SEC Info - National Picture & Frame Co - ‘DEF 14A’ for 8/19/96

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National Picture & Frame Co – ‘DEF 14A’ for 8/19/96

As of: Tuesday, 7/30/96 · For: 8/19/96 · Accession #: 950137-96-1202 · File #: 0-22502

  As Of                Filer                Filing    For·On·As Docs:Size              Issuer               Agent

 7/30/96  National Picture & Frame Co       DEF 14A     8/19/96    1:49K                                    Bowne Boc/FA

Definitive Proxy Solicitation Material — Schedule 14A
Filing Table of Contents

Document/Exhibit                   Description                      Pages   Size 

 1: DEF 14A     Notice and Proxy Statement                            17     83K

Document Table of Contents

Page	(sequential)	\|	(alphabetic)	Top
			Alternative Formats (Word, et al.) Compensation Committee Compensation Program Components Employment Agreements Executive Compensation Proxy Statement Stock Ownership
1	1st Page - Filing Submission
4	Proxy Statement
6	Compensation Committee
12	Executive Compensation
13	Employment Agreements
14	Compensation Program Components
15	Stock Ownership

DEF 14A 1st Page of 17 TOC ↑Top Previous Next ↓Bottom Just 1st
SCHEDULE 14A
(Rule 14a-101)

INFORMATION REQUIRED IN PROXY STATEMENT

SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES
EXCHANGE ACT OF 1934 (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 Rule 14a-11(c) or Rule 14a-12

NATIONAL PICTURE AND FRAME COMPANY
-------------------------------------------------------------------------------
(Name of Registrant as Specified in Its Charter)

NATIONAL PICTURE AND FRAME COMPANY
-------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)

Payment of filing fee (Check the appropriate box):

[X] $125 per Exchange Act Rule 0-11(c)(1)(ii), 14a-6(i)(1), or 14a-6(i)(2).

[ ] $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 (Set forth the amount on which the filing
fee is calculated and state how it was determined):

--------------------------------------------------------------------------------

(4) Proposed maximum aggregate value of transaction:

--------------------------------------------------------------------------------

[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was
paid previously. Identify the previous filing by registration statement
number, or the form or schedule and the date of its filing.

(1) Amount previously paid:

--------------------------------------------------------------------------------

(2) Form, schedule or registration statement no.:

--------------------------------------------------------------------------------

(3) Filing party:

--------------------------------------------------------------------------------

(4) Date filed:

--------------------------------------------------------------------------------
(1) Set forth the amount on which the filing fee is calculated and state how it
was determined.

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NATIONAL PICTURE & FRAME COMPANY
1500 COMMERCE STREET
GREENWOOD, MS 38930

Dear Stockholder:

You are cordially invited to attend the annual meeting of stockholders
which will be held on Monday, August 19, 1996, at 10:00 a.m., at the Company's
corporate office facility located at 702 Highway 82 West, Greenwood,
Mississippi 38930 (the "Annual Meeting").

The Notice of Meeting, Proxy Statement and Proxy are included with this
letter. The matters listed in the Notice of Meeting are more fully described in
the Proxy Statement.

It is important that your shares are represented and voted at the Annual
Meeting, regardless of the size of your holdings. Accordingly, please mark,
sign and date the enclosed Proxy and return it promptly in the enclosed
envelope. If you attend the Annual Meeting, you may, of course, withdraw your
Proxy should you wish to vote in person.

Sincerely,

LOGO
Daniel J. Hennessy
Chairman of the Board

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NATIONAL PICTURE & FRAME COMPANY
1500 COMMERCE STREET
GREENWOOD, MS 38930

NOTICE OF ANNUAL MEETING OF STOCKHOLDERS

TO BE HELD AUGUST 19, 1996

The annual meeting of stockholders of National Picture & Frame Company
(the "Company") will be held on Monday, August 19, 1996, at 10:00 a.m., at the
Company's corporate office facility located at 702 Highway 82 West, Greenwood,
Mississippi 38930 (the "Annual Meeting"), to consider and take action with
respect to the following proposals:

1. To elect six directors to serve until the next annual meeting
of stockholders or until their successors are duly elected and
qualified.

2. To approve the National Picture & Frame Company Non-Employee
Director Stock Option Plan.

3. To ratify the appointment of Ernst & Young LLP as the
Company's independent accountants.

4. To consider and vote on any such other business as may
properly come before the Annual Meeting and any adjournments
or postponements thereof.

Holders of record of the Company's common stock as of the close of
business on July 3, 1996 are entitled to receive notice of and to vote on all
matters presented at the Annual Meeting and at any adjournments or
postponements thereof. A list of such holders will be open to examination by
any stockholder, for any purpose germane to the meeting, at the Company's
headquarters located at 1500 Commerce Street, Greenwood, Mississippi 38930.

By order of the Board of Directors,

LOGO
Robert Littlejohn
Secretary

July 29, 1996

WHETHER OR NOT YOU PLAN TO ATTEND THE ANNUAL MEETING IN PERSON AND REGARDLESS
OF THE NUMBER OF SHARES YOU OWN, PLEASE MARK, SIGN AND DATE THE ENCLOSED PROXY
AND MAIL IT PROMPTLY IN THE ENVELOPE PROVIDED TO ENSURE THAT YOUR SHARES WILL
BE REPRESENTED. YOU MAY NEVERTHELESS VOTE IN PERSON IF YOU ATTEND THE ANNUAL
MEETING.

