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next $5 million and 8°fo of any balance. Incentive compensation for any year can be paid only if a cash dividendl has been paid' on t'he Company's Common Stock during such year and only if net operating income, as defined above, for such year exceeds 12% of net worth as diefined in the By-lavw. The total incentive com* pensation amount is subject to di'stribut'ion among the following classes of per- sons: 10% to the Chairman, 8e to the President, 6clo to each of not more than four Vice Presidents (the By-law o ~fl'icers) andl 587c to other officers and key personnel but not in excess of' 47o to any one person. At present, the Company has a Chairman, a President and six Vice Presidents, including an Executive Vice President. The aggregate number of oflicers„directors and employees (other than the six By-law officers referred to) who participate for any year is deter- mined, after the close of such year, by the Board of'D2rectors on recommend'ationi of the Chief Executive Officer and, accordingly, itl is not possible to state what the number thereof will be for 1966' or subsequent years. For the year 1965, twenty-three officers and directors and approximateNy 404 other employees are expected to participate in incentive compensation. The only persons who will participate in, the amendenent' to the plan described above are those in the Contingent Compensat'ion Group, which is a class of employees determined according to rules and regulations of general application by the committee appointed under the plan. T!Jnder such, rules and regulations as promulgated in, 11958 and in effect at all times thereafter, such class is composed of' employees whose salary andl incentive eompensat'ion for any calendar year aggregates $35,000, and to whom incentive compensation in excess of $5,000 is allottedl for such year. The number of such persons in 1965 was sixteen. The amounts payable as Contingent Allotlments as the result of' awards made in 1965' are: (11) to the officers and directors referredl to in the remuneration table on page 5' as follows: J. E. Bennett, $45;037; M. J. Cramer, $78,540; Ji. J'. Darby, $10,000; G:O: Davies, $45,898!;H. E. Erickson, $52;12'4I; W'. A.J'ordan, $18,750; W. D. Okerson, $10;q00';, H. B. Parmele, $52,124; M. Yellen{ $45,037; and (2) to all other ernployees,.$33',412. The amounts so payable as Contingent Allothnents as the result of awards in 1966 to the persons named in the remunera- tion table and those expeetedl to be made to officers and directors as a group in 1966' are shown in the remuneration table. The amounts so payable as Contingent Allotments as a resultl of'awards to all other employees are not known at the date hereof, since such awards hadl not then been determined by the Board of Directors. 12 89301 0z09'

The plk ni cannot be amended by the Bbard of Directors so as to, increase the incentive compensation amount for any year or so as to change the stated per- centages that may be allottedi to the By-law officers, but may otherwise be amended by the Boardl so as to alter the allocation of' benefits as between other officers and directors and employees. The Cbmpany believes that the amendment to whsch, the proposal relates does not require concurrence by stockholders, but the Company is submitting the plany as so amended, to the stockholders before action is taken under the amendL ment in view of the change from long-term to short-term deferment. In the event that the stockholders do not concur, the Board of Directors will review the plan with the viewpoint of'the stockholders in mind and will determine the course with respect thereto which it may consider, appropriate, including, but not limited to, a determination to rescind or modify the amendment to which the proposal relates or otherwise amending the plan. The affirmative vote of two-thirds in interest of each class of stockholders voting at the meeting is required for concurrence in the proposal. There will be no rights of appraisal in connection with the proposal. AUDI'Il'ORS, The Board of Directors has appointed, Messrs. Haskins & Sells, Certified Pub- lic Accountants, to be the independent auditors of the Company, and a represen- tative of that firm wi1'1~ be present at the Annual Meeting, of Stockholders. OTHER MATTERS The Annual Meeting, is called for the purposes set forth above and for the transaction of such other business as may properly come before the meeting. Atl the date of this proxy statement, the managem~ent knows of no other matters which may come before t'he meeting. However, if' any other matters properly come before the meeting, it is the intention of the persons named ini the enclosed formm of proxy to vote such proxy in accordance with their judgment. Dated March 4, 1966. 1389'3012'30