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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))
National Sanitary Supply Company
.........................................................................
(Name of Registrant as Specified in its Charter)
National Sanitary Supply Company
.........................................................................
(Name of Person(s) Filing Proxy Statement)
Payment of Filing Fee (Check the appropriate box):
[x] $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), 14a-6(i)(2) or
Item 22(a)(2) of Schedule 14A.
[ ] $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3).
[ ] Fee computed on table below per Exchange Act Rules
14a-6(i)(4) and 0-11.
1) Title of each class of securities to which transaction applies:
.....................................................................
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_/
.....................................................................
4) Proposed maximum aggregate value of transaction:
.....................................................................
5) Total fee paid:
----------------
_/ Set forth the amount on which the filing fee is calculated and state how
it was determined.
[ ] Fee previously paid 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:
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NATIONAL SANITARY
SUPPLY COMPANY
Notice of Annual Meeting of Stockholders
May 15, 1995
The Annual Meeting of Stockholders of National Sanitary Supply
Company will be held at The Phoenix Club, 812 Race Street, Cincinnati, Ohio,
on Monday, May 15, 1995 at 11:30 a.m. for the following purposes:
(1) To elect directors;
(2) To approve and adopt the 1995 Stock Incentive Plan;
(3) To ratify the selection by the Board of Directors of
independent accountants; and
(4) To transact such other business as may properly be brought
before the meeting.
Stockholders of record at the close of business on March 20, 1995
are entitled to notice of, and to vote at, the meeting.
IF YOU DO NOT PLAN TO ATTEND THE MEETING, PLEASE COMPLETE, DATE AND
SIGN THE ENCLOSED PROXY AND RETURN IT IN THE ENVELOPE PROVIDED AT YOUR
EARLIEST CONVENIENCE. NO POSTAGE IS REQUIRED IF IT IS MAILED IN THE UNITED
STATES.
Naomi C. Dallob
Secretary and General Counsel
April 6, 1995
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NATIONAL SANITARY SUPPLY COMPANY
PROXY STATEMENT
This Proxy Statement is furnished in connection with the solicitation
by the Board of Directors of National Sanitary Supply Company (hereinafter
called the "Company" or "National") of proxies to be used at the Annual Meeting
of Stockholders of the Company to be held on May 15, 1995 ("Annual Meeting")
and any adjournments thereof. The Company's mailing address is 2900 Chemed
Center, 255 E. Fifth Street, Cincinnati, Ohio 45202. The approximate date on
which this Proxy Statement and the enclosed proxy are being sent to
stockholders is April 6, 1995. Each valid proxy received in time will be voted
at the meeting and, if a choice is specified on the proxy, the shares
represented thereby will be voted accordingly. The proxy may be revoked by the
stockholder at any time before the meeting by providing notice to the
Secretary.
Only stockholders of record as of the close of business on March 20,
1995 will be entitled to vote at the meeting or any adjournments thereof. On
such date, the Company had outstanding 6,061,348 shares of common stock, $1 par
value ("Common Stock"), entitled to one vote per share.
ELECTION OF DIRECTORS
Twenty directors are to be elected at the Annual Meeting to serve until
the following annual meeting of stockholders and until their successors are
duly elected and qualified. Set forth below are the names of the persons to be
nominated by the Board of Directors, together with a description of each
person's principal occupation during the past five years and other pertinent
information.
Unless authority is withheld or names are stricken, it is intended that
the shares covered by each proxy will be voted for the nominees listed. Votes
that are withheld will be excluded entirely from the vote and will have no
effect. The Company anticipates that all nominees listed in this Proxy
Statement will be candidates when the election is held. However, if for any
reason any nominee is not a candidate at that time, proxies will be voted for
any substitute nominee designated by the Board of Directors (except where a
proxy withholds authority with respect to the election of directors). The
affirmative vote of the holders of a majority of the voting power of the
stockholders represented at the meeting will be necessary to elect each of the
nominees for director.
NOMINEES
EDWARD L. HUTTON Mr. Hutton is Chairman of the Company and has held this
Director since 1983 position since November 1983. Mr. Hutton is also
Age: 75 Chairman, Chief Executive Officer, and a director of
Chemed Corporation, Cincinnati, Ohio (a diversified
public corporation with interests in residential and
commercial plumbing and drain cleaning services, home-
repair service contracts, janitorial supply products
distribution, medical and dental supply distribution
for private practices, and home healthcare services), a
Delaware corporation, the majority (85%) owner of the
Company's outstanding Common Stock ("Chemed") and has
held those positions since November 1993 and 1970,
respectively. He was also President of Chemed from 1970
to 1993. Mr. Hutton is Chairman and a director of
Omnicare, Inc., Cincinnati, Ohio (healthcare services
and medical equipment and supplies) ("Omnicare"), a
publicly held corporation in which Chemed holds a 5.8
percent ownership interest; Chairman and a director of
Roto-Rooter, Inc., Cincinnati, Ohio (plumbing and drain
cleaning services and home repair service contracts)
("Roto-Rooter"), a publicly held corporation in which
Chemed holds a 59 percent ownership interest; and a
director of Sonic Corp. (restaurants). Mr. Hutton is
the father of Thomas C. Hutton, a director of
the Company.
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KEVIN J. MCNAMARA Mr. McNamara is Vice Chairman of the Company and
Director since 1988 President of Chemed, having held these positions since
Age: 41 August 1994. Previously, he served as General Counsel
and Assistant Secretary of the Company from August
1986, and as Executive Vice President, General Counsel
and Secretary of Chemed, from November 1993. He served
as a Vice Chairman of Chemed from May 1992 to November
1993. He is a director of Chemed, Omnicare and
Roto-Rooter.
PAUL C. VOET Mr. Voet is President and Chief Executive Officer of
Director since 1983 the Company and has held these positions since January
Age: 48 1992. Previously, from November 1983 to January 1992,
he was Vice Chairman and Chief Executive Officer of the
Company. Mr. Voet is also an Executive Vice President
of Chemed. He held the position of Vice Chairman of
Chemed from May 1988 to November 1993. He is a director
of Chemed.
ROBERT B. GARBER Mr. Garber is a Vice Chairman of the Company and has
Director since 1984 held this position since January 1992. Previously, from
Ages: 68 April 1986 to January 1992, he was President and
Chief Operating Officer of the Company.
ARTHUR J. BENNERT, JR. Mr. Bennert is Vice President of Corporate Planning of
Director since 1992 the Company and has held this position since April
Age: 37 1991. Previously, from April 1989 to April 1991, he
was Director of Corporate Planning.
JAMES A. CUNNINGHAM Mr. Cunningham is a Senior Chemical Adviser to Wertheim
Director since 1990 Schroder & Co. Inc., New York, New York (an investment
Age: 50 banking, asset management and securities firm) and has
held this position since March 1992. From October 1990
to March 1992 he was a Managing Director of Furman Selz
Incorporated, New York, New York (an institutional
investment firm). From January 1988 to June 1990, he
was a Director of The First Boston Corporation, New
York, New York (an investment banking concern). He is a
director of Roto-Rooter and Chemed.
NAOMI C. DALLOB Ms. Dallob is Secretary and General Counsel of the
Director since 1987 Company and has held these positions since November
Age: 41 1986 and August 1994, respectively. Ms. Dallob is also
a Vice President and Secretary of Chemed and has held
these positions since February 1987 and August 1994,
respectively. She is a director of Roto-Rooter.
CHARLES H. ERHART, JR. Mr. Erhart retired as President of W. R. Grace & Co.,
Director since 1989 Boca Raton, Florida (international specialty chemicals
Age: 69 and health care) ("Grace") in August 1990, having held
this position since July 1989. Previously, from
November 1986 to July 1989, he served Grace as Chairman
of its Executive Committee. He is a director of Grace
and also is a director of Omnicare, Chemed and
Roto-Rooter.
NEAL GILLIATT Mr. Gilliatt is President of Neal Gilliatt/Stuart
Director since 1986 Watson, Inc., New York, New York (management
Age: 77 consulting), having held this position since April
1982. On April 1, 1982 he retired as Chairman of the
Executive Committee of the Interpublic Group of
Companies, Inc., New York, New York (advertising and
related communications), having held that position
since February 1980. Mr. Gilliatt is a director of
Consolidated Products, Inc. (restaurants) and
Roto-Rooter. He is a director emeritus of Chemed.
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J. PETER GRACE Mr. Grace is Chairman and a director of Grace and
Director since 1986 served as its Chief Executive Officer from 1945 to
Age: 81 1992. Mr. Grace is a director of Chemed, Milliken &
Co., Omnicare, Roto-Rooter, and Stone & Webster,
Incorporated. He is also a trustee emeritus of Atlantic
Mutual Insurance Company, Atlantic Reinsurance Company
and Centennial Insurance Co., a director emeritus of
Ingersoll-Rand Company, and an Honorary Director of
Brascan Ltd.
WILL J. HOEKMAN Mr. Hoekman is a Senior Vice President of Firstar Bank,
Director since May 1994 Des Moines, Iowa and has held this position since
Age: 49 November 1980. He is a director of Roto-Rooter.
THOMAS C. HUTTON Mr. T. C. Hutton is a Vice President of Chemed
Director since 1986 and has held this position since February 1988. Mr.
Age: 44 Hutton is a director of Chemed, Omnicare, and
Roto-Rooter and is the son of Edward L. Hutton,
Chairman and a director of the Company.
