<PAGE> 1
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:
<TABLE>
<S> <C>
[ ] 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
</TABLE>
MEADOWCRAFT, INC.
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
(1) Title of each class of securities to which transaction applies:
(2) Aggregate number of securities to which transaction applies:
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which the
filing fee is calculated and state how it was determined):
(4) Proposed maximum aggregate value of transaction:
(5) Total fee paid:
[ ] Fee paid previously with preliminary materials:
[ ] Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
(2) Form, Schedule or Registration Statement No.:
(3) Filing Party:
(4) Date Filed:
<PAGE> 2
MEADOWCRAFT, INC.
4700 Pinson Valley Parkway
Birmingham, Alabama 35215
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
To be held December 4, 1998
To The Stockholders:
The annual meeting of stockholders of Meadowcraft, Incorporated (the
Company) will be held at the Company Corporate Office on the 4th day of December
1998 at 10:00 a.m. (Central Standard Time), for the following purposes:
(1) To elect a Board of Directors to serve until the next
annual meeting or until their successors are duly elected;
(2) To consider and vote upon a proposal to ratify the
engagement of the accounting firm of Arthur Andersen LLP as independent auditors
for the current fiscal year, and
(3) To transact such other business as may properly come
before the meeting or any adjournment thereof.
We hope you will attend the meeting and take an active part in it.
Details concerning those matters to come before the meeting are set forth in the
accompanying proxy statement for your inspection. Whether you plan to attend the
meeting or not, please execute the enclosed proxy and return it in the envelope
which is enclosed for your convenience.
The annual report of the Company for the fiscal year ended July 31,
1998, is enclosed. We hope you will find it informative.
Pursuant to a resolution adopted by the Board of Directors of the
Company, the close of business on November 3, 1998, has been fixed as the date
for the determination of stockholders entitled to notice of this meeting and to
vote at the meeting.
By Order of the Board of Directors
/s/ Samuel R. Blount
----------------------------------
Samuel R. Blount
Chairman
Birmingham, Alabama
October 30, 1998
<PAGE> 3
MEADOWCRAFT, INC.
4700 Pinson Valley Parkway
Birmingham, Alabama 35215
ANNUAL MEETING OF STOCKHOLDERS
DECEMBER 4, 1998
PROXY STATEMENT
-------------
INTRODUCTION
GENERAL
This Proxy Statement is furnished in connection with the solicitation
of proxies by the Board of Directors of Meadowcraft Incorporated (the "Company")
to be voted as the annual meeting of stockholders to be held at 4700 Pinson
Valley Parkway, Birmingham, Alabama 35215 on December 4, 1998 at 10:00 a.m.,
Central Standard Time, for the purposes set forth in the accompanying notice,
and at any adjournment thereof. This Proxy Statements and the accompanying form
of proxy are first being mailed or given to stockholders on or about October 30,
1998.
If the enclosed proxy is properly executed, returned and not revoked,
it will be voted in accordance with the instructions, if any, given by the
stockholder, and if no instructions are given, it will be voted (a) FOR the
election as directors of the nominees listed and described in this Proxy
Statement, (b) FOR the ratification of the engagement of the accounting firm of
Arthur Andersen LLP as independent auditors for the current fiscal year, and (c)
FOR the recommendations of the Board of Directors on any other proposal that may
properly come before the meeting. The persons named as proxies in the enclosed
form of proxy were selected by the Company's Board of Directors.
Please sign and return the proxy in the enclosed return envelope so the Common
Stock you own will be voted in accordance with your wishes. Proxies may be
solicited by personal interview, telephone, or mail. Banks, brokerage houses,
and other custodians, nominees or fiduciaries will be requested to forward
soliciting materials to their principals and to obtain authorization for the
execution of proxies, and will be reimbursed for their reasonable out-of-pocket
expenses incurred in that process. The Company will bear the cost of the
solicitation of proxies, which is expected to be nominal.
PROXY IS REVOCABLE
If after you send in your proxy you desire to revoke your proxy for any reason,
you may do so by giving notification of such intent to Steven C. Braswell, the
Secretary of the Company, in writing at any time prior to the commencement of
the annual meeting. Also, your proxy may be revoked by submitting a later-dated
proxy or by attending the meeting and voting in person. Unmarked proxies
received by the Company will be voted in favor of each of the proposal herein
specified and as directed by the attorneys-in-fact as to any other matter which
may come before the meeting.
