Section 240.14a-101 Schedule 14A.
Information required in proxy statement.
Schedule 14A Information
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934
(Amendment No. )
Filed by the Registrant [X]
Filed by a party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only (as permitted
by Rule 14a-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Section 240.14a-11(c) or Section
240.14a-12
REX STORES CORPORATION
..................................................................
(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)(1)
and 0-11
(1) Title of each class of securities to which transaction
applies:
............................................................
(2) Aggregate number of securities to which transaction
applies:
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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):
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which the offsetting fee was paid previously. Identify the
previous filing by registration statement number, or the
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[REX STORES LOGO]
REX STORES CORPORATION
2875 NEEDMORE ROAD
DAYTON, OHIO 45414
-------------------
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON JUNE 1, 2006
The Annual Meeting of Shareholders of REX Stores Corporation will be held at
the Dayton Racquet Club, Kettering Tower, Dayton, Ohio on Thursday, June 1,
2006, at 2:00 p.m., for the following purposes:
1. Election of seven members to the Board of Directors to serve until
the next Annual Meeting of Shareholders and until their respective
successors are elected and qualified.
2. Transaction of such other business as may properly come before the
Annual Meeting or any adjournment thereof.
Only shareholders of record at the close of business on April 20, 2006 will
be entitled to notice of and to vote at the Annual Meeting.
All shareholders are cordially invited to attend the Annual Meeting in
person.
By Order of the Board of Directors
EDWARD M. KRESS
EDWARD M. KRESS
Secretary
Dayton, Ohio
April 27, 2006
WHETHER OR NOT YOU PLAN TO ATTEND THE MEETING, PLEASE MARK, DATE,
SIGN AND PROMPTLY RETURN THE ENCLOSED PROXY IN THE ENVELOPE
PROVIDED.
REX STORES CORPORATION
2875 NEEDMORE ROAD
DAYTON, OHIO 45414
--------------------------
PROXY STATEMENT
--------------------------
MAILING DATE
APRIL 27, 2006
GENERAL INFORMATION
This Proxy Statement is furnished in connection with the solicitation of
proxies by the Board of Directors of REX Stores Corporation, a Delaware
corporation (the 'Company'), for use for the purposes set forth herein at its
Annual Meeting of Shareholders to be held on June 1, 2006 and any adjournments
thereof. All properly executed proxies will be voted as directed by the
shareholder on the proxy card. If no direction is given, proxies will be voted
in accordance with the Board of Directors' recommendations and, in the
discretion of the proxy holders, in the transaction of such other business as
may properly come before the Annual Meeting and any adjournments thereof. Any
proxy may be revoked by a shareholder by delivering written notice of revocation
to the Company or in person at the Annual Meeting at any time prior to the
voting thereof.
The Company has one class of stock outstanding, namely Common Stock, $.01
par value, of which there were 10,220,429 shares outstanding as of April 20,
2006. Only holders of Common Stock whose names appeared of record on the books
of the Company at the close of business on April 20, 2006 are entitled to notice
of and to vote at the Annual Meeting. Each shareholder is entitled to one vote
per share.
A majority of the outstanding shares of Common Stock will constitute a
quorum at the Annual Meeting. Abstentions and broker non-votes are counted for
purposes of determining the presence or absence of a quorum. Directors are
elected by a plurality of the votes cast by the holders of Common Stock at a
meeting at which a quorum is present. Abstentions and broker non-votes will not
be counted toward a nominee's achievement of a plurality and thus will have no
effect. A broker non-vote occurs when a broker submits a proxy with respect to
shares held in a fiduciary capacity (or 'street name') that indicates the broker
does not have discretionary authority to vote the shares on a particular matter.
Brokers normally have discretion to vote shares held in street name on 'routine'
matters, such as election of directors, but not on non-routine matters such as
approval of stock plans.
FISCAL YEAR
All references in this Proxy Statement to a particular fiscal year are to
the Company's fiscal year ended January 31. For example, 'fiscal 2005' means the
period February 1, 2005 to January 31, 2006.
ELECTION OF DIRECTORS
Seven directors are to be elected at the Annual Meeting to hold office until
the next Annual Meeting of Shareholders and until their successors are elected
and qualified. Unless otherwise directed, it is the intention of the persons
named in the accompanying proxy to vote each proxy for the election of the
nominees listed below. All nominees are presently directors of the Company.
If at the time of the Annual Meeting any nominee is unable or declines to
serve, the proxy holders will vote for the election of such substitute nominee
as the Board of Directors may recommend. The Company and the Board of Directors
have no reason to believe that any substitute nominee will be required.
Set forth below is certain information with respect to the nominees for
director.
STUART A. ROSE, 51, has been the Chairman of the Board and Chief Executive
Officer of the Company since its incorporation in 1984 as a holding company to
succeed to the ownership of Rex Radio and Television, Inc., Kelly & Cohen
Appliances, Inc. and Stereo Town, Inc. Prior to 1984, Mr. Rose was Chairman of
the Board and Chief Executive Officer of Rex Radio and Television, Inc., which
he founded in 1980 to acquire the stock of a corporation which operated four
retail stores.
LAWRENCE TOMCHIN, 78, retired as the President and Chief Operating Officer
of the Company in 2004, a position he held since 1990, and remained a part-time
employee of, and consultant to, the Company until January 31, 2006. From 1984 to
1990, he was the Executive Vice President and Chief Operating Officer of the
Company. Mr. Tomchin has been a director since 1984. Mr. Tomchin was Vice
President and General Manager of the corporation which was acquired by Rex Radio
and Television, Inc. in 1980 and served as Executive Vice President of Rex Radio
and Television, Inc. after the acquisition.
ROBERT DAVIDOFF, 79, has been a director since 1984. Mr. Davidoff has been a
Managing Director of Carl Marks & Co., Inc., an investment banking firm, since
1990, the general partner of CMNY Capital II, L.P., a venture capital affiliate
of Carl Marks & Co., since 1989, and is Chairman and Chief Investment Officer of
CM Capital Corporation, the firm's leveraged buyout affiliate. Mr. Davidoff is
also a director of Hubco Exploration, Inc., Marisa Christina, Inc. and Access
Integrated Technologies, Inc.