W. DWIGHT JACKSON Mr. Jackson is an Executive Vice President of the
Director since February Company and Executive Vice President and General
1995 Manager of its Century Papers, Inc. subsidiary
Age: 48 ("Century"). He has held these positions since November
and October 1994, respectively. Previously, from
January 1990 to October 1994, he was Director of Sales
for Scott Paper Co.'s Southwest Division.
CHARLES O. LANE Mr. Charles Lane is Executive Vice President of
Director since 1984 Marketing and Manufacturing of the Company and has held
Age: 64 this position since April 1986. Mr. Lane is the brother
of Mr. Thomas Lane, Vice President-Administration
of the Company.
SANDRA E. LANEY Mrs. Laney is Senior Vice President and Chief
Director since 1986 Administrative Officer of Chemed and has held these
Age: 51 positions since November 1993 and May 1991,
respectively. She served as a Vice President of Chemed
from May 1984 to November 1993. Mrs. Laney is a
director of Chemed, Omnicare, and Roto-Rooter.
TIMOTHY S. O'TOOLE Mr. O Toole is an Executive Vice President and the
Director since May 1994 Treasurer of Chemed and has held these positions since
Age: 39 May 1992. Previously, from February 1989 to May 1992,
he held the positions of Vice President and Treasurer
of Chemed. He is a director of Chemed, Roto-Rooter and
Omnicare.
D. WALTER ROBBINS, JR. Mr. Robbins is retired Vice Chairman and a consultant
Director since 1991 to Grace and has held this latter position since
Age: 75 January 1987. He is a director of Chemed, Grace,
Omnicare and Roto-Rooter.
GARY H. SANDER Mr. Sander is Vice President, Treasurer and Chief
Director from May 1986 Financial Officer of the Company and has held
to May 1988 and since these positions since August 1988.
August 1988
Age: 45
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JEROME E. SCHNEE Mr. Schnee is Professor of Management at the
Director since November University of Cincinnati College of Business
1993 Administration ("College") and has held this position
Age: 53 since September 1988. From September 1988 to May
1994, he also served as Dean of the College. He is
a director of Roto-Rooter.
KENNETH F. VUYLSTEKE Mr. Vuylsteke is an Executive Vice President of
Director since 1991 the Company and General Manager of National West and
Age: 48 has held these positions since January 1992 and July
1991, respectively. Previously, from February 1989
to July 1991, he was Vice President and General
Manager of the Company's Northwest division.
COMPENSATION OF DIRECTORS
During 1994 each member of the Board of Directors who was not an
executive officer or an officer-employee of the Company was paid $850 for
attendance at each meeting of the Board and $450 for each meeting of a
Committee of the Board attended. The Chairman of each Committee was paid $525
for each Committee meeting attended.
Effective February 1, 1995, each member of the Board of Directors who
is not an executive officer or an officer employee of the Company is paid $925
for attendance at each meeting of the Board and $500 for each meeting of a
Committee of the Board attended. The Chairman of each committee is paid $550
for each Committee meeting attended. Members of the Incentive Committee are
also paid a fee at the rate of $1,000 per annum. Beginning in May 1991, each
member of the Board of Directors (other than those serving on the Incentive
Committee and Mr. Robbins) was granted an annual unrestricted stock award
covering 100 shares of the Company's Common Stock under the 1988 Stock
Incentive Plan. Incentive Committee members and Mr. Robbins were paid the cash
equivalent of the stock award. In addition, each member of the Board of
Directors and of a Committee is reimbursed for reasonable travel expenses
incurred in connection with such meetings.
COMMITTEES AND MEETINGS OF THE BOARD
The Company has the following Committees of the Board of Directors:
Audit Committee, Compensation Committee, and Incentive Committee. It does not
have a nominating committee of the Board of Directors.
The Audit Committee (a) recommends to the Board of Directors a firm of
independent accountants to audit the Company and its consolidated subsidiaries,
(b) reviews and reports to the Board of Directors on the Company's annual
financial statements and the independent accountants' report on such financial
statements and (c) meets with the Company's senior financial officers, internal
auditors and independent accountants to review audit plans and work and other
matters regarding the Company's accounting, financial reporting and internal
control systems. The Audit Committee consists of Messrs. Erhart, T. C. Hutton
and Hoekman. The Audit Committee met twice during 1994.
The Incentive Committee administers the Company's 1986 and 1988 Stock
Incentive Plans. In addition, the Incentive Committee grants stock options and
stock awards to key employees of the Company and recommends to the Board of
Directors additional year-end contributions by the Company under The National
Sanitary Supply Company Employees Thrift and Profit Sharing Plan. The Incentive
Committee consists of Messrs. Cunningham, Erhart and Gilliatt. The Incentive
Committee met twice during 1994.
During 1994 there were five meetings of the Board of Directors. Each
incumbent director attended at least 75 percent of the aggregate of (a) the
total number of meetings held by the Board of Directors and (b) the total
number of meetings held by all Committees of the Board of Directors on which he
served that were held during the period for which he was a director or member
of any such Committee.
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COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION IN COMPENSATION
DECISIONS
Mr. McNamara, a member of the Company's Compensation Committee, is Vice
Chairman of the Company and is an executive officer and director of Chemed.
Mrs. Laney, also a member of the Compensation Committee, is also an executive
officer and a director of Chemed. Messrs. E. L. Hutton and Voet are directors
of Chemed.
EXECUTIVE COMPENSATION
JOINT REPORT OF THE COMPENSATION COMMITTEE AND INCENTIVE COMMITTEE ON EXECUTIVE
COMPENSATION
The Company believes that executive compensation must align executive
officers' interests with those of the Company's shareholders and that such are
best served by directly and materially linking compensation to financial and
operating performance criteria, which, when successfully achieved, will enhance
shareholder value.
The Company attempts to achieve this objective with an executive
compensation package for its senior executives which combines base salary,
annual cash incentive compensation, long-term incentive compensation in the
form of stock options and restricted stock awards along with various benefit
plans, including pension plans, savings plans and medical benefits generally
available to the employees of the Company.
The executive compensation program is administered through the
coordinated efforts of the Compensation and the Incentive Committees of the
Board of Directors. The membership of the Incentive and Compensation Committees
is composed of outside directors (i.e., non-employees of the Company), although
the Compensation Committee includes two officers of Chemed (see "Compensation
Committee Interlocks and Insider Participation in Compensation Decisions"
above). The Compensation Committee, which met four times in 1994, is
responsible for the review, approval and recommendation to the Board of
Directors of matters concerning base salary and annual cash incentive
compensation for key executives of the Company. The recommendations of the
Compensation Committee on such matters must be approved by the full Board of
Directors. The Incentive Committee administers the Company's stock incentive
plans under which it reviews and approves grants of stock options and
restricted stock awards.
Both the Compensation and Incentive Committees may use their discretion
subjectively to set executive compensation where, in their collective judgment,
external, internal or individual circumstances warrant. The Compensation and
Incentive Committees have considered, and are continuing to review, the
qualifying compensation regulations issued by the Internal Revenue Service in
December of 1993. As compensation is currently not expected to exceed the $1
million base, it is not presently affected by these regulations.
Following is a discussion of the components of the executive officer
compensation program.
In determining base salary levels for the Company's executive officers,
the Compensation Committee takes into account the magnitude of responsibility
of the position, individual experience and performance and specific issues
particular to the Company. In general, base salaries are set at levels believed
by this Compensation Committee to be sufficient to attract and retain qualified
executives when considered with the other components of the Company's
compensation structure.
The Compensation Committee believes that a significant portion of total
cash compensation should be linked to annual performance criteria.
Consequently, the purpose of annual incentive compensation for senior
executives and key managers is to provide a direct financial incentive in the
form of an annual cash bonus to these executives to achieve their business
units' and the Company's annual goals. Operational and financial goals are
established at the beginning of each fiscal year and generally take into
account such measures of performance as sales and earnings growth,
profitability, cash flow and return on investment. Other non-financial and
somewhat subjective measures of performance relate to organizational
development, service expansion and strategic positioning of the Company's
assets.
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Individual performance is also taken into account in determining
individual bonuses. It is the Company's belief that bonuses as a percent of a
senior executive's salary should be sufficiently high to provide a major
incentive for achieving annual performance targets. Bonuses for senior
executives of the Company generally range from 10 percent to 40 percent of base
salary.
The stock option and restricted stock award program forms the basis of
the Company's incentive plans for executive officers and key managers. The
objective of these plans is to align executive and long-term shareholder
interests by creating a strong and direct link between executive pay and
shareholder return.
Stock options and restricted stock awards are granted annually and are
generally regarded as the primary incentive for long-term performance as they
are granted at fair market value and have vesting restrictions which lapse over
three year periods. The Committee considers each grantee's current option and
award holdings in making grants. Both the amounts of restricted stock awards
and proportion of stock options increase as a function of higher salary and
positions of responsibility within the Company.
Mr. P. C. Voet's compensation costs were paid 70 percent by the Company
and 30 percent by Chemed Corporation in 1994, with the exception of a $35,000
special bonus in December 1994, paid wholly by Chemed. His base salary was
increased at an annualized rate of 6.9 percent in 1994 to a base rate of
$264,500. His cash bonus paid 70% by the Company in respect of 1994 services
was $85,000, which represents an increase of 21 percent over 1993 and 32
percent of his current base salary. Restricted stock awards granted to Mr. Voet
in respect of 1994 services are consistent with his responsibilities and
relative position in the Company and are shown on the Summary Compensation
Table. He did not receive any stock options in 1994.