DATE OF RECORD
The close of business on November 3, 1998 has been fixed as the record
date for the purposes of determining the stockholders entitled to notice of and
to vote at the annual meeting. Each share of Common Stock is entitled to one
vote on all matters.
<PAGE> 4
OUTSTANDING SECURITIES
As of the close of business on July 31, 1998, the Company had
authorized 30,000,000 shares of common stock, par value $.01 per share (the
"Common Stock"), of which 19,708,750 shares were issued and outstanding and
entitled to vote. The Common Stock is the Company's only outstanding voting
stock.
BUSINESS TO BE CONSIDERED AT ANNUAL MEETING OF STOCKHOLDERS
It is expected that the following business will be considered and
action taken thereon at the annual meeting:
(1) The election of a Board of Directors to serve until the
next annual meeting or until their successors are duly
elected;
(2) A proposal to ratify the engagement of the accounting
firm of Arthur Andersen LLP as independent auditors for
the current fiscal year, and
(3) Such other business as may properly come before the
meeting or any adjournment thereof.
STOCKHOLDERS LIST
A complete list of the stockholders entitled to vote at the annual
meeting of stockholders to be held on December 4, 1998, will be available or
inspection during the normal business hours at the principal office of the
Company for a period of at least ten (10) days prior to the meeting, upon
written request to the Company by a stockholder, and at all times during the
annual meeting at the place of meeting.
ELECTION OF DIRECTORS
INTRODUCTION
A Board of Directors consisting of no less than three and no more than
15 persons is authorized by the Company's Amended and Restated Bylaws (the
"Bylaws"). As provided in the Company's Bylaws, the Board of Directors has fixed
at five (5) the number of members to serve on the Board. Proxies cannot be voted
for a greater number of persons than the number of nominees named. The five
nominees receiving the highest number of votes at the annual meeting will be
elected as directors. Abstentions and broker non-votes will not affect the tally
of votes cast in the election. (A non-vote occurs when a broker, or other
fiduciary, holding shares for the beneficial owner votes on one proposal but
lack authority from the owners to vote on another proposal.) Each nominee for
the Board of Directors has expressed the willingness to serve as a Director
during the coming year. Each Director elected to the Board of Directors at this
meeting will serve for a term of one year or until a successor is duly elected
and qualified.
Unless a proxy shall specify otherwise, the persons named in the proxy shall
vote the shares covered thereby for the nominees designated by the Board of
Directors listed below. If any nominee becomes unavailable for election, the
current Board of Directors will determine how the proxies will be voted.
2
<PAGE> 5
NOMINEES
The following table sets forth the name, age, and principal occupation
for the previous five years of each nominee for Director and the year in which
each nominee became a Director:
<TABLE>
<CAPTION>
Director
Name Age Principal Occupation Since
- ---------------------- ------- --------------------------------------------- --------
<S> <C> <C> <C>
Samuel R. Blount 51 Chairman of the Board of Directors of the 1985
Company and has served in such capacity
since the Company formation in 1985. Prior
to the formation of the Company served as
President of HBC, Inc., a holding company.
William J. McCanna 58 President of the Company since 1991. Prior to 1991
joining the Company, served as Chief
Operations Officer and Director of Philips
Industries in Dayton, Ohio.
T. Morris Hackney 66 Chairman of the Board of Citation Corporation 1997
since 1974
James M. Scott 62 Partner, past Chairman of the Board of 1997
Governors and past Chairman of the Business
and Tax Section of Capell, Howard, Knabe and
Cobbs, P.A., a law firm. Mr. Scott has been
with the firm since 1964.
Reese H. McKinney, Jr. 50 Appointed Probate Judge for Montgomery County 1997
in 1998. Prior to being appointed Probate
Judge, Mr. McKinney served as the
Administrative Assistant to the Mayor of the
City of Montgomery, Alabama and served in
such capacity since 1978.
