<PAGE>
Wm. WRIGLEY Jr. Company
Wrigley Building 410 N. Michigan Avenue Chicago, Illinois 60611
NOTICE OF ANNUAL MEETING
To the Stockholders:
The Annual Meeting of the Stockholders of the Wm. Wrigley Jr.
Company, a Delaware corporation, will be held in the Wrigley Building, 410
N. Michigan Avenue, Chicago, Illinois, on Wednesday, March 5, 1997, at
9:00 a.m., Central Standard Time, for the following purposes:
1. To elect the full Board of nine directors;
2. To approve the 1997 Management Incentive Plan;
3. To ratify the appointment of independent auditors for the year
ending December 31, 1997; and
4. To transact such other business as may properly come before the
Annual Meeting and any adjournments thereof.
Stockholders of record at the close of business on January 15, 1997
are entitled to notice of and to vote at the Annual Meeting and any
adjournments thereof.
Your copy of the 1996 Annual Report of the Wm. Wrigley Jr. Company
is enclosed.
You can help your Company prepare for the Annual Meeting by marking,
signing and dating the accompanying proxy and returning it as soon as
possible. For your convenience, a return envelope is enclosed with postage
paid if mailed in the United States or Canada.
By Authorization of the Board of Directors,
Wm. M. Piet, Secretary
Chicago, February 5, 1997
YOUR VOTE IS IMPORTANT. WHETHER YOU OWN ONE SHARE OR MANY, YOUR PROMPT
COOPERATION IN RETURNING YOUR SIGNED PROXY IS GREATLY APPRECIATED.
<PAGE>
Proxy Statement for
Annual Meeting of Stockholders of
WM. WRIGLEY JR. COMPANY
To Be Held on March 5, 1997
TABLE OF CONTENTS
<TABLE>
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Page
<S> <C>
General 1
Proposal 1 -- Election of Directors 2
Security Ownership of Directors and Executive Officers 5
Security Ownership of Certain Beneficial Owners 6
Meetings and Committees of the Board 7
Compensation of Directors 7
Proposal 2 -- Approval of Adoption of the Wm. Wrigley Jr. Company
1997 Management Incentive Plan 9
Federal Tax Consequences 12
New Plan Benefits 13
Proposal 3 -- The Appointment of Ernst & Young LLP as Independent Auditors 14
Executive Compensation 15
Compensation Committee Report on Executive Compensation 15
Five-Year Total Stockholder Return Index 18
Summary Compensation Table 19
Stock Options and Stock Appreciation Rights 21
Long-Term Stock Grant Program 21
Pension Plan 22
Stockholder Proposals for 1998 Annual Meeting of Stockholders 22
Other Business 22
Wm. Wrigley Jr. Company Management Incentive Plan A-1
</TABLE>
<PAGE>
PROXY STATEMENT
FOR THE
ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD AT 9:00 A.M., MARCH 5, 1997
GENERAL
SOLICITATION OF PROXIES. The accompanying proxy is solicited by and
on behalf of the Board of Directors (the "Board") of the Wm. Wrigley Jr.
Company (the "Company") in connection with the Annual Meeting of
Stockholders (the "Annual Meeting") to be held at 9:00 a.m. on Wednesday,
March 5, 1997, and at any adjournments thereof. The principal executive
offices of the Company are located in the Wrigley Building, 410 N. Michigan
Avenue, Chicago, Illinois 60611. This proxy statement, the enclosed proxy
and a copy of the Company's Annual Report to Stockholders for the fiscal
year ended December 31, 1996 are being mailed on or about February 5, 1997,
to stockholders of record as of January 15, 1997.
COSTS OF SOLICITATION. The costs of soliciting proxies will be borne
by the Company. In addition to the use of the mails, certain directors,
officers or employees of the Company may solicit proxies by telephone,
telegram, cable or personal contact. Upon request, the Company will
reimburse brokers, dealers, banks and trustees, or their nominees, for
reasonable expenses incurred by them in forwarding proxy material to
beneficial owners of shares of the Company's Common and Class B Common
Stock.
OUTSTANDING VOTING SHARES. Stockholders of record at the close of
business on January 15, 1997 will be entitled to notice of and to vote at
the Annual Meeting. As of January 15, 1997, there were 92,034,035 shares
of Common Stock and 24,143,339 shares of Class B Common Stock outstanding
and entitled to notice and to vote. Each share of Common Stock is entitled
to one vote, and each share of Class B Common Stock is entitled to ten votes
on each matter presented to the stockholders.
VOTE REQUIRED FOR APPROVAL. Shares of both classes of Common Stock
will vote together as a single class with respect to the election of
directors, approval of the 1997 Management Incentive Plan and the
ratification of appointment of independent auditors. Under the Company's
By-laws, the election of directors, approval of the 1997 Management
Incentive Plan and the ratification of the appointment of independent
auditors each requires the affirmative vote of a majority of the votes
entitled to be cast by holders of shares represented at the Annual Meeting
in person or by proxy. Votes may be cast by a stockholder in favor of the
nominees or withheld. Votes may be cast by a stockholder in favor of or
against approval of the 1997 Management Incentive Plan and the ratification
of appointment of independent auditors or a stockholder may elect to abstain
on one or both matters. Since votes withheld and abstentions will be
counted for quorum purposes and are deemed to be present for purposes of the
respective proposals, they will have the same effect as a vote against each
matter. Broker non-votes, if any, while counted for general quorum
purposes, are not deemed to be present with respect to any matter for which
a broker does not have authority to vote.
VOTING YOUR PROXY. Proxies in the accompanying form, properly
executed and received by the Company prior to the Annual Meeting and not
revoked, will be voted as directed. In the absence of direction from the
stockholder, properly executed proxies received prior to the Annual Meeting
will be voted FOR the election of all nominees for director, FOR approval
of the 1997 Management Incentive Plan and FOR the ratification of the
appointment of the independent auditors. You may revoke your proxy by
giving written notice of revocation to the Secretary of the Company at
any time before it is voted, by submitting a later-dated proxy or by
attending the Annual Meeting and voting your shares in person.
<PAGE>
PROPOSAL 1
ELECTION OF DIRECTORS
The annual election of the Board will take place at the Annual
Meeting. At its January 30, 1997 meeting the Board approved the
recommendation of the Nominating Committee that nine directors be submitted
to the stockholders for approval at the Annual Meeting and accepted the
resignation of Gary E. Gardner, who had served as a Director since
January 31, 1994. Mr. Gardner's resignation was not due to any disagreement
with the Company or the Board but to the time demands of his new enterprise.
Each of the nine nominees, if elected, will serve on the Board until
the next annual meeting or until their successors shall be duly elected and
qualified in accordance with the By-laws of the Company. All nominees are
presently members of the Board. If any of the nine nominees should become
unable to accept election, the persons named in the proxy as members of the
proxy committee may vote for such other person or persons as may be
designated by the Board or the proxy committee. Management has no reason
to believe that any of the nominees named below will be unable to serve.
Approval of the nominees for election to the Board will require the
affirmative vote of a majority of the votes entitled to be cast by the
holders of the outstanding shares of Common Stock and Class B Common Stock
represented at the Annual Meeting in person or by proxy, voting together as
one class.
Charles F. Allison III
Mr. Allison, 68, a Director of the Company since 1980, is Partner of
Counsel to Booz Allen & Hamilton, Inc., a management consulting firm where
he has been a member since 1958. Mr. Allison is Chairman of the Audit
Committee and a member of the Compensation Committee.
Douglas S. Barrie
Mr. Barrie, 63, a Director of the Company since January 30, 1996,
was Group Vice President-International since 1984 and has been Group Vice
President since 1996.
Lee Phillip Bell
Mrs. Bell, 68, a Director of the Company since 1981, has, since
1980, been a Director of Bell-Phillip Television Productions, Inc., a
producer of television dramas. Mrs. Bell is a member of the Compensation
and Nominating Committees.
Robert P. Billingsley
Mr. Billingsley, 69, a Director of the Company since 1977, is a
private investor. From 1987 to 1994 he was Executive Vice President of WLD
Enterprises, Inc., an investment firm. Mr. Billingsley is Chairman of the
Compensation Committee and a member of the Nominating Committee.
Thomas A. Knowlton
Mr. Knowlton, 50, a Director of the Company since August 21, 1996, has
been Executive Vice President of the Kellogg Company, a worldwide
manufacturer of ready-to-eat cereal products and convenience foods, since
January 1992 and was named President-Kellogg North America in 1994.
Mr. Knowlton is a member of the Audit and Compensation Committees.
<PAGE>
Penny Pritzker
Ms. Pritzker, 37, a Director of the Company since 1994, has been a
partner of Pritzker & Pritzker, a commercial real estate venture company and
has been President of Classic Residence by Hyatt, an affiliate of Hyatt
Corporation, since 1985 and 1987, respectively. Ms. Pritzker is also
President of Penguin Group L.P., which acquires and develops non-Hyatt hotel
real estate, and a Director of Coast-to-Coast Financial Corporation. Ms
Pritzker is a member of the Audit and Nominating Committees.
Richard K. Smucker
Mr. Smucker, 48, a Director of the Company since 1988, has been
President and a Director of The J.M. Smucker Company, a manufacturer of
food spreads and food spread-related items, since 1987 and 1975,
respectively. Mr. Smucker is also a Director of The Sherwin-Williams
Company. Mr. Smucker is Chairman of the Nominating Committee and a member
of the Audit Committee.
William Wrigley
Mr. Wrigley, 64, a Director of the Company since 1960, has been
President and Chief Executive Officer of the Company since 1961.
Mr. Wrigley is also a Director of Texaco Inc. and American Home Products
Corporation. Mr. Wrigley is a non-voting, ex officio member of the Audit,
Compensation and Nominating Committees.
William Wrigley, Jr.
Mr. Wrigley, 33, a Director of the Company since 1988, has been Vice
President of the Company since 1991 and was Assistant to the President from
1985 to 1992. Mr. Wrigley is also a Director of The J.M. Smucker Company.
William Wrigley, Jr. is the son of William Wrigley.
YOUR BOARD RECOMMENDS THAT STOCKHOLDERS
VOTE FOR ALL DIRECTORS.
<PAGE>
Security Ownership of Directors and Executive Officers
The following table sets forth the beneficial ownership of all Company
Common Stock, as of January 15, 1997, for each director and nominee, the
Chief Executive Officer, the next four most highly compensated executive
officers, and for all directors and executive officers as a group.