By the Compensation Committee: Kevin J. McNamara, Chairman
James A. Cunningham
Sandra E. Laney
By the Incentive Committee: Neal Gilliatt, Chairman
Charles H. Erhart, Jr.
James A. Cunningham
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SUMMARY COMPENSATION TABLE
The following table shows the plan and non-plan compensation awarded
to, earned by, or paid to the Chief Executive Officer and the four most
highly compensated executive officers of the Company for the past three
years for all services rendered in all capacities to the Company and its
subsidiaries:
SUMMARY COMPENSATION TABLE
- -------------------------------------------------------------------------------------------------------
LONG-TERM COMPENSATION
----------------------------
ANNUAL COMPENSATION AWARDS
- -------------------------------------------------------------------------------------------------------
NAME RESTRICTED SECURITIES ALL
AND STOCK UNDERLYING OTHER
PRINCIPAL AWARDS STOCK COMPEN-
POSITION YEAR SALARY $ BONUS $ $ (1) OPTIONS # SATION $
- -------------------------------------------------------------------------------------------------------
Paul C. Voet 1994 $171,150 $59,500 $79,625 -- $37,854(3)
President and 1993 156,325 45,500 55,125 -- 33,958
CEO(2) 1992 136,318 36,000 45,705 -- 60,174
Robert B. 1994 120,000 10,000 -- -- 7,729(4)
Garber 1993 120,000 10,000 -- -- 4,775
Vice Chairman 1992 120,000 10,000 8,310 -- 7,192
Charles O. Lane 1994 135,000 12,000 -- -- 13,310(5)
Executive Vice 1993 174,215 12,000 -- -- 8,343
President - 1992 174,215 12,000 8,310 -- 9,654
Marketing and
Manufacturing
Kenneth F. 1994 143,958 42,000 42,875 -- 8,672(6)
Vuylsteke 1993 132,500 35,000 28,788 -- 3,804
Executive Vice 1992 125,208 30,000 22,853 -- 7,522
President
Gary H. Sander 1994 93,125 26,000 24,500 -- 17,209(8)
Vice President, 1993 88,417 22,000 20,213 -- 18,878
Treasurer and 1992 85,500 20,000 15,997 -- 35,273
Chief Financial
Officer(7)
- -------------------------------------------------------------------------------------------------------
<FN>
(1) The number and value of aggregate restricted stock holdings at December 31, 1994 are as follows: Paul C. Voet 11,334
shares, $131,616; Robert B. Garber 334 shares, $2,776; Charles O. Lane 334 shares, $2,776; Kenneth F. Vuylsteke 5,985 shares,
$69,700; Gary H. Sander 3,743 shares, $43,318. Dividends are paid to the holders of restricted stock. Restricted stock awards
made in 1992, 1994 and in 1995 vest evenly over three-year periods.
(2) Represents 70 percent of total compensation, as charged to the Company by Chemed in 1994, 65 percent in 1993, and 60
percent in 1992. Excludes a $35,000 special bonus paid by Chemed in December, 1994.
(3) Composed of contributions to defined contribution plans - $33,704; term life insurance premiums - $4,150.
(4) Composed of contributions to defined contribution plans - $7,453; term life insurance premiums - $276.
(5) Composed of contributions to defined contribution plans - $9,398; term life insurance premiums - $3,912.
(6) Composed of contributions to defined contribution plans - $8,396; term life insurance premiums - $276.
(7) Mr. Sander is an employee of Chemed Corporation, these costs are reimbursed 100% by the Company.
(8) Composed of contributions to defined contribution plans - $16,489; term life insurance premiums - $720.
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OPTION GRANTS
None of the named executive officers received option grants in 1994.
The following table summarizes stock option exercises during 1994 and
the year-end number and value of unexercised stock options held by the named
executive officers.
AGGREGATED OPTION EXERCISES IN 1994 AND
STOCK OPTION VALUES AS OF DECEMBER 31, 1994
- ---------------------------------------------------------------------------------------------------------------------------------
VALUE OF
NUMBER OF UNEXERCISED UNEXERCISED IN-THE-MONEY
SHARES OPTIONS AT 12/31/94 (#) OPTIONS AT 12/31/94 (1)
ACQUIRED VALUE ------------------------------ ------------------------------
NAME ON EXERCISE (#) REALIZED ($) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- ---------------------------------------------------------------------------------------------------------------------------------
Paul C. Voet -- -- 55,723 5,000 $206,050 $25,600
Robert B. -- -- 67,500 2,500 258,400 12,800
Garber
Charles O. Lane -- -- 57,500 1,250 203,263 6,400
Kenneth F. 4,562 $24,509 2,063 1,625 11,002 8,483
Vuylsteke
Gary H. -- -- 7,250 750 34,020 3,840
Sander
<FN>
- ------------------------------------------------------------------------------------------------------------------------------------
(1) Based upon the market value of the underlying securities at year-end, minus the exercise or base price.
- ------------------------------------------------------------------------------------------------------------------------------------
EMPLOYMENT AGREEMENTS
The Company has entered into employment agreements with Mr. C. Lane
providing for his services to the Company through December 31, 1995 and with
Mr. Jackson providing for services through October 31, 1996, at specified
minimum annual rates of compensation. These agreements also provide for
limited restrictions against competition during and for a two-year period
after the term of employment, and provide assurances to the Company
concerning use or disclosure of trade secrets and confidential information.
The Company has entered into an employment agreement with Mr.
Vuylsteke providing for his continued employment as an executive until May
31, 1997 at a specified base salary rate. In the event of employment
termination without cause, the Company shall pay the former employee monthly
severance for the remaining term of the agreement, at the rate of 150 percent
of his then-current base salary and incentive bonus.
Messrs. Voet and Sander are employed by Chemed pursuant to
agreements providing for their continued employment as senior executives
until May 31, 1999 and 1997, respectively. The remaining terms and
conditions of these agreements are the same as those of Mr. Vuylsteke's
agreement, except that Mr. Voet is to be a management nominee for election as
a Chemed director. The Company reimburses Chemed for 75 percent of such
costs in 1995 with respect to Mr. Voet, and 100% with respect to Mr. Sander,
pursuant to the Services Agreement.
COMPARATIVE STOCK PERFORMANCE GRAPH
The line graph below compares the yearly percentage change in the
Company's cumulative total shareholder return on its Common Stock, as measured
by dividing (i) the sum of (A) the cumulative amount of dividends for the
period January 1, 1990 to December 31, 1994, assuming dividend reinvestment,
and (B) the difference between the Company's share price at January 1, 1990 and
December 31, 1994; by (ii) the share price at January 1, 1990, with
(i) the cumulative total return, assuming reinvestment of dividends, of
the Media General Market Index; and
(ii) the cumulative total return, assuming reinvestment of
dividends, of the Media General Wholesale-Nondurable Index.