</TABLE>
MEETINGS OF THE BOARD OF DIRECTORS AND COMMITTEES
The Board of Directors held three meetings during Fiscal 1998. All of
the Directors were present at all of the meetings of the Board of Directors and
the Committees on which they served during Fiscal 1998.
The Audit Committee, consisting of James M. Scott, Reese H. McKinney, Jr., and
T. Morris Hackney, confers with the auditors and determines the scope of their
annual and interim examinations, determines through discussions with the
auditors and otherwise that no restrictions were placed by management on the
scope of the examination or its implementation, inquires into the effectiveness
of the Company's accounting and internal control functions, reports to the Board
of Directors on the results of the committee's activities and recommends any
changes in the appointment of independent auditors which the committees may deem
to be in the best interest of the Company and its shareholders. No member of the
audit committee may be an officer or employee of the Company. The audit
committee held one meeting during Fiscal 1998, and all members of the committee
were present.
The Compensation Committee consisting of Reese H. McKinney, Jr., James M. Scott,
and T. Morris Hackney, establishes the general compensation policy for the
Company and has the responsibility for the approval of increases in directors'
fees and for determining salaries and bonuses paid to executive officers and
senior employees of the Company. The Compensation Committee also possesses all
of the powers of administration under all of the Company's employee benefit
plans, including the Company's 1997 Stock Option Plan (the
3
<PAGE> 6
"Option"), and any bonus plans, retirement plans, stock purchase plans and
medical, dental, and insurance plans. In connection therewith, the Compensation
Committee determines, subject to the provision of the Company's plans, the
directors, officers, and employees of the Company eligible to participate in any
of the plans, the extent of such participation and the terms and conditions
under which benefits may be vested, received, or exercised. The Compensation
Committee held one meeting during 1998.
The Company does not have a Nominating Committee.
COMPENSATION OF DIRECTORS
Directors who are employees of the Company receive no additional compensation
for serving on the Board of Directors. Each non-employee member of the Board
received no annual compensation in 1998. The Chairman of the Audit Committee is
entitled to $5,000 per year compensation.
During Fiscal 1998 each non-employee director was awarded options to purchase
7,692 shares of Common Stock under the 1997 Stock Option Plan with an exercise
price of $13.00 per share subject to vesting at the rate of 20% per year.
OFFICERS
The Officers of the Company serve a term of one year or until their successors
are duly elected and qualified.
THE BOARD OF DIRECTORS RECOMMENDS THAT THE STOCKHOLDERS VOTE "FOR" THE ELECTION
OF ALL THE PROPOSED NOMINEES TO THE BOARD OF DIRECTORS. (PROPOSAL NO. 1.)
SELECTION OF AUDITORS
Arthur Andersen LLP, 420 North 25th Street, Suite 1800, Birmingham, Alabama
35203-3204, has been recommended by the Board of Directors for selection as
independent auditor of the Company for Fiscal 1999. Arthur Andersen LLP has
served as independent auditor of the Company for the fiscal years ended April
28, 1996, May 3, 1997, July 31, 1998, and for the thirteen weeks ended July 31,
1997. Services provided by Arthur Andersen include work related to the audit of
the financial statements and preparation of state and federal income tax
returns. A representative of Arthur Andersen LLP is expected to attend the
annual meeting of stockholders and will have the opportunity to make a
statement, if he desires, and will be available to respond to appropriate
questions.
The affirmative vote of a majority of the votes cast at the meeting is needed to
ratify the appointment of Arthur Andersen LLP as auditor of the Company for
1999. If the appointment is not approved, the matter will be referred to the
Audit Committee for further review.
THE BOARD OF DIRECTORS RECOMMENDS THAT THE STOCKHOLDERS VOTE "FOR" RATIFICATION
OF THE APPOINTMENT. (PROPOSAL NO. 2.)
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
Based solely on information made available to the Company, the following table
sets forth certain information regarding the beneficial ownership of the
Company's Common Stock as of October 6, 1998, by: (i) each of the executive
officers of the Company named in the summary compensation table included herein,
(ii) each director of the Company, (iii) all directors and executive officers as
a group, and (iv) each stockholder known by the Company to be the beneficial
owner of more that five percent (5%) of the outstanding Common Stock. Except as
otherwise indicated, each person or entity listed below has sole voting and
investment power with respect to all shares to be beneficially owned by such
person. Under the rules of the Securities and Exchange Commission (the
"Commission"), a person is deemed to be a "beneficial owner" of a security if
such person has or shares the
4
<PAGE> 7
power to vote or direct the voting of such security or the power to dispose of
or to direct the disposition of such security. Accordingly, more than one person
may be deemed to be a beneficial owner of the same security.
