<PAGE> 1
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. )
Filed by the Registrant /X/
Filed by a Party other than the Registrant / /
Check the appropriate box:
<TABLE>
<S> <C>
/ / Preliminary Proxy Statement / / Confidential, for Use of the Commission
Only (as permitted by Rule 14a-6(e)(2))
/X/ Definitive Proxy Statement
/ / Definitive Additional Materials
/ / Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
</TABLE>
HAVERTY FURNITURE COMPANIES, INC.
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
/X/ $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), or 14a-6(i)(2) or
Item 22(a)(2) of Schedule 14A.
/ / $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3).
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
(2) Aggregate number of securities to which transaction applies:
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the
filing fee is calculated and state how it was determined):
(4) Proposed maximum aggregate value of transaction:
(5) Total fee paid:
/ / Fee paid previously with preliminary materials.
/ / Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
(2) Form, Schedule or Registration Statement No.:
(3) Filing Party:
(4) Date Filed:
<PAGE> 2
HAVERTY FURNITURE COMPANIES, INC.
866 West Peachtree Street, N.W.
Atlanta, Georgia 30308-1123
ANNUAL MEETING OF STOCKHOLDERS
APRIL 26, 1996
TO THE STOCKHOLDERS:
Notice is hereby given that the Annual Meeting of Stockholders of
Haverty Furniture Companies, Inc., a Maryland corporation (the "Company"), will
be held at 11:00 A.M., on Friday, April 26, 1996, at the Harbor Court Hotel,
550 Light Street, Baltimore, Maryland 21202, for the following purposes:
1. To elect thirteen directors for terms of one year and until
their successors are elected and qualified, four of whom shall
be elected by holders of Common Stock and nine of whom shall be
elected by holders of Class A Common Stock.
2. To approve the Directors' Compensation Plan, as set forth in the
Proxy Statement as Appendix I, to provide for the payment of all
or a portion of the annual retainer fees paid to directors in
shares of the Company's Common Stock.
3. To approve the Directors' Deferred Compensation Plan, as Amended
and Restated, as set forth in the Proxy Statement as Appendix
II.
4. To transact such other business as may properly be brought
before the meeting or any adjournment thereof.
Only stockholders of record at the close of business on March 8, 1996,
are entitled to notice of, and to vote at, the meeting.
Your attention is directed to the attached Proxy Statement.
By order of the Board of Directors
Christine M. Jones
Vice President and Secretary
Atlanta, Georgia
March 20, 1996
PLEASE FILL IN, SIGN, DATE AND RETURN THE ACCOMPANYING PROXY. IF YOU ATTEND
THE MEETING IN PERSON, YOU MAY WITHDRAW YOUR PROXY AND VOTE YOUR OWN SHARES.
<PAGE> 3
HAVERTY FURNITURE COMPANIES, INC.
866 West Peachtree Street, N.W.
Atlanta, Georgia 30308-1123
ANNUAL MEETING OF STOCKHOLDERS
April 26, 1996
PROXY STATEMENT
SOLICITATION OF PROXIES
The enclosed proxy is solicited by the Board of Directors of Haverty
Furniture Companies, Inc., in connection with the Annual Meeting of
Stockholders to be held at the time and place and for the purposes set forth in
the accompanying notice. All shares represented by duly furnished proxies will
be voted in accordance with the instructions given therein.
Any proxy given pursuant to this solicitation may be revoked by any
stockholder who attends the meeting and gives oral notice of his election to
vote in person, without compliance with any other formalities. In addition,
any proxy given pursuant to this solicitation may be revoked prior to the
meeting by delivering to the Secretary of the Company an instrument revoking it
or a duly executed proxy for the same shares bearing a later date. Proxies
which are returned properly executed and not revoked will be voted in
accordance with the stockholder's directions specified thereon. Where no
direction is specified, proxies will be voted FOR each of the matters set forth
in the Notice accompanying this proxy statement. Abstentions and broker
non-votes will not be counted as votes either in favor of or against the matter
with respect to which the abstention or broker non-vote relates; however, with
respect to any proposal other than the election of directors, abstentions and
broker non-votes would have the effect of a vote against the proposal. All
costs of this solicitation will be borne by the Company.
Only stockholders of record at the close of business on March 8, 1996,
are entitled to notice of, and to vote at, the meeting. The Annual Report to
Stockholders, Notice of Annual Meeting of Stockholders, this Proxy Statement
and form of Proxy were first mailed to stockholders of the Company on or about
March 20, 1996.
OUTSTANDING CAPITAL STOCK
As of the close of business on March 8, 1996, there were outstanding
and entitled to vote at the 1996 Annual Meeting of Stockholders 8,680,855
shares of the Company's $1.00 par value Common Stock and 2,962,608 shares of
the Company's $1.00 par value Class A Common Stock, the Company's only
outstanding classes of voting securities.
With respect to all stockholder matters, holders of Common Stock are
entitled to one vote for each share held. With respect to the election of
directors, holders of Class A Common Stock are entitled to one vote for each
share held; on all other matters, holders of Class A Common Stock are entitled
to ten votes for each share held.
The holders of Common Stock and Class A Common Stock vote as separate
classes in the election of directors. The holders of Common Stock are entitled
to elect 25% of the members of the Board of Directors, or the nearest higher
whole number that is at least 25% of the total number of directors standing for
election; and holders of Class A Common Stock are entitled to elect 75% of the
members of the Board of Directors, or the remaining number of directors
standing for election. The Common Stock carries a dividend preference over the
Class A Common Stock.
<PAGE> 4
SECURITY OWNERSHIP OF CERTAIN
BENEFICIAL OWNERS AND MANAGEMENT
The following information is provided with respect to all persons
known to the Company to be the beneficial owners of more than five percent (5%)
of the Company's Common Stock and/or Class A Common Stock as of March 8, 1996.
Unless otherwise indicated, the person or entity shown possesses sole voting
and investment powers with respect to the amounts shown.
<TABLE>
<CAPTION>
Class A
Common Stock Common Stock
Beneficially Beneficially
Owned and Owned and
Name and Address of Percent Percent
Beneficial Owner of Class of Class
- ------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Rawson Haverty * 765,227 (a)
866 West Peachtree Street, N.W. 25.83%
Atlanta, Georgia 30308-1123
NationsBank, N.A. (South) * 253,822 (b)
(formerly Bank South, N.A.) 8.57%
P. O. Box 4387
Atlanta, Georgia 30302
Mrs. Betty Haverty Smith * 245,589 (c)
158 West Wesley Road, N.W. 8.29%
Atlanta, Georgia 30305
Clarence H. Ridley * 244,205 (d)
191 Peachtree Street 8.24%
Atlanta, Georgia 30303
John Rhodes Haverty, M.D. * 241,011
3359 Woodhaven Road, N.W. 8.14%
Atlanta, Georgia 30305
Frank S. McGaughey, Jr. * 204,255
3180 Lemons Ridge 6.89%
Atlanta, Georgia 30339
FMR Corporation 1,674,300 (e) *
82 Devonshire Street 19.29%
Boston, Massachusetts 02109-3614
Mellon Bank Corporation 462,000 (f) *
One Mellon Bank Center 5.32%
Pittsburgh, Pennsylvania 15258
Dimensional Fund Advisors, Inc. 457,750 (g) *
1299 Ocean Avenue - 11th Floor 5.27%
Santa Monica, California 90401
</TABLE>
- --------------------------
* Less than 5% of outstanding shares of class.
- --------------------------
-2-
<PAGE> 5
(a) Of this amount, Mr. Haverty has sole voting and investment
power with respect to 400,123 shares, sole investment power
with respect to 4,662 shares, shared voting and investment
power with respect to 218,767 shares, and shared voting power
with respect to 141,675 shares.
(b) Of this amount, NationsBank, N.A., in various fiduciary
capacities, has sole voting power with respect to 6,637
shares, sole investment power with respect to 143,650 shares,
and shared voting and investment power with respect to 105,510
shares. Of the total number shown, 251,847 shares are also
included in the total shown for Rawson Haverty and 300 shares
are also included in the total shown for Lynn H. Johnston.
See "Election of Directors."
(c) Of this amount, Mrs. Smith has sole voting and investment
power with respect to 238,229 shares and shared voting and
investment power with respect to 7,360 shares.
(d) Of this amount, Mr. Ridley has sole voting and investment
power with respect to 181,726 shares, shared voting and
investment power with respect to 1,327 shares, and sole voting
power with respect to 61,152 shares. This amount includes
unexercised options to purchase 3,000 shares.
(e) The shares shown were reported to be held beneficially as of
12/31/95 by FMR Corporation in a Schedule 13G filed with the
Securities and Exchange Commission.
Fidelity Management & Research Company ("Fidelity"), a
wholly-owned subsidiary of FMR Corp. and an investment adviser
registered under Section 203 of the Investment Advisers Act of
1940, is the beneficial owner of the 1,574,300 shares of the
Common Stock shown as a result of acting as investment adviser
to various investment companies registered under Section 8 of
the Investment Company Act of 1940.
The ownership of one investment company, Fidelity Advisor
Growth Opportunities Portfolio, amounted to 556,400 of the
shares shown.
Edward C. Johnson 3d, FMR Corp., through its control of
Fidelity, and the Funds each has sole power to dispose of the
1,574,300 shares owned by the Funds.
Neither FMR Corp. nor Edward C. Johnson 3d, Chairman of FMR
Corp., has the sole power to vote or direct the voting of the
shares owned directly by the Fidelity Funds, which power
resides with the Funds' Boards of Trustees. Fidelity carries
out the voting of the shares under written guidelines
established by the Funds' Boards of Trustees.
Fidelity Management Trust Company, a wholly-owned subsidiary
of FMR Corp. and a bank as defined in Section 3(a)(6) of the
Securities Exchange Act of 1934, is the beneficial owner of
100,000 of the shares shown as a result of its serving as
investment manager of the institutional account(s).
Edward C. Johnson 3d and FMR Corp., through its control of
Fidelity Management Trust Company, has sole dispositive power
over 100,000 shares and sole power to vote or to direct the
voting of 56,100 shares, and no power to vote or to direct the
voting of 43,900 shares owned by the institutional account(s),
as reported above.