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TOTAL CUMULATIVE SHAREHOLDER RETURN FOR
FIVE-YEAR PERIOD ENDING DECEMBER 31, 1994
dollars [GRAPH}
12/31/89 12/31/90 12/31/91 12/31/92 12/31/93 12/31/94
NATIONAL SANITARY MEDIA GENERAL MARKET INDEX
WHOLESALE - NONDURABLE INDEX
dollars 12/31/89 12/31/90 12/31/91 12/31/92 12/31/93 12/31/94
National Sanitary Supply Co. 100.00 54.95 58.33 76.38 113.69 105.29
Media General Market Index 100.00 92.98 120.02 124.83 143.29 142.10
Media General Wholesale-Nondurable Index 100.00 93.09 136.29 150.68 162.41 153.17
<FN>
(a) Fiscal year ends 12/31. Assumes $100 invested on 1/1/90. SOURCE:MEDIA GENERAL
SECURITY OWNERSHIP OF CERTAIN
BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth as of February 1, 1995
information with respect to the only person who is known to be
the beneficial owner of more than 5 percent of the Common Stock of
the Company:
NAME AND ADDRESS AMOUNT AND NATURE PERCENT
OF BENEFICIAL OF BENEFICIAL OF
TITLE OF CLASS OWNER OWNERSHIP CLASS
-------------- ----------------- ----------------- --------
Common Stock Chemed Corporation 5,144,551 Direct 85%
Par Value Cincinnati, Ohio
$1 Per Share
The following table sets forth information as of February 1, 1995
with respect to the Common Stock of the Company and the capital
stock of Chemed beneficially owned by all nominees and directors
of the Company, each of the executive officers named in the
Summary Compensation Table, and its directors and executive
officers as a group:
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AMOUNT AND NATURE PERCENT
OF BENEFICIAL OF
NAME TITLE OF CLASS OWNERSHIP (1) CLASS (2)
-------------- --------------------- -------------------- ------------
E. L. Hutton National Common Stock 29,704 Direct
49,723 Option
3,194 Trustee
Chemed Capital Stock 68,634 Direct
65,500 Option
4,000 Trustee
P. C. Voet National Common Stock 28,235 Direct
60,723 Option
Chemed Capital Stock 23,549 Direct
9,250 Option
Trustee (4)
R. B. Garber National Common Stock 25,534 Direct
70,000 Option
Chemed Capital Stock 1,556 Direct
A. J. Bennert, Jr. National Common Stock 7,591 Direct
1,625 Option
Chemed Capital Stock 3,756 Direct
J. A. Cunningham National Common Stock 1,000 Direct
Chemed Capital Stock 1,000 Direct
500 Trustee
N. C. Dallob National Common Stock 4,453 Direct
1,845 Option
Chemed Capital Stock 5,790 Direct
1,000 Option
C. H. Erhart, Jr. National Common Stock 5,000 Direct
Chemed Capital Stock 1,500 Direct
N. Gilliatt National Common Stock 1,000 Direct
Chemed Capital Stock 3,400 Direct
J. P. Grace National Common Stock 400 Direct
1,500 Option
Chemed Capital Stock 200 Direct
W. J. Hoekman National Common Stock 1,000 Trustee (5)
Chemed Capital Stock 117,900 Trustee (5) 1.2%
T. C. Hutton National Common Stock 3,888 Direct
2,000 Option
3,194 Trustee
Chemed Capital Stock 14,738 Direct
4,250 Option
4,500 Trustee
W. Dwight Jackson National Common Stock 1,500 Direct
Chemed Capital Stock None
C. O. Lane National Common Stock 19,751 Direct
58,750 Option
Chemed Capital Stock 4,998 Direct
13,715 Trustee (3)
S. E. Laney National Common Stock 3,346 Direct
1,063 Option
Chemed Capital Stock 24,788 Direct
23,050 Option
Trustee (4)
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AMOUNT AND NATURE PERCENT
OF BENEFICIAL OF
NAME TITLE OF CLASS OWNERSHIP (1) CLASS (2)
-------------- ---------------------- -------------------- ------------
K. J. McNamara National Common Stock 3,367 Direct
2,500 Option
Chemed Capital Stock 11,745 Direct
4,250 Option
Trustee (4)
T. S. O'Toole National Common Stock 2,913 Direct
Chemed Capital Stock 11,381 Direct
5,050 Option
D. W. Robbins, Jr. National Common Stock 2,000 Trustee
Chemed Capital Stock 2,000 Trustee
G. H. Sander National Common Stock 9,413 Direct
8,000 Option
Chemed Capital Stock 6,954 Direct
1,525 Option
J. E. Schnee National Common Stock 500 Direct
Chemed Capital Stock None
K. F. Vuylsteke National Common Stock 11,322 Direct
2,438 Option
Chemed Capital Stock 609 Direct
Directors and National Common Stock 161,917 Direct 2.6%
Executive Officers 260,167 Option 4.1%
as a Group 6,194 Trustee
(20 Persons) Chemed Capital Stock 184,598 Direct 1.8%
113,875 Option 1.1%
197,446 Trustee (4) 1.9%
<FN>
FOOTNOTES TO STOCK OWNERSHIP TABLE
(1) Includes securities beneficially owned (a) by the named persons or group members, their spouses and their minor
children (including shares of Chemed capital stock and the Company's Common Stock allocated as at December 31,
1994 to the account of each named person or member of the group participating under Chemed's Savings and Investment
Plan, Chemed's Employee Stock Ownership Plans, and the Company's Thrift and Profit Sharing Plan), (b) by trusts and
custodianships for their benefit and (c) by trusts and other entities as to which the named person or group has or
shares the power to direct voting or investment of securities. Direct refers to securities in categories (a) and
(b) and "Trustee" to securities in category (c). Where securities would fall into both "Direct" and "Trustee"
classifications, they are included under "Trustee" only. "Option" refers to shares which the named person or
group has a right to acquire within 60 days from February 1, 1995. For purposes of determining the
Percent of Class, all shares subject to stock option, which were exercisable within 60 days of February 1, 1995,
were assumed to have been issued.
(2) Percent of Class under 1.0 percent is not shown.
(3) Mr. Charles Lane is a co-trustee of a trust holding 13,715 shares of Chemed capital stock, as to which he shares
voting and investment power.
(4) Messrs. T. Hutton, McNamara and Voet and Mrs. Laney are trustees of the Chemed Foundation which holds 54,821
shares of Chemed capital stock over which the trustees share both voting and investment power. This number is
included in the total number of "Trustee" shares held by the Directors and Executive Officers as a group, but is
not reflected in the respective holdings of the individual trustees.
(5) Comprises shares with respect to which Mr. Hoekman shares the power to direct the voting as a member of a
bank trust committee.
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COMPLIANCE WITH SECTION 16(A) OF THE SECURITIES EXCHANGE ACT OF 1934
Section 16(a) of the Securities Exchange Act of 1934 and the
regulations thereunder require the Company's officers and directors, and
persons who own more than 10 percent of a registered class of the Company's
equity securities, to file reports of ownership and changes in ownership with
the Securities and Exchange Commission ("SEC"). Officers, directors and greater
than 10 percent shareholders are required by SEC regulations to furnish the
Company with copies of all Section 16(a) forms they file.
Based on review of the copies of such forms furnished to the Company
and on the written representations of those who have not furnished such forms
that, with respect to 1994, no Forms 5 were required to be filed with the SEC,
the Company believes that during the period January 1, 1994 through December
31, 1994, the Company's officers, directors and greater than 10 percent
shareholders have complied with all Section 16(a) filing requirements.
CERTAIN ARRANGEMENTS AND TRANSACTIONS
TRANSACTIONS WITH CHEMED
CASH MANAGEMENT AND FINANCING. The Company deposits funds in excess of
its working capital requirements with Chemed for short-term investment and
Chemed may make short-term loans to the Company for working capital needs.
These unsecured demand deposits and short-term loans bear interest at fifty
basis points over U.S. Treasury Notes. At December 31, 1994, the Company had a
short-term loan from Chemed of $13,721,000, which represented the largest loan
balance during the year. The amount of interest expense paid to Chemed during
1994 for the combination of demand deposits and short-term loans was
$2,381,000.
Chemed loaned the Company $10 million on November 10, 1988 at an
interest rate of 10.67 percent, due in eleven equal installments beginning
November 1, 1993. The Company paid $1 million on this note November 1, 1994.
The Company borrowed $8 million from Chemed on January 1, 1993, executing a
promissory note at an interest rate of 7.66 percent, with interest payable
quarterly and the principal payable in full on January 1, 1998. The Company
used these funds to acquire Century and real estate in Tempe, Arizona. The
loans are evidenced by promissory notes which provide Chemed with a call at any
time in the event the debtor becomes insolvent; files, or consents to the
filing of, a petition for protection under any bankruptcy or insolvency law in
any jurisdiction; makes an assignment for the benefit of its creditors; or
assigns its obligations thereunder to any third party without Chemed's consent.
During 1993, non-union employees of the Company participated in
Chemed's ESOPs. The Company paid Chemed 75 percent of the average monthly
price of Chemed stock during 1994 for these shares to be allocated to employees'
accounts, or $1,346,000.
SERVICE ARRANGEMENTS. As a subsidiary of Chemed and pursuant to an
agreement with Chemed, the Company uses certain administrative, financial,
insurance, tax, audit, legal, managerial and other services provided by Chemed.
The Company pays fees for these services based on Chemed's costs. During 1994,
the Company paid Chemed $580,000 for such services.
LEASES. The Company has lease arrangements with Chemed for its
headquarters office facility in Cincinnati, Ohio and for a portion of its
transportation equipment. The rents paid by the Company to Chemed totaled
$220,000 in 1994 and represented Chemed's cost to provide such leases.
STATE AND LOCAL INCOME TAXES. Should any state or locality impose an
income or franchise tax on Chemed or the Company by combining or consolidating
all or part of the income, losses, properties, payrolls, sales or other
attributes of Chemed and the Company or one of Chemed's subsidiaries, Chemed
and the Company have agreed the Company will reimburse Chemed for the Company's
share of such franchise or income tax, or Chemed shall reimburse the Company
for Chemed's share of such franchise or income tax, as the case may be. The
amount to be reimbursed is equal to the tax that would have been required to be
paid had the Company or Chemed, as the case may be, filed a separate return
without the inclusion of any income, losses, properties, payrolls, sales or
other attributes of any related parent or subsidiary corporation.
ARRANGEMENTS AND TRANSACTIONS WITH MANAGEMENT. In January 1994, the
Company exercised separate options to purchase two parcels previously leased
from Messrs. Garber, C. Lane, T. Lane and other members of
13
15
their respective immediate families. The purchase price for each parcel was
substantially equal to its appraised value in November 1983. The price for one
of the parcels was $3,000,000, in which Mr. Garber had an interest of 21
percent and Mr. C. Lane had an interest of 10 percent. The price for the other
parcel was $275,000, in which both Mr. Garber and Mr. C. Lane each had an
interest of 25 percent.
PROPOSAL TO APPROVE AND ADOPT THE
1995 STOCK INCENTIVE PLAN
In view of the few remaining shares available for the grant of
additional stock awards or stock options under the previously adopted stock
incentive plans, the Board of Directors has approved, subject to stockholder
approval, the adoption of the 1995 Stock Incentive Plan (the "Plan") pursuant to
which 400,000 shares of the Company's Common Stock may be issued or transferred
to key employees as stock incentives. The full text of the proposed Plan is set
forth as Exhibit A to this Proxy Statement and the following discussion is
qualified in its entirety by reference to such text.
THE PLAN
The Plan will become effective as of the date it is adopted by the
stockholders of the Company, i.e., May 15, 1995. If it is not adopted by the
stockholders, the Plan will be of no force and effect. If it is adopted, no
stock options may be granted under the Plan after May 15, 2005. The Board of
Directors may terminate the Plan at any earlier time, but outstanding options
will continue to be exercisable until they expire in accordance with their
terms. The market value of the Common Stock as of March 20, 1995 was $13.125
per share.