DEF 14A 4th Page of 17 TOC 1st Previous Next ↓Bottom Just 4th

NATIONAL PICTURE & FRAME COMPANY
1500 COMMERCE STREET
GREENWOOD, MS 38930-1910

_____________________________

PROXY STATEMENT
_____________________________

ANNUAL MEETING OF STOCKHOLDERS

TO BE HELD

AUGUST 19, 1996
_____________________________

This proxy statement (this "Proxy Statement") is being furnished to the
holders of the Common Stock, par value $0.01 per share (the "Common Stock"), of
National Picture & Frame Company (the "Company") in connection with the
solicitation of proxies on behalf of the Board of Directors of the Company (the
"Board of Directors" or the "Board") for the annual meeting of stockholders to
be held on August 19, 1996 at 10:00 a.m., and at any adjournments or
postponements thereof (the "Annual Meeting"). These proxy materials are being
mailed on or about July 29, 1996 to holders of the Common Stock as of the close
of business on July 3, 1996.

If the enclosed proxy is properly signed and returned to the Company, the
shares represented thereby will be voted at the Annual Meeting. Unless
otherwise indicated on the completed proxy, the shares represented thereby will
be voted FOR the slate of directors described herein, FOR approval of the
National Picture & Frame Company Non-Employee Director Stock Option Plan (the
"Director Plan"), FOR ratification of Ernst & Young LLP as the Company's
independent accountants, and, as to any other business that may be properly
brought before the Annual Meeting and any adjournments or postponements
thereof, in the discretion of the proxy holders.

Returning your completed proxy will not prevent you from voting in person
at the Annual Meeting should you be present and wish to do so. In addition,
you may revoke your proxy at any time before it is voted by written notice to
the Secretary of the Company prior to the Annual Meeting or by submission of a
later-dated proxy.

Each outstanding share of Common Stock entitles the holder thereof to one
vote. As of July 3, 1996, there were 4,961,249 shares of Common Stock
outstanding. The presence in person or by proxy of a majority of the shares of
Common Stock outstanding will constitute a quorum for the transaction of
business. Under Delaware law, abstentions are treated as present and entitled
to vote, and therefore will be counted in determining the existence of a quorum
and will have the effect of a vote against any matter requiring the affirmative
vote of a majority of the shares present and entitled to vote at the Annual
Meeting. Under Delaware law, broker "non-votes" (where a broker submits a proxy
but does not have authority to vote its customer's shares on one or more
matters) are considered present but not entitled to vote, and thus will be
counted in determining the existence of a quorum but will not be counted in
determining the approval of any matter requiring the affirmative vote of a
majority of the shares present and entitled to vote at the Annual Meeting.

PROPOSAL 1

ELECTION OF DIRECTORS

The Board of Directors is currently comprised of six directors (each, a
"Director"). The Board of Directors has nominated and recommends the election
of each of the nominees set forth below as a Director to serve until the next
annual meeting of stockholders or until their successors are duly elected and
qualified. The Board of Directors expects that all nominees named below will be
available for election. In case any nominee is not available, the proxy holders
may vote for a substitute unless the Board of Directors reduces the number of
directors.

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Directors will be elected at the Annual Meeting by a plurality of the
votes cast at the meeting by the holders of shares represented in person or by
proxy. Votes may be cast for or withheld from each nominee. There is no
cumulative voting as to any matter, including the election of Directors.

NOMINEES FOR ELECTION AS DIRECTORS

The following sets forth information as to each nominee for election at
the Annual Meeting, including age as of July 3, 1996, principal occupation and
employment during the past five years, directorships in other publicly held
companies and period of service as a Director.

PETER B. FOREMAN Age: 60

Mr. Foreman has served as the President of Sirius Corporation, an
investment management company, since 1994. Mr. Foreman was a founding
partner of Harris Associates, L.P., an investment management company, from
1976 to 1994. Mr. Foreman has served as a director of Eagle Food Centers
Inc., a retail food store company, since 1988. Mr. Foreman has served as
a director of Glacier Water Services, Inc., a bottled water distribution
company, since 1991 and has served as a director of PCA International
Inc., a company involved in the photography business, since 1994. Mr.
Foreman has been a Director since July 15, 1994.

ARTHUR L. GOESCHEL Age: 74

Mr. Goeschel is presently retired. Mr. Goeschel has served as the Chairman
of the Board of Rexene Corporation, a manufacturer of plastic film and
plastic resins, since March 1992. Mr. Goeschel has served as a member of
the board of trustees of Laurel Mutual Funds. Mr. Goeschel was formerly
the Executive Vice President of Merck & Company, Inc. and President of
Calgon Corporation, a Merck corporation subsidiary, and is a member of the
Board of Directors of Calgon Corporation, a producer of granular activated
carbon. Mr. Goeschel has been a Director since July 15, 1994.

DANIEL J. HENNESSY Age: 38

Mr. Hennessy has, since August 1988, been a General Partner of CHS
Management, the General Partner of Code, Hennessy & Simmons Limited
Partnership ("CHS"), a limited partnership engaged in private equity
investing, and a principal of Code, Hennessy and Simmons, Inc. ("CHSI"),
a company engaged in private equity investing. Mr. Hennessy has served as
Chairman of the Board and has been a Director since July 31, 1992.

JOHN F. LEVY Age: 49

Mr. Levy was the President and Chief Executive Officer of Waban Inc., a
retailing company, until May 30, 1993. Mr. Levy is a director of High
Road, Inc. (f/k/a Velocity, Inc.), a retailing company. Mr. Levy has been
a Director since July 15, 1994.

JESSE C. LUXTON Age: 53

Mr. Luxton has been with the Company for 18 years. He has served as the
Company's President and Chief Executive Officer since 1987 and prior to
that Mr. Luxton served as the Company's General Manager and Vice President
of Sales and Marketing. Mr. Luxton has been a Director since July 31,
1992.