EDWARD M. KRESS, 56, has been the Secretary of the Company since 1984 and a
director since 1985. Mr. Kress has been a partner of the law firm of Chernesky,
Heyman & Kress P.L.L., counsel for the Company, since 1988. Mr. Kress has
practiced law in Dayton, Ohio since 1974.
LEE FISHER, 54, has been a director since 1996. Mr. Fisher is a Democratic
candidate for Lt. Governor of Ohio and served as the President and Chief
Executive Officer of the Center for Families and Children, a private nonprofit
human services organization, from 1999 to March 2006. Mr. Fisher was a partner
of the law firm of Hahn Loeser & Parks LLP from 1995 to 1999, served as Ohio
Attorney General from 1991 to 1995, State Senator, Ohio General Assembly, from
1983 to 1991, and State Representative, Ohio General Assembly, from 1981 to
1983. Mr. Fisher practiced law with Hahn Loeser & Parks from 1978 to 1991.
CHARLES A. ELCAN, 42, has been a director since 2003. Mr. Elcan became
Executive Vice President -- Medical Office Properties of Health Care Property
Investors, Inc. (HCP), a real estate investment trust specializing in health
care related real estate, in October 2003. Prior to that date, he served as the
Chief Executive Officer and President of MedCap Properties, LLC, a real estate
company located in Nashville, Tennessee that owned, operated and developed real
estate in the healthcare field,
2
which HCP acquired in October 2003. From 1992 to 1997, Mr. Elcan was a founder
and investor in Behavioral Healthcare Corporation (now Ardent Health Services
LLC), a healthcare company that owns and operates psychiatric and acute care
hospitals.
DAVID S. HARRIS, 46, has been a director since 2004. Mr. Harris serves as a
Managing Director of Tri-Artisan Partners, LLC, a private merchant banking firm
engaged in investment banking and principal investment activities. From
May 2001 to December 2001, Mr. Harris served as a Managing Director in the
investment banking division of ABN Amro Securities LLC (ABN). From 1997 to
May 2001, Mr. Harris served as a Managing Director and Sector Head of the
Retail, Consumer and Leisure Group of ING Barings LLC (ING). The investment
banking operations of ING were acquired by ABN in May 2001. From 1986 to 1997
Mr. Harris served in various capacities as a member of the investment banking
group of Furman Selz LLC. Furman Selz was acquired by ING in 1997. Mr. Harris is
also a director of Steiner Leisure Limited.
BOARD OF DIRECTORS
The Board of Directors consists of seven directors. The Board has determined
that four of the seven directors, Robert Davidoff, Lee Fisher, Charles A. Elcan
and David S. Harris, are independent within the meaning of Section 303A.02 of
the New York Stock Exchange ('NYSE') Listed Company Manual.
To be considered independent, the Board must determine that the director has
no material relationship with the Company, either directly or as a partner,
shareholder or officer of an organization that has a relationship with the
Company, including commercial, industrial, banking, consulting, legal,
accounting, charitable and family relationships, among others. The Board has
established the following guidelines, consistent with Section 303A.02 of the
NYSE listing standards, to assist it in determining independence of directors.
A director who is an employee, or whose immediate family member is an
executive officer, of the Company is not independent until three years
after the end of such employment relationship.
A director who receives, or whose immediate family member receives, more
than $100,000 during any 12-month period in direct compensation from the
Company, other than director and committee fees and pension or other forms
of deferred compensation for prior service (provided such compensation is
not contingent in any way on continued service), is not independent until
three years after he or she ceases to receive more than $100,000 during
any 12-month period in such compensation. (Compensation received by an
immediate family member for service as a non-executive employee need not
be considered in determining independence under this test.)
A director who is a partner or employee, or whose immediate family member
is a partner, or an employee participating in the audit, assurance or tax
compliance (but not tax planning) practice, of the Company's internal or
external auditor, or a director or immediate family member who was within
the last three years a partner or employee of such a firm and personally
worked on the Company's audit, is not independent.
A director who is employed, or whose immediate family member is employed,
as an executive officer of another company where any of the Company's
present executives serve on that company's compensation committee is not
'independent' until three years after the end of such service or the
employment relationship.
3
A director who is an employee, or whose immediate family member is an
executive officer, of a company that makes payments to, or receives
payments from, the Company for property or services in an amount which, in
any single fiscal year, exceeds the greater of $1 million, or 2% of such
other company's consolidated gross revenues, is not 'independent' until
three years after falling below such threshold.
Messrs. Davidoff, Fisher and Harris have no relationships with the Company
other than being a director. Mr. Elcan has only an indirect, immaterial
relationship with the Company. Elcan & Associates, Inc., a firm owned by Mr.
Elcan's brother, provides real estate brokerage services to the Company and has
acted as a finder in connection with the Company's investments in synthetic fuel
limited partnerships and facilities. Because Mr. Elcan has no financial interest
or involvement in Elcan & Associates, nor any involvement in the Company's
business activities with Elcan & Associates, and the amount of the Company's
annual payments to Elcan & Associates falls within the Company's director
independence guidelines, the Board has determined that the relationship is not a
material relationship affecting Mr. Elcan's independence.
The Board of Directors held two meetings and took action by unanimous
written consent four times during the fiscal year ended January 31, 2006. The
average attendance by incumbent directors at Board and Board Committee meetings
was 97%.
Directors are invited and encouraged to attend the Company's annual meeting
of shareholders. All directors attended the 2005 Annual Meeting.
The non-management directors meet at regularly scheduled executive sessions
without management. The presiding director for each such executive session is
rotated among the chairs of the independent Board committees.
BOARD COMMITTEES
The Board of Directors has four standing committees: the Audit Committee,
the Compensation Committee, the Nominating/Corporate Governance Committee and
the Executive Committee.
Audit Committee. The Audit Committee assists Board oversight of the
integrity of the financial statements of the Company, the Company's compliance
with legal and regulatory requirements, the independent accountants'
qualifications and independence, and the performance of the Company's internal
audit function and independent accountants. The Audit Committee is directly
responsible for the appointment, retention and oversight of the work of the
Company's independent accountants. The Audit Committee acts pursuant to a
written charter. The members of the Audit Committee are Messrs. Harris
(Chairman), Davidoff, Fisher and Elcan. All members of the Audit Committee are
independent within the meaning of applicable NYSE listing standards and rules of
the Securities and Exchange Commission ('SEC'). The Board has determined that
Mr. Harris and Mr. Davidoff are each an audit committee financial expert as
defined by applicable SEC rules and that all members of the Audit Committee are
financially literate within the meaning of NYSE listing standards. The Audit
Committee met ten times and took action by unanimous written consent once during
fiscal 2005.