The Plan authorizes the issuance or transfer of a maximum of 400,000
shares of Common Stock pursuant to stock incentives granted to key employees of
the Company and its subsidiaries under the Plan. For purposes of the Plan, a
"subsidiary" is a corporation or other form of business association of which
shares (or other ownership interests) having 50 percent or more of the voting
power are owned or controlled, directly or indirectly, by the Company and "key
employees" are employees of the Company or a subsidiary, including officers and
directors thereof, who in the opinion of the Incentive Committee (as defined
below) are deemed to have the capacity to contribute significantly to the
growth and successful operations of the Company or a subsidiary.
Stock incentives granted under the Plan may be in the form of options
to purchase Common Stock ("stock options") or in the form of awards of Common
Stock in payment of incentive compensation ("stock awards"), or a combination of
stock awards and stock options.
The Plan shall be administered by a Committee (the "Incentive
Committee") consisting of no fewer than three persons designated by, and
serving at the pleasure of, the Board of Directors of the Company.
The Incentive Committee designates the key employees of the Company and
its subsidiaries who might participate in the Plan and as to the form and terms
of the number of shares covered by each stock incentive granted thereunder. In
making such designation the Committee may consider an employee's present or
potential contribution to the success of the Company or any subsidiary and
other factors which it may deem relevant.
Under the Plan, a stock incentive in the form of a stock award will
consist of shares of Common Stock issued as incentive compensation earned or to
be earned by the employee. Shares subject to a stock award may be issued when
the award is granted or at a later date, with or without dividend equivalent
rights. A stock award shall be subject to such terms, conditions and
restrictions (including restrictions on the transfer of the shares issued
pursuant to the award) as the Incentive Committee shall designate.
Under the 1995 Plan, a stock incentive in the form of a stock option
will provide for the purchase of shares of Common Stock in the future at an
option price per share which will not be less than 100 percent of the fair
market value of the shares covered thereby on the date the stock option is
granted. Each option shall be exercisable in full or in part six months after
the date the option is granted, or may become exercisable in one or more
installments and at such time or times, as the Incentive Committee shall
determine or upon various circumstances which may result in a change of
control; provided, however, that in no event shall an option be exercisable
until six months after the date the option is granted. Unless otherwise provided
in the option, an option, to the extent it is
14
16
or becomes exercisable, may be exercised at any time in whole or in part until
the expiration or termination of the option. Any term or provision in any
outstanding option specifying when the option may be exercisable or that it be
exercisable in installments may be modified at any time during the life of the
option by the Incentive Committee, provided, however, no such modification of
an outstanding option shall, without the consent of the optionee, adversely
affect any option theretofore granted to him.
Upon the exercise of an option, the purchase price shall be paid in
cash or, if so provided in the option, in shares of Common Stock or in a
combination of cash and such shares. The Company may cancel all or a portion of
an option subject to exercise, and pay the holder cash or shares equal in value
to the excess of the fair market value of the shares subject to the portion of
the option so canceled over the option price of such shares. Options shall be
granted for such lawful consideration as the Incentive Committee shall
determine.
All stock options granted under the Plan will expire within ten years
from the date of grant. A stock option is not transferable or assignable by an
optionee otherwise than by will, by the laws of descent and distribution,
pursuant to a qualified domestic relations order or to certain family members,
if permitted under SEC Rule 16b-3 or any successor rule thereto, and each
option is exercisable, during his lifetime, only by him or by a permitted
transferee or assignee. Unexercised options terminate upon termination of
employment, except that if termination arises from a resignation with the
consent of the Incentive Committee, the options terminate three months after
such termination of employment, and except further that if an optionee ceases
to be an employee by reason of his death while employed, retirement or
disability, or if he should die within three months following his resignation
with the consent of the Incentive Committee, the options terminate fifteen
months after an optionee's termination of employment but may be exercised only
to the extent that they could have been exercised by the optionee, had he
lived, three months after he ceased to be an employee. A leave of absence for
military or governmental service or for other purposes, if approved by the
Incentive Committee, does not constitute a termination of employment, but no
options are exercisable during any such leave of absence.
Exercise of a stock option will be conditioned on an optionee's payment
in full of the purchase price for the shares, in cash or by the transfer to the
Company of shares of the Company's Common Stock at fair market value on the
date of transfer. An optionee shall not be considered a holder of the shares
subject to a stock option until actual delivery of a certificate representing
such shares is made by the Company.
None of the stock options granted under the Plan will be "restricted",
"qualified" or "incentive" stock options or options granted pursuant to an
employee stock purchase plan as the quoted terms are defined in Sections 422
through 424 of the Internal Revenue Code.
With respect to stock awards in Common Stock that are either
transferable or not subject to a substantial risk of forfeiture, the employee
must recognize ordinary income equal to the cash or the fair market value of
the Common Stock and the Company will be entitled to a deduction for the same
amount. With respect to stock awards that are settled in Common Stock that is
restricted as to transferability and subject to substantial risk of forfeiture,
the employee must recognize ordinary income equal to the fair market value of
the Common Stock at the first time the Common Stock becomes transferable or not
subject to a substantial risk of forfeiture, whatever occurs earlier, and the
Company will be entitled to a deduction for the same amount.
An optionee realizes no taxable income by reason of the grant of a
nonstatutory option. Subject to insider trading restrictions, upon exercise of
the option, an optionee realizes compensation taxable as ordinary income in the
amount of the excess of the fair market value of the stock over the option
price on the date of exercise. Upon the sale of stock acquired pursuant to the
exercise of an option, an optionee realizes either a capital gain or a capital
loss based upon the difference between his selling price and the fair market
value of the stock on the date of exercise. Such capital gain or loss, as the
case may be, will be either short term or long term depending on the period
elapsed between the date of exercise and the date of sale. In those instances
where the employee receives compensation taxable as ordinary income, the
Company or a subsidiary will generally be entitled to a Federal income tax
deduction in the amount of such compensation. An employee will not recognize
gain on previously owned shares of the Company's Common Stock if he exercises
an option and transfers such shares to the Company in payment of the option
price. Taxes payable by an optionee or awardee on exercise of an option or
removal of restrictions on an award may be paid in cash, surrender of shares,
or withholding of shares of Common Stock as the Incentive Committee shall
determine.
15
17
The Board of Directors, upon the recommendation of the Incentive
Committee, may amend the Plan subject, in the case of specified amendments,
to stockholder approval. The Plan may be discontinued at any time by the Board
of Directors. No amendment or discontinuance of the Plan shall, without the
consent of the employee, adversely affect any stock incentive held by him
under the Plan.
The Incentive Committee has determined that, contingent upon the
approval and adoption of the 1995 Plan by the Company's stockholders, the
presently determinable options that will be received by each of the following
under the 1995 Plan are as follows:
NEW PLAN BENEFITS
1995 STOCK INCENTIVE PLAN
NAME AND POSITION NUMBER OF UNITS(1)
----------------- ------------------
Paul C. Voet 40,000
President and CEO
Robert B. Garber --
Vice Chairman
Charles O. Lane --
Executive Vice President-
Marketing and Manufacturing
Kenneth F. Vuylsteke 20,000
Executive Vice President
Gary H. Sander 7,500
Vice President, Treasurer
and Chief Financial Officer
Executive Group 127,500
Non-Executive Director Group 18,000
Non-Executive Officer Employee 67,750
Group
<FN>
- ------------
(1) "Dollar Value" omitted as option price per share is fair market value on the date the option is granted, and there is
no presently ascertainable cash value to the options.
Otherwise, because the selection of stock incentives and the size
thereof is left to the Incentive Committee's discretion to be exercised from
time to time, no determination has or can be made as to prospective grants of
stock incentives under the 1995 Plan to any persons, or as to such grants which
would have been made had the 1995 Plan been in effective during 1994. The
proceeds of sale of Common Stock under the Plan will be used by the Company for
general corporate purposes.
In order to effect the approval and adoption of the Plan, the following
resolution will be presented to the Annual Meeting:
"RESOLVED THAT THE 1995 STOCK INCENTIVE PLAN SET FORTH AS EXHIBIT
A TO THE PROXY STATEMENT ACCOMPANYING THE NOTICE OF THE ANNUAL
MEETING OF THE STOCKHOLDERS OF NATIONAL SANITARY SUPPLY COMPANY
TO BE HELD MAY 15, 1995 BE AND THE SAME HEREBY IS APPROVED AND
ADOPTED."
The affirmative vote of the holders of a majority of the voting power
of the stockholders represented at the meeting will be necessary for the
adoption of the foregoing resolution. The approval and adoption of the Plan is
not a matter which is required to be submitted to a vote of the stockholders of
the Company. The reason for submitting such proposal to a vote of the
stockholders is to meet a condition of Rule 16b-3 of the Securities and
Exchange Commission which provides for an exemption from the operation of
Section 16(b) of the Securities
16
18
Exchange Act of 1934, as amended. Section 16(b) provides generally that profits
realized by directors and officers from any purchase and sale (or sale and
purchase) of the Company's Common Stock within a period of less than six months
are recoverable by the Company. Rule 16b-3 exempts from the application of
Section 16(b): (i) the acquisition, expiration, cancellation or surrender to
the Company of a stock option; (ii) the surrender or delivery to the Company of
shares of Common Stock as payment for the exercise of a stock option for shares
of Common Stock; and (iii) the acquisition upon the exercise of a stock option
of shares of Common Stock equal to the number of shares of Common Stock
surrendered or delivered to the Company as payment for the exercise of the
option. Management has not determined what course of action it intends to take
in the event of a negative vote on the proposal by stockholders.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE APPROVAL AND ADOPTION
OF THE PLAN.