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JON S. VESELY Age: 30

Mr. Vesely is a managing director of CHSI. Mr. Vesely was an associate of
CHS Management from 1991 to 1994. Prior to such date, he was a Corporate
Finance Officer with First Chicago Corporation. Mr. Vesely has served as a
Director since July 31, 1992.

There are no family relationships among the foregoing persons.

THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE ELECTION OF EACH OF THE
FOREGOING PERSONS.

BOARD AND COMMITTEE MEETINGS

The Board of Directors held six meetings (exclusive of committee meetings)
during the preceding fiscal year. The Board of Directors has established the
following committees, the functions and current members of which are noted
below. During the preceding fiscal year each Director attended 80% or more of
the number of meetings of the Board of Directors and any committees on which
such Director served that were held while he was a Director.

Audit Committee. The Audit Committee of the Board of Directors consists of
Messrs. Hennessy and Vesely. The Audit Committee makes recommendations to the
Board regarding the selection of independent accountants and reviews the
independence of such accountants, approves the scope of the annual audit
activities of the independent accountants, and reviews such audit results. The
Audit Committee met one time during the preceding fiscal year.

Compensation Committee. The Compensation Committee of the Board of
Directors (the "Compensation Committee") consists of Messrs. Foreman and
Hennessy. The duties of the Compensation Committee are to establish the
compensation of all officers of the Company, grant awards under the Company's
compensation and benefit plans and make recommendations concerning major
Company compensation policies and practices. The Compensation Committee met one
time during the preceding fiscal year.

COMPENSATION OF DIRECTORS

Each member of the Board who is not a regular employee of the Company or
any of its subsidiaries (a "Non-Employee Director") is entitled to receive an
annual retainer fee for his service on the Board equal to $10,000. Subject to
stockholder approval of the Director Plan (see Proposal 2 of this Proxy
Statement), each Non-Employee Director may elect annually to receive Deferral
Election Stock Options (as defined below) granted pursuant to the Director Plan
in lieu of such retainer fee. Non-Employee Directors are not entitled to
receive additional fees based on their attendance at meetings of the Board or
any committees or subcommittees thereof. Employee Directors are not entitled
to receive any fees or other compensation for their service as Directors. All
Directors are reimbursed for out-of-pocket expenses related to the Company's
business.

COMPLIANCE WITH SECTION 16(a) OF THE SECURITIES EXCHANGE ACT OF 1934

Section 16(a) of the Securities Exchange Act of 1934, as amended, requires
the Company's officers, Directors and persons who beneficially own more than
ten percent of a registered class of the Company's equity securities to file
reports of securities ownership and changes in such ownership with the
Securities and Exchange Commission (the "SEC"). Officers, directors and greater
than ten-percent beneficial owners also are required by rules promulgated by
the SEC to furnish the Company with copies of all Section 16(a) forms they
file.

Except as set forth below, based solely upon a review of the copies of
such forms furnished to the Company, or written representations that no Form 5
filings were required, the Company believes that each of its officers,
directors and greater than ten percent beneficial owners complied with all
Section 16(a) filing requirements applicable to them during the period from May
1, 1995 through April 30, 1996. With respect to a sale of 20,000 shares of
Common

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Stock, Richard A. Beattie failed to file a Form 4 within 10 days after the end
of the month in which such sale transaction occurred and failed to file a Form
5 within 45 days after the end of the Company's fiscal year in which such sale
transaction occurred. The Company has been informed that Mr. Beattie intends
to file promptly a Form 5 reporting such transaction.

PROPOSAL 2

APPROVAL OF THE NATIONAL PICTURE & FRAME COMPANY
NON-EMPLOYEE DIRECTOR STOCK OPTION PLAN

GENERAL

The Board unanimously approved the Director Plan on August 21, 1995 and
recommends that stockholders vote in favor of the Director Plan. The Board
seeks stockholder approval of the Director Plan (i) to enable Deferral Election
Stock Options granted under the Director Plan to be qualified under Rule 16b-3
promulgated under the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), which rule exempts certain qualified transactions from the
short-swing matching and recovery provisions of Section 16(b) of the Exchange
Act, and (ii) to comply with Rule 4460 of The Nasdaq National Market-Issuer
Designation Requirements, which requires stockholder approval of most plans or
arrangements pursuant to which shares of Common Stock designated as a Nasdaq
National Market security may be issued to management of the Company.

The Director Plan, subject to stockholder approval, provides for
Non-Employee Directors to elect annually to receive all, but not less than all,
of the fees for their services as Directors in the form of options to acquire
Common Stock ("Deferral Election Stock Options"). By allowing Non-Employee
Directors to receive Deferral Election Stock Options in lieu of cash
compensation, the Director Plan further encourages stock ownership in the
Company by its Non-Employee Directors. The following summary of the terms of
the Director Plan is qualified in its entirety by reference to the full text of
the Director Plan, a copy of which may be obtained by any stockholder of the
Company upon request directed to the Secretary of the Company at 1500 Commerce
Street, Greenwood, Mississippi 38930.

TERMS OF THE DIRECTOR PLAN

Each Non-Employee Director is eligible to participate in the Director
Plan. Under the Director Plan, each participating Non-Employee Director
annually may elect to receive Deferral Election Stock Options in lieu of cash
compensation for services as a Director for the following year (not including
reimbursement of expenses). The number of Deferral Election Stock Options
granted to an electing Non-Employee Director in any year shall be an amount
whose value, as determined by the Compensation Committee, is equivalent on the
date of grant to the cash compensation which the Non-Employee Director would
otherwise have been entitled to receive for the year. Each Deferral Election
Stock Option has a five year term commencing on the date of grant and is
exercisable (the "Option Exercise Price") at a price equal to the market price
per share of the Common Stock on the date of grant (determined in the manner
set forth in the Director Plan). The Option Exercise Price is payable in cash
or by certified or bank check unless the Board and the applicable participating
Non-Employee Director agree, at the time of exercise, that the Option Exercise
Price may be paid in whole or in part with a note or shares of the Common
Stock. There is an aggregate of 125,000 shares of the Common Stock authorized
for issuance upon exercise of the Deferral Election Stock Options granted under
the Director Plan. The Director Plan is administered by the Compensation
Committee.