<TABLE>
<CAPTION>
Percentage of
Amount and Nature of Outstanding Shares
Name of Beneficial Owner (1) Beneficial Ownership Owned (2)
---------------------------------- ------------------------ --------------------
<S> <C> <C>
Samuel R. Blount 14,393,031 73.0%
William J. McCanna 1,600,000 8.1%
Steven C. Braswell 3,200 (3) *
Timothy M. LeRoy 800 (4) *
Rory S. Rehmert 400 (5) *
T. Morris Hackney 0 *
James M. Scott 3,000 (6) *
Reese H. McKinney, Jr. 1,000 (7) *
All Named Executive Officers, directors and
director nominees as a group (8 persons) 16,001,431 81.2%
</TABLE>
------
* Less than 1 percent
(1) The address of the directors and Named Executive Officers set
forth in the table is the address in care of Meadowcraft,
Inc., 4700 Pinson Valley Parkway, Birmingham, Alabama 35215.
(2) Includes 11,188,741 shares of Common stock held of record by
Mr. Blount and 3,204,290 shares of Common Stock beneficially
owned by him.
(3) Includes 3,200 shares owned by Mr. Braswell at the completion
of the Offering.
(4) Includes 700 shares owned by Mr. LeRoy at the completion of
the Offering.
(5) Includes 400 shares owned by Mr. Rehmert at the completion of
the Offering.
(6) Includes 3,000 shares owned by Mr. Scott.
(7) Includes 1,000 shares owned by Mr. McKinney.
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities and Exchange Act of 1934, as amended, requires
the Company's directors and executive officers, and persons who own more than
10% of the Company's Common Stock, to file with the Securities and Exchange
Commission ("SEC") initial reports of ownership and reports of changes in
ownership on the Common Stock. The executive officers, directors, and greater
than 10% stockholders of the Company are required by the SEC to furnish the
Company with copies of all Section 16(a) reports they file. There are specific
due dates for these reports and the Company is required to report in this Proxy
Statement any failure to file reports as required during fiscal 1998.
Based upon a review of these filings, the Company believes that the reporting
and filing requirements relating to ownership of Common Stock were complied with
during fiscal 1998, except as follows: (i) each Named Executive Officer filed
Form 3 late; and (ii) Timothy M. LeRoy filed the initial Form 4 late.
CERTAIN TRANSACTIONS
TRANSACTIONS WITH DIRECTOR
On July 1, 1987, the Company entered into an Assignment of Sublease with
Champion International Corporation, a New York corporation ("CIC"), and Pinson
Partners, an Alabama partnership, with respect to the substitution of the
Company as sublessee under a Sublease dated January 31, 1977 (the "Sublease")
between CIC and Birmingham Ornamental Iron Company, Inc., an Alabama corporation
("BIOC"). Under the terms of the Sublease, the Company
5
<PAGE> 8
subleases the Meadowcraft Road property from CIC for use as a manufacturing
facility. The current rental rate is approximately $32,100 per month, of which
approximately $29,500 per month is payable to Pinson Partners. Mr. T. Morris
Hackney, a Director, and his wife, Brenda Hackney, own 40% interest in Pinson
Partners which entitles them to approximately $11,800 per month of the rental
payments made by the Company to Pinson Partners. The Company, as sublessee, is
also required to maintain insurance on the premises and pay all operating
expenses, including utility charges, with respect to the premises. The
Meadowcraft Road property is currently exempt from ad valorem taxes, but the
Company is required to pay all such taxes if and when the premises become
taxable. The underlying lease between BOIC and the City of Tarrant City, a
municipal corporation, expires on August 29, 2000. The Company believes that the
terms of the underlying lease, including the monthly rental rate, are at least
as favorable to the Company as those which could have been negotiated with an
unaffiliated third party.