(f) The shares shown were reported to be held beneficially as of
12/31/95 by Mellon Bank Corporation in a Schedule 13G filed
with the Securities and Exchange Commission.
Of this amount, Mellon Bank Corporation has sole voting power
with respect to 433,000 shares, sole dispositive power with
respect to 418,000 shares and shared dispositive power with
respect to 44,000 shares. The shares reported are
beneficially owned by the following direct or indirect
subsidiaries of Mellon Bank Corporation: (1) Boston Safe
Deposit and Trust Company and (2) Mellon Bank, N.A., which are
Banks as defined in Section 3(a)(6) of the Securities and
Exchange Act of 1934; and, (3) Mellon Capital Management
Corporation, (4) The Boston Company Asset Management, Inc.,
and (5) The Dreyfus Corporation, which are investment advisers
registered under Section 203 of the Investment Advisers Act of
1940.
(g) The shares shown were reported to be held beneficially as of
12/31/95 by Dimensional Fund Advisors, Inc. in a Schedule 13G
filed with the Securities and Exchange Commission.
-3-
<PAGE> 6
Of this amount, Dimensional Fund Advisors, Inc., an investment
adviser registered under Section 203 of the Investment
Advisers Act of 1940, has sole dispositive power for 457,750
shares and sole voting power for 317,450 shares. Persons who
are officers of Dimensional Fund Advisors, Inc., also serve as
officers of DFA Investment Dimensions Group, Inc. (the "Fund")
and The DFA Investment Trust Company (the "Trust"), each an
open-end management investment company registered under the
Investment Advisers Act of 1940; and, in their capacities as
officers of the Fund and the Trust, respectively, these
persons vote 72,100 shares owned by the Fund and 68,200 shares
owned by the Trust.
The following information is provided with respect to the number of
shares of the Company's Common Stock and/or Class A Common Stock beneficially
owned as of March 8, 1996, by (i) two executive officers who are not directors
and are named in the Summary Compensation Table, (ii) one director who is not
standing for re-election, and (iii) all executive officers and directors as a
group. Unless otherwise indicated, the person or entity shown possesses sole
voting and investment powers with respect to the amounts shown.
<TABLE>
<CAPTION>
Class A
Common Stock Common Stock
Beneficially Beneficially
Owned and Owned and
Name or Number of Percent Percent
Persons in Group of Class of Class
- --------------------------------------------------------------------------------------------------------
<S> <C> <C>
Dennis L. Fink 72,617 (a) --
.84%
M. Tony Wilkerson 36,281 (b) 7,477 (c)
.42% .25%
Dr. Kenneth Black, Jr. (d) 10,897 (e) 397
.13% .01%
23 Executive Officers and 1,081,421 (f) 1,550,564 (g)
Directors as a Group 12.48% 52.34%
</TABLE>
- ----------------------------
(a) This amount includes unexercised options to purchase 66,810
shares.
(b) This amount includes unexercised options to purchase 28,196
shares.
(c) Mr. Wilkerson has sole voting and investment power with
respect to 7,357 shares and shared voting and investment power
with respect to 120 shares.
(d) Dr. Black is retiring as a Director of the Company with the
expiration of his term at the 1996 Annual Meeting.
(e) This amount includes unexercised options to purchase 10,500
shares.
(f) Of this amount, the persons included in this group have sole
voting and investment power with respect to 727,220 shares,
shared voting and investment power with respect to 156,446
shares, sole investment power with respect to 750 shares, and
shared voting power with respect to 197,005 shares. This
amount includes unexercised options to purchase 536,621
shares.
(g) Of this amount, the persons included in this group have sole
voting and investment power with respect to 1,093,229 shares,
shared voting and investment power with respect to 249,846
shares, sole investment power with respect to 4,662 shares,
sole voting power with respect to 61,152 shares, and shared
voting power with respect to 141,675 shares. This amount
includes unexercised options to purchase 16,500 shares.
-4-
<PAGE> 7
AGENDA ITEM ONE
ELECTION OF DIRECTORS
The Board of Directors is presently comprised of thirteen members.
All directors of the Company are to be elected annually, with stockholders of
each of the two classes of common stock voting separately by class as provided
in the Articles of Incorporation. The holders of Common Stock of the Company
are entitled to elect 25% of the members of the Board of Directors, or the
nearest higher whole number that is at least 25% of the total number of
directors standing for election; and the holders of Class A Common Stock of the
Company are entitled to elect 75% of the members of the Board of Directors, or
the remaining number of directors standing for election.
The Board of Directors has nominated thirteen persons for election as
directors at the 1996 Annual Meeting of Stockholders, four of whom will be
elected by the holders of Common Stock and nine of whom will be elected by the
holders of Class A Common Stock.
Dr. Kenneth Black, Jr., who has served as a Director of the Company
since April 1975, is retiring as a Director of the Company with the expiration
of his term at the 1996 Annual Meeting. The Board of Directors has nominated
John T. Glover to fill the vacancy created by the retirement of Dr. Black.
Unless otherwise instructed, it is intended that proxies will be voted
FOR the election of the thirteen nominees named below. The affirmative vote of
a majority of all votes cast at the meeting by the holders of Class A Common
Stock is required for the election of the nine nominees standing for election
by the holders of that class. The affirmative vote of a majority of all votes
cast at the meeting by the holders of Common Stock is required for the election
of the four nominees standing for election by the holders of that class.
NOMINEES FOR ELECTION BY HOLDERS OF CLASS A COMMON STOCK
The names of, and certain information relating to, the nine nominees
to be elected by the holders of Class A Common Stock are as follows:
<TABLE>
<CAPTION>
Security Ownership
as of 3-8-96
and Percent of Class*
----------------------------------
Class A
Name and Year Age Common Common
First Became a Director (3-8-96) Principal Occupation Stock Stock
- ---------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Rawson Haverty (a) 75 Chairman of the Board of 237,803 (b) 765,227 (c)
1947 Company since 1984; President 2.74% 25.83%
(1955-1984) and Chief
Executive Officer (1955-1990)
of Company
John Rhodes Haverty, M.D.(d) 69 Retired (Former Dean, 20,010 (e) 241,011
1974 College of Health Sciences, .23% 8.14%
Georgia State University)
(1968-1991)
Clarence H. Ridley (f) 53 Partner of King & Spalding, 23,005 (g) 244,205 (h)
1979 Attorneys, since 1977 .27% 8.24%
</TABLE>
-5-
<PAGE> 8
<TABLE>
<CAPTION>
Security Ownership
as of 3-8-96
and Percent of Class*
-------------------------------
Class A
Name and Year Age Common Common
First Became a Director (3-8-96) Principal Occupation Stock Stock
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Fred J. Bates 60 Regional Manager and General 47,592 (i) 39,823
1981 Manager of Company's Dallas, .55% 1.34%
Texas, operations since 1979
John E. Slater, Jr. 61 President and Chief Executive 93,378 (j) 15,960 (k)
1983 Officer of Company since 1.08% .54%
1994; Executive Vice
President (1993-1994) and
Chief Operating Officer
(1992-1994); Senior Vice
President (1987-1993);
General Manager, Stores
(1990-1992)
Lynn H. Johnston (l) 64 Retired; Chairman of the 191,630 (n) 3,300 (o)
1986 Board of ING America Life 2.21% .11%
Corporation [formerly the
GeorgiaUS Corporation, re-
named in 1993] (1983-1994);
Deputy Chairman and
President of Nationale-
Nederlanden North America
Corporation (1989-1992);
Chairman of the Board of
Life Insurance Company of
Georgia (1983-1994) (m)
Clarence H. Smith (p) 45 Vice President, Operations 32,249 (q) 42,396 (r)
1989 and Development, of Company .37% 1.43%
since 1994; Vice President
(1984-1994); Regional Manager
and General Manager of
Company's Atlanta, Georgia,
operations (1986-1994)
Rawson Haverty, Jr. (s) 39 Vice President, Real Estate 22,763 (t) 75,712 (u)
1992 and Insurance Divisions of .26% 2.56%
Company since 1992; Assistant
Vice President (1987-1992);
Assistant Secretary (1985-
1993)
Frank S. McGaughey, III 47 Partner of Powell, Goldstein, 17,244 (v) --
1995 Frazer & Murphy, Attorneys, .20%
since 1980
</TABLE>
- ------------------------
-6-
<PAGE> 9
* Unless otherwise indicated, the amounts shown in the columns
represent the number of shares over which the nominee has sole
voting and investment power and include, where applicable,
shares subject to unexercised options.
- --------------------------
(a) Rawson Haverty is first cousin of John Rhodes Haverty, M.D.,
father of Rawson Haverty, Jr., and uncle of Clarence H. Ridley
and Clarence H. Smith.
(b) Of this amount, Mr. Haverty has sole voting and investment
power with respect to 124,570 shares, sole investment power
with respect to 750 shares, shared voting and investment power
with respect to 78,808 shares, and shared voting power with
respect to 33,675 shares. This amount includes unexercised
options to purchase 68,939 shares.
(c) Of this amount, Mr. Haverty has sole voting and investment
power with respect to 400,123 shares, sole investment power
with respect to 4,662 shares, shared voting and investment
power with respect to 218,767 shares, and shared voting power
with respect to 141,675 shares.
(d) John Rhodes Haverty, M.D., is first cousin of Rawson Haverty.
(e) This amount includes unexercised options to purchase 10,500
shares.
(f) Mr. Ridley is the nephew of Rawson Haverty and first cousin of
Clarence H. Smith and Rawson Haverty, Jr.
(g) Of this amount, Mr. Ridley has sole voting and investment
power with respect to 21,678 shares and shared voting and
investment power with respect to 1,327 shares. This amount
includes unexercised options to purchase 10,500 shares.
(h) Of this amount, Mr. Ridley has sole voting and investment
power with respect to 181,726 shares, shared voting and
investment power with respect to 1,327 shares, and sole voting
power with respect to 61,152 shares. This amount includes
unexercised options to purchase 3,000 shares.
(i) This amount includes unexercised options to purchase 21,495
shares.
(j) Of this amount, Mr. Slater has sole voting and investment
power with respect to 55,168 shares, and shared voting and
investment power with respect to 38,210 shares. This amount
includes unexercised options to purchase 55,018 shares.
(k) Of this amount, Mr. Slater has sole voting and investment
power with respect to 150 shares and shared voting and
investment power with respect to 15,810 shares.