RATIFICATION OF SELECTION OF INDEPENDENT ACCOUNTANTS
The Board of Directors has selected the firm of Price Waterhouse, LLP
as independent accountants for the Company and its consolidated subsidiaries
for the year 1995. This firm has acted as independent accountants for Chemed
since 1970 and for the Company since 1983. Although the submission of this
matter to the stockholders is not required by law or by the By-Laws of the
Company, the selection of Price Waterhouse will be submitted for ratification
at the Annual Meeting. The affirmative vote of the holders of a majority of the
voting power of the stockholders represented at the meeting will be necessary
to ratify the selection of Price Waterhouse as independent accountants for the
Company and its consolidated subsidiaries for the year 1995. If the selection
is not ratified at the meeting, the Board of Directors will reconsider its
selection of independent accountants.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR RATIFICATION.
It is expected that a representative of Price Waterhouse will be
present at the Company's Annual Meeting. Such representative shall have the
opportunity to make a statement if he so desires and shall be available to
respond to appropriate questions raised at the meeting.
STOCKHOLDER PROPOSALS
Any proposals by stockholders intended to be included in the proxy
materials for presentation at the 1996 Annual Meeting of Stockholders must be
in writing and received by the Secretary of the Company no later than December
6, 1995.
OTHER MATTERS
As of the date of this Proxy Statement, the management knows of no
other matters which will be presented for consideration at the Annual Meeting.
However, if any other business should come before the meeting, the persons
named in the enclosed proxy (or their substitutes) will have discretionary
authority to take such action as shall be in accordance with their best
judgment.
EXPENSES OF SOLICITATION
The expense of soliciting proxies in the accompanying form will be
borne by the Company. The Company will request banks, brokers and other persons
holding shares beneficially owned by others to send proxy materials to the
beneficial owners and to secure their voting instructions, if any. The Company
will reimburse such persons for their expenses in so doing. In addition to
solicitation by mail, officers and regular employees of the Company may
solicit, without extra remuneration, proxies personally, by telephone or by
telegram from some stockholders if such proxies are not promptly received. This
Proxy Statement and the accompanying Notice of Meeting are sent by order of the
Board of Directors.
Naomi C. Dallob
Secretary
April 6, 1995
17
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EXHIBIT A
NATIONAL SANITARY SUPPLY COMPANY
1995 STOCK INCENTIVE PLAN
1. PURPOSES: The purposes of this Plan are (a) to secure for the
Corporation the benefits of incentives inherent in ownership of Common Stock by
Key Employees, (b) to encourage Key Employees to increase their interest in the
future growth and prosperity of the Corporation and to stimulate and sustain
constructive and imaginative thinking by Key Employees, (c) to further the
identity of interest of those who hold positions of major responsibility in the
Corporation and its Subsidiaries with the interests of the Corporation's
stockholders, (d) to induce the employment or continued employment of Key
Employees and (e) to enable the Corporation to compete with other organizations
offering similar or other incentives in obtaining and retaining the services of
competent executives.
2. DEFINITIONS: Unless otherwise required by the context, the following
terms when used in this Plan shall have the meanings set forth in this section
2.
BOARD OF DIRECTORS: The Board of Directors of the Corporation.
COMMON STOCK: The Common Stock of the Corporation, par value $1.00 per
share, or such other class of shares or other securities as may be applicable
pursuant to the provisions of section 8.
CORPORATION: National Sanitary Supply Company, a Delaware corporation.
FAIR MARKET VALUE: As applied to any date, the last trading price of a
share of Common Stock on the principal stock exchange on which the Common Stock
is listed or, if it is not so listed, as reported by the National Association
of Securities Dealers Automated Quotation System on such date or, if no sales
were made on such date, on the next preceding date on which there were sales of
Common Stock; provided, however, that, if the Common Stock is not so listed or
quoted, Fair Market Value shall be determined in accordance with the method
approved by the Incentive Committee, and, provided further, if any of the
foregoing methods of determining Fair Market Value shall not be consistent with
the regulations of the Secretary of the Treasury or his delegate at the time
applicable to a Stock Incentive of the type involved, Fair Market Value in the
case of such Stock Incentive shall be determined in accordance with such
regulations and shall mean the value as so determined.
INCENTIVE COMMITTEE: The Incentive Committee designated to administer
this Plan pursuant to the provisions of section 10.
INCENTIVE COMPENSATION: Bonuses and extra and other compensation
payable in addition to a salary or other base amount, whether contingent or
discretionary or required to be paid pursuant to an agreement, resolution or
arrangement, and whether payable currently or on a deferred basis, in cash,
Common Stock or other property, awarded by the Corporation or a Subsidiary
prior or subsequent to the date of the approval and adoption of this Plan by
the stockholders of the Corporation.
KEY EMPLOYEE: An employee of the Corporation or of a Subsidiary who in
the opinion of the Incentive Committee can contribute significantly to the
growth and successful operations of the Corporation or a Subsidiary. The grant
of a Stock Incentive to an employee by the Incentive Committee shall be deemed
a determination by the Incentive Committee that such employee is a Key
Employee. For the purposes of this Plan, a director or officer of the
Corporation or of a Subsidiary shall be deemed an employee regardless of
whether or not such director or officer is on the payroll of, or otherwise paid
for services by, the Corporation or a Subsidiary.
OPTION: An option to purchase shares of Common Stock.
PERFORMANCE UNIT: A unit representing a share of Common Stock, subject
to a Stock Award, the issuance, transfer or retention of which is contingent,
in whole or in part, upon attainment of a specified performance
A-1
20
objective or objectives, including, without limitation, objectives determined
by reference to or changes in (a) the Fair Market Value, book value or earnings
per share of Common Stock, or (b) sales and revenues, income, profits and
losses, return on capital employed, or net worth of the Corporation (on a
consolidated or unconsolidated basis) or of any one or more of its groups,
divisions, Subsidiaries or departments, or (c) a combination of two or more of
the foregoing factors.
PLAN: The 1995 Stock Incentive Plan herein set forth as the same may
from time to time be amended.
STOCK AWARD: An issuance or transfer of shares of Common Stock at the
time the Stock Incentive is granted or as soon thereafter as practicable, or an
undertaking to issue or transfer such shares in the future, including, without
limitation, such an issuance, transfer or undertaking with respect to
Performance Units.
STOCK INCENTIVE: A stock incentive granted under this Plan in one of
the forms provided for in section 3.
SUBSIDIARY: A corporation or other form of business association of
which shares (or other ownership interests) having 50% or more of the voting
power are owned or controlled, directly or indirectly, by the Corporation.
3. GRANTS OF STOCK INCENTIVES:
(a) Subject to the provisions of this Plan, the Incentive Committee may
at any time, or from time to time, grant Stock Incentives under this Plan to,
and only to, Key Employees.
(b) Stock Incentives may be granted in the following forms:
(i) a Stock Award, or
(ii) an Option, or
(iii) a combination of a Stock Award and an Option.
4. STOCK SUBJECT TO THIS PLAN:
(a) Subject to the provisions of paragraph (c) and (d) of this section
4 and of section 8, the aggregate number of shares of Common Stock which may be
issued or transferred pursuant to Stock Incentives granted under this Plan
shall not exceed 400,000 shares.
(b) The maximum aggregate number of shares of Common Stock which may be
issued or transferred under the Plan to directors of the Corporation or of a
Subsidiary shall not exceed 350,000 shares.
(c) Authorized but unissued shares of Common Stock and shares of Common
Stock held in the treasury, whether acquired by the Corporation specifically
for use under this Plan or otherwise, may be used, as the Incentive Committee
may from time to time determine, for purposes of this Plan, provided, however,
that any shares acquired or held by the Corporation for the purposes of this
Plan shall, unless and until transferred to a Key Employee in accordance with
the terms and conditions of a Stock Incentive, be and at all times remain
treasury shares of the Corporation, irrespective of whether such shares are
entered in a special account for purposes of this Plan, and shall be available
for any corporate purpose.
(d) If any shares of Common Stock subject to a Stock Incentive shall
not be issued or transferred and shall cease to be issuable or transferable
because of the termination, in whole or in part, of such Stock Incentive or for
any other reason, or if any such shares shall, after issuance or transfer, be
reacquired by the Corporation or a Subsidiary because of an employee's failure
to comply with the terms and conditions of a Stock Incentive, the shares not so
issued or transferred, or the shares so reacquired by the Corporation or a
Subsidiary shall no longer be charged against any of the limitations provided
for in paragraphs (a) or (b) of this section 4 and may again be made subject to
Stock Incentives.
A-2
21
5. STOCK AWARDS: Stock Incentives in the form of Stock Awards shall be
subject to the following provisions:
(a) A Stock Award shall be granted only in payment of Incentive
Compensation that has been earned or as Incentive Compensation to be earned,
including, without limitation, Incentive Compensation awarded concurrently with
or prior to the grant of the Stock Award.
(b) For the purposes of this Plan, in determining the value of a Stock
Award, all shares of Common Stock subject to such Stock Award shall be valued
at not less than 100% of the Fair Market Value of such shares on the date such
Stock Award is granted, regardless of whether or when such shares are issued or
transferred to the Key Employee and whether or not such shares are subject to
restrictions which affect their value.