Compensation Committee. The Compensation Committee has direct responsibility
to review and approve CEO compensation, makes recommendations to the Board with
respect to non-CEO compensation and compensation plans, and administers the
Company's stock option plans. The Compensation Committee acts pursuant to a
written charter. The members of the Compensation Committee are Messrs. Davidoff
(Chairman), Fisher, Elcan and Harris. All members of the
4
Compensation Committee are independent within the meaning of applicable NYSE
listing standards. The Compensation Committee met three times and took action by
unanimous written consent once during fiscal 2005.
Nominating/Corporate Governance Committee. The Nominating/Corporate
Governance Committee identifies individuals qualified to become Board members
consistent with criteria approved by the Board, recommends for the Board's
selection a slate of director nominees for election to the Board at the annual
meeting of shareholders, develops and recommends to the Board the Corporate
Governance Guidelines applicable to the Company, and oversees the evaluation of
the Board and management. The Nominating/Corporate Governance Committee acts
pursuant to a written charter. The members of the Nominating/Corporate
Governance Committee are Messrs. Fisher (Chairman), Davidoff, Elcan and Harris.
All members of the Nominating/Corporate Governance Committee are independent
within the meaning of applicable NYSE listing standards. The
Nominating/Corporate Governance Committee took action by unanimous written
consent once during fiscal 2005.
The Board seeks director candidates who possess the background, skills and
expertise to make a significant contribution to the Board, the Company and
shareholders. In identifying and evaluating director candidates, the
Nominating/Corporate Governance Committee may consider a number of attributes,
including experience, skills, judgment, accountability and integrity, financial
literacy, time, industry knowledge, networking/contacts, leadership,
independence from management and other factors it deems relevant. The
Nominating/Corporate Governance Committee reviews the desired experience, mix of
skills and other qualities to assure appropriate Board composition, taking into
account the current directors and specific needs of the Company and the Board.
The Nominating/Corporate Governance Committee may solicit advice from the CEO
and other members of the Board.
The Nominating/Corporate Governance Committee will consider director
candidates recommended by the Company's shareholders. Shareholders must submit
the name of a proposed shareholder candidate to the Nominating/Corporate
Governance Committee at the Company's corporate offices by the date specified
under 'Shareholder Proposals.'
Executive Committee. The Executive Committee is empowered to exercise all of
the powers and authority of the Board of Directors between meetings of the
Board, other than the power to fill vacancies on the Board or on any Board
committee and the power to declare dividends. The members of the Executive
Committee are Messrs. Rose and Tomchin. The Executive Committee met informally
throughout the year and took formal action by unanimous written consent seven
times during fiscal 2005.
CODE OF ETHICS, CORPORATE GOVERNANCE GUIDELINES AND COMMITTEE CHARTERS
The Company has adopted a Code of Business Conduct and Ethics applicable to
its employees, officers and directors. A copy of the Code of Business Conduct
and Ethics has been filed as an exhibit to the Company's Annual Report on Form
10-K for the year ended January 31, 2004 and is posted on the Company's website
www.rextv.com.
The Company has adopted a set of Corporate Governance Guidelines addressing
director qualification standards, director responsibilities, director access to
management and independent advisors, director compensation and other matters. A
copy of the Corporate Governance Guidelines is posted on the Company's website
www.rextv.com.
5
The charters of the Audit Committee, Compensation Committee and
Nominating/Corporate Governance Committee are posted on the Company's website
www.rextv.com.
Copies of the Code of Business Conduct and Ethics, Corporate Governance
Guidelines and the charters of Audit Committee, Compensation Committee and
Nominating/Corporate Governance Committee are available in print to shareholders
by contacting Douglas L. Bruggeman, Vice President -- Finance, REX Stores
Corporation at (937) 276-3931.
PROCEDURES FOR CONTACTING DIRECTORS
Shareholders may communicate with the Board, the non-management directors as
a group, or a specific director by writing to REX Stores Corporation, 2875
Needmore Road, Dayton, Ohio 45414, Attention: Board of Directors, Non-Management
Directors or [Name of Specific Director]. All communications will be forwarded
as soon as practicable to the specific director, or if addressed to the
Non-Management Directors to the Chairman of the Audit Committee, or, if
addressed to the Board, to the Chairman of the Board or other director
designated by the Board to receive such communications.
DIRECTOR COMPENSATION
Directors who are not officers or employees of the Company are paid an
annual retainer of $20,000 per year (plus reasonable travel expenses) and a
$5,000 per year retainer if they serve on one or more Board committees. The
Chairman of the Audit Committee is paid an additional $5,000 per year retainer.
Nonemployee directors are eligible to receive grants of stock options under
the Company's 1999 Omnibus Stock Incentive Plan. Under the Plan, on the date of
each annual meeting of the Company's shareholders, each nonemployee director is
awarded a nonqualified stock option to purchase a number of shares of Common
Stock such that the exercise price of the option multiplied by the number of
shares subject to the option is as near as possible to $100,000, but in no event
more than 10,000 shares. The exercise price of each nonqualified option is the
fair market value of the Common Stock on the date of grant. The options are
exercisable in five equal annual installments commencing on the first
anniversary of the date of grant and expire ten years from the date of grant.
Directors who are not officers or employees of the Company are paid an
additional $20,000 per year for each year such director waives his right to the
grant of stock options pursuant to the 1999 Omnibus Plan. The non-employee
directors waived their right to the grant of stock options under the Plan for
fiscal 2005.
AUDIT COMMITTEE REPORT
The Audit Committee assists Board oversight of the integrity of the
financial statements of the Company. The Audit Committee is comprised of
nonemployee directors who meet the independence and financial experience
requirements of applicable NYSE listing standards and SEC rules. The Audit
Committee operates under a written charter.
Management has the primary responsibility for the financial statements and
the reporting process, including the Company's systems of internal controls. In
fulfilling its oversight responsibilities, the Committee reviewed the audited
financial statements in the Annual Report on Form 10-K with management,
including a discussion of the quality and the acceptability of the Company's
financial reporting and controls.