(l) Mr. Johnston is a director of ING America Life Corporation.
(m) ING America Life Corporation (a subsidiary of ING Group) is
the holding company for Life Insurance Company of Georgia,
Southland Life Insurance Company and Security Life of Denver.
ING Group is an international diversified financial services
company based in Amsterdam, The Netherlands, with banking and
insurance operations in 55 countries.
(n) Of this amount, Mr. Johnston has sole voting and investment
power with respect to 28,300 shares and shared voting power
with respect to 163,330 shares. This amount includes
unexercised options to purchase 19,500 shares.
(o) This amount includes unexercised options to purchase 3,000
shares.
(p) Clarence H. Smith is the nephew of Rawson Haverty and first
cousin of Clarence H. Ridley and Rawson Haverty, Jr.
-7-
<PAGE> 10
(q) Of this amount, Mr. Smith has sole voting and investment power
with respect to 32,099 shares and shared voting and investment
power with respect to 150 shares. This amount includes
unexercised options to purchase 16,137 shares.
(r) Of this amount, Mr. Smith has sole voting and investment power
with respect to 41,671 shares and shared voting and investment
power with respect to 725 shares.
(s) Rawson Haverty, Jr., is the son of Rawson Haverty and first
cousin of Clarence H. Ridley and Clarence H. Smith.
(t) This amount includes unexercised options to purchase 22,625
shares.
(u) Of this amount, Mr. Haverty has sole voting and investment
power with respect to 74,737 shares and shared voting and
investment power with respect to 975 shares.
(v) Of this amount, Mr. McGaughey has sole voting and investment
power with respect to 3,000 shares and shared voting and
investment power with respect to 14,244 shares. This amount
includes unexercised options to purchase 3,000 shares.
NOMINEES FOR ELECTION BY HOLDERS OF COMMON STOCK
The names of, and certain information relating to, the four nominees
to be elected by the holders of Common Stock are as follows:
<TABLE>
<CAPTION>
Security Ownership
as of 3-8-96
and Percent of Class*
------------------------------
Class A
Name and Year Age Common Common
First Became a Director (3-8-96) Principal Occupation Stock Stock
- --------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
William A. Parker, Jr. (a) 68 Chairman of the Board of 27,000 (b) 3,000 (c)
1987 Seminole Investment Company, .31% .10%
L.L.C., since 1994; Chairman
of the Board of Cherokee
Investment Co. (1978-1994)
Robert R. Woodson (d) 63 Chairman of the Board of 31,500 (e) 9,000 (f)
1987 John H. Harland Company since .36% .30%
1992. President (1984-
1995); Chief Executive
Officer (1990-1995)
L. Phillip Humann (g) 50 President, SunTrust Banks, 17,500 (h) --
1992 Inc., since 1991; Senior .20%
Executive Vice President,
Banking (1990-1991)
John T. Glover (i) 49 President, Post Properties, 2,000 --
Inc., since 1984
</TABLE>
- --------------------------
* Unless otherwise indicated, the amounts shown in the columns
represent the number of shares over which the nominee has sole
voting and investment power and include, where applicable,
shares subject to unexercised options.
-8-
<PAGE> 11
- ----------------------------
(a) Mr. Parker is a director of Genuine Parts Co., The Southern
Company, Georgia Power Company, ING America Life Corporation
and Post Properties, Inc.
(b) This amount includes unexercised options to purchase 19,500
shares.
(c) This amount represents unexercised options to purchase 3,000
shares.
(d) Mr. Woodson is a director of Allied Holdings, Inc.
(e) This amount includes unexercised options to purchase 19,500
shares.
(f) This amount represents unexercised options to purchase 3,000
shares.
(g) Mr. Humann is a director of SunTrust Banks, Inc., Coca-Cola
Enterprises, Inc., and Equifax, Inc.
(h) This amount includes unexercised options to purchase 15,000
shares.
(i) Mr. Glover is a director of SunTrust Banks of Georgia, Inc.,
and SunTrust Bank, Atlanta.
-9-
<PAGE> 12
BOARD COMMITTEES AND ATTENDANCE
The Company has a standing Audit Committee composed of Dr. Kenneth
Black, Jr., Chairman (who will retire from the Board of Directors effective
with the expiration of his term on April 26, 1996), William A. Parker, Jr., and
L. Phillip Humann. The Audit Committee, which held one meeting during fiscal
1995, performs the following functions: recommends independent certified
public accountants to be engaged as auditors of the Company; approves the fees
of the Company's auditors; reviews with the independent auditors the plan and
results of the auditing engagement; reviews the scope and results of the
Company's procedures for internal auditing; and reviews the adequacy of the
Company's system of internal accounting controls.
The Executive Committee is composed of Rawson Haverty, Chairman, John
E. Slater, Jr., Clarence H. Ridley, John Rhodes Haverty, M.D., and L. Phillip
Humann. The Executive Committee held five meetings during fiscal 1995.
The Company has no standing compensation committee; however, the
Executive Committee determines salary and bonus arrangements for certain
personnel. See "Report of Executive Committee on Executive Compensation."
The Company has a Stock Option Committee, composed of non-employee
directors appointed by the Board, which serves to administer the Company's
qualified and non-qualified stock option plans and the employee stock purchase
plan. Present members of the Stock Option Committee are John Rhodes Haverty,
M.D., Chairman, William A. Parker, Jr., and Robert R. Woodson. The Stock
Option Committee held two meetings during fiscal 1995.
The Company has a standing Employee Benefits Committee composed of
Lynn H. Johnston, Chairman, Robert R. Woodson and Frank S. McGaughey, III.
The Employee Benefits Committee serves as Administrator for all formal employee
benefit plans of the Company and also oversees and gives guidance for all other
employee benefit programs and policies of the Company. The Employee Benefits
Committee held one meeting during fiscal 1995.
The Company has no standing nominating or other standing committee
performing similar functions.
The Board of Directors held a total of four meetings during fiscal
1995. Each incumbent director, except William A. Parker, Jr., attended at
least 75% of the aggregate of all meetings held by the Board of Directors and
by committees of the Board on which the director served during the director's
period of service.
COMPLIANCE WITH SECTION 16(A) OF THE SECURITIES EXCHANGE ACT OF 1934
Section 16(a) of the Securities Exchange Act of 1934 requires the
Company's directors, certain officers and persons who own more than 10% of the
outstanding Class A Common Stock or Common Stock of the Company, to file with
the Securities and Exchange Commission reports of changes in ownership of the
Class A Common Stock or Common Stock of the Company held by such persons.
Officers, directors and greater than 10% stockholders are also required to
furnish the Company with copies of all forms they file under this regulation.
To the Company's knowledge, based solely on a review of the copies of such
reports furnished to the Company and representations that no other reports were
required during the fiscal year ended December 31, 1995, the Company's
officers, directors and 10% stockholders complied with all Section 16(a) filing
requirements applicable to them.
-10-
<PAGE> 13
EXECUTIVE COMPENSATION
The following table provides certain summary information concerning
compensation paid or accrued by the Company to or on behalf of the Company's
Chief Executive Officer and each of the four other most highly compensated
executive officers of the Company (determined as of the end of the last fiscal
year) (hereinafter referred to as the "Named Executive Officers") for the
fiscal years ended December 31, 1995, 1994 and 1993.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
Long Term
Compensation
-----------------------------------------------------------------
Annual Compensation Awards
-----------------------------------------------------------------
Other Securities All
Annual Underlying Other
Name and Salary Bonus Compensation Options Compensation
Principal Position Year ($) ($) ($)(a) (#) ($)(b)
- ------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
John E. Slater, Jr. 1995 $200,000 $250,000 $3,000 35,000 $3,000
President and Chief 1994 166,875 250,000 (c) 3,000 20,000 3,030
Executive Officer 1993 130,000 170,000 3,000 22,500 2,998
(since 4/1/94)
Dennis L. Fink 1995 170,000 110,000 -- 33,750 3,000
Senior Vice President 1994 129,792 100,000 -- 30,000 3,080
and Chief Financial 1993 125,000 55,000 -- 30,000 --
Officer
M. Tony Wilkerson 1995 140,000 100,000 -- 10,000 3,000
Senior Vice President, 1994 123,333 100,000 -- 20,000 3,151
Marketing 1993 84,792 50,000 -- 12,000 2,396
Clarence H. Smith 1995 120,000 90,000 3,000 10,000 2,311
Vice President, 1994 100,000 75,000 3,000 17,000 2,963
Operations and 1993 90,000 50,750 3,000 9,000 2,667
Development
Rawson Haverty, Jr. 1995 100,000 90,000 3,000 10,000 3,000
Vice President, Real 1994 85,000 75,000 3,000 20,000 2,596
Estate & Insurance 1993 80,000 45,000 3,000 15,000 2,098
Divisions
</TABLE>
- -------------------------
(a) The amounts shown represent the annual retainer fees paid to
those named Executive Officers who are also directors for
their services on the Company's Board of Directors.
(b) The amounts shown represent Company contributions to the
account of the Named Executive Officer pursuant to the
Company's 401(k) Plan.
(c) Of this amount, $50,000 was awarded for services performed as
Chief Operating Officer during first quarter 1994 and $200,000
was awarded for services performed as Chief Executive Officer
for the remainder of fiscal year 1994.
STOCK OPTION PLANS
The following table provides certain information concerning individual
grants of stock options under the Company's 1988 Incentive Stock Option Plan
and 1993 Non-Qualified Stock Option Plan made during the fiscal year ended
December 31, 1995, to each of the Named Executive Officers:
-11-
<PAGE> 14
OPTION GRANTS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
Alternative
Grant Date
Individual Grants Value (a)
- ----------------------------------------------------------------------------------------------------------------
% of Total Grant Date
Number of Options Present Value
Securities Granted to (Using Black-
Underlying Employees Exercise or Scholes Option
Options in Fiscal Base Price Expiration Pricing Model)
Name Granted (#) Year ($ Per Share) Date ($)
- ----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
John E. Slater, Jr. 35,000 9.0% $12.25 8-25-00 $169,750
Dennis L. Fink 33,750 8.7% 12.25 8-25-00 163,688
M. Tony Wilkerson 10,000 2.6% 12.25 8-25-00 48,500
Clarence H. Smith 10,000 2.6% 12.25 8-25-00 48,500
Rawson Haverty, Jr. 10,000 2.6% 12.25 8-25-00 48,500
</TABLE>
- -------------------------
(a) The dollar amounts under this column are the result of
calculations based upon the Black-Scholes pricing model and
are not intended to forecast possible future appreciation of
the market value of the Company's Common Stock.