<TABLE>
<CAPTION>
Total
Class B Stock and
Common Stock Common Stock Based
Name Common Stock(1) Units(2) Stock* Holdings(3)
<S> <C> <C> <C> <C>
Charles F. Allison III 20,077(4) 11,874 6,648(4) 38,599
Douglas S. Barrie 34,728 13,469 1,218 49,415
Lee Phillip Bell 59,659(5) 12,915 8,562 81,136
Robert P. Billingsley 6,000 12,317 -0- 18,317
Thomas A. Knowlton 500 450 -0- 950
Penny Pritzker 200 3,450 -0- 3,650
Richard K. Smucker 3,568 10,597 -0- 14,165
William Wrigley 21,891,867(6) 44,445 12,854,508(6) 34,790,820
William Wrigley, Jr. 10,449 1,255 6,884 18,588
John F. Bard 9,693 13,225 -0- 22,918
Ronald O. Cox 41,573 11,915 6,796 60,284
Martin J. Geraghty 76,277(7) 1,606 7,571(7) 85,454
All directors and executive
officers as a group (30) 22,307,666(8) 180,550 12,913,621 35,401,837
</TABLE>
(1) Includes restricted shares held by directors and executive officers
over which they have voting power but not investment power, shares
held directly or in joint tenancy, shares held in trust by broker,
bank or nominee or other indirect means and over which the individual
or member of the group has sole or shared voting and/or investment
power. Unless otherwise noted, each individual or member of the
group has sole voting and investment power with respect to the shares
shown. This column also includes 15,000 shares for Mr. Geraghty
which are subject to outstanding exercisable stock options awarded
under the 1988 Stock Option Program. These are the only options
outstanding for all directors and executive officers as a group. No
director or executive officer, except Mr. William Wrigley, owns more
than one tenth of one percent of the total outstanding shares of
either class of Common Stock. Mr. William Wrigley beneficially owns
23.79% of the shares of Common Stock outstanding and 53.24% of the
shares of Class B Common Stock outstanding.
(2) Includes the non-voting share units as may be credited to the account
of the named individual or members of the group, as applicable, under
the Stock Deferral Plan for Non-Employee Directors (formerly called
the Stock Retirement Plan for Non-Employee Directors, a complete
description of which is set forth under the heading "Compensation of
Directors") or pursuant to deferred compensation elections.
(3) Includes the sum of Common Stock, Common Stock Units and Class B
Common Stock and represents the aggregate of the individual's Common
Stock holdings assuming distribution of Common Stock Units as Common
Stock and conversion of all Class B Common Stock to Common Stock.
(4) Includes 8,779 shares of Common Stock and 3,048 shares of Class B
Common Stock over which Mr. Allison has shared voting and investment
power.
(5) Includes 6,000 shares of Common Stock held by the Bell Family
Foundation, over which shares Mrs. Bell has shared investment and
voting power, and 6,000 shares held by her husband.
<PAGE>
(6) Includes 21,002,416 shares of Common Stock and 11,537,000 shares of
Class B Common Stock held by various trusts, a corporation and a
nonprofit corporation. Mr. Wrigley has sole voting and investment
power over the shares listed with the exception of 396,886 shares of
Common Stock and 195,264 shares of Class B Common Stock over which
Mr. Wrigley has shared voting power and 2,002,990 shares of Common
Stock and 912,048 shares of Class B Common Stock, over which
Mr. Wrigley has shared investment power. Of the total shares shown
for Mr. Wrigley, he disclaims any beneficial interest in 9,220,353
shares of Common Stock and 4,689,598 shares of Class B Common Stock.
(7) Includes 129 shares of Common Stock held by Mr. Geraghty's wife.
(8) Includes 2,038,578 shares of Common Stock and 918,480 shares of
Class B Common Stock over which members of the group share voting or
investment power.
* Shares of Class B Common Stock are at all times convertible into
shares of Common Stock on a share-for-share basis. Assuming an
individual, or the group, converts the shares of Class B Common Stock
held by such individual or group into shares of Common Stock, the
percentage of Common Stock owned beneficially by Mr. William Wrigley
would be 33.14%, and 33.33% for all directors and executive officers
as a group. No other individual named or member of the group would
own beneficially more than 0.10% of the Common Stock as the result of
such conversion.
Security Ownership of Certain Beneficial Owners
As of January 15, 1997, the Company's records and other information
made available by outside sources indicated that the following stockholders
were beneficial owners of more than five percent of the outstanding shares
of the Company's Common Stock or Class B Common Stock.
<TABLE>
<CAPTION>
Amount and Nature of Beneficial Ownership
Class B
Common Stock* Common Stock
Name Shares Percent of Class Shares Percent of Class
<S> <C> <C> <C> <C>
Edna Jean Offield,
James S. Offield
and Paxson H. Offield(1)
410 N. Michigan Avenue
Chicago, Illinois 60611 6,157,767 6.69 3,000,069 12.43
William Wrigley(2)
410 N. Michigan Avenue
Chicago, Illinois 60611 21,891,867 23.79 12,854,508 53.24
</TABLE>
Due to their substantial stock holdings, the Offield family and
Mr. Wrigley may each be deemed a "control person" of the Company under
applicable regulations of the Securities and Exchange Commission. James and
Paxson Offield are the sons of Edna Jean Offield.
<PAGE>
(1) Of the shares listed, Edna Jean Offield has sole voting and
investment power over 821,120 shares of Common Stock; James
S. Offield has sole voting and investment power over 1,660 shares of
Common Stock and 64,002 shares of Class B Common Stock; and Paxson
H. Offield has sole voting andinvestment power over 86,701 shares of
Common Stock and 10,299 shares of Class B Common Stock. Also, of the
shares listed, Edna Jean Offield, James S. Offield and Paxson
H. Offield share voting and investment power over 3,347,990 shares of
Common Stock held in various family trusts and by a charitable
foundation and 1,716,120 shares of Class B Common Stock held in
various family trusts; Edna Jean Offield and James S. Offield share
voting and investment power over 264,196 shares of Common Stock held
in various family trusts and 226,848 shares of Class B Common Stock
held in various family trusts; and Edna Jean Offield shares with
other parties voting and investment power over 1,636,100 shares of
Common Stock and 982,800 shares of Class B Common Stock held in
various family trusts. Of their total shareholdings, Edna Jean
Offield disclaims beneficial ownership of 3,724,877 shares of Common
Stock held in the trusts and by the foundation and 2,212,080 shares
of Class B Common Stock held in the trusts; James S. Offield
disclaims beneficial ownership of 2,967,553 shares of Common Stock
held in various family trusts and by the foundation and 1,441,752
shares of Class B Common Stock held in various family trusts; and
Paxson H. Offield disclaims beneficial ownership of 2,688,157 shares
of Common Stock held in various family trusts and by the foundation
and 1,214,904 shares of Class B Common Stock held in various family
trusts.
(2) See footnotes (1) and (6) on page 5.
* Shares and percent of class indicated for Common Stock do not reflect
the shares of Common Stock that could be acquired upon the conversion
of the shares of Class B Common Stock into shares of Common Stock on
a share-for-share basis. In such event, the percentage of Common
Stock beneficially owned would be 9.64% for the Offield Family and
33.14% for William Wrigley.
In addition to the above listed shareholders, Putnam Fiduciary Trust
Company holds 3,980,019 shares (4.32%) of Common Stock and 807,720 shares
(3.35%) of Class B Common Stock as Trustee (the "Trustee") under the Special
Investment and Savings Plan (the "SISP") for Wrigley Employees. In
accordance with the terms of the SISP, the Trustee must vote the shares as
directed by proxies submitted by participants.
Meetings and Committees of the Board
The Board has three standing Committees: the Audit, the Compensation
and the Nominating.
Audit Committee. This Committee, comprised of four
non-employee independent directors, met three times in 1996. It
annually recommends to the Board the appointment of independent
auditors and reviews with the auditors the plan and scope of their
audit and their fees; reviews the guidelines established for the
dissemination of financial information; meets periodically with the
independent and internal auditors, the Board and management to
monitor the adequacy of reporting and internal controls; reviews
consolidated financial statements; and performs any other functions
or duties deemed appropriate by the Board.
Compensation Committee. This Committee, comprised of four
non-employee independent directors, met four times in 1996. It
annually sets the base salary, incentive compensation and any other
compensation of the Chairman of the Board, if any, and of the
President and CEO. It also determines annually whether or not an
Executive Incentive Compensation Plan should be established for that
year and, if so, recommends a plan to the Board for adoption. This
Committee also sets and administers the terms and policies of the
Company's Management Incentive Plan and reviews and submits
recommendations to the Board regarding employee benefit plans
generally and performs any other functions or duties as deemed
appropriate by the Board.
Nominating Committee. This Committee, comprised of four
non-employee independent directors, met twice in 1996. It considers
and proposes director nominees for election at the Annual Meeting,
selects candidates to fill Board vacancies as they may occur, makes
recommendations to the Board regarding Board committee memberships
and performs any other functions or duties deemed appropriate by the
Board.
<PAGE>
The Nominating Committee will accept for consideration
stockholders' nominations for directors if made in writing. The
nominee's written consent to the nomination and sufficient background
information on the candidate must be included to enable the Committee
to make proper judgments as to his or her qualifications.
Nominations should be addressed to the Chairman of the Nominating
Committee at the Company's headquarters and must be received no later
than October 8, 1997 in order to be considered for the next annual
election of directors.
During 1996, there were six meetings of the Board. All directors
attended at least 75% of the meetings of the Board and of the committees of
which they were members.
Compensation of Directors
Non-employee directors receive an annual cash retainer of $25,000.
There are no additional fees for attending Board and Board committee
meetings. Each Board committee member receives an annual retainer of
$3,500. Each Board committee chair receives an additional annual retainer
of $5,000. All or a portion of the annual cash retainer received by the
non-employee Director may be deferred in cash or stock. Directors who are
employees of the Company receive no compensation for services as Directors.
A Deferred Compensation Plan for Non-Employee Directors has been in
effect since 1983. Under the plan, participants may defer up to 100% of
their total retainer fees. Such deferred amounts are generally distributed
at the earlier of age 70 or retirement in a lump sum or in equal annual
installments over a period not to exceed fifteen years, or in a combination
thereof at the Director's election. Deferred amounts may be invested,
through a grantor trust, in the form of share units (each share unit is
equivalent to a share of the Company's Common Stock) or money credits
deposited in one or more funds offered by the plan trustee.
The Stock Deferral Plan for Non-Employee Directors has been in effect
since 1988. This plan is designed not only to provide a deferred benefit
for non-employee directors, but also to increase the Directors beneficial
ownership in the Company and more closely tie their interest in the
long-term growth and profitability of the Company with that of the
stockholders. Following the conclusion of each business year there is
credited to the deferred stock accounts of each non-employee director a
number of share units with a value equivalent to the stated value of the
annual Board retainer in effect on the last business day of such year.
Dividend equivalents, equal in value to dividends paid on the Company's
Common Stock, are also credited on the share units accumulated in the plan,
and converted into additional units. The plan credits non-employee
directors share units over the first ten years of service. Participants
have the option to receive upon retirement actual shares or a cash payout,
either in a lump sum or over a period not to exceed fifteen years. In
accordance with the plan, each participant's account was credited with 450
share units on January 3, 1997. The aggregate number of share units
accumulated by each non-employee director from the inception of the plan in
1988 is included in the "Total" column in the table under the heading
"Security Ownership of Directors and Executive Officers" on page 5.
The Company maintains a Non-Employee Directors' Death Benefit Plan
pursuant to which a director's beneficiary receives a $250,000 lump sum
benefit if death occurs after the directorship terminates, or $25,000 per
year for ten years if death occurs prior to termination. To participate in
the plan, a director must agree to contribute $600 per year for a maximum
of ten years. The Company maintains life insurance policies to fund the
cost of the plan. All non-employee directors participate in this plan.