EXECUTIVE COMPENSATION
SUMMARY COMPENSATION TABLE
The following table sets forth a summary of the compensation paid or accrued by
the Company for services in all capacities to the Company during Fiscal 1998, to
the Company's Chairman of the Board of Directors and the four other highest paid
executive officers (the "Named Executive Officers").
<TABLE>
<CAPTION>
Annual Compensation Long Term Compensation
----------------------------------- --------------------------------
Awards Payouts
--------------------------------
Other Securities
Annual Restricted Underlying LTIP All Other
Compensation Stock Options/ Payouts Compensation
Name and Principal Position Year Salary($) Bonus($) ($) Award(s) SARs(#) ($) ($)(1)
- --------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Samuel R. Blount 1998 300,000 0 5,391 (2) 4,796
Chairman of the 1997 300,000 0 6,026 (2) 3,770
Board of Directors 1996 300,000 0 2,250 (2) 2,572
William J. McCanna 1998 293,289 473,508 8,835 (3) 6,254
President 1997 276,242 584,144 8,800 (3) 6,254
1996 263,250 482,208 8,142 (3) 6,254
Steven C. Braswell 1998 114,263 52,989 3,400 (4) 1,228
Vice President of 1997 108,192 51,962 3,062 (4) 1,169
Finances, Chief 1996 104,700 30,943 3,490 (4) 1,131
Financial Officer
and Secretary
Timothy M. LeRoy 1998 113,846 92,915 3,036 (4) 369
Vice President of Sales 1997 105,192 89,308 2,805 (4) 343
And Marketing 1996 95,192 36,131 2,538 (4) 306
(Mass Accounts)
Rory S. Rehmert 1998 92,520 76,993 3,084 (4) 703
Vice President of Sales 1997 89,167 76,205 2,972 (4) 351
And Marketing 1996 86,550 25,583 2,885 (4) 339
(Specialty Accounts)
</TABLE>
- ------
(1) Represents dollar value of insurance premiums paid with respect to life
insurance for the benefit of the Named Executive Officer, and for Mr.
Blount and Mr. McCanna medical insurance premiums for 2% or greater
shareholders.
(2) Includes I.R.S. reported income for transportation provided by the Company.
(3) Includes country club dues and I.R.S. reported income for transportation
provided by the Company.
(4) Matching contribution to 401k plan.
6
<PAGE> 9
OPTION GRANTS IN FISCAL YEAR 1998
The following table set forth certain information concerning individual grants
of stock options made during fiscal 1998 to certain of the named executive
officers:
<TABLE>
<CAPTION>
Potential Realizable Value
Number of % of Total At Assumed Annual Rates
Securities Options Of Stock Price Appreciation
Underlying Granted to Exercise or For Option Terms(2)
Options Employees in Base Price Expiration ----------------------------
Name Granted (#) (1) Fiscal Year ($/Share) Date 5%($) 10%($)
- --------------------- ---------------- ------------ ----------- ------------ ------------ --------------
<S> <C> <C> <C> <C> <C> <C>
Samuel R. Blount 34,965 10.3% $14.30 July 31, 2002 $ 138,140 $ 305,254
38,462 11.4% $13.00 July 31, 2007 $ 314,451 $ 796,881
William J. McCanna 76,924 22.8% $13.00 July 31, 2007 $ 628,902 $ 1,593,762
Steven C. Braswell 15,385 4.6% $13.00 July 31, 2007 $ 125,782 $ 318,756
Timothy M. LeRoy 38,462 11.4% $13.00 July 31, 2007 $ 314,451 $ 796,881
Rory S. Rehmert 19,231 5.7% $13.00 July 31, 2007 $ 157,226 $ 398,440
</TABLE>
(1) All options outstanding were issued under the Incentive Plan. Options
granted in 1998 vest evenly over five years and have a ten year term, except for
Mr. Blount's options with a $14.30 exercise price, which have a five year term,
and are exercisable 20% per year on the first anniversary of the grant date and
20% each year for the next four years on the anniversary of the grant date.
(2) Based upon the market price on the date of grant and an annual appreciation
at the rate stated of such market price through the expiration date of such
options. The dollar amounts under these columns are the result of calculations
at the 5% and 10% rates set by the SEC and, therefore, are not intended to
forecast possible future appreciation, if any, of the Company's stock price.