Assumptions Used for Black-Scholes Model:
<TABLE>
<S> <C>
Grant Date: 8/25/95
Risk-Free Rate (i): 6.04%
Exercise Price: $ 12.25
Share Price on Grant Date: $ 12.25
Volatility (ii): 49.0%
Term (Years): 5
Dividend Yield: 2.9%
Black-Scholes Option Value: $ 4.85
</TABLE>
(i) Based on US Stripped Treasury Securities with similar
maturities to the option terms.
(ii) Based on 21 consecutive quarter-end stock prices and
dividends paid prior to each grant date.
OPTION GRANTS IN LAST FISCAL YEAR NOT IMMEDIATELY EXERCISABLE
The terms of the 1988 Incentive Stock Option Plan and the 1993
Non-Qualified Stock Option Plan generally provide that options granted are
immediately exercisable and are exercisable for a period of five years from the
date of grant. However, Internal Revenue Code provisions limit the dollar
amount of incentive stock options which may be first exercisable in any given
calendar year to $100,000. Due to this limitation, as well as exercise
restrictions placed on certain incentive stock options granted in fiscal year
1995, the following portions of the incentive stock options granted in 1995 to
the Named Executive Officers were not immediately exercisable, and the
schedules for first exercise of those specific portions that were not
immediately exercisable are as follows:
-12-
<PAGE> 15
<TABLE>
<CAPTION>
Options Granted in 1995 Not Immediately Exercisable
--------------------------------------------------------
Number Date When
Date Exercise of Options
of Price Incentive First
Name Grant ($ Per Share) Options Exercisable
- --------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
John E. Slater, Jr. 8/25/95 $ 12.25 5,705 1/1/99
8/25/95 12.25 4,295 1/1/00
Dennis L. Fink 8/25/95 12.25 603 1/1/99
8/25/95 12.25 8,147 1/1/00
M. Tony Wilkerson 8/25/95 12.25 714 1/1/97
8/25/95 12.25 8,163 1/1/98
8/25/95 12.25 1,123 1/1/99
Clarence H. Smith 8/25/95 12.25 4,907 1/1/97
8/25/95 12.25 5,093 1/1/98
Rawson Haverty, Jr. 8/25/95 12.25 3,163 1/1/97
8/25/95 12.25 6,837 1/1/98
</TABLE>
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR
AND FISCAL YEAR-END OPTION VALUES
The following table provides certain information concerning the
exercise of stock options under the Company's 1988 Incentive Stock Option Plan
during the fiscal year ended December 31, 1995, by the Named Executive Officers
and the fiscal year end value of unexercised options held by such persons under
the Company's 1988 Incentive Stock Option Plan and 1993 Non-Qualified Stock
Option Plan:
<TABLE>
<CAPTION>
Options Exercised in 1995 All Outstanding Options
-----------------------------------------------------------------------------------------------
Number of Securities
Shares Value Underlying Unexercised Value of Unexercised In-
Acquired on Realized Options at Fiscal the-Money Options at Fiscal
Name Exercise (#) ($) (a) Year End (#) Year End ($) (b)
- ----------------------------------------------------------------------------------------------------------------------
Exercisable Unexercisable Exercisable Unexercisable
----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
John E. Slater, Jr. -0- $ -0- 48,225 29,275 $65,782 $15,625
Dennis L. Fink -0- -0- 60,676 33,074 79,929 19,994
M. Tony Wilkerson 6,000 37,375 27,625 23,375 91,571 28,992
Clarence H. Smith -0- -0- 16,137 19,863 18,549 25,889
Rawson Haverty, Jr. -0- -0- 22,625 22,375 24,383 27,180
</TABLE>
- --------------------------
(a) Dollar values were calculated by determining the difference
between the fair market value of the underlying securities at
exercise date and the exercise price of the options.
(b) Dollar values were calculated by determining the difference
between the fair market value of the underlying securities at
year end and the exercise price of the options.
-13-
<PAGE> 16
RETIREMENT PLAN
The Company maintains a tax-qualified, non-contributory defined
benefit retirement plan (the "Retirement Plan"). All employees of the Company
are eligible to participate upon completion of one year of service and reaching
age 21. Officers are eligible to participate in the Retirement Plan, but
directors are not eligible unless they are also full-time employees. Annual
contributions to the Retirement Plan are made in amounts determined by the
Retirement Plan's actuaries to be sufficient to fund the benefits to be paid
and to meet regulatory requirements.
The Retirement Plan provides for the payment of fixed monthly benefits
upon an employee's normal retirement at age 65. Benefits may also be paid upon
early retirement as provided in the Retirement Plan. Benefits upon retirement
are based upon years of service (up to a maximum of 40 years for calculating
such benefits) and final average earnings. "Final average earnings" means the
average annual earnings for the five consecutive years in which a participant
had the highest earnings during the last ten years of employment. Compensation
for purposes of computing annual benefits under the Retirement Plan includes
basic salary, wages, overtime pay, bonuses, commissions, amounts contributed to
the 401(k) plan by the employee and other direct compensation included in the
IRS Form W-2.
The table below illustrates the estimated annual benefits payable upon
retirement under the Retirement Plan to persons in specified years of service
and compensation categories. The benefits shown are straight-life annuities
and are based upon an assumed retirement during 1996. The compensation amounts
shown are compensation in the final year of employment. For purposes of
determining final average earnings, a 5% per year increase in earnings was used
for prior years.
<TABLE>
<CAPTION>
Years of Service
1995 ---------------------------------------------------------------------------------------
Compensation * 15 20 25 30 35 40 or More
-------------- --------- -------- -------- -------- -------- ----------
<S> <C> <C> <C> <C> <C> <C>
$ 50,000 $ 5,433 $ 7,243 $ 9,054 $ 10,865 $ 12,676 $ 14,487
100,000 12,933 17,245 21,556 25,867 30,178 34,489
150,000 20,434 27,246 34,057 40,869 47,680 54,491
200,000 27,935 37,247 46,558 55,870 65,182 74,494
250,000 35,436 47,248 59,060 70,872 82,684 94,496
300,000 42,937 57,249 71,561 85,873 100,186 114,498
350,000 50,438 67,250 84,063 100,875 117,688 134,500 *
400,000 57,938 77,251 96,564 115,877 135,189 * 154,502 *
450,000 65,439 87,252 109,065 130,878 * 152,691 * 174,504 *
500,000 72,940 97,253 121,567 * 145,880 * 170,193 * 194,507 *
550,000 80,441 107,254 134,068 * 160,882 * 187,695 * 214,509 *
</TABLE>
- --------------------------
* Earnings used to calculate benefits under the Retirement Plan
may not exceed $150,000 for 1995. Annual benefits under the
Retirement Plan may not exceed $120,000 for 1995, regardless
of the benefit amount otherwise produced by the Retirement
Plan formula. Both of these amounts are subject to future
adjustments for cost of living increases. Annual benefits in
the above table do not reflect either of these limits, and are
in addition to any amounts payable from Social Security.
- --------------------------
The years of service accrued to the Named Executive Officers are as
follows:
<TABLE>
<CAPTION>
Employee Years of Service Accrued as of 12/31/95
-------- ---------------------------------------
<S> <C>
John E. Slater, Jr. 39
Dennis L. Fink 3
M. Tony Wilkerson 19
Clarence H. Smith 22
Rawson Haverty, Jr. 12
</TABLE>
-14-
<PAGE> 17
SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN
On November 3, 1995, the Board of Directors adopted a non-qualified
Supplemental Executive Retirement Plan (the "Plan"), effective January 1, 1996,
for the benefit of those employees whose retirement benefits would otherwise be
reduced by the limitation imposed by federal pension law and I.R.S. regulations
on the amount of compensation that may be taken into account in computing
benefits under a defined benefit retirement plan. Federal pension law and
I.R.S. regulations currently prohibit providing benefits on annual
compensation above $150,000. Under the provisions of the 1996 Supplemental
Plan, participation in the Plan will be automatic for any employee who has pay
that cannot be included in computing benefits under the Company's defined
benefit Retirement Plan because it exceeds the I.R.S. limit; however, the total
amount of annual retirement benefits that may be paid to an eligible
participant in the Plan from all sources (Retirement Plan, Social Security and
the 1996 Supplemental Plan) may not exceed $125,000. [See "Retirement Plan"
(p. 14) for information on the amount of benefits which the Named Executive
Officers are eligible to receive upon retirement.]
COMPENSATION OF DIRECTORS
Annual retainer fees to directors, paid semi-annually each year on May
1 and November 1, total $3,000 for employee directors and $15,000 for
non-employee directors. Effective for fiscal year 1996, the semi-annual
portion of the annual retainer fee to be paid on May 1 each year shall be paid
in shares of the Company's $1 par value Common Stock equal to the fair market
value of such stock at the close of the market on that day. In addition to the
annual retainer, each non-employee director receives a fee of $600 for
attendance at each Board meeting and each meeting of a Board committee on which
he serves, except that a non-employee director who serves as chairman of a
Board committee receives $700 for attendance at each meeting of the committee
which he chairs. [See "Agenda Item Two - Proposal to Approve the Directors'
Compensation Plan," p. 20.]
Since 1982, the Company has maintained a Directors' Deferred
Compensation Plan that permits all directors who choose participation in the
Plan to defer to a future date receipt of retainer and/or meeting fees (meeting
fees being applicable only to non-employee directors) which would otherwise be
paid in cash for their services as directors and members of committees of the
Board of Directors. Under the Plan as it currently exists, such deferred fees,
plus accrued interest (at a rate determined annually by the Executive Committee
in accordance with the Plan), may be distributed in the future to a director in
one lump sum or in no more than ten equal annual installments on any date or
dates that had been pre-determined and elected by such director under the terms
of the Plan. During the years the Plan has been in existence, a number of
employee and non-employee directors have participated. Currently, four
directors participate in the Plan.