<PAGE>
PROPOSAL 2
APPROVAL OF ADOPTION OF THE WM. WRIGLEY JR. COMPANY
1997 MANAGEMENT INCENTIVE PLAN
At the 1988 Annual Meeting, the stockholders approved the Wm. Wrigley
Jr. Company Management Incentive Plan (the "1988 MIP") which will expire
in 1998. A successor plan, the Wm. Wrigley Jr. Company 1997 Management
Incentive Plan (the "1997 MIP") was adopted by the Board on October 29,
1996, and, if approved by the stockholders of the Company at the Annual
Meeting, will be effective as of January 1, 1997, and will have a ten year
term. The 1997 MIP takes into account the legislative and regulatory
changes that have occurred since adoption of the 1988 MIP and incorporates
the Company's Executive Incentive Compensation Plan which, since its
inception in 1984, has been administered separately from the 1988 MIP.
As with the 1988 MIP, the 1997 MIP is designed to keep the Company
competitive with other employers, to foster and promote the long-term
financial success of the Company and to increase stockholder value by
providing key employees with the opportunity to participate with the
stockholders in the long-term growth and profitability of the Company. It
enables the Company to retain and attract key employees possessing
outstanding abilities, and to motivate key employees through
performance-related incentives to achieve both current and long-term
performance goals.
A brief description of the proposed 1997 MIP is set forth below and
is qualified in its entirety by reference to the complete text of the 1997
MIP, a copy of which is attached hereto as Exhibit A.
Key employees of the Company, and subsidiaries in which the Company
owns a majority of the voting stock, are eligible to receive awards under
the 1997 MIP. The Company currently has approximately 70 key employees who
would be eligible to receive awards under one or more programs under the
1997 MIP.
Awards under the 1997 MIP may be stock awards, share units, money
credits, stock options, stock appreciation rights, performance units,
performance awards, annual or long-term incentive compensation awards or a
combination thereof. If the 1997 MIP is approved by the stockholders, no
further grants will be made under the 1988 MIP, which expires in March 1998,
except that the 1988 MIP will continue to govern all awards previously
granted under the 1988 MIP and all existing outstanding award opportunities
and long-term grant cycles approved thereunder prior to January 1, 1997.
If the 1997 MIP is not approved by the stockholders, all award opportunities
that have been granted thereunder contingent upon stockholder approval will
be cancelled and the 1997 MIP will be terminated.
The Board has determined that a maximum of 5,000,000 shares of the
Company's Common Stock may be issued pursuant to all grants made under the
1997 MIP, as may be adjusted pursuant to the terms of the plan. The 1997
MIP contemplates the use of shares purchased on the open market, treasury
shares, the issuance of authorized but unissued shares of the Company's
Common Stock, or a combination thereof. Shares subject to grants which, by
reason of the expiration, cancellation or other termination of such grants
prior to issuance of shares thereunder, and shares subject to certain
restrictions that are forfeited after their issuance, are not deemed to be
issued and will again be available for future grants. During the term of
the 1997 MIP, no participant can receive stock options or freestanding stock
appreciation rights relating to shares of Common Stock that in the aggregate
exceed 15% of the total number of shares of Common Stock authorized pursuant
to the 1997 MIP.
<PAGE>
The Compensation Committee of the Board will administer the 1997 MIP
and the underlying programs (the "Programs") unless another committee is
designated by the Board for some or all purposes. The Compensation
Committee or any other such committee will be referred to herein as the
"Compensation Committee." With respect to awards that are intended to comply
with Section 162(m) ("Section 162(m)") of the Internal Revenue Code of 1986,
as amended (the "Code") or Rule 16b-3 ("Rule 16b-3") of the General Rules
and Regulations under the Securities Exchange Act of 1934, as amended, the
Compensation Committee will meet the requirements of Section 162(m) and
Rule 16b-3, with respect to being comprised of disinterested, independent
directors.
Subject to the terms and limitations of the 1997 MIP itself, the
Compensation Committee is authorized, among other things, to interpret and
administer the 1997 MIP; to determine the type of awards to be made and to
develop specific guidelines governing each award category; to establish
selection guidelines and to choose key employees who are eligible for
participation in the 1997 MIP; to determine the number of shares of Common
Stock, and to establish, when necessary, the basis on which the fair market
value of the shares covered by grants under the 1997 MIP is measured; to
establish the conditions, form, time, manner and terms of payment of any
award; to fix restrictions and forfeiture provisions; and to establish the
time and conditions of vesting or exercise and the conditions, if any, under
which vesting or exercise may be accelerated. The Compensation Committee
may, in its discretion, delegate to the Chief Executive Officer of the
Company the authority to select and make grants to eligible key employees
of the Company.
The Board may amend or terminate the 1997 MIP or any of its Programs
except that, unless otherwise determined by the Board, no amendment may be
made without stockholder approval if such approval would be required to
comply with any applicable provisions of Section 162(m) or Rule 16b-3, or
any successor to the foregoing. The 1997 MIP will terminate ten years after
it becomes effective unless the Board terminates it earlier. Any amendment
or termination of the 1997 MIP may not adversely affect any award granted
to a participant prior to such amendment or termination.
The Company may make such provisions as it may deem appropriate for
the withholding of any taxes due on any award or distribution under the 1997
MIP, including permitting participants to authorize the Company to withhold
shares of Common Stock earned with respect to any grant or award.
The following are brief descriptions of the various types of awards
that may be granted under the 1997 MIP at the discretion of the Compensation
Committee:
Stock Awards. Stock awards may be either in the form of
performance awards or fixed awards. Performance awards are awards
granted in terms of a stated potential maximum number of shares of
Common Stock, with the actual number earned to be determined by
reference to the level of achievement of corporate, group, division,
individual or other specific objectives over a period or periods of
not less than one or more than ten years. Fixed awards are awards
granted that are not contingent on the performance of objectives, but
are contingent upon the participant's continuing in the employ of the
Company, rendering consulting services or refraining from competitive
activities for a period of not less than one year. Awards may be
paid in the form of shares of Common Stock or cash, or in such
combination thereof as the Compensation Committee shall determine.
If shares of restricted stock (i.e., shares subject to certain
restrictions) are issued pursuant to an award, the participant will,
unless otherwise determined by the Committee, have the right to vote
the shares and receive dividends thereon from the date of issuance,
unless and until forfeited.
Share Units. Share units may be credited to a participant,
each of which is equivalent to a share of Common Stock except for the
power to vote and the entitlement to current dividends. With respect
to share units credited to a participant, amounts equal to dividends
otherwise payable on a like number of shares of Common Stock may, in
the discretion of the Compensation Committee, be paid directly to the
account of the participant as and when dividends are paid, or be
converted into additional share units which are credited to the
participant and held until later forfeited or distributed. Share
units may be distributed to the participant in cash, shares of Common
Stock or a combination thereof, as the Compensation Committee deems
appropriate.
<PAGE>
Money Credits. Money credits may be credited to a participant
in units of a dollar or a fraction thereof. A money account is
established for the participant which is credited with interest
equivalents on amounts previously credited to the account, or an
amount equal thereto is paid directly to the participant, on a
calendar quarter basis, compounded at such rate as the Compensation
Committee may determine from time to time. Money credits may be
distributed to the participant in the form of cash, shares of Common
Stock or a combination thereof, as the Compensation Committee deems
appropriate.
Stock Options. Stock options may be granted under the 1997 MIP
and may either be "incentive stock options," as defined in the Code,
or non-statutory options, and, at the discretion of the Compensation
Committee, may include a reload feature. No options may be
exercisable more than ten years after the date of grant. The per
share option price may be not less than 100% of the fair market value
at the time the option is granted, unless otherwise determined by the
Compensation Committee. Upon exercise, the option price and, if the
Compensation Committee deems appropriate, any withholding tax
required by law, may be paid by the participant in cash, in shares of
Common Stock having a fair market value equal to the option price or
the amount of the withholding tax, in a combination of cash and
shares or in such other manner as the Compensation Committee deems
appropriate.
Stock Appreciation Rights. Under the 1997 MIP, stock
appreciation rights may be granted entitling the grantee to receive
cash or shares of Common Stock having a fair market value equal to
the appreciation in market value from the date of the grant of a
stated number of shares of Common Stock or, in the case of rights
granted in tandem with or by reference to a stock option, from the
date of grant of the related stock option to the date of exercise.
Stock appreciation rights may be granted in tandem with or by
reference to a related stock option or independently of any stock
option. If a stock appreciation right is granted in tandem with a
stock option, the grantee may exercise either the stock option or the
stock appreciation right, but not both. Stock appreciation rights
are not exercisable more than ten years after the date of grant.
Performance Units. Performance units may be granted subject to
such terms and conditions as the Compensation Committee in its
discretion may determine. The Compensation Committee will establish
a dollar value for each performance unit, the performance goals to be
attained with respect to a performance unit, the various percentages
of performance unit value to be paid out upon the attainment, in
whole or in part, of the performance goals and such other performance
unit terms, conditions and restrictions as the Compensation Committee
deems appropriate. The payment, if any, which is due on a
performance unit may be made in the form of cash or shares of Common
Stock, or a combination thereof.
Incentive Compensation Awards. The Compensation Committee may,
as it deems appropriate, establish annual and long-term incentive
compensation programs pursuant to which incentive compensation awards
may be granted to selected participants, subject to such terms and
conditions as the Compensation Committee deems appropriate.
Loans. Under the 1997 MIP, the Compensation Committee may
authorize loans by the Company to participants in connection with the
grant of stock awards or other awards or the exercise of options or
stock appreciation rights. The interest rate and other terms and
conditions of any such loan shall be as determined by the
Compensation Committee.
<PAGE>
The performance goals underlying the award opportunities granted under
the 1997 MIP that are intended to satisfy the requirements of Section 162(m)
shall be the performance goals established by the Compensation Committee.
Such goals must be met during the applicable performance period as a
condition of the participant's receipt of payment (or, in the case of
certain stock awards, the lapse of restrictions) with respect to an award
opportunity. Payments are based on the attainment of, or degree of
exceeding, Compensation Committee established thresholds or targets with
respect to one or more objective business criteria including: earnings per
share, return on equity, pre-tax profit, post-tax profit, consolidated net
income, stock price, market share, sales, unit sales volume, return on
assets, return on invested capital, cash flow, discounted cash flow,
economic value added, costs, production, unit production volume or total
shareholder return.
In addition, with respect to awards intended to satisfy the
requirements of Section 162(m), in no event shall payment be made with
respect to annual incentive compensation awards for any plan year, valued
as of the end of such plan year, in an amount that exceeds the lesser of
(i) 125% of such participant's annual rate of base salary as in effect as
of the first day of the applicable plan year, without regard to any optional
or mandatory deferral of base salary pursuant to any salary deferral
arrangement ("Annual Base Salary") and (ii) $1,200,000. In addition, during
the 10 year term of the 1997 MIP, no participant can receive restricted
stock awards relating to shares of Common Stock that in the aggregate exceed
375,000 shares of Common Stock, as may be adjusted pursuant to the terms of
the 1997 MIP. Further, with respect to all awards intended to satisfy the
requirements of Section 162(m) that are not annual incentive compensation
awards, stock options, stock appreciation rights or restricted stock awards,
in no event shall payment be made with respect to such awards for any
three-year period, valued as of the end of such three-year period, in an
amount that exceeds the lesser of 100% of such Participant's Annual Base
Salary and $900,000.