The Deferral Election Stock Options shall be granted to such participating
Non-Employee Directors at the commencement of the 12-month period for which the
election has been made. In general, the Deferral Election Stock Options become
exercisable one year after the date of grant (or such longer period as the
Compensation Committee may set). If a Non-Employee Director's tenure ends due
to death, disability or change in control, each such Deferral Election Stock
Option shall become immediately exercisable with respect to all shares of
Common Stock covered thereby. If a Non-Employee Director's tenure terminates
for a reason other than death or disability (a "Termination Event"), then the
number of Deferral Election Stock Options granted for the year in which such
Termination Event

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occurs shall be reduced to an amount proportionate to the portion of such year
prior to such Termination Event during which such Non-Employee Director
actually served on the Board.

AMENDMENT AND TERMINATION OF THE DIRECTOR PLAN

The Board may amend or terminate the Director Plan at any time in its sole
discretion. However, no amendment may, without a participating Non-Employee
Director's consent, materially and adversely affect the right of such
participating Non-Employee Director with respect to any Deferral Election Stock
Options therefore granted under the Director Plan without such participating
Non-Employee Director's written consent. In addition, stockholder approval of
any changes or modifications to the Director Plan will be required to the
extent such stockholder approval is required by law. Unless earlier terminated
by the Board in its sole discretion, the Director Plan will terminate on the
tenth anniversary of the date of its approval by the stockholders.

FEDERAL INCOME TAX CONSEQUENCES

General. The following is intended only as a brief, general summary of
the federal income tax rules relevant to the Deferral Election Stock Options
granted under the Director Plan, and assumes (i) that any participating
Non-Employee Director subject to Section 16(b) of the Exchange Act (typically,
Directors and officers and major stockholders of the Company) will not exercise
any Deferral Election Stock Option granted under the Director Plan before the
six month anniversary of the date of grant of such Deferral Election Stock
Option, and (ii) that the exercise of any Deferral Election Stock Option and
disposition of shares issuable upon exercise of such Deferral Election Stock
Option occur during the lifetime of the participant. This discussion is not
intended to provide guidance to participants; participants should consult their
own personal tax advisors.

Deferred Election Stock Options. The holder of a Deferral Election Stock
Option does not recognize taxable income upon the grant of the Deferral
Election Stock Option, nor is the Company entitled, for income tax purposes, to
a deduction. The participant recognizes ordinary income (subject to
withholding taxes) on the exercise of a Deferral Election Stock Option equal to
the excess of the fair market value of the shares received on exercise over the
exercise price of the Deferral Election Stock Option. The fair market value of
such shares is measured on the exercise date. The Company is generally
entitled to a deduction in computing its federal income taxes in an amount
equal to the ordinary income recognized by the participant on the exercise of
the Deferral Election Stock Option.

If a participant sells shares acquired pursuant to the exercise of a
Deferral Election Stock Option, the participant will recognize capital gain or
loss equal to the difference between the selling price of the shares and their
fair market value on the exercise date. The participant's gain is long-term or
short-term depending upon whether such shares were held for more than one year.
The Company does not receive a deduction for any capital gain recognized by the
participant.

Exercise with Previously Owned Shares. The Director Plan generally
provides, and the previous discussion assumes, that all shares of the Common
Stock acquired on the exercise of a Director Election Stock Option are paid for
in cash. If the Board determines that a participant may pay for all or a
portion of the Director Election Stock Option exercise price with previously
owned shares of the Common Stock such participant will generally (although not
in all cases) recognize no gain or loss on the previously owned shares
surrendered. Such participant's tax basis in and holding period for the
surrendering shares (for purposes of determining capital gains and losses) will
generally carry over to an equal number of shares received.

APPROVAL REQUIRED

The affirmative vote of a majority of votes cast by the holders of shares
of the Common Stock represented in person or by proxy at the Annual Meeting is
required for approval of the Director Plan.

THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" APPROVAL OF THE DIRECTOR PLAN.

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PROPOSAL 3

RATIFICATION OF APPOINTMENT OF INDEPENDENT PUBLIC ACCOUNTANTS

The Board of Directors, upon recommendation by the Audit Committee,
has appointed Ernst & Young LLP as independent public accountants to examine
the financial statements of the Company for the fiscal year ending April 30,
1997 and to perform other appropriate accounting services.

A proposal will be presented at the Annual Meeting to ratify the
appointment of Ernst & Young LLP as the Company's independent public
accountants. One or more members of that firm are expected to be present at
the Annual Meeting to respond to questions and to make a statement if they
desire to do so. If the stockholders do not ratify this appointment by the
affirmative vote of a majority of the shares represented in person or by proxy
at the Annual Meeting, other independent public accountants will be considered
by the Board of Directors upon recommendation by the Audit Committee.

THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" RATIFICATION OF THE
APPOINTMENT OF ERNST & YOUNG LLP AS THE COMPANY'S INDEPENDENT PUBLIC
ACCOUNTANTS.

OTHER BUSINESS

At the date of this Proxy Statement, the Company has no knowledge of any
business other than that described above that will be presented at the Annual
Meeting. If any other business should come before the Annual Meeting, the
proxies will be voted in the discretion of the proxy holders.