On February 6, 1996, the Board of Directors authorized, subject to
approval at the 1996 Annual Meeting of Stockholders, that the Directors'
Deferred Compensation Plan be amended and restated for the purpose of also
providing, upon the election of a director through participation in the Plan,
for the deferment of retainer fees that would otherwise be paid in shares of
the Company's $1 par value Common Stock. [See "Agenda Item Three - Proposal to
Approve the Directors' Deferred Compensation Plan as Amended and Restated," p.
21.]
Pursuant to an automatic grant provision under the Company's 1993
Non-Qualified Stock Option Plan, the Plan authorizes that each non-employee
director of the Company be granted, on a pre-determined date annually, an
option to purchase 3,000 shares of Common Stock at an exercise price equal to
100% of the fair market value of such stock on the date of grant. On October
31, 1995, options were granted to the then eight non-employee directors of the
Company covering an aggregate of 24,000 shares
-15-
<PAGE> 18
of Common Stock at a per share exercise price of $13.75. Such options were
granted to Dr. Kenneth Black, Jr., John Rhodes Haverty, M.D., L. Phillip
Humann, Lynn H. Johnston, William A. Parker, Jr., Clarence H. Ridley, Robert R.
Woodson and Frank S. McGaughey, III.
ADDITIONAL INFORMATION WITH RESPECT TO COMPENSATION COMMITTEE INTERLOCKS AND
INSIDER PARTICIPATION IN COMPENSATION DECISIONS
Although the Company does not have a Compensation Committee of the
Board of Directors, the Executive Committee has performed the function of
determining executive officer compensation. During the fiscal year ended
December 31, 1995, the Executive Committee was comprised of five members:
Rawson Haverty, Chairman of the Board; John E. Slater, Jr., President and Chief
Executive Officer, Clarence H. Ridley, John Rhodes Haverty, M.D., and L.
Phillip Humann. John Rhodes Haverty, M.D., and L. Phillip Humann were
appointed to serve on the Executive Committee by the Board of Directors on May
5, 1995, to fill the vacancies on the Committee created by the retirement on
April 28, 1995, of Frank S. McGaughey, Jr., and Alex W. Smith as directors and
members of the Committee.
In March 1995, SunTrust Bank, Atlanta (formerly Trust Company Bank),
and the Company closed a $30-million term loan from SunTrust Bank, Atlanta, to
the Company, which loan is for a term of 12 years (with an average life of 8
years) and bears interest at an average fixed rate of 8.16% per annum. L.
Phillip Humann, a director of the Company and a member of the Executive
Committee of the Board of Directors, is the President of SunTrust Banks, Inc.,
the parent of SunTrust Banks of Georgia, Inc., and its subsidiary SunTrust
Bank, Atlanta.
-16-
<PAGE> 19
Notwithstanding anything to the contrary set forth in any of the
Company's previous filings under the Securities Act of 1933, as amended, or the
Exchange Act that might incorporate future filings, including this Proxy
Statement, in whole or in part, the following Report of Executive Committee on
Executive Compensation and the Stockholder Return Performance Graph shall not
be incorporated by reference into any such filings.
REPORT OF EXECUTIVE COMMITTEE ON EXECUTIVE COMPENSATION
The Company has no standing compensation committee; however, the
Executive Committee of the Board of Directors determines salary and bonus
arrangements for all executive officers of the Company, including the Chief
Executive Officer, subject to approval by the full Board. The Executive
Committee is composed of Rawson Haverty, Chairman of the Board, John E.
Slater, Jr., President and Chief Executive Officer, Clarence H. Ridley, John
Rhodes Haverty, M.D., and L. Phillip Humann.
Compensation of market area and regional managers consists of a base
salary, which is related to the size of the metropolitan market managed, plus a
bonus based on a pre-set formula related to annual profits produced in such
area or region. Compensation of other officers, including executive officers
and department heads (approximately 25 persons, including the five most highly
compensated officers), consists of a base salary, which is related to the
duties and responsibilities of the position, plus a bonus related to the
profits of the Company and assessment of individual contribution. Bonuses are
determined subjectively by the Executive Committee, subject to approval by the
full Board of Directors.
Based on profits before bonuses and income taxes, a pool is created
for payment of executive and key-person bonuses. Determination of actual
executive and key-person bonuses is made only after all area and regional
manager bonuses have been computed. Total bonuses earned and paid for fiscal
year 1995 to 76 individuals amounted to $2,440,000, a decrease of $103,000, or
4.2%, as compared to the 1994 bonuses. Of this amount, 26.2% was paid to the
five executive officers holding the five most highly compensated positions
during fiscal year 1995.
The Chief Executive Officer's compensation, as well as that of the
other executive officers, is comprised of a base salary which is directly
related to the responsibilities of the position and a bonus which is related
primarily to the Company's performance. The principal burden of corporate
management decisions is carried by a Management Committee that is appointed by
the Chief Executive Officer and which is currently comprised of those executive
officers holding the positions of Chief Executive Officer, Chief Financial
Officer, Senior Vice President of Marketing, Vice President of Operations and
Development, and Vice President of the Real Estate and Insurance Divisions,
with the Chairman of the Board serving in an advisory capacity; however, the
Chief Executive Officer bears final responsibility for such management
decisions. Thus, the executive officers serving as the Management Committee
participate more heavily in the division of bonus awards.
Traditionally, the compensation of the Chief Executive Officer and
other executive officers has increased or decreased in relation to the
profitability of the Company, as well as its competitive position and likely
prospects based on the specific actions of management. In 1993, corporate
profits (on which bonuses were computed) increased 86.8% from the prior year,
and actual net income of the Company increased 114.4%; while the bonus of the
Chief Executive Officer increased a more modest 40%, and overall average
bonuses increased 35.3%. In 1994, corporate profits (on which bonuses were
computed) increased 20.4% from the prior year, and actual net income of the
Company increased 29.0%, as compared to an overall average increase in bonuses
of 27.1%. Overall bonuses increased somewhat more in 1994 than did earnings
because the Executive Committee believed the transition and leadership under
the new Chief Executive Officer was carried out in an excellent manner, and
also in light of competitive compensation levels.
-17-
<PAGE> 20
In 1995, corporate profits (on which bonuses were computed) decreased
2.8% from the prior year, and actual net income of the Company also decreased
2.8%; while actual total bonuses paid decreased 4.2% compared to the prior
year.
Based upon a review of available information on public companies
reporting comparable amounts of annual gross revenues, the Executive Committee
believes that the cash compensation (salary and bonus) paid to the Chief
Executive Officer of the Company is moderate, as compared to the compensation
of chief executive officers of other such companies.
The Company has been in business for 111 years. Throughout its long
history it has maintained employee compensation programs designed to encourage
its employees to become owners of the business in which they are employed.
Stock options for officers and other key employees are awarded in the
discretion of the Stock Option Committee of the Board of Directors, which is
comprised of non-employee directors. A non-qualified stock option plan is in
place for non-employee directors; and, in 1992, an employee stock purchase
plan was established for all eligible employees. As a result of this long
established policy, a substantial number of shares of Company Common Stock and
Class A Common Stock are held by those currently employed in the business and
by former Haverty Furniture Companies, Inc., employees.
It is the Company's intention that the compensation to be paid to its
executive officers will not exceed the present maximum allowable amount for
purposes of deductibility set forth in the Internal Revenue Code.
Executive Committee, Board of Directors
Rawson Haverty, Chairman John E. Slater, Jr., President and C.E.O.
Clarence H. Ridley John Rhodes Haverty, M.D. L. Phillip Humann
-18-
<PAGE> 21
STOCKHOLDER RETURN PERFORMANCE GRAPH
Set forth below is a line graph comparing the yearly percentage change
in the cumulative total stockholder return on the Company's Common Stock and
Class A Common Stock against the cumulative total return of the Nasdaq Home
Furnishings Stores Index and the Nasdaq U.S. Companies Index for the period of
five years commencing December 31, 1990, and ending December 31, 1995.
The Nasdaq Home Furnishings Stores Index includes the 31 active Nasdaq
U.S. issues as of December 31, 1995, which carry the Standard Industrial
Classification (SIC) Code of 5700-5799, defined as home furniture, furnishings
and equipment stores. This group includes several retailers normally
considered to be direct competitors of the Company.
The graph below assumes that the value of the investment in the
Company's Common Stock or Class A Common Stock and each index was $100 on
December 31, 1990, and that all dividends were reinvested.
COMPARISON OF FIVE YEAR TOTAL RETURN AMONG
HAVERTY FURNITURE COMPANIES, INC.
NASDAQ HOME FURNISHINGS STORES AND
NASDAQ U.S. COMPANIES INDICES
<TABLE>
<CAPTION>
$100 Value 1990 1991 1992 1993 1994 1995
- -----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Haverty Furniture Companies, Inc. - Common Stock $100.00 $150.40 $253.30 $384.10 $268.60 $325.40
Haverty Furniture Companies, Inc. - Class A Common 100.00 123.50 199.40 328.10 208.00 277.40
Nasdaq (SIC Code 57) Home Furnishings Stores Index 100.00 192.20 229.40 222.90 169.60 135.10
Nasdaq U.S. Companies Index 100.00 160.50 186.90 214.50 209.70 296.50
</TABLE>
<TABLE>
<CAPTION>
Annual Return 1990 1991 1992 1993 1994 1995
- --------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Haverty Furniture Companies, Inc. - Common Stock N/A 50% 68% 52% -30% 21%
Haverty Furniture Companies, Inc. - Class A Common N/A 24% 61% 65% -37% 33%
Nasdaq (SIC Code 57) Home Furnishings Stores Index N/A 92% 19% -3% -24% -20%
Nasdaq U.S. Companies, Index N/A 61% 16% 15% -2% 41%
</TABLE>
-19-
<PAGE> 22
AGENDA ITEM TWO
PROPOSAL TO APPROVE
DIRECTORS' COMPENSATION PLAN
In February 1996 and subject to stockholder approval at the 1996
Annual Meeting, the Board of Directors approved a Directors' Compensation Plan
(the "Directors' Plan") pursuant to which shares of the class of $1.00 par
value common stock of the Company known as Common Stock (the "Common Stock")
will be issued to each director in payment of one-half of the director's annual
retainer fee. The Directors' Plan is set forth as Appendix I of this Proxy
Statement and is incorporated herein by reference. The purpose of the Plan is
to enable the Company to attract and retain directors who contribute to the
Company's success by their ability, ingenuity and industry, and to better
ensure that the interests of such directors are more closely aligned with the
interests of the Company's stockholders.