Federal Tax Consequences
Under the Code, participants who are granted non-statutory or
incentive stock options ("optionee") or stock appreciation rights under the
1997 MIP will not be subject to taxation at the time of the grant, nor will
the Company be allowed a deduction at the time of grant. If an incentive
stock option is exercised within three months following termination of
employment (one year in the case of termination of employment for total and
permanent disability or until the expiration of the term of the option in
the event of termination of employment by death), no income is recognized
on the exercise of such option, nor is the Company allowed a federal income
tax deduction at the time of exercise. However, the difference between the
option price and the fair market value of the shares at the time of exercise
will be an item of tax preference for determination of the alternative
minimum tax, which is payable if it exceeds the optionee's regular tax. If
the optionee subsequently sells the shares at least two years after grant
and one year after the date of receipt of the shares following exercise of
the option, any gain or loss realized will be treated as long-term capital
gain or loss, and the Company will not be entitled to a deduction for income
tax purposes. The capital gain (or loss) will be measured by the difference
between the selling price of the shares and the option price.
If, however, an optionee sells any shares acquired pursuant to the
exercise of an incentive stock option before the expiration of the requisite
holding periods, the optionee will be deemed to have made a "disqualifying
disposition" of the shares and will realize ordinary income in the year of
disposition in an amount equal to the excess, if any, of (i) the lesser of
the fair market value of such shares on the exercise date or the total
amount realized on disposition of the shares over (ii) the option price of
the shares. In the event of a disqualifying disposition, the Company will
be entitled to a federal income tax deduction in the year of disposition of
the shares in the amount of the ordinary income realized by the optionee,
subject to the application of Section 162(m).
<PAGE>
If a non-statutory stock option is exercised or if an incentive stock
option is exercised after expiration of the three-month period following
termination of employment (or such longer period as provided in the case of
death or disability), the optionee will recognize, as ordinary income, the
difference between the option price and the fair market value of the shares
at the time of exercise. The Company will receive a federal income tax
deduction in the year of exercise of the option in the amount of ordinary
income realized by the optionee, subject to the application of
Section 162(m).
Shares or cash delivered upon the exercise of a stock appreciation
right will be treated as taxable compensation to the optionee equal to the
cash plus the fair market value of the shares. The Company may generally
claim a federal income tax deduction in the amount of compensation to the
participant at the time such shares or cash are distributed, subject to the
application of Section 162(m).
Under certain circumstances, directors and officers of the Company who
are subject to Section 16(b) of the Securities Exchange Act of 1934 are not
taxed at the time of exercise of a non-statutory stock option (or the
exercise of an incentive stock option which is treated for tax purposes in
the same manner as a non-statutory stock option), but are taxed on the
difference between the market value on the earlier of the date of
disposition of the shares or the date the Section 16(b) restrictions lapse
(usually six months after exercise) and the option price. The optionee may,
however, avoid the delay in computing and recognizing the amount of taxable
gain by filing with the Internal Revenue Service, within 30 days after
receiving the shares, an election to make the computation at the time of
receipt of the shares.
The reported closing price of the Company's Common Stock on the
NYSE-Composite Transactions of January 28, 1997, was $55 3/4 per share.
Reference is made to other sections of this Proxy Statement as to the
provisions of the 1988 MIP and the Executive Incentive Compensation Plan and
the amounts paid thereunder to the officers and executives named in the
Summary Compensation Table on page 18.
NEW PLAN BENEFITS
The benefit or amounts that may be received by or allocated to the
participants if the 1997 MIP is approved by the shareholders, generally will
be discretionary and therefore are not presently determinable. Benefits
awarded under the Alternate Investment and Savings Program, however, will
generally be equivalent to five percent of the participant's base salary
paid to the participant during the calendar year for which the participant
is eligible to participate in the program, or such higher or lower amount
as may be determined by the Compensation Committee from time to time. In
this regard, the fair market value of awards of restricted stock (prior to
any deduction for withholding taxes) made to the named participants in
January 1997 for the 1996 Plan year under the Alternate Investment and
Savings Program under the 1988 MIP are set forth in column (e) of the
Summary Compensation Table on page 18.
Approval of the 1997 MIP requires the affirmative vote of a majority
of the votes cast by the holders of the outstanding shares of Common Stock
and Class B Common Stock represented at the Annual Meeting in person or by
proxy, voting together as one class.
YOUR BOARD RECOMMENDS THAT STOCKHOLDERS
VOTE FOR APPROVAL OF THE 1997 MIP.
<PAGE>
PROPOSAL 3
THE APPOINTMENT OF ERNST & YOUNG LLP
AS INDEPENDENT AUDITORS
At its meeting of October 29, 1996, the Audit Committee recommended
the appointment of Ernst & Young LLP as independent auditors for the year
ending December 31, 1997. At a meeting of the Board on January 30, 1997,
the directors accepted the recommendation of the Audit Committee and
appointed Ernst & Young LLP, subject to ratification by the stockholders,
to examine the 1997 consolidated financial statements of the Company.
Accordingly, the stockholders will be asked to ratify such appointment at
the Annual Meeting by the affirmative vote of a majority of the votes
entitled to be cast by the holders of the outstanding shares of Common Stock
and Class B Common Stock represented at the Annual Meeting in person or by
proxy, voting together as one class.
It is expected that representatives of Ernst & Young LLP will attend
the Annual Meeting and be available to make a statement or respond to
appropriate questions.
YOUR BOARD RECOMMENDS THAT STOCKHOLDERS VOTE FOR THE
APPOINTMENT OF ERNST & YOUNG LLP AS INDEPENDENT AUDITORS.
<PAGE>
EXECUTIVE COMPENSATION
Compensation Committee Report on Executive Compensation
The Compensation Committee of the Board (the "Committee") is
responsible for establishing the base salary of the Company's President and
CEO and for setting and administering the terms and policies of the
Company's Executive Incentive Compensation Plan ("EICP") and the Management
Incentive Plan ("MIP"). If the stockholders approve the Wm. Wrigley Jr.
Company 1997 Management Incentive Plan (the "1997 MIP") the EICP and the
programs currently in the 1988 MIP will become the Programs collectively
administered under the 1997 MIP. Prior to 1997, the EICP and the MIP were
separate plans; the EICP being administered by the full Board and the 1988
MIP being administered by the Committee.
Compensation Principles
The Committee believes that the most effective executive compensation
program is one that provides incentives to achieve both specific annual,
long-term and strategic goals of the Company, with the ultimate objective
of enhancing stockholder value. The Committee believes executive
compensation should be comprised of cash and equity-based programs that
reward performance as measured against these goals. Additionally, the
Committee recognizes that the Company operates in a competitive environment
and that both performance and compensation should be evaluated to ensure the
Company remains competitive and maintains its ability to attract and retain
superior key employees.
Annual executive cash and incentive-based equity compensation is
structured to encourage achievement, initiative and teamwork. Also,
ownership and retention of the Company's Common Stock by key employees helps
to more directly align their interests with those of the stockholders.
Base Salaries
The Company's By-laws require the Committee to set the base salary,
incentive and any other compensation of the President and CEO. The base
salaries of the Company's next four most highly compensated senior executive
officers are determined by the President and CEO. The same principles used
in setting the base salary range of the CEO and the other senior executive
officers are also used for all other salaried employees to ensure that
salaries are fairly and competitively established. Base salary ranges are
determined for each position using three criteria: accountability, know-how,
and problem-solving ability. These ranges are then compared to
independently obtained salary surveys. Base salary ranges are designed so
that salary opportunities for a given position will be between 80% and 120%
of the competitive average base salaries.
The Committee administers Mr. Wrigley's salary and receives an annual
analysis from the Company's Compensation Manager on all aspects of
Mr. Wrigley's remuneration and its relationship to the comparative survey
data. During its review, the Committee primarily considers the Company's
overall performance (including unit sales, earnings growth, and total
stockholder return), adherence to the Company's strategic plan, the
development of sound management practices, and the succession of skilled
personnel. The Committee at its meeting of October 29, 1996 recommended an
increase in Mr. Wrigley's base salary, which Mr. Wrigley respectfully
declined.
Executive Incentive Compensation Plan
An annual incentive compensation program, the Executive Incentive
Compensation Plan ("EICP"), together with those key employees eligible to
participate in the EICP, is considered by the Committee prior to the
beginning of each fiscal year and, if recommended by the Committee, is
submitted to the Board for approval.
<PAGE>
The EICP is designed to encourage initiative and creativity in the
achievement of annual corporate, personal and unit goals, and to foster
effective teamwork. It also enables the Company, without inflating base
salaries, to attract and retain highly skilled managers and competitively
reward them with performance-measured cash compensation.
The EICP adopted for 1996 included various incentive levels based on
the participant's accountability and impact on Company operations, with
target award opportunities ranging from 20% to 60% of base salary. Awards
for performance, if earned, may range from 50% below to 50% above the
established target award.
All participants, except Mr. Wrigley, are assigned weightings for
performance elements consisting of at least one or more operational or
personal goals that vary from year to year and are unique to each individual
participant, and for teamwork effectiveness. Weights for these elements are
based on the participant's accountability and impact on overall operations
and, if assigned, vary from 20% to 70% of target for one or more operational
goals, 20% to 50% of target for one or more personal goals and equals 10%
for team effectiveness. For certain participants, including the senior
executive officers, a corporate performance element is also included, which
varies from 20% to 50% of target. In rating the performance of Mr. Wrigley,
the Committee considers his overall effectiveness in guiding the affairs of
the Company as evaluated primarily by corporate performance for the year and
by progress toward longer-range objectives and strategies.
Under the EICP for 1996, the corporate performance element consisted
of an increased unit volume goal with a relative weight of 25% of the total
element and an increased earnings per share goal with a relative weight of
75%. Although not weighted, the Committee also considers as part of the
corporate performance element two additional goals: pre-tax cost savings and
adherence to the corporate strategic plan. Any awards to be made under the
EICP for performance in 1996 will be determined and paid by the Committee
in February 1997 and will be reported in the next proxy statement.
The EICP adopted for 1995 had a corporate performance element
consistent with the above. At its meeting of February 21, 1996 the
Committee reviewed all corporate goals for the year ended December 31, 1995
and determined that the award for 1995 performance would be below the
established target award for the corporate element. Awards made thereunder
to the CEO, the next four most highly compensated executive officers are
shown in column (d) of the Summary Compensation Table on page 18 as 1995
compensation.
An EICP for 1997 was adopted by the Board at its meeting of
October 29, 1996. Any awards under the 1997 EICP will be determined in
February 1998.
Participants may defer all or any part of their EICP award and have
such amounts credited to their deferral account as share units or money
credits, or a combination of both, in accordance with procedures set forth
in the EICP. (See description below under the heading "Management Incentive
Plan" for deferral options).
Management Incentive Plan
The Management Incentive Plan (the "MIP") is a flexible omnibus plan
designed to provide the Committee with various equity-based incentive
compensation tools to promote achievement by key employees and allow them
to participate in the long-term growth and profitability of the Company.
As considered appropriate by the Committee, it may grant participants shares
of the Company's Common Stock, share units, stock options, stock
appreciation rights, performance units, or any combination thereof;
establish any conditions or restrictions thereon; and provide for deferral
thereof pursuant to written elections made by the participants prior to the
commencement of the plan year.