(c) Shares of Common Stock subject to a Stock Award may be issued or
transferred to the Key Employee at the time the Stock Award is granted, or at
any time subsequent thereto, or in installments from time to time, as the
Incentive Committee shall determine. In the event that any such issuance or
transfer shall not be made to the Key Employee at the time the Stock Award is
granted, the Incentive Committee may provide for payment to such Key Employee,
either in cash or in shares of Common Stock from time to time or at the time or
times such shares shall be issued or transferred to such Key Employee, of
amounts not exceeding the dividends which would have been payable to such Key
Employee in respect of such shares (as adjusted under section 8) if they had
been issued or transferred to such Key Employee at the time such Stock Award
was granted. Any amount payable in shares of Common Stock under the terms of a
Stock Award may, at the discretion of the Corporation, be paid in cash, on each
date on which delivery of shares would otherwise have been made, in an amount
equal to the Fair Market Value on such date of the shares which would otherwise
have been delivered.
(d) A Stock Award shall be subject to such terms and conditions,
including, without limitation, restrictions on sale or other disposition of the
Stock Award or of the shares issued or transferred pursuant to such Stock
Award, as the Incentive Committee shall determine; provided, however, that upon
the issuance or transfer of shares pursuant to a Stock Award, the recipient
shall, with respect to such shares, be and become a stockholder of the
Corporation fully entitled to receive dividends, to vote and to exercise all
other rights of a stockholder except to the extent otherwise provided in the
Stock Award. Each Stock Award shall be evidenced by a written instrument in
such form as the Incentive Committee shall determine, provided the Stock Award
is consistent with this Plan and incorporates it by reference.
6. OPTIONS: Stock Incentives in the form of Options shall be subject to
the following provisions:
(a) Upon the exercise of an Option, the purchase price shall be paid in
cash or, if so provided in the Option or in a resolution adopted by the
Incentive Committee (and subject to such terms and conditions as are specified
in the Option or by the Incentive Committee), in shares of Common Stock or in a
combination of cash and such shares. Shares of Common Stock thus delivered
shall be valued at their Fair Market Value on the date of exercise. Subject to
the provisions of section 8, the purchase price per share shall be not less
than 100% of the Fair Market Value of a share of Common Stock on the date the
Option is granted.
(b) Each Option shall be exercisable in full or in part six months
after the date the Option is granted, or may become exercisable in one or more
installments and at such time or times, as the Incentive Committee shall
determine. Unless otherwise provided in the Option, an Option, to the extent it
is or becomes exercisable, may be exercised at any time in whole or in part
until the expiration or termination of the Option. Subject to the first
sentence of this paragraph, any term or provision in any outstanding Option
specifying when the Option is exercisable or that it be exercisable in
installments may be modified at any time during the life of the Option by the
Incentive Committee, provided, however, no such modification of an outstanding
Option shall, without the consent of the optionee, adversely affect any Option
theretofore granted to him. Subject to the preceding provisions of this
paragraph, an Option will become immediately exercisable in full if at any time
during the term of the Option the Corporation obtains actual knowledge that any
of the following events has occurred, irrespective of the applicability of any
limitation on the number of shares then exercisable under the Option: (1) any
person within the meaning of Sections 13(d) and 14(d) of the Securities
Exchange Act of 1934 ("the 1934 Act"), other than Chemed Corporation or the
Corporation or any of its subsidiaries, has become the beneficial owner, within
the meaning of Rule 13d-3 under the 1934 Act, of 30 percent or more of the
combined voting power of the
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Corporation's then outstanding voting securities; (2) the expiration of a
tender offer or exchange offer, other than an offer by the Corporation or
Chemed Corporation, pursuant to which 20 percent or more of the shares of the
Corporation's Common Stock or Chemed Corporation's Capital Stock have been
purchased; (3) the stockholders of the Corporation or Chemed Corporation have
approved (i) an agreement to merge or consolidate with or into another
corporation and the Corporation or Chemed Corporation is not the surviving
corporation or (ii) an agreement to sell or otherwise dispose of all or
substantially all of the assets of Chemed Corporation or the Corporation
(including a plan of liquidation); or (4) during any period of two consecutive
years, individuals who at the beginning of such period constitute the Board of
Directors cease for any reason to constitute at least a majority thereof,
unless the nomination for the election by the Corporation's stockholders of
each new director was approved by a vote of at least one-half of the persons
who were directors at the beginning of the two-year period.
(c) Each Option shall be exercisable during the life of the optionee
only by him or any assignee or transferee prermitted by Section 6(f), and,
after his death, only by his estate or by a person who acquired the right to
exercise the Option pursuant to one of the provisions of Section 6(f). An
Option, to the extent that it shall not have been exercised, shall terminate
when the optionee ceases to be an employee of the Corporation or a Subsidiary,
unless he ceases to be an employee because of his resignation with the consent
of the Incentive Committee (which consent may be given before or after
resignation), or by reason of his death, incapacity or retirement under a
retirement plan of the Corporation or a Subsidiary. Except as provided in the
next sentence, if the optionee ceases to be an employee by reason of such
resignation, the Option shall terminate three months after he ceases to be an
employee. If the optionee ceases to be an employee by reason of such death,
incapacity or retirement, or if he should die during the three-month period
referred to in the preceding sentence, the Option shall terminate fifteen
months after he ceases to be an employee. Where an Option is exercised more
than three months after the optionee ceased to be an employee, the Option may
be exercised only to the extent it could have been exercised three months after
he ceased to be an employee. A leave of absence for military or governmental
service or for other purposes shall not, if approved by the Incentive
Committee, be deemed a termination of employment within the meaning of this
paragraph (c); provided, however, that an Option may not be exercised during
any such leave of absence. Notwithstanding the foregoing provisions of this
paragraph (c) or any other provision of this Plan, no Option shall be
exercisable after expiration of the term for which the Option was granted,
which shall in no event exceed ten years. Where an Option is granted for a term
of less than ten years, the Incentive Committee, may, at any time prior to the
expiration of the Option, extend its term for a period ending not later than
ten years from the date the Option was granted. Such an extension shall not be
deemed the grant of an Option under this Plan.
(d) Options shall be granted for such lawful consideration as the
Incentive Committee shall determine.
(e) Neither the Corporation nor any Subsidiary may directly or
indirectly lend any money to any person for the purpose of assisting him to
purchase or carry shares of Common Stock issued or transferred upon the
exercise of an Option.
(f) No Option nor any right thereunder may be assigned or transferred
by the optionee except:
(i) by will or the laws of descent and distribution;
(ii) pursuant to a qualified domestic relations order as defined
by the Internal Revenue Code of 1986, as amended, or by the Employee Retirement
Income Security Act of 1974, as amended, or the rules thereunder;
(iii) by an optionee who, at the time of the transfer, is not
subject to the provisions of Section 16 of the 1934 Act, provided such transfer
is to or for the benefit of (including but not limited to trusts for the
benefit of) the optionee's spouse or lineal descendants of the optionee's
parents; or
(iv) by an optionee who, at the time of the transfer, is subject
to the provisions of Section 16 of the 1934 Act, to the extent, if any, such
transfer would be permitted under Securities and Exchange Commission Rule 16b-3
or any successor rule thereto, as such rule or any successor rule thereto may
be in effect at the time of the transfer.
If so provided in the Option or if so authorized by the Incentive
Committee and subject to such terms and conditions as are specified in the
Option or by the Incentive Committee, the Corporation may, upon or without the
request of the holder of the Option and at any time or from time to time,
cancel all or a portion of the Option
A-4
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then subject to exercise and either (i) pay the holder an amount of money equal
to the excess, if any, of the Fair Market Value, at such time or times, of the
shares subject to the portion of the Option so cancelled over the aggregate
purchase price of such shares, or (ii) issue or transfer shares of Common Stock
to the holder with a Fair Market Value, at such time or times, equal to such
excess.
(g) Each Option shall be evidenced by a written instrument, which shall
contain such terms and conditions, and shall be in such form, as the Incentive
Committee may determine, provided the Option is consistent with this Plan and
incorporates it by reference. Notwithstanding the preceding sentence, an
Option, if so granted by the Incentive Committee, may include restrictions and
limitations in addition to those provided for in this Plan.
(h) Any federal, state or local withholding taxes payable by an
optionee or awardee upon the exercise of an Option or upon the removal of
restrictions of a Stock Award shall be paid in cash, or in such other form as
the Incentive Committee may authorize from time to time, including the
surrender of shares of Common Stock or the withholding of shares of Common
Stock to be issued to the optionee or awardee. All such shares so surrendered
or withheld shall be valued at Fair Market Value on the date such are
surrendered to the Corporation or authorized to be withheld.
7. COMBINATIONS OF STOCK AWARDS AND OPTIONS: Stock Incentives authorized
by paragraph (b)(iii) of section 3 in the form of combinations of Stock Awards
and Options shall be subject to the following provisions:
(a) A Stock Incentive may be a combination of any form of Stock Award
with any form of Option; provided, however, that the terms and conditions of
such Stock Incentive pertaining to a Stock Award are consistent with section 5
and the terms and conditions of such Stock Incentive pertaining to an Option
are consistent with section 6.
(b) Such combination Stock Incentive shall be subject to such other
terms and conditions as the Incentive Committee may determine, including,
without limitation, a provision terminating in whole or in part a portion
thereof upon the exercise in whole or in part of another portion thereof. Such
combination Stock Incentive shall be evidenced by a written instrument in such
form as the Incentive Committee shall determine, provided it is consistent with
this Plan and incorporates it by reference.