The Directors' Plan is being submitted to stockholders of the Company
for approval for the sole purpose of qualifying the Director's Plan under Rule
16b-3 of the Securities Exchange Act of 1934, as amended (the "Act"). Rule
16b-3 provides that the award of an equity security of an issuer pursuant to a
plan which is qualified under Rule 16b-3 is exempt from the short swing trading
liability of Section 16(b) of the Act. Section 16(b) provides, in pertinent
part, that in order to prevent the unfair use of information which may have
been obtained by a director, officer (which term is more specifically defined
in the regulations), or any person who owns more than 10% of the equity
securities of an issuer whose securities are registered under Section 12 of the
Act, any profit realized by such a person from any purchase and sale, or any
sale and purchase, of any equity security of such issuer within any period of
less than six months shall inure to and be recoverable by the issuer,
irrespective of any intention on the part of such director, officer, or 10%
stockholder. If the Directors' Plan is approved by stockholders, then stock
issued under the Directors' Plan would be exempt from being "matched" against
sales of the Company's Common Stock for purposes of Section 16(b). The Board
of Directors believes that the Directors' Plan is in the best interests of the
Company and recommends that stockholders approve the plan.
The Directors' Plan provides that on May 1, 1996, and on each May 1
thereafter, one-half of each director's annual retainer fee shall be paid in
shares of Common Stock of the Company. At the present time, the annual
retainer fee payable to non-employee directors amounts to $15,000, and the
annual retainer fee payable to employee directors amounts to $3,000, such
annual retainer fees being divided into two equal semi-annual payments on May 1
and November 1 each year. The amount of the annual retainer fee payable to
both non-employee and employee directors is subject to future adjustment by
action of the Board of Directors. In addition, in the discretion of each
director, a director may elect to be paid the entire amount of his annual
retainer fee in shares of Company Common Stock. This election must be effected
by a written notice by such director making such election on or before October
31 of each year, and such election shall be irrevocable and shall apply to the
payment on May 1 of the entire annual retainer fee for the next succeeding
year. The number of whole shares of Company Common Stock to be paid to the
director will be determined on May 1 by dividing the dollar amount of either
the semi-annual retainer fee, or the entire annual retainer fee if the director
had so elected, to be paid in Company Common Stock by the market price (defined
to mean the closing bid price) of the Common Stock on such date. Fractional
shares will not be issued, but will be paid in cash to the director.
For purposes of Rule 16b-3, the Directors' Plan also provides that a
director may not sell the shares issued under the Plan for a period of six
months after the date of issuance. Shares awarded under the Plan will be
issued from the Company's treasury or, alternately, from authorized and
unissued shares.
-20-
<PAGE> 23
As of March 8, 1996, the closing bid price for the Company's Common Stock as
reported on the Nasdaq National Market System was $12.75 per share.
The Directors' Plan must be approved by a majority of all votes
present or represented at the Annual Meeting and entitled to vote on this
matter. The Board of Directors recommends that stockholders vote FOR the
Directors' Compensation Plan.
AGENDA ITEM THREE
PROPOSAL TO APPROVE DIRECTORS' DEFERRED COMPENSATION PLAN
AS AMENDED AND RESTATED
As discussed under Agenda Item Two on page 20 of this Proxy Statement,
the Board of Directors of the Company has adopted, subject to stockholder
approval, the Directors' Compensation Plan set forth as Appendix I to this
Proxy Statement, requiring that all directors be paid at least one-half of
their annual retainer fees for services on the Board in shares of the Company's
$1 par value Common Stock. In addition, such plan allows each director, by his
own individual choice, the opportunity to receive payment of the entire amount
of his annual retainer fee in shares of Common Stock.
Since 1982, the Company has maintained a Directors' Deferred
Compensation Plan allowing directors to defer to a future date the receipt of
"cash" fees paid for their services on the Board. On February 6, 1996, the
Board of Directors, following its adoption of the aforementioned Directors'
Compensation Plan requiring all directors to receive payment of at least
one-half of their annual retainer fees in shares of Common Stock, authorized
that an amended and restated Directors' Deferred Compensation Plan (the
"Directors' Deferred Plan") be submitted for stockholder approval for the
purpose of also allowing directors to defer the receipt of "stock" to be paid
to them for their services.
The Directors' Deferred Plan, set forth as Appendix II to this Proxy
Statement and incorporated herein by reference, is being submitted to
stockholders for approval for the purpose of qualifying such plan under Rule
16b-3 of the Securities Exchange Act of 1934, as amended. See Agenda Item Two
on page 20 for a discussion of Rule 16b-3 and Section 16(b) under such Act.
The Directors' Deferred Plan provides directors of the Company who
elect to do so the opportunity to defer to a future date the receipt of part or
all of their compensation, whether payable in Common Stock or cash, as
directors and as members of Committees of the Board of Directors. Each
director may elect, not later than October 31 each year, to participate in the
Directors' Deferred Plan for the next "Annual Period" (commencing on May 1 of
the succeeding fiscal year) and until such election is revoked or revised as
permitted by the Directors' Deferred Plan.
Directors who participate in the Directors' Deferred Plan may elect to
defer: (1) all or none of the cash fees paid to directors for attendance at
meetings of the Board and Board Committees; (2) all or none of that half of
the annual retainer fee that is required to be paid on May 1 in shares of
Common Stock; and (3) all or none of that half of the annual retainer fee
specified in the Directors' Compensation Plan to be paid on November 1 in
"cash" (which payment may actually have been made and/or deferred on the
preceding May 1 in shares of Common Stock as elected by a director in a timely
manner in accordance with the Directors' Deferred Plan).
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Compensation (stock and/or cash) deferred under the Plan will be
distributed to the participant director upon termination of the director's
service on the Board of Directors, unless the participant director has elected
an earlier alternative date for such distribution. An earlier alternative date
("elective distribution date") elected by a participant director for
distribution is irrevocable. In the event of death of a participant director
prior to termination of his service on the Board of Directors, or prior to the
elective distribution date that such participant director may have elected,
distribution of his Account will be made within 30 days of his death.
Compensation deferrals made by a director shall be credited to a Cash
Compensation Sub-Account and/or a Stock Compensation Sub-Account, as
appropriate. Amounts credited to a director's Cash Compensation Sub-Account
and any cash balance in such account shall bear interest at an annual interest
rate fixed in advance at the beginning of each fiscal year based upon the
13-week Federal Treasury Bill rate as of the end of the preceding fiscal year.
Deferrals of compensation payable in Common Stock shall be credited to the
director's Stock Compensation Sub-Account annually on May 1 as a whole number
of shares of Company Common Stock (based on the applicable "Market Price" of
the stock). The Stock Compensation Sub-Account shall also be credited from
time to time for the cash equivalent of any dividends paid by the Company on
its Common Stock (whether payable in cash or securities), with the amount so
credited to be based on the number of shares of Common Stock then credited to
such account. Fractional shares will not be credited to the Stock Compensation
Sub-Account, but the account will be credited instead for the cash equivalent
of such fraction. Cash amounts in the Stock Compensation Sub-Account shall
also bear interest. On May 1 each year, cash balances contained in a
director's Stock Compensation Sub-Account shall be converted to the number of
whole shares of Common Stock (based on the applicable "Market Price" of the
stock) to be credited to the Sub-Account on that day.
In the case of a recapitalization, reclassification, stock split, or
other combination or alteration of the capital structure of the Company (other
than by reason of a dividend payable in shares of an existing class of
securities of the Company), an appropriate adjustment shall be made to the
Stock Compensation Sub-Accounts of all directors. In the event that the
Company is a party to any reorganization involving a merger, consolidation,
acquisition of the capital stock or assets of the Company, the Stock
Compensation Sub-Account of each director shall be adjusted to reflect the same
number and type of securities of the resulting corporation to which such
director would be entitled as a record holder of the number of shares of Common
Stock then credited to the Sub-Account of the director.
The Plan is administered by the Executive Committee of the Board of
Directors of the Company and all determinations of the Committee are conclusive
and binding on all participants.
Shares of Common Stock and cash amounts which are deferred by a
director under the Plan (or which otherwise accrue under the terms of the Plan)
shall be credited to the appropriate Sub-Account by book entry only; no shares
of Common Stock which are deferred under the Plan shall be issued until the
distribution date. A director who participates in the Plan with respect to
stock compensation shall have no rights as a stockholder with respect to shares
of Common Stock issuable to such director, other than as specifically provided
in the Plan, until such shares are actually issued to such director.
The Directors' Deferred Plan must be approved by a majority of all
votes present or represented at the annual meeting and entitled to vote on this
matter. The Board of Directors recommends that stockholders vote FOR the
Directors' Deferred Plan.
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<PAGE> 25
INDEPENDENT AUDITORS
Ernst & Young were the independent auditors for the Company during the
year ended December 31, 1995. The Company has been advised that no
representative of Ernst & Young will be present at the Annual Meeting.
Although the Board of Directors has not yet selected independent auditors for
the Company for the fiscal year ended December 31, 1996, it is expected that
Ernst & Young will be chosen.
FINANCIAL STATEMENTS
The Company's financial statements for the year ended December 31,
1995, are set forth in the Company's Annual Report to Stockholders for 1995.
The Annual Report to Stockholders has been included and delivered with this
Proxy Statement.
PROPOSALS OF STOCKHOLDERS
Proposals of stockholders intended to be presented at the 1997 Annual
Meeting of Stockholders of the Company must be received by the Secretary of the
Company, P. O. Box 54678, Civic Center Station, Atlanta, Georgia 30308-0678,
no later than November 20, 1996.
OTHER MATTERS
At the date hereof, there are no other matters management intends to
present or has reason to believe others will present to the meeting. If other
matters now unknown to management come before this meeting, those who shall act
as proxies will vote in accordance with their judgment.
By Order of the Board of Directors
Christine M. Jones
Vice President and Secretary
March 20, 1996
Atlanta, Georgia
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APPENDIX I
HAVERTY FURNITURE COMPANIES, INC.