<PAGE>
All awards of stock under the MIP Programs are at the fair market
value at the time of the award. Stock grants were awarded by the Committee
in January and February 1996 for performance in the prior year under three
MIP Programs. Awards, if any, to be granted in January or February 1997 for
1996 fiscal year performance will be made under the programs of the 1988 MIP
described below:
Long-Term Stock Grant Program. The Long-Term Stock Grant
Program, established in January 1993, provides an opportunity for
executive officers and certain other designated key employees to
increase their stake in the Company through grants of Common Stock.
The program is currently designed to provide participants with target
stock grant opportunities ranging in value from 20% to 60% of base
salary, depending on the participant's accountability and impact on
operations. Actual awards, if earned, may range from 50% below to
50% above targets depending upon the comparison of the Company's
total stockholder return to the total stockholder return for the
S&P's Food Group for the applicable performance period. Target
awards are earned at the target level if the Company's total
stockholder return equals the S&P's Food Group total stockholder
return for such period. The aggregate value of shares awarded to all
participants for a specific period is limited to not more than
nine-tenths of one percent (0.9%) of the Company's average annual
growth in total stockholder value during any such period.
Any shares awarded under this program are held in the Company's
custody and restricted as to transfer or sale until one year after
the date the shares were awarded, except in cases of retirement,
disability, or death. Voting and dividend rights inure to the
recipient upon award. Alternatively, prior to any such award,
participants may elect to defer receipt of all or any portion of
their awards in the form of share units. After one year following
award, participants may transfer any amount deferred to other
investment options available under a grantor trust for which Putnam
Fiduciary Trust Company is the Trustee.
On February 21, 1996 the Committee determined that the
performance ratio of the Company's total shareholder return to the
total shareholder return for the S&P's Food Group transitional
five-year cycle 1991-1995 exceeded the target level. Awards granted
on February 21, 1996 for the 1991-1995 cycle to the CEO and the next
four most highly compensated executive officers appear in column (e)
of the Summary Compensation Table on page 18 for 1995.
Awards, if any, for the transitional five-year cycle 1992-1996,
will be determined by the Committee at its meeting in February 1997
and any awards granted will be reported in the next proxy statement.
A Long-Term Stock Grant opportunity for the performance cycle
1996-2000 was also approved by the Committee on February 21, 1996 and
is indicated in the Long-Term Stock Grant Program table on page 20.
Stock Award Program. Under this program, EICP participants may
be awarded shares of the Company's Common Stock comparable in value
to the present value of 1.5% of the participant's average EICP award
received for the prior three years multiplied by such participant's
years of service, and reduced by the present value of prior awards
under this program.
Upon award, participants may vote the shares and may receive or
reinvest dividends thereon, but the shares are retained in the
Company's custody and are subject to a restriction on sale or
transfer until one year after termination of employment, unless due
to death or retirement. Alternatively, participants may elect to
defer all or any portion of their awards in the form of share units.
Awards granted to the CEO and the next four most highly
compensated executives on February 21, 1996 for fiscal year 1995
appear in column (e) of the Summary Compensation Table on page 18.
Awards for services in 1996 will be determined in February 1997 and
reported in the next proxy statement.
<PAGE>
Alternate Investment and Savings Program. EICP participants
are ineligible to participate in The Special Investment and Savings
Plan for Wrigley Employees, and instead receive a benefit under the
Alternate Investment and Savings Program ("AISP") equal to 5% of
their base salary. They may elect to receive this benefit in the
form of shares of Common Stock and may receive or reinvest dividends
thereon, with the shares being retained in the Company's custody and
subject to restriction on sale or transfer until one year after
termination of employment, unless due to death or retirement.
Alternatively, they may elect to defer all or any portion of this
benefit in the form of share units.
Benefits granted under the AISP to the CEO and the next four
most highly compensated executive officers for 1996 were made on
January 30, 1997 and are reflected in column (e) of the Summary
Compensation Table on page 18.
No stock options were granted in 1996. For options exercised in 1996,
refer to the table on page 20 entitled "Aggregated Option/SAR Exercises in
the Last Fiscal Year and FY-End Option/SAR Values."
Deductibility of Executive Compensation
During 1996, the Committee reviewed and considered the deductibility
of executive compensation under Section 162(m) of the Internal Revenue Code
of 1986, as amended, with respect to compensation paid to the executive
officers named in the Summary Compensation Table. All such compensation
paid by the Company during 1996 was fully deductible for federal income tax
purposes.
THE COMPENSATION COMMITTEE
Robert P. Billingsley, Chairman
Charles F. Allison
Lee Phillip Bell
Thomas A. Knowlton
Five-Year Total Stockholder Return
The following indexed graph and table indicate the Company's total
stockholder return for the five year period ending December 31, 1996 as
compared to the total return for the Standard & Poor's 500 Composite Index
and the Standard & Poor's Food Group Index, assuming a common starting point
of 100. Total stockholder return for the Company, as well as for the
Indexes, is determined by adding (a) the cumulative amount of dividends for
a given year (assuming dividend reinvestment), and (b) the difference
between the share price at the beginning and at the end of the year, the sum
of which is then divided by the share price at the beginning of such year.
Please note that the graph and table are five-year historical
representations and, as such, are not indicative of future performance
relative to the Indexes.
<TABLE>
<CAPTION>
TOTAL STOCKHOLDER RETURN
1991 1992 1993 1994 1995 1996
<S> <C> <C> <C> <C> <C> <C>
Wrigley 100 124 171 195 211 231
S&P 500 100 108 118 120 165 203
S&P Food Group 100 100 92 102 131 155
</TABLE>
<PAGE>
Summary Compensation Table
The following table sets forth the total cash and non-cash
compensation in each of the last three years ended December 31 for the
Company's Chief Executive Officer and the next four most highly compensated
executive officers.
<TABLE>
<CAPTION>
Long-Term
Compensation
Annual Compensation(1) Awards
(a) (b) (c) (d) (e) (f)
Restricted
Stock
Name and Award(s) All Other
Principal ($)(3) Compensation
Position Year Salary($)Bonus($)(2) (4)(5) ($)(6)
<S> <C> <C> <C> <C> <C>
William Wrigley 1996 $500,000 -- $ 25,000 $ 6,860
President & CEO 1995 475,000 $256,500 789,687 6,860
1994 475,000 427,500 722,750 6,860
John F. Bard 1996 298,167 -- 14,908 10,412
Senior Vice President 1995 276,583 160,971 330,094 9,744
1994 261,000 194,445 255,509 8,560
Douglas S. Barrie 1996 382,500 -- 19,125 34,210
Group Vice President 1995 352,500 215,730 434,121 24,762
1994 324,833 232,905 325,038 24,675
Ronald O. Cox 1996 322,500 -- 16,125 14,830
Group Vice President 1995 298,500 136,713 360,896 11,804
1994 276,500 160,923 289,358 10,933
Martin J. Geraghty 1996 273,000 -- 13,650 7,771
Senior Vice President -- 1995 253,000 144,210 362,843 6,984
Manufacturing 1994 240,250 163,851 309,644 11,365
</TABLE>
(1) While each of the named executive officers received perquisites or
other personal benefits in the years shown, the value of these
benefits did not exceed, in the aggregate for any executive officer,
the minimum reportable amount.
(2) Amounts shown in column (d) are the cash awards to the named
individuals under the Executive Incentive Compensation Plan
(including any amounts deferred). Awards to be paid for 1996
performance, if any, are not calculable as of the latest practicable
date, and if paid will be reported in the next proxy statement.
(3) The figures in column (e) for 1996 represent the fair market value of
awards of restricted stock at the time of the award (prior to any
deduction for withholding taxes) under the Alternate Investment and
Savings Program. Awards for 1996 under Stock Award Program and the
Long-Term Stock Grant Program, if any, are not determinable as of the
latest practicable date, and if paid will be reported in the next
proxy statement.
(4) The figures in column (e) for 1995 represent the fair market value of
awards of restricted stock at the time of the award (prior to any
deduction of withholding taxes) under the Alternate Investment and
Savings Program and the Stock Award Program, and under the Long-Term
Stock Grant Program for the transitional five-year performance cycle
ending December 31, 1995.
(5) The figures in column (e) for 1994 represent the fair market value of
awards of restricted stock at the time of the award (prior to any
deduction of withholding taxes) under the Alternate Investment and
Savings Program and the Stock Award Program, and under the Long-Term
Stock Grant Program for the transitional five-year performance cycle
ending December 31, 1994.
<PAGE>
The aggregate number and dollar value of restricted stock (net of any
withholding for tax purposes) accumulated from the inception of the
Stock Award Program, the Alternate Investment and Savings Program,
the Long-Term Stock Grant Program and through deferral elections,
under the Executive Incentive Compensation Plan and held at
December 31, 1996 are as follows: William Wrigley, 140,110 shares and
32,938 share units ($9,733,950); John F. Bard, 9,693 shares and 7,879
share units ($988,425); Douglas S. Barrie, 12,781 shares and 7,044
share units ($1,115,158); Ronald O. Cox, 16,171 shares and 6,154
share units ($1,255,820) and Martin J. Geraghty, 21,888 shares and
1,380 share units ($1,308,843). All shares of restricted stock or
share units vest upon award and are entitled to dividends or dividend
equivalents at the same rate as dividends paid on unrestricted shares
of the Company's Common Stock. Shares awarded under the Long-Term
Stock Grant Program are restricted for a period of one year following
award. Shares awarded under the Stock Award Program and the
Alternate Investment and Savings Program are restricted until one
year following termination of employment, unless due to death or
retirement.
(6) Includes the value of corporate-paid life insurance premiums under
the Senior Executive Life Insurance Plan, interest earned during the
year on sums accumulated since 1984 in deferred compensation accounts
to the extent such interest was in excess of certain long-term rates
prescribed by the Internal Revenue Code, and for Mr. Geraghty in
1994, includes pay in lieu of vacation.
For the last completed fiscal year, the value of corporate-paid life
insurance premiums and above-market rate of interest on accumulated
deferred compensation accounts were, respectively, as follows for
each named executive officer: William Wrigley, $6,860 and $0; John
F. Bard, $4,975 and $5,437; Douglas S. Barrie, $6,221 and $27,989;
Ronald O. Cox, $3,391 and $11,439; and Martin J. Geraghty, $4,040 and
$3,731.
The Company may provide to key employees interest free, fully-secured
housing or bridge loans for up to five years which are generally repaid
through regular payroll deductions. During 1996, the Company had a total
of $1,490,899 of loans outstanding to all key employees, including a total
of $706,018 outstanding to four officers not named above.
<PAGE>
Stock Options and Stock Appreciation Rights
The Company has not granted any stock options or stock appreciation
rights since August 27, 1988. At that time, options to acquire a total of
240,000 shares of Common Stock were granted under the 1988 Stock Option
Program to six senior executive officers with an exercise price of
$11.208 per share, the fair market value of the stock on the day prior to
the grant date. The options have a ten-year term and were granted in tandem
with stock appreciation rights (SARs) intended to provide funds necessary
to exercise the options and pay tax liabilities.
The following table sets forth the number of options/SARs and the
dollar value of such unexercised options as of December 31, 1996 for the
executive officers named in the Summary Compensation Table on page 18.