6
The Committee reviewed with the independent auditors, who are responsible
for expressing an opinion on the conformity of those audited financial
statements with generally accepted accounting principles, their judgments as to
the quality and the acceptability of the Company's financial reporting and such
other matters as are required to be discussed with the Committee under generally
accepted auditing standards. In addition, the Committee has discussed with the
independent auditors the auditors' independence from management and the Company,
including the matters in the auditors' written disclosures required by the
Independence Standards Board.
The Committee also discussed with the Company's independent auditors the
overall scope and plans for their respective audits. The Committee meets
periodically with the independent auditors, with and without management present,
to discuss the results of their examinations, their evaluations of the Company's
internal controls, and the overall quality of the Company's financial reporting.
In reliance on the reviews and discussions referred to above, the Committee
recommended to the Board of Directors that the audited financial statements be
included in the Company's Annual Report on Form 10-K for the fiscal year ended
January 31, 2006 for filing with the Securities and Exchange Commission.
AUDIT COMMITTEE
DAVID S. HARRIS, Chairman
ROBERT DAVIDOFF
LEE FISHER
CHARLES A. ELCAN
7
EXECUTIVE COMPENSATION
SUMMARY COMPENSATION TABLE
The following table sets forth the compensation awarded to, earned by or
paid to the Chief Executive Officer, and to each of the other executive officers
of the Company whose total annual salary and bonus exceeded $100,000, for
services rendered in all capacities to the Company and its subsidiaries for each
of the last three fiscal years.
LONG-TERM
COMPENSATION
------------
AWARDS
ANNUAL COMPENSATION ------------
-------------------------------------------- SECURITIES
NAME AND OTHER ANNUAL UNDERLYING ALL OTHER
PRINCIPAL POSITION YEAR SALARY ($) BONUS ($) COMPENSATION ($)(1) OPTIONS (#) COMPENSATION ($)(2)
------------------ ---- ---------- --------- ------------------- ----------- -------------------
Stuart A. Rose ............. 2005 154,500 1,154,360 1,600 -- --
Chairman of the Board and 2004 154,500 821,689 8,750 -- --
Chief Executive Officer 2003 154,500 984,225 8,750 -- --
David L. Bearden(3) ........ 2005 57,564 88,750 695 -- --
President and Chief
Operating Officer
Douglas L. Bruggeman ....... 2005 212,967 60,180 -- -- 200
Vice President -- Finance, 2004 167,367 43,817 -- 35,000 200
Chief Financial Officer 2003 148,800 51,500 -- 35,000 200
and Treasurer
David Fuchs ................ 2005 174,783 60,180 -- -- 200
Vice President -- 2004 150,683 42,917 -- 35,000 200
Management Information 2003 144,000 51,500 -- 35,000 200
Systems
Philip J. Kellar ........... 2005 148,939 91,229 -- -- 200
Vice President -- Store 2004 118,018 53,536 -- 10,000 200
Operations 2003 122,450 64,250 -- 10,000 200
Keith B. Magby ............. 2005 160,133 90,270 -- -- 200
Vice President -- 2004 136,033 64,376 -- 35,000 200
Operations 2003 129,350 77,265 -- 35,000 200
Zafar A. Rizvi ............. 2005 145,503 123,516 -- -- 200
Vice President -- Loss 2004 121,103 90,040 -- 35,000 200
Prevention 2003 112,481 103,274 -- 35,000 200
---------
(1) Amounts represent the value of use of a company automobile.
(2) Amounts represent employer matching contributions on behalf of the named
executive under the Company's Profit Sharing Plan.
(3) Mr. Bearden joined the Company in October 2005. Bonus includes a $65,000
signing bonus.
8
EMPLOYMENT AGREEMENTS
STUART A. ROSE
Stuart A. Rose, the Chairman and Chief Executive Officer of the Company, has
an employment agreement with Rex Radio and Television, Inc. that provides for an
annual salary of $154,500 and annual cash bonuses based upon (i) the earnings
before income taxes ('EBT') of the retail business of the Company ('Retail EBT')
starting at $5,000 for each $1 million of Retail EBT up to $5 million and
increasing incrementally to $15,000 for each $1 million of Retail EBT over $20
million and (ii) the earnings before income taxes of the synthetic fuel or other
alternative energy investments of the Company ('Energy Investment EBT') equal to
3% of the Energy Investment EBT for the fiscal year, provided that Mr. Rose will
in no event receive a total cash bonus exceeding $1 million in any fiscal year.
Mr. Rose is also eligible to participate in all employee benefit plans.
Mr. Rose's employment agreement is for a term of two years and one month
commencing January 1, 2006 and continuing through January 31, 2008 and is
automatically renewed for additional one-year terms unless earlier terminated by
resignation, death, total disability or termination for cause, or unless
terminated by either party upon 180 days notice. Termination for 'cause' means
Mr. Rose's repeated failure or refusal to perform his duties under the
agreement, violation of any material provision of the agreement, or clear and
intentional violation of law involving a felony which has a materially adverse
effect on the Company. If Mr. Rose's employment is terminated by the Company
without cause, he is entitled to the balance of his annual salary plus all
rights to the bonuses based on Retail EBT and Energy Investment EBT for the
remainder of the employment period. If Mr. Rose's employment is terminated for
any other reason, he is entitled to a pro rata portion of his annual salary and
cash bonuses based upon the date of termination.
DAVID L. BEARDEN
David L. Bearden, the President and Chief Operating Officer of the Company,
has an employment agreement with Rex Radio and Television, Inc. that provides
for an annual salary of $200,000, a signing bonus of $65,000, and an annual cash
bonus based upon the earnings before income taxes ('EBT') of the retail business
of the Company starting at $10,000 for each $1 million of EBT up to $5 million
and increasing incrementally to $30,000 for each $1 million of EBT over $20
million. Mr. Bearden is also entitled to an additional, one-time cash bonus of
$1 million if the retail business of the Company is sold during his employment
('change of ownership award') or within one calendar year of termination of his
employment without cause (as defined in the agreement). Mr. Bearden is eligible
to participate in all employee benefit plans and is furnished a Company owned
automobile for use during his employment.
Mr. Bearden's employment agreement is for a term of two years and three
months through January 31, 2008 and is automatically renewed for additional
one-year terms unless earlier terminated by resignation, death, total disability
or termination for cause, or unless terminated by either party upon 90 days
notice prior to the expiration of the employment term or any renewal term.