OPTIONS EXERCISES AND YEAR-END VALUES
The following table provides certain information with respect to the Named
Executive Officers in 1998 concerning the exercise of options during 1998 and
with respect to unexercised options at July 31, 1998:
AGGREGATED OPTION EXERCISE IN LAST FISCAL YEAR
AND FISCAL YEAR-END OPTION VALUES
<TABLE>
<CAPTION>
Number of Unexercised Value of Unexercised In-the-
Options at Fiscal Money Options at Fiscal
Shares Year-End (#) Year-End ($)
Acquired on Value ------------------------- --------------------------
Name Exercise ($) Realizes ($) Exercisable Unexercisable Exercisable Unexercisable
- --------------------- ---------------------------------------------------- ----------- --------------
<S> <C> <C> <C> <C> <C> <C>
Samuel R. Blount 0 0 0 73,427 0 0
William J. McCanna 0 0 0 76,924 0 0
Steven C. Braswell 0 0 0 15,385 0 0
Timothy M. LeRoy 0 0 0 38,462 0 0
Rory S. Rehmert 0 0 0 19,231 0 0
</TABLE>
7
<PAGE> 10
1997 EMPLOYEE STOCK INCENTIVE PLAN
On July 31, 1997, the Board of Directors of the Company adopted the Company's
1997 Stock Option Plan ("the Plan"), which was approved by the Stockholders on
July 31, 1997. The Plan provides for the grant of stock options ("Options") to
participants. The objectives of the Plan are to promote the success and enhance
the value of the Company by providing flexibility in the Company's ability to
motivate, attract and retain the services of employees. A total of 1,000,000
shares of Common Stock have been reserved for issuance under the Plan. The Plan
authorizes the grant of nonqualified Options and Options intended to qualify as
incentive stock options ("Incentive Options") under Section 422 of the Code.
The Plan will be administered by the Board of Directors, which has the exclusive
power to (i) designate participants, (ii) determine the number of Options to be
granted, (iii) fix the terms and conditions of any Option, (iv) prescribe the
form of each Option agreement, (v) decide all other matters that must be
determined in connection with an Option, (vi) establish, adopt, or revise any
rules and regulations as it may deem necessary or advisable to administer the
Plan, and (vii) make all other decisions and determinations that may be required
under the Plan. The Plan provides that the Board of Directors will select
participants from among employees, officers and directors of the Company or its
future subsidiaries.
The exercise price for each Option granted under the Plan will be determined by
the Board of Directors, but will not be less than the fair market value of the
Common Stock on the date of grant. No Incentive Options may be granted to any
employee who owns, at the date of grant, stock representing in excess of 10% of
the combined voting power of all classes of stock of the Company or any
subsidiary unless the exercise price for the stock subject to such Incentive
Options is at least 110% of the fair market value of such stock at the time of
grant and the Incentive Option term does not exceed five years.
The term of each Option will be for the period as determined by the Board of
Directors, provided no Option will exceed a period of 10 years from the date of
grant. If a participant who holds options ceases, for any reason, to be an
employee of the Company (the "Termination"), the Options expire three months
after such Termination. Notwithstanding the foregoing, in the event of
Termination due to the optionee's death, the Options may be exercised for a
period of 12 months following the date of such optionee's death. Options granted
under the Plan may be exercisable in installments.
Upon the exercise of Incentive Options, the option exercise price must be paid
in full, either in cash or other form acceptable to the Board of Directors,
including delivery of shares of Common Stock already owned by the optionee.
Unless terminated earlier, the Plan will terminate on July 30, 2007.
401(K) PLAN
The Company maintains a Section 401 (k) Profit Sharing Plan (the "KPlan") for
its salaried employees. The KPlan is a Code Section 401 (k) plan, which
requires, subject to certain limited exceptions, 12 month of service and
attainment of age 21 to become a participant in the KPlan. The KPlan allows the
employees to make pretax contributions to the KPlan, which are matched at a rate
determined by the Company's Board of Directors (currently 33%) up to a maximum
of 10% of the employee's compensation. The total KPlan expense for Fiscal 1998,
1997 and 1996 was $118,000, $94,000 and $82,000, respectively.