<TABLE>
<CAPTION>
Aggregated Option/SAR Exercises in Last Fiscal Year and FY-End Option/SAR Values
Value of
Number of Unexercised
Unexercised In-the-Money
Options/SARs Option/SARs
at FY-End(#) at FY-End($)
Shares Value Exercisable/ Exercisable/
Name Exercised(#) Realized($) Unexercisable(1) Unexercisable(1)
<S> <C> <C> <C> <C>
Douglas S. Barrie 36,000 970,188 -- --
Ronald O. Cox 36,000 987,569 -- --
Martin J. Geraghty 15,000 397,367 15,000 $675,720
</TABLE>
(1) All outstanding options are fully exercisable.
Long-Term Stock Grant Program
The following table reflects threshold, target and maximum stock grant
opportunities under the Long-Term Stock Grant Program for the five-year
performance cycle ending December 31, 2000.
<TABLE>
<CAPTION>
Long-Term Incentive Plans -- Awards in Last Fiscal Year
Estimated Future Payouts under
Non-Stock Price-Based Plans*
(a) (b)* (c) (d) (e) (f)
Performance
Number of or Other
Shares, Units Period Until
or Other Maturation or Threshold Target Maximum
Name Rights(#) Payout ($ or #) ($ or #) ($ or #)
<S> <C> <C> <C> <C> <C>
William Wrigley 1996-2000 3,135 6,270 9,405
John F. Bard 1996-2000 1,435 2,870 4,305
Douglas S. Barrie 1996-2000 1,785 3,570 5,355
Ronald O. Cox 1996-2000 1,520 3,040 4,560
Martin J. Geraghty 1996-2000 1,320 2,640 3,960
</TABLE>
* Estimated future payouts are based on the performance ratio of the
Company's total stockholder return (stock price appreciation plus
reinvested dividends) for the five year performance cycle to the
total return for the Standard & Poor's Food Group Index for the same
period. The threshold amount is 50% of the target and the maximum
amount is 150% of the target amount.
<PAGE>
Pension Plan
The Wrigley Retirement Plan is a qualified, defined benefit,
non-contributory pension plan covering substantially all employees of the
parent and domestic associated companies who have one or more years of
service. Credited service accrues from the date of employment.
Retirement benefits are calculated by multiplying the product of 1.5%
times the years of service by the final average eligible pay for the three
highest consecutive years in the last ten years before retirement, less 1%
of the annual primary Social Security benefit multiplied by the years of
credited service since January 1, 1976.
The table below illustrates various estimated annual pension benefits
generated by the plan formula when combined with an estimated annual Social
Security benefit of $14,000.
<TABLE>
<CAPTION>
Eligible Years of Service
Remuneration 10 20 30 40 50
<S> <C> <C> <C> <C> <C>
$150,000 36,000 57,000 78,000 99,000 120,000
200,000 43,500 72,000 100,500 129,000 157,500
250,000 51,000 87,000 123,000 159,000 195,000
300,000 58,500 102,000 145,500 189,000 232,500
350,000 66,000 117,000 168,000 219,000 270,000
400,000 73,500 132,000 190,500 249,000 307,500
500,000 88,500 162,000 235,500 309,000 382,500
600,000 103,500 192,000 280,500 369,000 457,500
</TABLE>
Eligible pay for officers and other covered employees is only base
salary. The current base salary of the Chief Executive Officer and the next
four most highly compensated executive officers is set forth in column (c)
in the Summary Compensation Table on page 18. The credited years of service
as of December 31, 1996 for each named executive officer are as follows:
William Wrigley, 40; John F. Bard, 6; Douglas S. Barrie, 14; Ronald O. Cox,
18 and Martin J. Geraghty, 34.
To the extent that an individual's annual retirement income benefit
under the plan exceeds the limitations imposed by the Internal Revenue Code
of 1986, as amended, and the regulations thereunder (including, among
others, the limitation that annual benefits paid under qualified plans may
not exceed $120,800), such excess benefits may be paid from the Company's
non-qualified, unfunded, non-contributory supplemental retirement plan.
STOCKHOLDER PROPOSALS FOR THE 1998 ANNUAL MEETING OF STOCKHOLDERS
If any stockholder intends to present a proposal to be considered for
action at the 1998 Annual Meeting of Stockholders, the proposal must be in
proper form and received by the Secretary of the Company on or before
October 8, 1997 for review and consideration for inclusion in the proxy
statement and form of proxy relating to that Annual Meeting.
OTHER BUSINESS
The Company's management does not know of any other matter to be
presented for action at the Annual Meeting. If any other matter should be
properly presented at the Annual Meeting, however, it is the intention of
the persons named in the accompanying proxy to vote said proxy in accordance
with their best judgment.
Wm. M. Piet, Secretary
Chicago, February 5, 1997
<PAGE>
EXHIBIT A
WM. WRIGLEY JR. COMPANY 1997 MANAGEMENT INCENTIVE PLAN
Effective as of January 1, 1997
I. General
1.1 Purpose. The purpose of the Wm. Wrigley Jr. Company 1997
Management Incentive Plan (the "Plan") for key employees of the Wm. Wrigley
Jr. Company (the "Company") and its subsidiaries is to foster and promote
the long-term financial success of the Company and increase stockholder
value by:
(a) attracting and retaining key personnel possessing outstanding
abilities; and
(b) motivating key employees by providing the opportunity to
participate with the stockholders in the long-term growth and
financial success of the Company.
1.2 Plan. The Committee hereinafter designated, or the Chief
Executive Officer of the Company if delegated the authority pursuant to
Section 1.5 hereof with respect to eligible key employees of the Company,
its operating units or its subsidiaries in which it owns, directly or
indirectly, a majority of the voting stock, may grant to such eligible key
employees (the "Participants") stock awards, stock options, stock
appreciation rights, performance units, share units, money credits, annual
or long-term incentive compensation awards or combinations thereof, on the
terms and subject to the conditions stated in the Plan.
1.3 Limitation on Shares to Be Issued. The maximum number of shares
of common stock of the Company, no par value (the "Common Stock"), to be
issued pursuant to all grants made under the Plan shall be 5,000,000 shares.
Shares awarded pursuant to grants that by reason of the expiration,
cancellation or other termination of grants prior to issuance, are not
issued, and restricted shares that are forfeited after their issuance, shall
again be available for future grants.
Shares of Common Stock to be issued may be authorized and unissued
shares of Common Stock, treasury stock, shares purchased on the open market
or a combination thereof.
1.4 Limitation on Stock Options and Stock Appreciation Rights.
During the term of the Plan, no Participant can receive stock options or
freestanding stock appreciation rights relating to shares of Common Stock
that in the aggregate exceed 15% of the total number of shares of Common
Stock authorized pursuant to the Plan, as adjusted pursuant to the terms
hereof.
1.5 Administration of Plan. The Plan and the programs thereunder
(the "Programs") shall be administered by a committee of two or more persons
selected by the Board of Directors of the Company (the "Board of Directors"
or "Board") from its own membership, which shall be the Compensation
Committee of the Board of Directors unless another committee of the Board
shall be designated by the Board for some or all purposes of the Plan (the
"Committee," or the "Compensation Committee"). Solely with respect to
administration of the awards granted hereunder that are intended to satisfy
the applicable requirements of Section 162(m) ("Section 162(m)") of the
Internal Revenue Code of 1986, as amended (the "Code"), each member of the
Committee shall be an "outside director" within the meaning of
Section 162(m), to the extent applicable. Solely with respect to
administration of the awards that are intended to satisfy the applicable
requirements of Rule 16b-3 ("Rule 16b-3") of the General Rules and
Regulations under the Securities Exchange Act of 1934 as then in effect or
any successor provision, each member of the Committee shall be a
"Non-Employee Director" within the meaning of Rule 16b-3, to the extent
applicable.
<PAGE>
The Committee shall, subject to the limitations of the Plan, have full
power and discretion to interpret and administer the Plan; to establish
selection guidelines; to select eligible persons for participation; and to
determine the form of grant, either in the form of money credits, share
units, performance units, stock options, stock appreciation rights, stock
awards (including restricted stock awards), annual or long-term incentive
compensation awards or combinations thereof, the number of shares subject
to the grant, the basis on which the fair market value of the Common Stock
is measured, when necessary, the restriction and forfeiture provisions
relating to restricted stock awards, the time and conditions of vesting or
exercise, the conditions, if any, under which time of vesting or exercise
may be accelerated, the conditions, form, time, manner and terms of payment
of any award and all other terms and conditions of the grant. In addition,
with respect to awards granted under the Plan that are intended to satisfy
the applicable provisions of Section 162(m), the Committee shall have full
power and discretion to establish and administer performance goals,
establish performance periods and to certify that performance goals have
been attained, to the fullest extent required to comply with Section 162(m).
The Committee may establish rules, regulations and guidelines for the
administration of the Plan, and impose, incidental to a grant, conditions
with respect to employment or other activities not inconsistent with or
conflicting with the Plan. The Committee may, in its discretion, delegate
to the Chief Executive Officer of the Company the power and authority with
respect to the selection of, and grants to, eligible key employees of the
Company, subject to the rules, regulations and guidelines of general
application prescribed by the Committee.
The interpretation by the Committee of the terms and provisions of the
Plan and the administration thereof, and all action taken by the Committee,
shall be final, binding and conclusive on the Company, its stockholders, all
Participants and employees of the Company, and upon their respective
beneficiaries, successors and assigns, and upon all other persons claiming
under or through any of them. By accepting any benefits under the Plan,
each Participant, and each person claiming under or through such
Participant, shall be conclusively deemed to have indicated acceptance and
ratification of, and consent to, all provisions of the Plan and any action
or decision under the Plan by the Company, the Board of Directors or the
Committee.
1.6 Adjustment Provisions. In the event that any recapitalization,
or reclassification, split-up or consolidation of shares of Common Stock
shall be effective, or the outstanding shares of Common Stock are, in
connection with a merger or consolidation of the Company or a sale by the
Company of all or a part of its assets, exchanged for a different number or
class of shares of stock or other securities of the Company, or for shares
of the stock or other securities of any other corporation, or new, different
or additional shares of other securities of the Company or of another
corporation are received by the holders of Common Stock or any distribution
is made to the holders of Common Stock other than a cash dividend, (a) the
maximum number and class of shares or other securities that may be issued
or transferred under the Plan, (b) the maximum number of shares that may be
issued as stock options, stock appreciation rights and restricted stock
awards to any Participant during the term of the Plan, and (c) the number
of share units, stock awards or the number and class of shares or other
securities that are the subject of any grant or the deferral of any grant,
shall be equitably adjusted by the Committee under the Plan as the Committee
determines will fairly preserve the intended benefits of the Plan to the
Participants and the Company, and will fairly accomplish the purposes of the
Plan.
1.7 Purchase of Shares of Common Stock. It is contemplated that the
Company, although under no legal obligation to do so, may from time to time
purchase shares of Common Stock for the purpose of paying all or any portion
of any award payable in or measured by the value of shares of Common Stock,
or for the purpose of replacing shares issued or transferred in payment of
all or part of an award. All shares so purchased shall, unless and until
transferred in payment of an award, be at all times the property of the
Company available for any corporate purpose, and no Participant or employee
or beneficiary, individually or as a group, shall have any right, title or
interest in any shares of Common Stock so purchased.