Termination for 'cause' means Mr. Bearden's repeated failure or refusal to
perform his duties under the agreement, violation of any material provision of
the agreement, clear and intentional violation of law involving a felony which
has a materially adverse effect on the Company, or commencing effective February
1, 2006 negative EBT for three consecutive fiscal quarters of the Company. If
Mr. Bearden's employment is terminated by the Company without cause, he is
entitled to the greater of the balance of his annual salary for the remainder of
the contract period or one-year's base salary. Mr. Bearden will forfeit any
9
rights to any annual cash bonus upon termination of his employment for any
reason, with the exception of the change of ownership award as provided above.
LAWRENCE TOMCHIN
Lawrence Tomchin, the former President and a director of the Company, was
paid a salary of $77,250, awarded a cash bonus of $269,832 and provided use of a
company automobile valued at $2,397 in fiscal 2005 pursuant to the terms of his
employment agreement with Rex Radio and Television, Inc. The employment
agreement was not renewed effective January 31, 2006.
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR
AND FISCAL YEAR-END OPTION VALUES
The following table sets forth information concerning each exercise of stock
options during fiscal 2005 by each of the named executive officers and the
fiscal year-end value of unexercised options.
NUMBER OF SECURITIES
UNDERLYING UNEXERCISED VALUE OF UNEXERCISED
SHARES OPTIONS AT FISCAL IN-THE-MONEY OPTIONS AT
ACQUIRED YEAR-END (#) FISCAL YEAR-END ($)(1)
ON VALUE --------------------------- ---------------------------
NAME EXERCISE (#) REALIZED ($) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
---- ------------ ------------ ----------- ------------- ----------- -------------
Stuart A. Rose................ 422,775 4,088,687 1,943,575 -- 19,334,342 --
David L. Bearden.............. -- -- -- -- -- --
Douglas L. Bruggeman.......... 48,000 510,853 202,250 60,250 1,568,838 284,613
David Fuchs................... 33,500 331,098 153,000 60,250 1,005,910 284,613
Philip J. Kellar.............. -- -- 22,750 18,500 93,035 92,285
Keith B. Magby................ 20,000 138,340 78,500 60,250 284,875 284,613
Zafar A. Rizvi................ 16,215 157,691 269,750 60,250 2,396,613 284,613
---------
(1) Unexercised options were in-the-money if the fair market value of the
underlying shares exceeded the exercise price of the option at January 31,
2006.
EQUITY COMPENSATION PLAN INFORMATION
NUMBER OF SECURITIES
REMAINING AVAILABLE
FOR FUTURE ISSUANCE
NUMBER OF SECURITIES UNDER EQUITY
TO BE ISSUED UPON WEIGHTED-AVERAGE COMPENSATION PLANS
EXERCISE OF EXERCISE PRICE OF (EXCLUDING SECURITIES
OUTSTANDING OPTIONS, OUTSTANDING OPTIONS, REFLECTED IN
WARRANTS AND RIGHTS WARRANTS AND RIGHTS COLUMN(a))
PLAN CATEGORY (a) (b) (c)
------------- --------------------- -------------------- ---------------------
Equity compensation plans approved by
security holders(1)................. 463,332 $5.08 108,011
Equity compensation plans not approved
by security holders(2).............. 4,210,389 $8.49 2,024,337
--------- ----- ---------
Total............................. 4,673,721 $8.15 2,132,348
--------- ----- ---------
--------- ----- ---------
(1) Includes the Company's 1995 Omnibus Stock Incentive Plan.
(2) Includes the Company's 1999 Omnibus Stock Incentive Plan, the 1998
Nonqualified Executive Stock Options and the 2001 Nonqualified Executive
Stock Options.
(footnote continued on next page)
10
(footnote continued from previous page)
Under the 1999 Omnibus Plan, the Company may grant to officers and key
employees awards in the form of nonqualified stock options, stock
appreciation rights, restricted stock, other stock-based awards and cash
incentive awards. The 1999 Omnibus Plan also allows for yearly grants of
nonqualified stock options to directors who are not employees of the
Company. The exercise price of each option must be at least 100% of the fair
market value of the Common Stock on the date of grant. A maximum of
4,500,000 shares are authorized for issuance under the 1999 Omnibus Plan, of
which 2,024,337 shares remain available for issuance.
The 1998 Nonqualified Executive Stock Options and the 2001 Nonqualified
Executive Stock Options are individual compensation arrangements. On
October 14, 1998, nonqualified stock options for 1,462,500 shares were
granted to Messrs. Rose and Tomchin at an exercise price of $4.42 per share,
which represented the market price on the date of grant, in connection with
their entering into three year employment agreements. These options are
fully exercisable and 906,417 remain outstanding. On April 17, 2001,
nonqualified stock options for 1,462,500 shares were granted to
Messrs. Rose and Tomchin at an exercise price of $8.01 per share, which
represented the market price on the date of grant, in connection with their
entering into new three year employment agreements. These options are fully
exercisable and outstanding.
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
The Compensation Committee reviews and approves Chief Executive Officer
(CEO) compensation, makes recommendations to the Board with respect to non-CEO
compensation and compensatory plans, and administers the Company's 1995 and 1999
Omnibus Stock Incentive Plans.
EXECUTIVE COMPENSATION POLICIES
The goal of the Company's executive compensation policy is to ensure that an
appropriate relationship exists between executive pay and the creation of
shareholder value, while at the same time motivating and retaining key
employees. To achieve this goal, the Company's executive compensation policies
integrate base salary with annual bonuses based upon corporate and individual
performance.
Base salary for the CEO is intended to be set at a level below or
competitive with the base salaries paid to CEOs of similarly-sized companies
within the industry and the peer group. An annual bonus is intended to comprise
a substantial portion of the CEO's annual cash compensation and is based upon
corporate financial performance. For fiscal 2005, to reflect tax savings and
income realized from the Company's investment in synthetic fuel entities, the
Committee established the amount of the Company's after-tax earnings as a
percentage of net sales (the 'After-Tax Earnings Percentage') as the performance
measure for determining the CEO's bonus.
Salaries and bonuses for executive officers, other than the CEO, are
reviewed by the Committee on an annual basis, subject to the terms of any
existing employment agreements. These salaries are intended to be comparable to
executives of similarly-sized companies within the industry and the peer group.