EMPLOYMENT AGREEMENTS; CONFIDENTIALITY AGREEMENTS
The Company has not entered into any employment agreements or noncompete
agreements with any of its employees. In 1992, the Company agreed to pay William
J. McCanna a bonus of $1.0 million when the Company achieved audited year-end
equity of $10.0 million, provided certain other conditions were satisfied. Mr.
McCanna became eligible to receive the bonus in August 1995. The bonus was
accrued in each of Fiscal 1995, 1996 and 1997 and was paid out in three annual
installments.
The Company maintains a long-term incentive program for certain of its key
employees, excluding the Chairman of the Board of Directors and the President.
Cash awards are granted to the key employees as determined by the Chairman of
the Board of Directors and the President. The cash bonuses vest at the rate of
20% per year based on
8
<PAGE> 11
the attainment of goals and objectives by the Company and by the employee. Once
fully vested, the bonuses are payable to the employee at the rate of 20% per
year with interest at the prime rate until the unpaid balance is paid. The bonus
is subject to forfeiture if the employee voluntarily terminates employment
before the bonus is fully vested. If employment is terminated for any other
reason, the employee is entitled to receive the vested portion of the bonus at
the rate of 20% per year.
All of the Company's exempt salaried employees, including the executive
officers, have each signed a confidentiality agreement pursuant to which each
has agreed not to disclose any of the Company's confidential information and to
assign to the Company any rights he or she may have in any design, invention,
software, process, trade secret or intellectual property that relates to or
resulted from work performed at the Company.
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
The Compensation Committee's general philosophy with respect to the compensation
on the Company's executive officers is to offer competitive compensation
programs designed to attract and retain key executives critical to the long-term
success of the Company and to recognize an individual's contribution. The
components of such compensation programs include a base salary and annual bonus,
and a stock option program designed to provide long-term incentives.
The Company has no employment agreements with its executive officers.
The stock option plan adopted on July 31, 1997 is administered by the
Compensation Committee (with respect to all eligible persons except Directors)
and is designed to attract and retain executive officers and other employees of
the Company and to reward them for their successful efforts to deliver growth in
value to the Company's shareholders.
Members of the Compensation Committee:
Reese H. McKinney, Jr. (Chairman)
T. Morris Hackney
James M. Scott
9
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COMPARATIVE PERFORMANCE GRAPH
MEADOWCRAFT, INC. STOCK PERFORMANCE
8 Month Total Return Comparison
Meadowcraft, Inc. Russell 2000 Index & NYSE Index
[GRAPH]
GENERAL INFORMATION
SHAREHOLDER LIST
A complete list of the shareholders entitled to vote at the annual meeting of
Shareholders to be held on December 4, 1998, will be available for inspection
during normal business hours at the principal office of the Company for a period
of at least 10 days prior to the meeting, upon written request to the Company by
a Shareholder, and at all times during the annual meeting at the place of the
meeting.
Meadowcraft will provide without charge a copy of its annual report on Form
10-K, including the financial statements and schedules thereto, for its fiscal
year ended July 31, 1998, to any beneficial owner of Meadowcraft, Incorporated
Common Stock as of November 2, 1998, who requests in writing a copy of such from
its Corporate Communications Manager, Amanda L. McCanna, c/o Meadowcraft, Inc.,
4700 Pinson Valley Parkway, Birmingham, Alabama 35215.
SHAREHOLDER PROPOSALS FOR 1999 ANNUAL MEETING
Shareholder proposals to be presented for consideration at the next meeting of
shareholders of the Company must be received by the Company at its executive
offices at 4700 Pinson Valley Parkway, Birmingham, Alabama 35215, no later than
August 31, 1999.
10
<PAGE> 13
COUNTING OF VOTES
All matters specified in this Proxy Statement to be voted on at the annual
meeting will be by written ballot. Inspectors of election will be appointed,
among other things, to determine the number of shares outstanding, to determine
the shares represented at the annual meeting, to determine the existence of a
quorum and the authenticity, validity, and effect of proxies, to receive votes
of ballots, to hear and determine all challenges and questions in any way
arising in connection with the right to vote, and to count and tabulate all
votes and to determine the result. Each item presented herein to be voted in at
the annual meeting must be approved by the affirmative vote of the holders of
the number of shares described under each such item. The inspectors of election
will treat shares represented by proxies that reflect abstentions as shares that
are present and entitled to vote for purposes of determining the presence of a
quorum. Abstentions, however, do not constitute a vote "for" or "against" any
matter and thus will be disregarded in the calculation of a plurality or of
"votes cast."
