION OF THE APPOINTMENT OF ERNST & YOUNG LLP AS THE COMPANY'S
INDEPENDENT AUDITORS FOR THE FISCAL YEAR ENDING DECEMBER 31, 1999.
OTHER BUSINESS
As of the date of this Proxy Statement, the Company knows of no business
that will be presented for consideration at the Annual Meeting other than that
which has been referred to above. As to other business, if any, that may come
before the Annual Meeting, it is intended that proxies in the enclosed form will
be voted in accordance with the judgment of the proxy holder.
STOCKHOLDER PROPOSALS
Any proposal of a stockholder intended to be presented at the Company's
2000 Annual Meeting of Stockholders must be received by the Secretary of the
Company by December 16, 1999 for inclusion in the notice of meeting and proxy
statement relating to the 2000 Annual Meeting.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Based solely upon a review of the Forms 3, 4, and 5 and any amendments
thereto furnished to the Company pursuant to Rule 16a-3(c) promulgated under the
Exchange Act, the Company is not aware of any failure of any officer, director
or beneficial owner of more than 10% of the Common Stock to timely file with the
Commission any Form 3, 4 or 5 in respect of the Company during 1998, except that
Form 3s for Raymond R. McManus and James P. Manning were filed late.
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FORM 10-K
Financial statements of the Company, the Company's certified public
accountants' report thereon and management's discussion and analysis of the
Company's financial condition and results of operations are contained in the
Company's Annual Report on Form 10-K for the year ended December 31, 1998. A
copy of the Company's Annual Report on Form 10-K was filed electronically with
the Commission and is available at the Commission's website
(http://www.sec.gov). A copy of the Company's Annual Report on Form 10-K for the
year ended December 31, 1998 (including the financial statements and the
financial statement schedules), as filed with the Commission, will be provided
without charge (except for exhibits) to any shareholder upon request addressed
to:
Richard L. Solar
Sr. Vice President, CFO and Assistant Secretary
Gerber Childrenswear, Inc.
1333 Broadway
New York, NY 10018
By Order of the Board of Directors,
/s/ David E. Uren
David E. Uren
Secretary
Dated: April 16, 1999
Greenville, South Carolina
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APPENDIX A
GERBER CHILDRENSWEAR, INC.
BOARD OF DIRECTORS PROXY FOR ANNUAL MEETING
MAY 18, 1999
The undersigned hereby appoints David E. Uren and Richard L. Solar, or
either of them, attorneys and Proxies with full power of substitution in each of
them, in the name and stead of the undersigned to vote as Proxy all the stock of
the undersigned in Gerber Childrenswear, Inc. a Delaware corporation, at the
Annual Meeting of Stockholders scheduled to be held on May 18, 1999 and any
adjournments thereof.
[X] Please mark your votes as in this example.
1. Election of seven (7) FOR all nominees listed at WITHHELD AUTHORITY to vote Nominees: Edward Kittredge
directors to serve right (except as marked to for nominees listed at Richard L. Solar
until the 2000 Annual the contrary below) [ ] right [ ] Richard M. Cashin
Meeting of Lawrence R. Glenn
Stockholders. James P. Manning
Joseph Medalie
John D. Weber
FOR, except vote withheld from the following nominee(s):
- - -------------------------------------------------------------------------------------------------------------------------------
(continued and to be signed on the reverse side)
22
(continued from reverse side)
2. To ratify the appointment of Ernst & Young LLP as independent accountants for
the year 1999.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
3. Upon any and all other business which may properly come before the Annual
Meeting.
This Proxy, which is solicited on behalf of the Board of Directors, will be
voted FOR the matters described in paragraphs (1) and (2) unless the shareholder
specifies otherwise, (in which case it will be voted as specified).
- - ---------------------------- ---------------------------- ---------------------------- ----------------------------
Signature Dated Signature Dated
Note: Please sign exactly as name or names appear hereon. When signing as
attorney, executor, administrator, trustee or guardian, please give your
full title. If a corporation, please sign in full corporate name by
president or other authorized officer. If a partnership, please sign in
partnership name by authorized partner.