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SECURITY OWNERS

The following information with respect to the outstanding shares of Common
Stock beneficially owned by each Director and nominee for Director, the chief
executive officer and the four other executive officers, and the Directors and
executive officers as a group and all beneficial owners of more than five
percent of the Common Stock is furnished as of July 3, 1996.

[Enlarge/Download Table]

NAME BENEFICIAL OWNERSHIP(1)
---- -----------------------
NUMBER OF PERCENT
SHARES(2) OF CLASS(2)
--------- ------------

Code, Hennessy & Simmons Limited Partnership(3) 1,581,625 31.88%
Andrew W. Code(4)(5) 1,582,025 31.89%
Daniel J. Hennessy(4)(6) 1,582,925 31.91%
Brian P. Simmons(4) 1,585,125 31.95%
Hesperus Partners Ltd.(7) 597,500 12.04%
Peter B. Foreman(8)(9) 603,711 12.15%
Arthur L. Goeschel(9) 11,211 *
John F. Levy(9) 6,211 *
Jesse C. Luxton(10) 438,795 8.65%
M. Wesley Jordan, Jr. 0 *
Billy D. Moore(11) 205,348 4.10%
Richard A. Beattie(12) 101,681 2.03%
Robert Littlejohn(13) 82,745 1.66%
Jon S. Vesely(14) 1,751 *
All executive officers and directors as a group (ten persons)
------- ----

--------------

(1) "Beneficial owner" means generally any person who, directly or
indirectly, has or shares voting power or investment power with
respect to a security. All information with respect to the beneficial
ownership of any stockholder has been furnished by such stockholder or
is based on reports filed with the SEC by or on behalf of such
stockholder. The Company believes that, except as otherwise indicated,
each stockholder has sole voting and investment power with respect to
shares listed as beneficially owned by such stockholder.

(2) Based on 4,961,249 shares of Common Stock outstanding as of July 3,
1996 plus, determined with respect to any person, the number of shares
of Common Stock issuable upon exercise of any options held by such
person as of July 3, 1996. Percentages less than 1.0% are denoted by
an asterisk.

(3) The business address of Code, Hennessy & Simmons Limited Partnership
("CHS") is 10 South Wacker Drive, Suite 3175, Chicago, IL 60606.

(4) 1,581,625 of such shares of Common Stock are held of record by CHS and
Messrs. Code, Hennessy and Simmons. Such persons are general partners
of the general partner of CHS and share investment and voting power
with respect to its securities held by CHS. Each of Messrs. Code,
Hennessy and Simmons disclaims beneficial ownership of such shares
except to the extent of his pecuniary interest therein. The business
address of each such person is c/o CHS, 10 South Wacker Drive, Suite
3175, Chicago, IL 60606.

(5) 400 of such shares of Common Stock are held by Mr. Code as custodian
for minor children under the Uniform Gifts to Minors Act.

(6) 800 of such shares of Common Stock are held by Mr. Hennessy as
custodian for minor children under the Uniform Gifts to Minors Act.

(7) The business address of Hesperus Partners Ltd. ("Hesperus") is 225 W.
Washington Street, Suite 1650, Chicago, IL 60606.

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(8) All of such shares are held by Hesperus. Mr. Foreman controls the
general partner of the general partner of Hesperus and possesses
investment and voting power with respect to securities held by
Hesperus. The business address of Mr. Foreman is 225 W. Washington
Street, Suite 1650, Chicago, IL 60606.

(9) Share amount includes exercisable options for 6,211 shares of the
Common Stock granted to each Non-Employee Director participating in
the Director Plan.

(10) The business address of Mr. Luxton is c/o National Picture &
Frame Company, 1500 Commerce Street, Greenwood, MS 38930. Share amount
shown includes exercisable options for 109,000 shares of the Common
Stock granted to Mr. Luxton under the Company's Long Term Incentive
Plan.

(11) Share amount shown includes exercisable options for 49,000
shares of the Common Stock granted to Mr. Moore under the
Company's Long Term Incentive Plan.

(12) Share amount shown includes exercisable options for 47,000 shares of
the Common Stock granted to Mr. Beattie under the Company's Long Term
Incentive Plan.

(13) Share amount shown includes exercisable option for 33,000
shares of the Common Stock granted to Mr. Littlejohn under the
Company's Long Term Incentive Plan.

(14) Mr. Vesely is an employee of Code, Hennessy & Simmons, Inc.,
an affiliate of CHS, but does not share investment or voting
discretion with respect to the securities held by CHS.

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EXECUTIVE COMPENSATION

SUMMARY COMPENSATION TABLE

The following summary compensation table sets forth the components of the
compensation of the Company's chief executive officer and the other four
executive officers (the "Named Executive Officers") for all services rendered
in all capacities for the fiscal years ended April 30, 1996, April 30, 1995 and
April 30, 1994.