DIRECTORS' COMPENSATION PLAN
1. Purpose. The name of this Plan is the Haverty Furniture
Companies, Inc., Directors' Compensation Plan (the "Plan"). The purpose of the
Plan is to enable Haverty Furniture Companies, Inc. (the "Company") to
compensate directors who contribute to the Company's success by their
abilities, ingenuity and industry, and to better ensure that the interests of
such directors are more closely aligned with the interests of the Company's
stockholders.
2. Mandatory Payment of One-Half of Annual Retainer in Common
Stock. Commencing on May 1, 1996, and on each May 1 thereafter, one-half of
each director's annual retainer fee shall be paid in shares of the $1.00 par
value class of common stock of the Company known as Common Stock (the "Common
Stock"). As of the effective date of this Plan, the dollar amounts of the
annual retainer fees (such annual retainer fees being divided into two equal
semi-annual payments on May 1 and November 1 each year) are $15,000 with
respect to non-employee directors and $3,000 with respect to employee
directors. Therefore, effective May 1, 1996, and on each May 1 thereafter,
non-employee directors shall be paid $7,500 in Company Common Stock and
employee directors shall be paid $1,500 in Company Common Stock until such time
as the dollar amounts of the annual retainer fees to be paid to non-employee
and employee directors are increased or decreased by action of the Company's
Board of Directors.
3. Discretionary Election to Receive Entire Retainer in Common
Stock. In the discretion of each director, effected by a written election made
annually by such director on or before October 31 of each year, each director
may elect to be paid the entire amount of his annual retainer fee in shares of
Company Common Stock, which entire annual retainer fee shall be paid on the
next succeeding May 1. Such election shall be irrevocable with respect to the
next year's annual retainer fee and shall be effective for the next succeeding
May 1 payment date.
4. Other Compensation. In addition to payment of the annual
retainer fee provided for in Sections 2 and 3, each non-employee director shall
be paid such additional fees in cash for attendance at Board and Board
Committee meetings as shall be approved by the Company's Board of Directors
from time to time. As of the effective date of this Plan, each non-employee
director is paid $600 for each Board and Board Committee meeting that he or she
attends, except that a non-employee director who serves as chairman of a Board
Committee is paid $700 for each such Board Committee meeting that he or she
chairs. Employee directors are not paid fees for attending meetings of the
Board or Board Committees.
5. Determination of Number of Shares of Common Stock Issuable.
On May 1 of each year, the number of whole shares of Company Common Stock to be
paid to a director in respect of such director's semi-annual retainer fee due
to be paid on that date (or, annual retainer fee, if the director had elected
to be paid the entire amount of his annual retainer in shares of Company Common
Stock) shall be determined by dividing the dollar amount of the semi-annual
retainer fee (or, annual retainer fee, as the case may be) to be paid in
Company Common Stock by the Market Price of the Common Stock (as hereinafter
defined) at the close of the Market on May 1 (or, if May 1 is not a day on
which trading is conducted on the securities market or exchange on which the
Company's Common Stock is then traded,
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then as of the last such trading day occurring before May 1). No fractional
share shall be paid pursuant to this section and, in lieu thereof, the director
shall be paid the cash equivalent of any such fractional share.
For the purpose of this section, "Market Price" shall mean, as of any
date, the closing bid price of the Common Stock of the Company on such date as
quoted by the National Association of Securities Dealers Automated Quotation
System (or, if the Common Stock of the Company is then traded on a different
securities market or exchange, the "Market Price" shall mean the closing price
of the Common Stock of the Company as quoted on such market or exchange on such
date).
6. Issuance of Common Stock. The shares of Company Common Stock
to be paid to directors under this Plan shall be issued from shares held in the
Company's treasury; or, if no shares (or, an insufficient number of shares) are
held in the treasury for such payment, then from authorized and unissued
shares.
7. Six Months' Holding Period. Any shares of Common Stock issued
to a director under this Plan must be held for six months from the date of
issuance prior to any disposition of such shares of Common Stock by such
director.
8. Amendments. The provisions of Sections 2 and 3 of this Plan
shall not be amended by the Company's Board of Directors more frequently than
once every six months, except as permitted by Section 10 hereof. This Plan may
be amended, modified, or terminated by the Company's Board of Directors subject
to the provisions of this Section.
9. Effective Date. The Effective Date of this Plan shall be the
date on which such Plan is approved by the Company's stockholders, which is
anticipated to be April 26, 1996.
10. Adjustment to Shares of Stock Issuable Pursuant to Plan. In
the event of any change in the outstanding shares of Common Stock of the
Company by reason of any stock split, stock split-up, stock dividend,
recapitalization, merger, consolidation, combination or exchange of shares, or
other similar change in corporate structure or change affecting the
capitalization of the Company, an equitable adjustment shall be made to the
number of shares issuable under this Plan as the Company's Board of Directors
determines is necessary or appropriate, in its discretion, to give proper
effect to such corporate action. Any such adjustment determined in good faith
by the Company's Board of Directors shall be conclusive and binding for all
purposes of this Plan.
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APPENDIX II
DIRECTORS' DEFERRED COMPENSATION PLAN
OF
HAVERTY FURNITURE COMPANIES,INC.
SECTION I
ESTABLISHMENT AND PURPOSE OF PLAN
1.1 Establishment and Duration of Plan: The Directors' Deferred
Compensation Plan of Haverty Furniture Companies, Inc., was initially
established by the Board of Directors of the Company as of December 15, 1982,
and was amended and restated as of August 3, 1990. On February 6, 1996, the
Board of Directors of the Company authorized a further amendment and
restatement of the Plan incorporating the provisions set forth below, subject
to approval by the stockholders of the Company. The Plan, as amended and
restated, shall continue until terminated by the Board of Directors of the
Company, subject to the provisions of Section VII below.
1.2 Purpose of Plan: The purpose of the Directors' Deferred
Compensation Plan is to provide those Directors of the Company who elect to do
so the opportunity to defer to a future date the receipt of their compensation
as Directors and as members of Committees of the Board of Directors.
SECTION II
DEFINITIONS
2.1 "Account" means the Account (comprised of Cash Compensation
Sub-Account and a Stock Compensation Sub-Account) being administered for the
benefit of a Member under Section IV below. Accounts shall not actually be
funded, but will be bookkeeping accounts established for each Member on the
Company's records with respect to the amount, if any, of Compensation deferred
by the applicable Member pursuant to such Member's election as hereinafter
provided.
2.2 "Annual Period" means each twelve-month period beginning on
May 1 and ending on April 30.
2.3 "Business Day" means a day other than a Saturday, Sunday, or
legal holiday on which the principal administrative offices of the Company are
open for business.
2.4 "Calendar Quarter" means each successive three-month period
during a Fiscal Year.
2.5 "Cash Compensation" means the amount in dollars of a
Participant's Compensation for the applicable Annual Period which, after giving
effect to any applicable election by such Participant with respect to the
receipt of a portion of such Compensation in the form of Company Common Stock
but without regard to any deferred election hereunder, is payable by the
Company in cash. Cash Compensation shall be comprised of Cash Fee Compensation
and Cash Retainer Compensation.
2.6 "Cash Compensation Sub-Account" means that Sub-Account within
a Member's Account in which entries are recorded to reflect the amounts, if
any, of Cash Compensation deferred by such Member from time to time hereunder,
with interest accrued thereon, and distributions therefrom, as applicable.
<PAGE> 29
2.7 "Cash Fee Compensation" means, with respect to any Annual
Period, the amount in dollars of a Member's Cash Compensation which is
attributable to fees payable by the Company for such Member's attendance at
meetings of the Company's Board of Directors or Board Committees during such
Annual Period.
2.8 "Cash Retainer Compensation" means, with respect to any Annual
Period, the amount in dollars of a Member's Cash Compensation which is
attributable to the retainer payable by the Company for such Member's service
as a director of the Company during such Annual Period.
2.9 "Committee" means the Executive Committee of the Board of
Directors of the Company.
2.10 "Common Stock" means the class of $1.00 par value common stock
of the Company known as "Common Stock."
2.11 "Compensation" means the retainer fees and meeting fees
payable to Directors by the Company in their capacity as Directors or as
members of Committees of the Board of Directors, without reduction for any
required withholding taxes and exclusive of the value of any fringe benefits
which any Director may receive or may be entitled to receive as a Director.
2.12 "Company" means Haverty Furniture Companies, Inc., a Maryland
corporation or any successor thereto.
2.13 "Director" means any duly elected member of the Board of
Directors of the Company.
2.14 "Dividend Equivalent Amount" means the amount to be credited
to the Stock Compensation Sub-Account of a Member from time to time upon the
payment by the Company of a dividend on its Common Stock (other than a dividend
payable in shares of such Common Stock). The Dividend Equivalent Amount with
respect to any such dividend paid by the Company shall be an amount equal to
the product of (i) the per share amount of the applicable dividend paid by the
Company (if such dividend is not payable in cash, such amount to be based on
the fair market value of the property distributed) and (ii) the number of
shares of Common Stock reflected in the Member's Stock Compensation Sub-Account
as of the record date of such dividend.
2.15 "Elective Distribution Date" shall have the meaning ascribed
thereto in Section 3.2 hereof.
2.16 "Fiscal Year" means the twelve-month period from January 1
through the next following December 31.
2.17 "Fractional Share Equivalent Amount" means the cash amount, if
any, to be credited to the Stock Compensation Sub-Account of a Member as of May
1 of any year to reflect that portion, if any, of the Member's Stock
Compensation deferred hereunder and otherwise payable on such date which
remains after crediting such Sub-Account with the number of whole shares of
Company Common Stock determined by dividing such deferred Stock Compensation by
the applicable Market Price.
2.18 "Initial Election Form" means, with respect to any Member, the
election form complying with the then applicable requirements of Section III
hereof pursuant to which such Member first elects (or elected, as applicable)
to defer any Compensation under the Plan.
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2.19 "Market Price" means, as of any date, the closing bid price of
the Common Stock of the Company (or such other securities as result from an
adjustment pursuant to Section 4.5 hereof) on such date as quoted by the
National Association of Securities Dealers Automated Quotation System (or, if
the Common Stock of the Company (or such other securities) is then traded on a
different securities market or exchange, the closing price of such Common Stock
(or such other securities) as quoted on such market or exchange).