Inspectors of election will treat shares referred to as "broker non-votes"
(i.e., shares held by a broker, or other fiduciary, holding shares for a
beneficial owner with authority to vote on one proposal but lacking authority to
vote on another proposal) as shares that are present and entitled to vote for
purposes of determining the presence of a quorum. However, for purposes of
determining the outcome of any matter as to which a broker has physically
indicated on the proxy that it does not have discretionary authority to vote,
those shares will be treated as not present and not entitled to vote with
respect to that matter (even though those shares are considered entitled to vote
for quorum purposes and may be entitled to vote on other matters.)
MISCELLANEOUS
The Company will bear the cost of printing, mailing and other expenses in
connection with this solicitation of proxies and will also reimburse brokers and
other persons holding shares in their names or in the names of nominees for
their expenses in forwarding this proxy material to the beneficial owners of
such shares. Certain of the directors, officers, and employees of the Company
may, without any additional compensation, solicit proxies in person or by
telephone.
Management of the Company is not aware of any matters other than those described
above, which may be presented for action at the meeting. If any other matters
properly come before the meeting, it is intended that the proxies will be voted
with respect thereto in accordance with the judgement of the person or persons
voting such proxies subject to the direction of the Board of Directors.
A copy of the Company's Annual Report has been mailed to all shareholders
entitled to notice of and to vote at the annual meeting.
INCORPORATION BY REFERENCE
The Consolidated Financial Statements of the Company and Management's Discussion
and Analysis of Financial Conditions and Results of Operations, set forth in the
Company's Annual Report to Shareholders accompanying this Proxy Statement, are
hereby incorporated by reference herein.
MEADOWCRAFT, INCORPORATED
/s/ Samuel R. Blount
--------------------------
Samuel R. Blount
Chairman
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APPENDIX
MEADOWCRAFT(R) INC.
4700 Pinson Valley Parkway, Birmingham, Alabama 35215
This Proxy is Solicited on Behalf of the Board of Directors
The undersigned hereby appoints Samuel R. Blount and William J. McCanna as
Proxies, each with the power to appoint his substitute, and hereby authorizes
them, to represent and vote, as designated on the reverse side, all shares of
Common Stock of Meadowcraft, Inc. (the "Company") held of record by the
undersigned on November 3, 1998, at the Annual Meeting of Stockholders to be
held on December 4, 1998 or any adjournment thereof.
(CONTINUED AND TO BE SIGNED ON THE REVERSE SIDE.)
<PAGE> 15
<TABLE>
<S> <C> <C> <C> <C> <C> <C> <C>
A [X] PLEASE MARK YOUR
VOTES AS IN THE
EXAMPLE.
WITHHOLD
FOR all nominees AUTHORITY
listed to right (except as to vote for
marked to the contrary) nominees listed
FOR AGAINST ABSTAIN
(1) Election [ ] [ ] NOMINEES: Samuel R. Blount (2) Proposal No. 2 [ ] [ ] [ ]
of William J. McCanna Ratification of the
Directors T. Morris Hackney appointment of Arthur
James M. Scott Andersen LLP as
For, except votes withheld from the following Reese H. McKinney, Jr. independent auditors
nominees.
NOTE: SUCH OTHER BUSINESS AS MAY PROPERLY COME
BEFORE THE MEETING OR ANY ADJOURNMENT THEREOF.
----------------------------------------------
SIGNATURE DATE SIGNATURE DATE
----------------------------------- ------------------- ------------------------------- --------------------
SIGNATURE IF HELD JOINTLY
NOTE: Please sign exactly as name appears hereon. When shares are held by joint tenants, both should sign. When signing as
attorney, executor, administrator, trustee or guardian please give full title as such. If a corporation, please sign in
full corporate name by President or other authorized officer. If a partnership, please sign in partnership name by
authorized person.
</TABLE>