[Enlarge/Download Table]

Annual Compensation Stock
Name and Fiscal ------------------- Options All Other
Principal Position Year Salary Bonus (#) Compensation(1)
------------------ ---- ------ ----- -- ---------------

Jesse C. Luxton 1996 $385,875 $ 24,473 0 $ 15,910
President and Chief Executive Officer 1995 367,500 191,500 0 18,093
1994 350,000 7,375 164,000 19,741

M. Wesley Jordan, Jr. (2) 1996 124,386 1,700 40,000(3) 1,388
Vice President and Chief Financial
Officer

Billy D. Moore 1996 192,937 4,400 0 8,609
Vice President of Operations 1995 183,750 77,700 0 12,603
and General Manager 1994 175,000 4,000 71,000 12,022

Richard A. Beattie 1996 192,937 4,150 0 8,609
Vice President of Sales and Marketing 1995 183,750 77,450 0 11,548
1994 175,000 3,750 67,000 10,228

Robert T. Littlejohn 1996 126,787 2,850 0 6,105
Controller 1995 120,750 38,950 0 8,347
1994 115,000 2,575 48,000 7,774

______________
(1) The 1994 amounts represent (i) estimated contributions by the Company to
the National Picture & Frame Co. Employee Retirement Plan (the "Retirement
Plan") and (ii) insurance premiums paid by the Company for the benefit of
the Named Executive Officers in the following amounts: Mr. Luxton, $17,641
and $2,100, respectively; Mr. Moore, $9,912 and $2,100, respectively; Mr.
Beattie, $9,388 and $840, respectively; and Mr. Littlejohn, $6,725 and
$1,049, respectively. The 1995 amounts represent (i) estimated
contributions by the Company to the Retirement Plan and (ii) insurance
premiums paid by the Company for the benefit of the Named Executive
Officers in the following amounts: Mr. Luxton, $15,208 and $2,885,
respectively; Mr. Moore, $10,883 and $1,720, respectively; Mr. Beattie,
$10,712 and $836, respectively; and Mr. Littlejohn, $7,070 and $1,277,
respectively. The 1996 amounts represent (i) estimated contributions by
the Company to the Retirement Plan and (ii) insurance premiums paid by the
Company for the benefit of the Named Executive Officers, in the following
amounts: Mr. Luxton, $13,301 and $2,609, respectively; Mr. Moore, $6,901
and $1,708, respectively; Mr. Beattie, $6,911 and $1,708, respectively;
Mr. Littlejohn, $4,706 and $1,399, respectively, and Mr Jordan, $0 and
$1,388, respectively.

(2) Mr. Jordan became an Officer of the Company on May 8, 1995.

(3) Stock Options subject to five year vesting.

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OPTION GRANTS IN LAST FISCAL YEAR

[Enlarge/Download Table]

POTENTIAL REALIZABLE
% OF TOTAL OPTIONS VALUE OF ASSUMED ANNUAL
NUMBER OF SHARES GRANTED TO RATES OF STOCK PRICE
UNDERLYING EMPLOYEES IN EXERCISE PRICE EXPIRATION APPRECIATION FOR
NAME OPTIONS GRANTED FISCAL YEAR ($/SHARE) DATE OPTION TERM
--------------------- ---------------- ------------------ -------------- ---------- -----------------------

0% ($) 10% ($) 5% ($)
------- ------- ------
Jesse C. Luxton --0-- --0-- --0-- -- --0-- --0-- --0--
M. Wesley Jordan 40,000 100% $9.00/ share 8/28/2005 9.00 23.34 14.66

Billy D. Moore --0-- --0-- --0-- -- --0-- --0-- --0--
Richard A. Beattie --0-- --0-- --0-- -- --0-- --0-- --0--
Robert Littlejohn --0-- --0-- --0-- -- --0-- --0-- --0--

AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR AND FISCAL YEAR-END OPTION
VALUES

[Enlarge/Download Table]

VALUE OF UNEXERCISED
NUMBER OF IN-THE-MONEY
UNEXERCISED OPTIONS OPTIONS AT FISCAL
AT FISCAL YEAR END YEAR END ($)
SHARES ACQUIRED VALUE REALIZED (#) EXERCISABLE/ EXERCISABLE/
NAME ON EXERCISE(1) ($)(1) UNEXERCISABLE(1) UNEXERCISABLE(1)
-------------------- --------------- -------------- -------------------- --------------------

Jesse C. Luxton --0-- --0-- 109,000/55,000 0/0

M. Wesley Jordan --0-- --0-- 0/40,000 0/390,000
Billy D. Moore --0-- --0-- 49,000/22,000 0/0
Richard A. Beattie --0-- --0-- 47,000/20,000 0/0
Robert Littlejohn --0-- --0-- 33,000/15,000 0/0

--------------

(1) No options were exercised by the Named Executive Officers during the last
fiscal year. As of the end of the fiscal year, none of the options held by
the Named Executive Officers (other than Mr. Jordan) was in-the-money. As
of the end of the fiscal year, all of the options held by Mr. Jordan were
in-the-money.

EMPLOYMENT AGREEMENTS

Each of the Named Executive Officers other than Mr. Jordan is party to an
employment agreement with the Company dated as of April 30, 1993 (the
"Employment Agreements"). The Employment Agreements establish base salaries for
Messrs. Luxton, Moore, Beattie and Littlejohn at $350,000, $175,000, $175,000
and $115,000, respectively, for fiscal year 1994, subject to 5% annual
increases and further increases at the discretion of the Board of Directors.
The Employment Agreements provide, in part, for an increase in base salaries
each fiscal year by the percentage by which the Company's earnings before
interest and taxes (as defined) ("EBIT") increased during the prior fiscal
year. The Employment Agreements also provide for the payment of annual cash
incentive bonuses. Annual cash incentive bonuses begin to accrue once EBIT
growth reaches 10% and fully vest once EBIT growth of 20% is achieved. The
maximum annual cash bonuses (as a percentage of base salary) for Messrs.
Luxton, Moore, Beattie and Littlejohn are 50%, 40%, 40% and 30%, respectively.
A 5% increase in Mr. Jordan's fiscal year 1996 salary of $126,787.50 for fiscal
year 1997 was negotiated at the time Mr. Jordan became Chief Financial Officer
of the Company. The Company also intends that Mr. Jordan will receive annual
cash incentive bonus payments not to exceed 30% of Mr. Jordan's base salary,
determined according to the formula applied in calculating annual bonus
payments for the other Named Executive Officers. In addition to the foregoing,
each Named Executive Officer is entitled to receive a holiday bonus in
accordance with the Company's holiday bonus program. Holiday bonuses for fiscal
year 1996 were $37,573 for the Named Executive Officers in the aggregate, which
amounts are included in the summary compensation table above.