<PAGE>
1.8 Effective Date and Term of Plan. The Plan shall be submitted to
the stockholders of the Company for approval at the 1997 Annual Meeting of
Stockholders of the Company scheduled to be held on March 5, 1997, and shall
be effective retroactively to January 1, 1997, subject to such approval by
the stockholders of the Company. The Plan shall terminate ten years after
it becomes effective unless terminated prior thereto by action of the Board
of Directors of the Company. No further grants shall be made under the Plan
after termination, but termination shall not affect the rights of any
Participant under any grants made prior to termination.
1.9 Amendments and Termination. The Plan and Programs may be amended
or terminated by the Board of Directors of the Company at any time and in
any respect, except that, unless otherwise determined by the Board, no
amendment may be made without stockholder approval if, and to the extent
that, such approval would be required to comply with any applicable
provisions of Section 162(m) or Rule 16b-3, or any successor to the
foregoing.
Similarly, subject to obtaining the consent of the Participant where
required by applicable law, the Committee may alter, amend or modify any
award or grant made pursuant to the Plan or Programs in any respect not in
conflict with the provisions of the Plan or Programs, as the case may be,
if the Committee deems such alterations, amendment or modification to be in
the best interests of the Participant or the Company by reason of changes
or interpretations in tax, securities, other applicable laws, or other
business purposes.
1.10 Prior Plans. Any grants made under the Wm. Wrigley Jr.
Company Management Incentive Plan (the "Prior Plan"), shall be covered by
the terms and conditions of the Prior Plan. Any grants made under the
Programs prior to the effective date of the Plan shall be covered by the
terms and conditions of such Programs and the Prior Plan.
1.11 Terms and Conditions. Awards granted under the Plan shall
contain such terms and conditions as the Committee shall specify, including
without limitation those terms and conditions described in Article IX
hereof, and restrictions on the sale or other disposition of the shares of
Common Stock, or the forfeiture of certain awards upon termination of
employment prior to the expiration of a designated period of time or the
occurrence of other events.
II. Stock Awards
2.1 Form of Award. The Committee may in its discretion provide that
a Participant shall receive stock awards, whether performance awards,
performance shares or fixed awards, in the form of shares of Common Stock,
but which may be forfeitable and/or with restrictions on transfer in any
form as hereinafter provided.
2.2 Performance Awards. Awards may be made in terms of a stated
potential maximum number of shares, with the actual number earned to be
determined by reference to the level of achievement of corporate, group,
division, individual or other specific objectives over a period or periods
of not less than one nor more than ten years. No right or interests of any
kind shall be vested in an individual receiving a performance award until
the conclusion of the period or periods and the determination of the level
of achievement specified in the award, and the time of vesting thereafter
shall be as specified in the award.
2.3 Fixed Awards. Awards may be made that are not contingent on the
performance of objectives but that are contingent on the Participant's
continuing in the employ of the Company, rendering consulting services or
refraining from competitive activities for a period to be specified in the
award, which period shall be not less than one year.
<PAGE>
2.4 Rights With Respect to Restricted Stock Awards. Awards may be
made in the form of shares that are subject to restrictions on transfer, as
determined by the Committee. Unless otherwise provided by the Committee,
the Participant who receives shares of restricted Common Stock shall have
the right to vote the shares and to receive dividends thereon from the dated
of issuance, unless and until forfeited.
2.5 Terms and Conditions. Shares of restricted Common Stock issued
pursuant to an award shall be released from the restrictions at the times
determined by the Committee. The award shall be paid to the Participant
either in shares of Common Stock having a fair market value equal to the
maturity value of the award, or in cash equal to the maturity value of the
award, or in such combination thereof as the Committee shall determine.
III. Share Units
3.1 Credits. The Committee may in its discretion provide that a
Participant shall receive a credit of share units, each of which is
equivalent to a share of Common Stock except for the power to vote and the
entitlement to current dividends.
3.2 Rights With Respect to Share Units. If share units are credited
to a Participant, amounts equal to dividends otherwise payable on a like
number of shares of Common Stock after the crediting of the units may, in
the discretion of the Committee, be paid to the Participant as and when
paid, or converted into additional share units which shall be credited to
the Participant and held until later forfeited or paid out. Share units may
be paid to the Participant in the form of cash, shares of Common Stock or
a combination thereof, according to such requirements and guidelines as the
Committee shall deem appropriate.
IV. Money Credits
4.1 Credits. The Committee may in its discretion provide that a
Participant shall receive a credit of money credits, which shall be in units
of a dollar or a fraction thereof.
4.2 Rights With Respect to Money Credits. If a Participant is
credited with money credits, a money account shall be established for the
Participant which shall be credited with interest equivalents on amounts
previously credited to the account, or an amount equal thereto paid to the
Participant, on a calendar quarter basis compounded at such rate as the
Committee determines to be appropriate from time to time. Money credits may
be paid to the Participant in the form of cash, shares of Common Stock or
a combination thereof, according to such requirements and guidelines as the
Committee shall deem appropriate.
V. Stock Options
5.1 Grants. The Committee may in its discretion provide that a
Participant shall receive an option to purchase shares of Common Stock.
5.2 Terms and Conditions of Options. Options shall contain such
terms and conditions as the Committee shall specify, may either be
"incentive stock options" as defined in Section 422(b) of the Code or
nonqualified stock options, and, at the discretion of the Committee, may
include a reload feature. No option shall be exercisable more than
ten years after the date of grant. The per share option price shall be not
less than 100% of the fair market value at the time the option is granted,
unless otherwise determined by the Committee. Upon exercise, the option
price may be paid in cash, in shares of Common Stock having a fair market
value equal to the option price or a combination thereof, or in such other
manner as the Committee, in its discretion, either at the time of grant or
thereafter, may provide, and the Committee may, in its discretion, require
as a condition of exercise that the optionee pay to the Company any federal,
state or local withholding tax or employment tax required by law to be paid
over as a result of such exercise, which payment may be made in cash, in
shares of Common Stock, or in a combination thereof, having a market value
equal to the amount of the required withholding tax. Unless otherwise
determined by the Committee, options shall not be transferable, except that
such options may be exercised by the executor, administrator or personal
representative of a deceased optionee through a period not to exceed the
date on which the option expires or three years after the death of such
optionee, whichever is earlier. Options may be exercised during the
optionee's continued employment with the Company and for a three year period
thereafter, or for such other period thereafter as the Committee may
determine, but in no event after the date on which the option expires.
<PAGE>
5.3 Incentive Stock Options. With respect to incentive stock
options, to the extent that the aggregate fair market value (determined at
the time the option is granted) of the Common Stock with respect to which
incentive stock options are exercisable for the first time by such
individual during any calendar year (under all plans of the Company) exceeds
$100,000, such options shall be treated as nonqualified stock options. The
per share option price for an incentive stock option shall not be less than
100% of the fair market value of a share of Common Stock at the time the
option is granted (110% of the fair market value of a share of Common Stock
at the time the option is granted in the case of an incentive stock option
granted to an employee, who, at the time the incentive stock option is to
be granted to such employee, owns (within the meaning of Section 422(b)(6)
of the Code) stock possessing more than ten percent (10%) of the total
combined voting power of all classes of stock of the Company, a parent or
a subsidiary within the meaning of Sections 422(e) and 422(f), respectively,
of the Code (a "Ten-Percent Stockholder"). Further, no incentive stock
option shall be exercisable after the expiration of ten years from the date
such option is granted (five years in the case of an incentive stock option
granted to a Ten-Percent Stockholder).
VI. Stock Appreciation Rights
6.1 Grants. The Committee may in its discretion provide that a
Participant shall receive rights entitling such Participant to receive cash
or shares of Common Stock having a fair market value equal to the
appreciation in market value of a stated number of shares of Common Stock
from the date of grant, or in the case of rights granted in tandem with or
by reference to a stock option granted simultaneously with or prior to the
grant of such rights, from the date of grant of the related stock option to
the date of exercise.
6.2 Terms of Grant. Such rights may be granted in tandem with or
with reference to a related stock option, in which event the grantee may
elect to exercise either the option or the right (as to the same shares of
Common Stock subject to the option and the right), or the right may be
granted independently of a stock option. The right shall be exercisable not
more than ten years after the date of grant. Stock appreciation rights
shall not be transferable, except that such rights may, if the grant so
provides, be exercised by the executor, administrator or personal
representative of the deceased grantee within three months after the death
of the grantee, and rights may be exercised during the individual's
continued employment with the Company and for a period not in excess of
three months following termination of employment, or for such longer period
thereafter as the Committee may determine, but in no event after the date
on which such stock appreciation rights expire, provided that if the grantee
is a member of the Board of Directors, the stock appreciation rights may,
if the term of the grant so provides, be exercised following termination of
employment for three months or during such longer period as the grantee
shall continue to serve as a member of the Board of Directors, or for such
longer period thereafter as the Committee may determine, but in no event
after the date on which such stock appreciation rights expire.
<PAGE>
6.3 Payment on Exercise. Upon exercise of a right, the grantee shall
be paid the excess of the then fair market value of the number of shares to
which the right relates over the exercise price of the right or of the
related stock option, as the case may be. Such excess shall be paid in cash
or in shares of Common Stock having a fair market value equal to such
excess, or a combination thereof, as the Committee shall determine.
VII. Performance Units
The Committee may in its discretion provide that a Participant shall
receive performance units, subject to such terms and conditions as the
Committee in its discretion shall determine. The Committee shall establish
a dollar value for each performance unit, the performance goals to be
attained in respect of the performance unit, the various percentages of
performance unit value to be paid out upon the attainment, in whole or in
part, of the performance goals and such other performance unit terms,
conditions and restrictions, as the Committee shall deem appropriate. As
soon as practicable after the termination of the performance period, the
Committee shall determine the payment, if any, which is due on the
performance unit in accordance with the terms thereof. The Committee shall
determine, among other things, whether the payment shall be made in the form
of cash or shares of Common Stock, or a combination thereof.
VIII. Incentive Compensation Awards
The Committee in its discretion may establish annual and long-term
incentive compensation programs pursuant to which incentive compensation
awards may be granted to selected Participants, subject to such terms and
conditions as the Committee in its discretion shall determine.
IX. Section 162(m) Awards
9.1 Performance Based Awards. The Committee shall determine the
amount of each annual or long-term incentive compensation award, stock
award, restricted stock award, money credit award, share, performance or
phantom unit award or other performance based award, and shall specify with
respect thereto Performance Goals (as defined in Section 9.2 below) and a
performance period during which such Performance Goals are required to be
achieved. Any award that is conditioned on the achievement of performance
goals that are not defined as Performance Goals in this Section 9.1 shall
be bifurcated into separate awards so that the awards subject to this
Article IX shall be conditioned solely on the achievement of Performance
Goals. Unless otherwise provided by the Committee in connection with either
a specified termination of employment or the occurrence of a Change in
Control (as defined in Section 11.2 hereof), payment in respect of awards
granted pursuant to this Article IX shall be made only if and to the extent
the Performance Goals with respect to such performance period are attained.
Performance Goals may include a level of performance below which no payment
shall be made and levels of performance at which specified percentages
(which may be greater than 100) of the award shall be paid or credited.