Annual bonuses are intended to supplement salaries and are generally based upon
the Company's earnings as a percentage of net sales.
Long-term incentive awards were historically made in the form of annual
grants of stock options pursuant to the Omnibus Plans. Stock appreciation
rights, restricted stock and other stock-based awards
11
may also be granted under the Plans. The Committee did not grant stock options
to employees during fiscal 2005 and does not intend to grant stock options to
employees during fiscal 2006.
CEO COMPENSATION
Stuart A. Rose, the Chairman and Chief Executive Officer of the Company,
received a base salary of $154,500 in fiscal 2005 pursuant to the terms of his
employment agreement.
Mr. Rose earned a cash bonus of $1,154,360 for fiscal 2005, compared to his
fiscal 2004 cash bonus of $821,689. This increase was based on the fiscal 2005
After-Tax Earnings Percentage of 6.996% (compared to the fiscal 2004 After-Tax
Earnings Percentage of 4.978%). In determining Mr. Rose's cash bonus, the
Committee utilized a measure of a $165,000 cash bonus for each After-Tax
Earnings Percentage point.
INTERNAL REVENUE CODE SECTION 162(M)
Section 162(m) of the Internal Revenue Code generally disallows a federal
income tax deduction to a public company for compensation paid in excess of
$1 million in any taxable year to the corporation's chief executive officer or
any of its other named executive officers in the proxy statement. Depending upon
the number of options exercised by an executive officer in a particular year and
the value of the underlying shares at that time, exercise of the 1998 or 2001
nonqualified executive stock options or the nonqualified options granted under
the 1999 Omnibus Plan could result in the individual's annual compensation
exceeding the $1 million deduction limitation. For fiscal 2005, Mr. Rose's
compensation exceeded the $1 million deduction limitation.
COMPENSATION COMMITTEE
ROBERT DAVIDOFF, Chairman
LEE FISHER
CHARLES A. ELCAN
DAVID S. HARRIS
12
PERFORMANCE GRAPH
Set forth below is a line graph comparing the yearly percentage change in
the cumulative total shareholder return on the Company's Common Stock against
the cumulative total return of the S&P 500 Stock Index and a peer group
comprised of selected publicly traded consumer electronics retailers (*) for the
period commencing January 31, 2001 and ended January 31, 2006. The graph assumes
an investment of $100 in the Company's Common Stock and each index on
January 31, 2001 and reinvestment of all dividends.
REX STORES CORPORATION
Comparison of Five Year Cumulative Total Return
Assumes Initial Investment of $100
REX Stores
Corporation S&P 500 Peer Group
------------- ---------- ----------
1/31/01....... 100 100 100
1/31/02....... 221.53 83.85 151.13
1/31/03....... 114.4 64.55 68.94
1/31/04....... 146.1 86.87 132.25
1/31/05....... 164.25 92.28 145.53
1/31/06....... 186.57 101.85 216.69
---------
* The peer group is comprised of Best Buy Co., Inc., Tweeter Home Entertainment
Group, Inc., Circuit City Stores, Inc. and Conn's, Inc.
13
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL
OWNERS AND MANAGEMENT
The following table sets forth, as of April 20, 2006 (the record date for
the Annual Meeting), certain information with respect to the beneficial
ownership of the Company's Common Stock by each director and nominee for
director of the Company, each executive officer of the Company, all directors
and executive officers of the Company as a group and those persons or groups
known by the Company to own more than 5% of the Company's Common Stock.
For purposes of this table, a person is considered to 'beneficially own' any
shares if such person, directly or indirectly, through any contract,
arrangement, understanding, relationship, or otherwise, has (or has the right to
acquire within 60 days after April 20, 2006) sole or shared power (i) to vote or
to direct the voting of such shares or (ii) to dispose or to direct the
disposition of such shares. Unless otherwise indicated, voting power and
investment power are exercised solely by the named person or shared with members
of his household.
COMMON STOCK
BENEFICIALLY OWNED
------------------------
NAME AND ADDRESS NUMBER PERCENT(1)
------------------ ---------- -----------
Stuart A. Rose(2)........................................... 2,929,634 24.1%
2875 Needmore Road
Dayton, Ohio 45414
Lawrence Tomchin(3) ........................................ 593,919 5.5%
2875 Needmore Road
Dayton, Ohio 45414
Robert Davidoff(4) ......................................... 294,994 2.9%
900 Third Avenue, 33rd Floor
New York, New York 10022
Edward M. Kress(5) ......................................... 136,373 1.3%
1100 Courthouse Plaza S.W.
Dayton, Ohio 45402
Lee Fisher(6) .............................................. 56,591 *
15925 Shaker Boulevard
Shaker Heights, Ohio 44120
Charles A. Elcan(7) ........................................ 8,267 *
3100 West End Avenue, Suite 800
Nashville, Tennessee 37203
David S. Harris(8) ......................................... 3,284 *
24 Avon Road
Bronxville, New York 10708
David L. Bearden ........................................... -- --
2875 Needmore Road
Dayton, Ohio 45414
Douglas L. Bruggeman(9) .................................... 198,100 2.0%
2875 Needmore Road
Dayton, Ohio 45414
David Fuchs(10) ............................................ 154,750 1.5%
2875 Needmore Road
Dayton, Ohio 45414
(table continued on next page)
14
(table continued from previous page)
COMMON STOCK
BENEFICIALLY OWNED
----------------------
NAME AND ADDRESS NUMBER PERCENT(1)
---------------- ------ ----------
Philip J. Kellar(11) ....................................... 29,250 *
2875 Needmore Road
Dayton, Ohio 45414
Keith B. Magby(12) ......................................... 86,750 *
2875 Needmore Road
Dayton, Ohio 45414
Zafar A. Rizvi(13) ......................................... 288,000 2.7%
2875 Needmore Road
Dayton, Ohio 45414
All directors and executive officers as a group
(13 persons)(14).......................................... 4,779,912 34.8%
FMR Corp.(15) ............................................. 1,400,000 13.7%
82 Devonshire Street
Boston, Massachusetts 02109
Dimensional Fund Advisors Inc.(16) ......................... 989,532 9.7%
1299 Ocean Avenue, 11th Floor
Santa Monica, California 90401
Royce & Associates, LLC(17)................................. 701,500 6.9%
1414 Avenue of the Americas
New York, New York 10019
Byram Capital Management LLC(18) ........................... 637,530 6.2%
41 West Putnam Avenue
Greenwich, Connecticut 06830
Advisory Research, Inc.(19) ................................ 526,100 5.1%
180 North Stetson Street, Suite 5500
Chicago, Illinois 60601
---------
* One percent or less.