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The Employment Agreements expire on October 31, 1997. The Employment
Agreements provide that in the event an executive's employment is terminated
without "good cause" (as defined), he will receive severance payments equal to
his base salary for one year following the date of termination. In addition,
the agreements provide for a one year noncompetition period following the date
of termination.

COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION

The Company's Compensation Committee is comprised of Messrs. Hennessy and
Foreman. Neither of them was an employee of the Company during the prior fiscal
year, and neither has served as an officer of the Company.

COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION

The following is the report of the Compensation Committee on executive
compensation. The Compensation Committee reviews and makes recommendations to
the Board of Directors regarding salaries, compensation and benefits of
executive officers and key employees of the Company and develops and
administers programs providing stock-based incentives. The following
Compensation Committee report documents the components of the Company's
executive officer compensation programs and describes the bases upon which
compensation has been and will be determined by the Committee with respect to
the Named Executive Officers.

This Compensation Committee report shall not be deemed incorporated by
reference by any general statement incorporating by reference this Proxy
Statement into any filing under the Securities Act of 1933 or under the
Securities Exchange Act of 1934, except to the extent that the Company
specifically incorporates this information by reference, and shall not
otherwise be deemed filed under such Acts.

Compensation Philosophy. The compensation philosophy of the Company is to
endeavor to link executive compensation to continuous improvements in corporate
performance and increases in stockholder value. The Compensation Committee has
adopted the following objectives as guidelines for compensation decisions.

- Display a willingness to pay levels of compensation that are necessary to
attract and retain highly qualified executives.

- Be willing to compensate executive officers in recognition of superior
individual performance, new responsibilities or new positions within the
Company.

- Take into account historical levels of executive compensation and the
overall competitiveness of the market for high quality executive talent.

- Implement a balance between short-term and long-term compensation to
complement the Company's annual and long-term business objectives and
strategy and encourage executive performance in furtherance of the
fulfillment of those objectives.

- Provide variable compensation opportunities based on the performance of
the Company, encourage stock ownership by executives and align executive
remuneration with the interests of stockholders.

Compensation Program Components. The particular elements of the
compensation program for the Named Executive Officers as set forth in their
respective Employment Agreements are explained below.

BASE SALARY. The base pay level for each of the Named Executive Officers
is set forth in each such executive's employment agreement. Base pay levels
were negotiated with each Named Executive Officer other than Mr. Jordan in
connection with the Company's initial public offering in 1993. Mr. Jordan's
base pay level was negotiated in connection with his being hired as Chief
Financial Officer of the Company in May 1995. See "Executive Compensation -
Employment Agreements."

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ANNUAL INCENTIVES. Annual bonuses for each of the Named Executive
Officers other than Mr. Jordan are determined according to formulae set
forth in his respective employment agreement. Annual bonus formulae were
negotiated with each Named Executive Officer other than Mr. Jordan in
connection with the Company's initial public offering. Annual bonuses for
Mr. Jordan are determined according to the formula set forth in Robert T.
Littlejohn's employment agreement. Annual bonuses for Mr. Jordan were
negotiated in connection with his becoming Chief Financial Officer of the
Company in May 1995. See "Executive Compensation - Employment
Agreements."

STOCK OWNERSHIP. The Compensation Committee strongly believes that by
providing those persons who have substantial responsibility over the management
and growth of the Company with an opportunity to establish a meaningful
ownership position in the Company, the interests of stockholders and executives
will be closely aligned. See "Security Ownership" above.

President and Chief Executive Officer Compensation. The base pay level and
annual incentive bonus compensation for Mr. Jesse C. Luxton, the Company's
President and Chief Executive Officer, are determined according to formulae set
forth in his employment agreement. Pursuant to his employment agreement, Mr.
Luxton's base salary for fiscal year 1994 was set at $350,000, subject to 5%
annual increases and further increases at the discretion of the Board. Mr.
Luxton's base salary for fiscal year 1996 was $385,875. Mr. Luxton did not
receive a bonus for fiscal year 1996. Mr. Luxton received a holiday bonus of
$24,473 in fiscal 1996. See "Compensation Program Components--Stock Ownership"
and "Executive Compensation - Employment Agreements" above.

Certain Tax Considerations. Section 162(m) of the Internal Revenue Code of
1986, as amended, limits the deductibility on the Company's tax return of
compensation over $1 million to any of the Named Executive Officers, unless, in
general, the compensation is paid pursuant to a plan which is
performance-based, non-discretionary and has been approved by the Company's
stockholders. The Compensation Committee's policy with respect to Section
162(m) is to make reasonable efforts to ensure that compensation is deductible
without limiting the Company's ability to attract and retain qualified
executives.

Summary. The Compensation Committee believes that the total compensation
program for executives of the Company is focused on increasing values for
stockholders and enhancing corporate performance. The Compensation Committee
currently believes that the compensation of executive officers is properly tied
to stock appreciation through stock options. The foregoing report has been
approved by all members of the Compensation Committee.