8. ADJUSTMENT PROVISIONS: In the event that any recapitalization, or
reclassification, split-up or consolidation of shares of Common Stock shall be
effected, or the outstanding shares of Common Stock are, in connection with a
merger or consolidation of the Corporation or a sale by the Corporation of all
or a part of its assets exchanged for a different number or class of shares of
stock or other securities of the Corporation or for shares of the stock or
other securities of any other corporation, or a record date for determination
of holders of Common Stock entitled to receive a dividend payable in Common
Stock shall occur (a) the number and class of shares or other securities that
may be issued or transferred pursuant to Stock Incentives, (b) the number and
class of shares or other securities which have not been issued or transferred
under outstanding Stock Incentives, (c) the purchase price to be paid per share
or other security under outstanding Options, and (d) the price to be paid per
share or other security by the Corporation or a Subsidiary for shares or other
securities issued or transferred pursuant to Stock Incentives which are subject
to a right of the Corporation or a Subsidiary to reacquire such shares or other
securities, shall in each case be equitably adjusted.
9. TERM: This Plan shall be deemed adopted and shall become effective
on the date it is approved and adopted by the stockholders of the Corporation.
No Stock Incentives shall be granted under this Plan after May 15, 2005.
10. ADMINISTRATION:
(a) The Plan shall be administered by the Incentive Committee, which
shall consist of no fewer than three persons designated by the Board of
Directors. Grants of Stock Incentives may be made by the Incentive Committee
either in or without consultation with employees, but, anything in this Plan to
the contrary notwithstanding, the Incentive Committee shall have full authority
to act in the matter of selection of all Key Employees and in determining the
number of Stock Incentives to be granted to them.
A-5
24
(b) The Incentive Committee may establish such rules and regulations,
not inconsistent with the provisions of this Plan, as it deems necessary to
determine eligibility to participate in this Plan and for the proper
administration of this Plan, and may amend or revoke any rule or regulation so
established. The Incentive Committee may make such determinations and
interpretations under or in connection with this Plan as it deems necessary or
advisable. All such rules, regulations, determinations and interpretations
shall be binding and conclusive upon the Corporation, its Subsidiaries, its
stockholders and all employees, and upon their respective legal
representatives, beneficiaries, successors and assigns and upon all other
persons claiming under or through any of them.
(c) Members of the Board of Directors and members of the Incentive
Committee acting under this Plan shall be fully protected in relying in good
faith upon the advice of counsel and shall incur no liability except for gross
negligence or willful misconduct in the performance of their duties.
11. GENERAL PROVISIONS:
(a) Nothing in this Plan nor in any instrument executed pursuant hereto
shall confer upon any employee any right to continue in the employ of the
Corporation or a Subsidiary, or shall affect the right of the Corporation or of
a Subsidiary to terminate the employment of any employee with or without cause.
(b) No shares of Common Stock shall be issued or transferred pursuant
to a Stock Incentive unless and until all legal requirements applicable to the
issuance or transfer of such shares, in the opinion of counsel to the
Corporation, have been complied with. In connection with any such issuance or
transfer the person acquiring the shares shall, if requested by the
Corporation, give assurances, satisfactory to counsel to the Corporation, that
the shares are being acquired for investment and not with a view to resale or
distribution thereof and assurances in respect of such other matters as the
Corporation or a Subsidiary may deem desirable to assure compliance with all
applicable legal requirements.
(c) No employee (individually or as a member of a group), and no
beneficiary or other person claiming under or through him, shall have any
right, title or interest in or to any shares of Common Stock allocated or
reserved for the purposes of this Plan or subject to any Stock Incentive except
as to such shares of Common Stock, if any, as shall have been issued or
transferred to him.
(d) The Corporation or a Subsidiary may, with the approval of the
Incentive Committee, enter into an agreement or other commitment to grant a
Stock Incentive in the future to a person who is or will be a Key Employee at
the time of grant, and, notwithstanding any other provision of this Plan, any
such agreement or commitment shall not be deemed the grant of a Stock Incentive
until the date on which the Company takes action to implement such agreement or
commitment.
(e) In the case of a grant of a Stock Incentive to an employee of a
Subsidiary, such grant may, if the Incentive Committee so directs, be
implemented by the Corporation issuing or transferring the shares, if any,
covered by the Stock Incentive to the Subsidiary, for such lawful consideration
as the Incentive Committee may specify, upon the condition or understanding
that the Subsidiary will transfer the shares to the employee in accordance with
the terms of the Stock Incentive specified by the Incentive Committee pursuant
to the provisions of this Plan. Notwithstanding any other provision hereof,
such Stock Incentive may be issued by and in the name of the Subsidiary and
shall be deemed granted on the date it is approved by the Incentive Committee,
on the date it is delivered by the Subsidiary or on such other date between
said two dates, as the Incentive Committee shall specify.
(f) The Corporation or a Subsidiary may make such provisions as it may
deem appropriate for the withholding of any taxes which the Corporation or a
Subsidiary determines it is required to withhold in connection with any Stock
Incentive.
(g) Nothing in this Plan is intended to be a substitute for, or shall
preclude or limit the establishment or continuation of, any other plan,
practice or arrangement for the payment of compensation or fringe benefits to
employees generally, or to any class or group of employees, which the
Corporation or any Subsidiary or other affiliate now has or may hereafter
lawfully put into effect, including, without limitation, any retirement,
pension, group insurance, stock purchase, stock bonus or stock option plan.
A-6
25
12. AMENDMENTS AND DISCONTINUANCE:
(a) This Plan may be amended by the Board of Directors upon the
recommendation of the Incentive Committee, provided that, without the approval
of the stockholders of the Corporation, no amendment shall be made which (i)
increases the aggregate number of shares of Common Stock that may be issued or
transferred pursuant to Stock Incentives as provided in paragraph (a) of
section 4, (ii) increases the maximum aggregate number of shares of Common
Stock that may be issued or transferred under the Plan to directors of the
Corporation or of a Subsidiary as provided in paragraph (b) of section 4, (iii)
withdraws the administration of this Plan from the Incentive Committee, (iv)
permits any person who is not at the time a Key Employee of the Corporation or
of a Subsidiary to be granted a Stock Incentive, (v) permits any Option to be
exercised more than ten years after the date it is granted, (vi) amends section
9 to extend the date set forth therein or (vii) amends this section 12.
(b) Notwithstanding paragraph (a) of this section 12, the Board of
Directors may amend the Plan to take into account changes in applicable
securities laws, federal income tax laws and other applicable laws. Should the
provisions of Rule 16b-3, or any successor rule, under the Securities Exchange
Act of 1934 be amended, the Board of Directors may amend the Plan in accordance
therewith.
(c) The Board of Directors may by resolution adopted by a majority of
the entire Board of Directors discontinue this Plan.
(d) No amendment or discontinuance of this Plan by the Board of
Directors or the stockholders of the Corporation shall, without the consent of
the employee, adversely affect any Stock Incentive theretofore granted to him.
A-7
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NATIONAL SANITARY SUPPLY COMPANY
2900 Chemed Center PLEASE MARK, SIGN, DATE AND
255 East Fifth Street RETURN PROXY CARD PROMPTLY USING
Cincinnati, Ohio 45202 THE ENCLOSED ENVELOPE.
________________________________________________________________________________
P THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS FOR THE ANNUAL
MEETING OF STOCKHOLDERS, MAY 15, 1995.
R
The undersigned hereby appoints E. L. Hutton and P. C. Voet as Proxies,
O both with the power to appoint a substitute, and hereby authorizes
them to represent and to vote, as designated below, all of the shares of
X stock of National Sanitary Supply Company held of record by the
undersigned on March 20, 1995 at the Annual Meeting of Stockholders to be
Y held on May 15, 1995, or at any adjournment thereof.
(Continued and to be signed on reverse side)
(1) Election of Directors:
FOR FOR WITHHOLD Edward L. Hutton, Paul C. Voet, Robert B. Garber, Arthur J. Bennert, Jr.,
all nominees ALL James A. Cunningham, Naomi C. Dallob, Charles H. Erhart, Jr.,
nominees listed AUTHORITY Neal Gilliatt, J. Peter Grace, Will J. Hoekman,
listed EXCEPT those to vote in Thomas C. Hutton, W. Dwight Jackson, Charles O. Lane,
whose names I the election Sandra E. Laney, Kevin J. McNamara, Timothy S. O'Toole,
have stricken of directors D. Walter Robbins, Jr., Gary H. Sander, Jerome E. Schnee, Kenneth F.
Vuylsteke
/ / / / / /
(2) Ratifying the selection of (4) In their discretion, the Proxies are
independent accountants. authorized to vote upon such other business
as may properly come before the meeting.
FOR AGAINST ABSTAIN
/ / / / / /
(3) Approving and adopting 1995 Stock IF NO CHOICE IS SPECIFIED, THIS PROXY WILL
Incentive Plan. BE VOTED FOR PROPOSALS (1), (2) AND (3).
DATED: , 1995
-------------------------------
(Be sure to date Proxy)
FOR AGAINST ABSTAIN SIGNED:
/ / / / / / ------------------------------------
---------------------------------------------
(Please sign exactly as names appear at left)
When signed on behalf of a corporation,
partnership, estate, trust, or other
shareholder, state your title or capacity or
otherwise indicate that you are authorized
to sign.
-------------------------------------------
PLEASE MARK INSIDE BLUE BOXES SO THAT DATA
PROCESSING EQUIPMENT WILL RECORD YOUR VOTES
-------------------------------------------