(1) Percentages are calculated on the basis of the number of shares outstanding
on April 20, 2006 plus the number of shares issuable upon the exercise of
options held by the person or group which are exercisable within 60 days
after April 20, 2006.
(2) Includes (i) 552,994 shares held by the Stuart Rose Family Foundation, an
Ohio nonprofit corporation of which Mr. Rose is the sole member, chief
executive officer and one of three members of the board of trustees, the
other two being members of his immediate family and (ii) 1,943,575 shares
issuable upon the exercise of options.
(3) Includes 5,622 shares held by Mr. Tomchin's wife and 571,592 shares
issuable upon the exercise of options.
(4) Includes 96,435 shares issuable upon the exercise of options.
(5) Includes 7,000 shares held by Mr. Kress as co-trustee of two trusts with
respect to which Mr. Kress has shared voting and investment power, 4,775
shares held by Mr. Kress as trustee of two trusts for the benefit of his
children and 96,435 shares issuable upon the exercise of options.
(footnotes continued on next page)
15
(footnotes continued from previous page)
(6) Includes 56,591 shares issuable upon the exercise of options.
(7) Includes 8,267 shares issuable upon the exercise of options.
(8) Includes 3,284 shares issuable upon the exercise of options.
(9) Includes 198,100 shares issuable upon the exercise of options.
(10) Includes 154,750 shares issuable upon the exercise of options.
(11) Includes 29,250 shares issuable upon the exercise of options.
(12) Includes 86,750 shares issuable upon the exercise of options.
(13) Includes 288,000 shares issuable upon the exercise of options.
(14) Includes 3,533,029 shares issuable upon the exercise of options.
(15) Based on a Schedule 13G filing dated February 14, 2003. Fidelity Management
& Research Company, a wholly-owned subsidiary of FMR Corp. and a registered
investment adviser, is the beneficial owner of 1,400,000 shares of Common
Stock of the Company as a result of acting as investment adviser to various
registered investment companies. One investment company, Fidelity Low
Priced Stock Fund, owns 1,400,000 shares. Edward C. Johnson 3d (Chairman of
FMR Corp.), FMR Corp., through its control of Fidelity Management &
Research Company, and the funds each has sole power to dispose of the
1,400,000 shares owned by the funds, while the sole power to vote or direct
the voting of the shares owned directly by the Fidelity funds resides with
the funds' boards of trustees.
(16) Based on a Schedule 13G filing dated February 1, 2006. Dimensional Fund
Advisors Inc., a registered investment adviser, furnishes investment advice
to four registered investment companies and serves as investment manager to
certain other commingled group trusts and separate accounts. In its role as
investment adviser or manager, Dimensional Fund Advisors Inc. has sole
power to vote and dispose of 989,532 shares owned by these funds.
Dimensional Fund Advisors Inc. disclaims beneficial ownership of all such
shares.
(17) Based on a Schedule 13G filing dated January 31, 2006. Royce & Associates,
LLC, a registered investment adviser, has sole power to vote or direct the
voting and sole power to dispose or direct the disposition of 701,500
shares.
(18) Based on a Schedule 13G filing dated February 13, 2006. Byram Capital
Management LLC, a registered investment adviser, has sole power to vote or
direct the vote of 630,640 shares and sole power to dispose or direct the
disposition of 637,530. Mr. Seth M. Lynn, Jr., as the majority owner and a
managing member of Byram Capital Management LLC, disclaims beneficial
ownership of all such shares except to the extent of his pecuniary interest
therein.
(19) Based on a Schedule 13G filing dated February 14, 2006. Advisory Research,
Inc., a registered investment adviser, is the beneficial owner of 526,100
shares and has the sole power to dispose of or vote the 526,100 shares.
16
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934 requires the Company's
directors and executive officers to file reports of ownership and changes of
ownership of the Company's Common Stock with the Securities and Exchange
Commission. The Company believes that during fiscal 2005 all filing requirements
applicable to its directors and executive officers were met.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Rex Radio and Television, Inc. leases 10,000 square feet for a store in a
strip shopping center in Beavercreek, Ohio, from Stuart Rose/Beavercreek, Inc.
under a net lease dated December 12, 1994. The shareholders of Stuart
Rose/Beavercreek, Inc. are Stuart A. Rose and Lawrence Tomchin. The lease was
renewed for a five year term effective January 31, 2005 pursuant to the terms of
the lease. Base rent is $92,500 per year for the renewal term. Rex Radio and
Television, Inc. also paid Stuart Rose/Beavercreek, Inc. $33,762 under the lease
in fiscal 2005 for its pro rata portion of common area maintenance, real estate
taxes and utilities.
During fiscal 2005, the Company paid the law firm of Chernesky, Heyman &
Kress P.L.L., of which Edward M. Kress is a partner, a total of $612,064 for
legal services.
INDEPENDENT PUBLIC ACCOUNTANTS
Deloitte & Touche LLP served as the Company's independent public accountants
for the fiscal year ended January 31, 2006, and has served in that capacity
since 2002. It is anticipated that representatives of Deloitte & Touche LLP will
be present at the Annual Meeting to respond to appropriate questions from
shareholders and to make a statement if they desire to do so.
The Board of Directors of the Company annually appoints the independent
public accountants for the Company after receiving the recommendations of its
Audit Committee. No recommendation of the Audit Committee has been made
concerning the appointment of independent public accountants for the fiscal year
ending January 31, 2007.
AUDIT AND NON-AUDIT FEES
The following table sets forth the aggregate fees billed to the Company for
the fiscal years ended January 31, 2006 and 2005 by Deloitte & Touche LLP:
FISCAL FISCAL
2005 2004
---- ----
Audit Fees(1)............................................... $452,850 $487,103
Audit-Related Fees(2)....................................... 11,500 48,170
Tax Fees(3)................................................. 156,240 159,490
All Other Fees(4)........................................... 3,210 --
-------- --------
Total................................................... $623,800 $694,763
-------- --------
-------- --------
---------
(1) Audit Fees consist of fees billed for professional services rendered for the
audit of the Company's annual financial statements and review of the interim
financial statements included in the Company's quarterly reports and
services that are normally provided by Deloitte & Touche LLP in connection
(footnotes continued on next page)
17
(footnotes continued from previous page)
with statutory and regulatory filings or engagements. This category included
fees related to the audit of the Company's internal control over financial
reporting required by Section 404 of the Sarbanes-Oxley Act.