9.2 Performance Goals and Performance Periods. The Performance Goals
underlying the awards granted pursuant to this Article IX shall be the
performance goals established by the Committee, which must be met during the
applicable performance period as a condition of the Participant's receipt
of payment (or, in the case of stock awards or restricted stock awards, the
lapse of restrictions) with respect to an award, and which are based on the
attainment of thresholds with respect to one or more of the following
objective business criteria: earnings per share, return on equity, pre-tax
profit, post-tax profit, consolidated net income, stock price, market share,
sales, unit sales volume, return on assets, return on invested capital, cash
flow, discounted cash flow, economic value added, costs, production, unit
production volume, total shareholder return.
<PAGE>
With respect to annual incentive compensation awards, the performance
period shall mean each calendar year, or, if different, each plan year.
With respect to long-term incentive compensation awards, the performance
period shall mean the period of consecutive plan years or such other period
(which in no case may be less than one plan year) as may be determined by
the Committee.
9.3 Maximum Limitation on Section 162(m) Awards (Other than Stock
Options and Stock Appreciation Rights). In no event shall payment be made
with respect to annual incentive compensation awards granted pursuant to
this Article IX for any plan year valued as of the end of such plan year,
in an amount that exceeds the lesser of 125% of such Participant's annual
rate of base salary as in effect as of the first day of the applicable plan
year, without regard to any optional or mandatory deferral of base salary
pursuant to any salary deferral arrangement ("Annual Base Salary") and
$1,200,000. In addition, during the term of the Plan, no Participant can
receive restricted stock awards relating to shares of Common Stock that in
the aggregate exceed 375,000 shares of Common Stock, as adjusted pursuant
to the terms hereof. Further, with respect to all awards granted pursuant
to this Article IX that are not annual incentive compensation awards, stock
options, stock appreciation rights or restricted stock awards, in no event
shall payment be made with respect to such awards for any three-year period,
valued as of the end of such three-year period, in an amount that exceeds
the lesser of 100% of such Participant's Annual Base Salary and $900,000.
9.4 Time and Form of Payment. Amounts in respect of awards granted
under this Article IX shall be paid after the end of the applicable
performance period, at such time as the Committee shall determine. Unless
otherwise determined by the Committee, such payments shall be made only
after achievement of the Performance Goals has been certified by the
Committee. Payments shall be made either in cash, in Common Stock, in such
other form as determined by the Committee or in a combination of the
foregoing, as determined by the Committee.
With respect to all employees who are Covered Employees (as defined
in Section 162(m)), the foregoing provisions shall apply to the extent
necessary for the awards granted pursuant to this Article IX to satisfy the
applicable requirements of Section 162(m).
X. Loans
The Committee may, in its discretion, authorize loans by the Company
to Participants in connection with the grant of stock awards, other awards
hereunder or the exercise of options or stock appreciation rights. The
loans shall be subject to such terms and conditions not inconsistent with
the Plan as the Committee shall impose from time to time. Every loan shall
meet all applicable laws, regulations and rules
of the Internal Revenue Service, the Federal Reserve Board and any other
governmental agency having jurisdiction.
XI. Miscellaneous
11.1 Withholding. In addition to any other withholding provisions
set forth in Section 5.2 hereof, the Company or a corporation or other form
of business association of which shares (or other ownership interests)
having 50% or more of the voting power are owned or controlled directly or
indirectly, by the Company (an "Associated Company") may make such
provisions as it may deem appropriate for the withholding of any taxes that
the Company or Associated Company determines is required to be withheld in
connection with any award or distribution hereunder, including permitting
Participants to authorize the Company to withhold shares of Common Stock
earned with respect to any grant or award.
<PAGE>
11.2 Change in Control. For purposes of the Plan and the Programs,
a "Change in Control" shall be deemed to have occurred:
(a) if and when any "person" (as such term is used in
Sections 13(d) and 14(d)(2) of the Securities Exchange Act of 1934)
in a transaction or series of transactions, is or becomes a
beneficial owner, directly or indirectly, of securities of the
Company (not including in the securities beneficially owned by such
person any securities acquired by an employee benefit plan of the
Company or any subsidiary thereof, or any trustee or other fiduciary
holding securities under any such employee benefit plan),
representing 5% or more of the combined voting power of the Company's
then outstanding securities and there is outstanding an exchange or
tender offer for securities of the Company (other than any such
exchange or tender offer by the Company or by members of the Wrigley
and Offield families); or
(b) if any "person" (as above-referenced but excluding members
of the Wrigley and Offield families) is or becomes a beneficial
owner, directly or indirectly, of securities of the Company
representing 20% or more of the combined voting power of the
Company's then outstanding securities (not including in the
securities beneficially owned by such person any securities acquired
by an employee benefit plan of the Company or any subsidiary thereof
or any trustee or other fiduciary holding securities under any such
employee benefit plan).
11.3 Certain Provisions Relating to Participation. No Participant
shall have any claim to be granted any award under the Plan, and there is
no obligation for uniformity of treatment for Participants.
Except as otherwise required by applicable law, no rights under the
Plan or Programs, contingent or otherwise, shall be assignable or subject
to any encumbrance, pledge or charge of any nature, except that, under such
rules and regulations as the Committee may establish, a Participant may
designate a beneficiary to receive, in the event of death, any amount that
would otherwise have been payable to the Participant or that may become
payable on account of or following his or her death except that, if any
amount shall become payable to the executor or administrator of the
Participant, such executor or administrator may transfer the right to the
payment of any such amount to the person, persons or entity (including a
trust) entitled thereto under the will of the Participant or, in case of
intestacy, under the laws relating to intestacy.
By accepting any benefits under the Plan or Programs, each Participant
and each person claiming under or through a Participant shall be
conclusively deemed to have indicated their acceptance and ratification of
and consent to any action or decision taken or made or to be taken or made
under the Plan or Program, as the case may be, by the Committee, the Company
or the Board of Directors.
Subject to any applicable forfeiture provisions provided in the
Programs, each Participant shall have a vested, unconditional and
nonforfeitable right to receive a distribution or distributions of the
amount credited to such Participant's respective accounts, but only at, and
not until, the time or times and only in the manner provided for in the Plan
or applicable Programs. However, no funds, securities or other property of
any nature shall be segregated or earmarked for any current or former
Participant, beneficiary or other person. Accordingly, no current or former
Participant, beneficiary or other person, individually or as a member of a
group, shall have any right, title or interest in an account in any fund or
specific sum of
money, in any asset or in any shares of stock that may be acquired by the
Company in respect of its obligations hereunder, the sole right of the
Participant being to receive distributions, as set forth in the Plan or
Programs, as a general creditor of the Company with an unsecured claim
against the Company's general assets.
The Plan and Programs shall be binding upon, and shall inure to the
benefit of, the Company and its successors and assigns and the Participants
and their heirs, administrators and personal representatives.
<PAGE>
11.4 Governing Law. The Plan and Programs shall be construed in
accordance with and governed by the laws of the State of Delaware.
XII. Interpretation
The Plan and the Programs thereunder are designed and, to the extent
determine by the Committee, in its discretion, intended to comply with
Rule 16b-3 and Section 162(m), in each case, to the extent applicable, and
all provisions hereof shall be construed in a manner to so comply.
<PAGE>
<PAGE>
X Please mark your
votes as in this
example.
6700
This proxy form represents all shares of Wrigley stock (both
Common
and Class B Common) held in the registration indicated below.
For employee stockholders, this includes your shares held in the savings
plan.
The Board of Directors recommends a vote FOR Items 1, 2 and 3.
FOR WITHHELD
1. Election of
Directors
(see reverse)
FOR AGAINST ABSTAIN
2. Adoption of
Management
Incentive Plan
(see reverse)
FOR AGAINST ABSTAIN
3. Appointment
of Auditors
(see reverse)
*For all nominee(s) except vote withheld from the following:
Change of
Address
Note: Please sign exactly as name appears on
this form. Joint owners should each sign
personally. Corporation proxies should
be signed by an authorized officer.
Executors, administrators, trustees,
etc. should so indicate when signing.
SIGNATURE(S) DATE
FOLD AND DETACH HERE
[Wm. WRIGLEY Jr. Company Letterhead]
February 5, 1997
Dear Stockholder:
You are cordially invited to attend the 94th Annual Meeting of Stockholders
of the Wm. Wrigley Jr. Company, which will be held in the Wrigley Building,
410 N. Michigan Avenue, Chicago, Illinois, at 9:00 a.m., on Wednesday, March
5, 1997.
The accompanying Notice of Annual Meeting of Stockholders and Proxy
Statement describe the items to be considered and acted upon by the
stockholders.
Whether or not you plan to attend this meeting, please sign, date and return
your proxy form above as soon as possible so that your shares can be voted
at the meeting in accordance with your instructions. If you attend the
meeting, you may revoke your proxy, if you wish, and vote personally. It is
very important that your stock be represented.
Sincerely,
WILLIAM WRIGLEY
President and
Chief Executive Officer
Wm. WRIGLEY Jr. Company PROXY FORM
This proxy is solicited on behalf of the Board of Directors for the Annual
Meeting on March 5, 1997.
This proxy will be voted as specified by the stockholder. If no
specification is made, all shares of both classes of stock will be voted as
set forth in the proxy statement FOR the election of Directors, FOR the
adoption of the Management Incentive Plan and FOR the appointment of
Auditors.
The stockholder represented herein appoints William Wrigley, Robert P.
Billingsley, Wm. M. Piet, or any of them, proxies with power of substitution
to vote all shares of Common Stock and Class B Common Stock entitled to be
voted by said stockholder(s) at the Annual Meeting of Stockholders of the
Wm. Wrigley Jr. Company to be held in the Wrigley Building, Chicago,
Illinois, on March 5, 1997, at 9:00 a.m., and at any adjournment thereof,
as specified in this proxy. The proxies are authorized in their discretion
to vote upon such other business as may properly come before the meeting.
The Board of Directors recommends a vote FOR Items 1, 2 and 3.
<TABLE>
<S> <C> <C>
1. ELECTION OF DIRECTORS 2. ADOPTION OF MANAGEMENT 3. APPOINTMENT OF AUDITORS
The nominees are: INCENTIVE PLAN To ratify the appointment of independent
Charles F. Allison III (1), To approve the adoption of auditors, Ernst & Young LLP, for the year
Douglas S. Barrie (2), the Wm. Wrigley Jr. Company 1997 ending December 31, 1997.
Lee Phillip Bell (3), Management Incentive Plan.
Robert P. Billingsley (4),
Thomas A. Knowlton (5),
Penny Pritzker (6),
Richard K. Smucker (7),
William Wrigley (8) and
William Wrigley, Jr (9).
</TABLE>
Your vote is Important!
Please sign and date on the reverse and return promptly in the enclosed
postage-paid envelope.
If you attend the meeting, you may revoke your proxy and vote in person.
Change of address:
(If you have written in the above space, please mark the "Change of Address" box
on the reverse of this card.)
FOLD AND DETACH HERE
TO MAKE SURE THAT YOUR VOTE ARRIVES AT OUR TABULATOR IN TIME TO BE COUNTED, YOU
MAY WISH TO VOTE BY PHONE OR BY FACSIMILE.
TO VOTE BY PHONE (touch tone):
1) Have your proxy card handy.
2) Call First Chicago Trust at 800-OK 2 VOTE.
3) Follow the automated instructions.
TO VOTE BY FACSIMILE:
1) Make a copy of both sides of your proxy card.
2) Fax them to First Chicago Trust at 312-407-3021.