COMPENSATION COMMITTEE

Peter B. Foreman
Daniel J. Hennessy

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PERFORMANCE GRAPH

The following graph compares the Company's cumulative total stockholder
return since the Common Stock became publicly traded on October 5, 1993 with
the Total Return Index for the Nasdaq Stock Market and with the Total Return
Index for publicly-traded non-financial companies with a market capitalization
as of April 30, 1996 within one percentage point of the Company's market
capitalization. The Company has chosen this group for comparison because the
Company does not believe that it can reasonably identify a peer group or a
published industry or line-of- business index that contains companies in a
similar line of business. Cumulative total stockholder return is defined as
share price appreciation assuming a $100 initial investment and reinvestment of
dividends.

CERTAIN TRANSACTIONS

TRANSACTIONS WITH DIRECTORS AND MANAGEMENT

The Company currently does business with Direct Connection Travel, a
company in which Mr. Luxton and his wife each have a 25% interest. During
fiscal 1996, the Company made payments to Direct Connection Travel totaling
approximately $141,849. The Company believes that the terms of such
arrangement are substantially comparable to those available with other travel
agencies.

VOTING AGREEMENT

The Company and certain stockholders, including CHS and Messrs. Luxton,
Vesely, Moore, Beattie and Littlejohn, which in the aggregate own approximately
49% of all outstanding shares of the Common Stock, are parties to a Voting
Agreement that provides for, among other things, voting with respect to the
election of Directors. CHS is entitled to designate three Directors and Mr.
Luxton is entitled to be designated as a Director for so long as he is the
Chief Executive Officer, after which time his successor would be designated.
The remaining Directors are to be independent Directors, unaffiliated with CHS.
The agreement automatically terminates at such time when CHS ceases to hold at
least ten percent of the Common Stock.

SUBMISSION OF STOCKHOLDER PROPOSALS

The Company's by-laws require that the Company be provided with written
notice with respect to the nomination of any person for election as a Director
or the submission of any proposal at an annual meeting of stockholders. Any
such notice must include certain information concerning the nominating or
proposing stockholder, and the nominee or the proposal, and must be furnished
to the Company not less than 130 days before the day of the meeting or within
ten days after the Company has mailed to stockholders a notice of the meeting,
whichever is later. A copy of the applicable provision of the Company's
by-laws may be obtained, without charge, upon written request to the Secretary
of the Company at the address set forth below.

In addition, all stockholder proposals to be included in the Board of
Directors' Proxy Statement and proxy for the 1997 Annual Meeting of the
Company's stockholders (i) must be received by the Secretary of the Company not
later than March 22, 1997, and (ii) must satisfy the conditions established by
the Securities and Exchange Commission as necessary to entitle such proposal to
be included in the Proxy Statement and form of proxy.

REPORT TO STOCKHOLDERS

The Company has mailed this Proxy Statement to each stockholder entitled
to vote at the Annual Meeting. A copy of the Company's 1996 Annual Report was
mailed to each stockholder on or about July 29, 1996. Included in the Company's
1996 Annual Report are the Company's consolidated financial statements and
notes relating thereto for the fiscal year ended April 30, 1996.

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ADDITIONAL INFORMATION

This solicitation is being made by the Board of Directors. All expenses of
the Company in connection with this solicitation will be borne by the Company.
In addition to the solicitation by mail, proxies may be solicited by directors,
officers and other employees of the Company by telephone, telex, in person or
otherwise, without additional compensation. The Company will request brokerage
firms, nominees, custodians and fiduciaries to forward proxy materials to the
beneficial owners of shares held of record by such persons and will reimburse
such persons and the Company's transfer agent for their reasonable
out-of-pocket expenses in forwarding such materials.

THE COMPANY WILL FURNISH WITHOUT CHARGE TO EACH PERSON WHOSE PROXY IS
BEING SOLICITED, UPON THE WRITTEN REQUEST OF ANY SUCH PERSON, A COPY OF THE
COMPANY'S ANNUAL REPORT ON FORM 10-K FOR THE FISCAL YEAR ENDED APRIL 30, 1996,
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION. REQUESTS FOR COPIES OF
SUCH ANNUAL REPORT ON FORM 10-K SHOULD BE DIRECTED TO THE SECRETARY OF THE
COMPANY AT THE ADDRESS BELOW.

PLEASE COMPLETE THE ENCLOSED PROXY AND MAIL IT IN THE ENCLOSED
POSTAGE-PAID ENVELOPE AS SOON AS POSSIBLE.

By order of the Board of Directors

LOGO
Robert Littlejohn
Secretary

NATIONAL PICTURE & FRAME COMPANY
1500 Commerce Street
Greenwood, MS 38930-1910
July 26, 1996

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Dates Referenced Herein and Documents Incorporated by Reference

		Referenced-On Page
This ‘DEF 14A’ Filing	Date	First	Last	Other Filings

	10/31/97	14
	4/30/97	9		10-K405, 10-K405/A, NT 10-K
	3/22/97	16
For Period End:	8/19/96	2	4
Filed on:	7/30/96
	7/29/96	3	16	10-K405
	7/26/96	17
	7/3/96	3	10
	4/30/96	6	17	10-K405
	8/21/95	7
	5/8/95	12
	5/1/95	6
	4/30/95	12
	7/15/94	5
	4/30/94	12
	10/5/93	16
	5/30/93	5
	4/30/93	13
	7/31/92	5	6
				List all Filings

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Filing Submission 0000950137-96-001202 – Alternative Formats (Word / Rich Text, HTML, Plain Text, et al.)

National Picture & Frame Co – ‘DEF 14A’ for 8/19/96

As of: Tuesday, 7/30/96 · For: 8/19/96 · Accession #: 950137-96-1202 · File #: 0-22502

Definitive Proxy Solicitation Material — Schedule 14AFiling Table of Contents

Document Table of Contents

Dates Referenced Herein and Documents Incorporated by Reference

Definitive Proxy Solicitation Material — Schedule 14A
Filing Table of Contents