(2) Audit-Related Fees consist of fees billed for assurance and related services
that are reasonably related to the performance of the audit or review of the
Company's financial statements and are not reported under 'Audit Fees.' This
category included fees related to the audit of the financial statements of
the Company's employee benefit plan, and Sarbanes-Oxley readiness and
advisory services in fiscal 2004.
(3) Tax Fees consist of fees billed for professional services rendered for tax
compliance, tax advice and tax planning.
(4) All Other Fees consist of fees paid for a web based accounting research
tool.
POLICY ON AUDIT COMMITTEE PRE-APPROVAL OF AUDIT AND NON-AUDIT SERVICES
The Audit Committee's policy is to pre-approve all audit and non-audit
services provided by the independent public accountants. The Audit Committee
will generally pre-approve a list of specific services and categories of
services, including audit, audit-related, tax and other services, for the
upcoming or current fiscal year, subject to a specified dollar limit. Any
material service not included in the approved list of services, and all services
in excess of the pre-approved dollar limit, must be separately pre-approved by
the Audit Committee. The independent public accountants and management are
required to periodically report to the Audit Committee all services performed
and fees charged to date by the independent public accountants pursuant to the
pre-approval policy. None of the fees billed by the independent public
accountants for Audit-Related, Tax and Other Services described above were
approved by the Audit Committee after the services were rendered pursuant to the
de minimus exception under SEC rules.
OTHER BUSINESS
SOLICITATION OF PROXIES
The Company will bear the entire expense of this proxy solicitation.
Arrangements will be made with brokers and other custodians, nominees and
fiduciaries to send proxy solicitation materials to their principals and the
Company will, upon request, reimburse them for their reasonable expenses in so
doing. Officers and other regular employees of the Company may solicit proxies
by mail, in person or by telephone.
OTHER MATTERS
The Board of Directors does not know of any matters to be presented at the
Annual Meeting other than those mentioned above. However, if other matters
should properly come before the Annual Meeting or any adjournments thereof, the
proxy holders will vote the proxies thereon in their discretion.
18
SHAREHOLDER PROPOSALS
Proposals by shareholders intended to be presented at the Company's 2007
Annual Meeting of Shareholders must, in accordance with applicable regulations
of the Securities and Exchange Commission, be received by the Secretary of the
Company at 2875 Needmore Road, Dayton, Ohio 45414 on or before December 28, 2006
in order to be considered for inclusion in the Company's proxy materials for
that meeting. Shareholder proposals intended to be submitted at the 2007 Annual
Meeting outside the processes of Rule 14a-8 will be considered untimely under
Rule 14a-4(c)(1) if not received by the Company at its corporate offices on or
before March 13, 2007. If the Company does not receive timely notice of such
proposal, the proxy holders will vote on the proposal, if presented at the
meeting, in their discretion.
Shareholder recommendations for director candidates must be received by the
Nominating/Corporate Governance Committee at the Company's corporate offices on
or before December 28, 2006 to be considered for nomination in connection with
the 2007 Annual Meeting. Names submitted after this deadline will not be
considered.
By Order of the Board of Directors
EDWARD M. KRESS
EDWARD M. KRESS
Secretary
April 27, 2006
Dayton, Ohio
19
Appendix 1
PROXY
REX STORES CORPORATION
Proxy for Annual Meeting of Shareholders
June 1, 2006
The undersigned hereby appoints Stuart A. Rose and Lawrence Tomchin and
each of them proxies for the undersigned, with full power of substitution, to
vote all the shares of Common Stock of REX STORES CORPORATION, a Delaware
corporation (the "Company"), which the undersigned is entitled to vote at the
Annual Meeting of Shareholders of the Company to be held on Thursday, June 1,
2006, at 2:00 p.m. and any adjournments thereof.
(Continued, and to be signed, on the other side)
ANNUAL MEETING OF SHAREHOLDERS OF
REX STORES CORPORATION
June 1, 2006
Please date, sign and mail
your proxy card in the
envelope provided as soon
as possible.
___ Please detach along perforated line and mail in the envelope provided. ___
------------------------------------------------------------------------------------------------------
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE ELECTION OF DIRECTORS.
PLEASE SIGN, DATE AND RETURN PROMPTLY IN THE ENCLOSED ENVELOPE. PLEASE MARK YOUR VOTE IN BLUE OR BLACK
INK AS SHOWN HERE [X]
------------------------------------------------------------------------------------------------------
1. ELECTION OF DIRECTORS: 2. IN THEIR DISCRETION the proxies are
authorized to vote upon such other business
NOMINEES: as may properly come before the Meeting.
[ ] FOR ALL NOMINEES [ ] Stuart A. Rose
[ ] Lawrence Tomchin This proxy is solicited on behalf of the Board of
[ ] WITHHOLD AUTHORITY [ ] Robert Davidoff Directors and will be voted as directed herein. If
FOR ALL NOMINEES [ ] Edward M. Kress no direction is given, this proxy shall be voted
[ ] Lee Fisher FOR Proposal 1.
[ ] FOR ALL EXCEPT [ ] Charles A. Elcan
(See Instructions below) [ ] David S. Harris
INSTRUCTION: To withhold authority to vote for
any individual nominee(s), mark "FOR ALL EXCEPT"
and fill in the circle next to each nominee you
wish to withhold, as shown here: [ ]
--------------------------------------------------
--------------------------------------------------
To change the address on your account, please
check the box at right and indicate your new
address in the address space above. Please [ ]
note that changes to the registered name(s)
on the account may not be submitted via this
method.
--------------------------------------------------
Signature of Shareholder Date: Signature of Shareholder Date:
------------------- --------- ------------------- ---------
Note: Please sign exactly as your name or names appear on this Proxy. When shares are held
jointly, each holder should sign. When signing as executor, administrator, attorney,
trustee or guardian, please give full title as such. If the signer is a corporation,
please sign full corporate name by duly authorized officer, giving full title as such. If
signer is a partnership, please sign in partnership name by authorized person.