2.20 "Member" means any Participant or former Participant who has
an amount credited to an Account for his or her benefit under the Plan.
2.21 "Participant" means each Director who elects to participate in
the Plan.
2.22 "Plan" means the Directors' Deferred Compensation Plan of
Haverty Furniture Companies, Inc., or any successor thereto, as described
herein and as the same may hereafter from time to time be amended.
2.23 "Service Termination Date" means, for any Member, the date of
termination of such Member's service as a director of the Company for any
reason other than the death of such Member.
2.24 "Stock Compensation" means the amount in dollars of a
Participant's Compensation for the applicable Annual Period which, after giving
effect to any applicable election by such Participant with respect to the
receipt of a portion of such Compensation in the form of Company Common Stock
but without regard to any deferral election hereunder, is payable by the
Company in Common Stock.
2.25 "Stock Compensation Sub-Account" means that Sub-Account within
a Member's Account in which entries are recorded to reflect: (i) the number
of shares of Company Common Stock attributable to the amounts, if any, of Stock
Compensation deferred by such Member from time to time hereunder as determined
for each deferral in accordance with Section 4.2(a) hereof; (ii) the number of
shares of Company Common Stock attributable to any dividend paid by the Company
in the form of shares of its Common Stock in accordance with Section 4.2(c)
hereof; (iii) the number of shares of Company Common Stock as determined in
accordance with Section 4.2(e) hereof; (iv) any Dividend Equivalent Amounts
and Fractional Share Equivalent Amounts; (v) any interest accrued on any cash
balance in such Stock Compensation Sub-Account pursuant to Section 4.4 hereof;
and, (vi) distributions therefrom, and adjustments thereto, as applicable, as
provided herein.
2.26 "Triggering Event" means, for any Member, the date of
termination of such Member's service as a director of the Company for any
reason other than the death of such Member.
SECTION III
PARTICIPATION
3.1 Each Director may, not later than October 31 each year, elect
to become a Participant in the Plan for the next Annual Period commencing after
such October 31 and for each Annual Period thereafter, until such election is
revoked or revised in the manner hereinafter provided, and thereby have all or
a portion of his or her Compensation for each such Annual Period deferred and
credited to an Account for his or her benefit under the Plan as and to the
extent provided below in Section 3.2 hereof. Any such election may be revoked
or revised by filing with the Secretary of the Company a written revocation or
election form complying with the requirements of Section 3.2 hereof. Any such
revocation or revised election shall first be effective with respect to the
Annual Period which first begins after the later to occur of (i) the filing of
such revocation or revised election with the Secretary of the Company
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or (ii) the next occurring October 31. A Director who revokes a previous
election may again elect participation in the Plan for deferral of future
Compensation in later Annual Periods by electing participation in the manner
provided above.
3.2 Any such election (either initial or revised) or revocation
shall be filed with the Secretary of the Company, shall be made in writing on
such form or forms as the Committee shall from time to time prescribe, and
shall specify the amount and type of Compensation which the Participant wishes
to defer hereunder. For any Annual Period, a Participant may elect in
accordance with the terms hereof to defer hereunder the following amounts of
his or her Compensation: (i) all or none of such Participant's Cash Fee
Compensation; (ii) all or none of such Participant's Cash Retainer
Compensation; and, (iii) all or none of such Participant's Stock Compensation.
An election form which specifies a deferral amount which is not permitted
hereunder for any type of Compensation (i.e., more than none, but less than
all) shall be deemed to specify that no portion of the applicable type of
Compensation be deferred for any Annual Periods to which such election applies
pursuant to the terms hereof. If a Participant desires to have the balance in
his or her Account distributed prior to such Participant's death or Service
Termination Date, such Participant may specify the date for such distribution
on such Participant's Initial Election Form, which specified date shall
constitute the Participant's "Elective Distribution Date," and no election or
revocation form filed subsequent to such Participant's Initial Election Form
shall be effective to change or revoke such Elective Distribution Date;
provided that, with respect to any Member who was a Participant in the Plan
prior to the effective date of the amendment and restatement of the Plan in
1996, such Members Elective Distribution Date shall be the date, if any, most
recently specified by such Member (other than a specification of the date of
such Member's retirement from or termination of service on the Board of
Directors of the Company) in an election form properly filed with the Secretary
of the Corporation prior to the effective date of such Plan amendment and
restatement, and no election or revocation form subsequently filed by such
member shall be effective to change or revoke such Elective Distribution Date.
SECTION IV
ADMINISTRATION OF ACCOUNTS
4.1 Compensation to be credited to a Member's Account by reason of
an election made under Section III above shall be credited to such Account on
the same day such Compensation would normally have been paid to such Member.
All Cash Compensation deferred hereunder by a Member shall be credited
to such Member's Cash Compensation Sub-Account and all Stock Compensation
deferred hereunder by a Member shall be credited to such Member's Stock
Compensation Sub-Account as provided in Section 4.2 hereof.
4.2 Each Member's Stock Compensation Sub-Account shall be credited
from time to time with the number of shares of Company Common Stock and cash
amounts as set forth below:
(a) on May 1 of each year, the number of whole shares of
Company Common Stock determined by dividing (i) the total
amount of the Member's Stock Compensation to be deferred
by such Member for the applicable Annual Period by (ii)
the Market Price as of May 1 of the applicable Annual
Period (or, if such May 1 is not a day on which trading is
conducted on the securities market or exchange on which
the Common Stock of the Company is then traded, as of the
last such trading day occurring before such May 1);
provided that no fractional share shall be credited to
such Stock Compensation Sub-Account, and, in lieu thereof,
the Member's Stock
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Compensation Sub-Account shall be credited with the
Fractional Share Equivalent Amount remaining after such
determination;
(b) on the date of payment of any dividend on the Common Stock
of the Company (other than a dividend payable in shares of
such Common Stock), the Dividend Equivalent Amount with
respect to such dividend;
(c) on the date of payment of any dividend on the Common Stock
of the Company which is payable in shares of such Common
Stock, the number of shares determined by multiplying (i)
the per share dividend amount times (ii) the number of
shares of Common Stock credited to such Member's Stock
Compensation Sub-Account as of the record date of such
dividend; provided that no fractional shares shall be
credited to such Stock Compensation Sub-Account as the
result of any dividend, and, in lieu thereof, an
appropriate adjustment shall be made to the cash balance
held in the applicable Stock Compensation Sub-Account;
(d) any adjustment to the cash balance of such Stock
Compensation Sub-Account required pursuant to Section 4.5
hereof; and
(e) on May 1 of each year, the number of whole shares of
Company Common Stock determined by dividing (i) the sum of
(1) any Fractional Share Equivalent Amount credited to
such Stock Compensation Sub-Account as of such date
pursuant to clause (a) above; (2) any cash amounts
credited to such Stock Compensation Sub-Account pursuant
to clause (c) or clause (d) above during the Annual Period
ending immediately prior to such date; (3) any Dividend
Equivalent Amounts credited to such Stock Compensation
Sub-Account during the Annual Period ending immediately
prior to such date; (4) the balance of any cash amount
remaining as a credit in such Stock Compensation
Sub-Account as of the immediately preceding May 1 after
giving effect to the reduction required pursuant to
Section 4.3 hereof; and, (5) the interest accrued on the
amounts set forth in sub-clauses (2), (3), and (4) of this
clause (e) during the immediately preceding Annual Period
by (ii) the Market Price as of such date (or, if such date
is not a day on which trading is conducted on the
securities market or exchange on which the Common Stock of
the Company is then traded, as of the last such trading
day occurring before such date); provided that no
fractional share shall be credited to such Stock
Compensation Sub-Account.
4.3 On May 1 of each year, the cash balance of each Member's Stock
Compensation Sub-Account (after giving effect to any amount to be credited to
such Stock Compensation Sub-Account on such date pursuant to Section 4.2(a)
hereof) shall be reduced by an amount equal to the product of (i) the number of
whole shares of Company Common Stock credited to such Stock Compensation
Sub-Account on such date pursuant to Section 4.2(e) hereof and (ii) the
applicable Market Price used in the determination of such number of shares
pursuant to such section.
4.4 Amounts credited to a Member's Cash Compensation Sub-Account
and any cash balance in a Member's Stock Compensation Sub-Account shall bear
interest computed and credited as follows: (i) the annual interest rate (the
"Applicable Rate") shall be fixed in advance by the Committee at the beginning
of each Fiscal Year based upon the 13-week Federal Treasury Bill rate at
year-end for the prior Fiscal Year; and (ii) interest shall accrue at the
Applicable Rate on the amount in such Cash Compensation Sub-Account and on the
cash balance in such Stock Compensation Sub-Account from time to time during
each Calendar Quarter and such interest will be credited to the Member's Cash
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Compensation Sub-Account or Stock Compensation Sub-Account, as applicable, on
the last day of each Calendar Quarter.
4.5 In the event that the outstanding shares of Common Stock of
the Company are hereinafter increased or decreased or changed into or exchanged
for a different number or kind of shares or other securities of the Company, in
any such case by reason of a recapitalization, reclassification, stock split,
or combination of shares (but not by reason of a dividend payable in shares of
Common Stock of the Company), an appropriate adjustment shall be made to the
Stock Compensation Sub-Accounts of all Members; provided, that no fractional
shares shall be credited to any such Stock Compensation Sub-Account as the
result of any such adjustment, and, in lieu thereof, an appropriate adjustment
shall be made to the cash balance held in the applicable Stock Compensation
Sub-Account.
In the event that the Company shall be a party to any reorganization
involving merger, consolidation, acquisition of the stock, or acquisition of
the assets of the Company, the Stock Compensation Sub-Account of each Member
shall be adjusted to reflect the same number and type of securities of the
resulting corporation to which the number of shares of Company Common Stock
then credited to such Stock Compensation Sub-Account would entitle a
shareholder of the Company in such reorganization (and, if the consideration in
such reorganization includes cash as well as securities, the amount of such
cash).
In the event that the Common Stock of the Company ceases to be
publicly traded in circumstances not otherwise addressed in this Section 4.5,
then any amount credited to a Member's Stock Compensation Sub-Account in the
form of a number of shares of Company Common Stock (or such other securities as
resulted from an adjustment pursuant to this Section 4.5) shall be converted to
a cash amount computed by multiplying (i) the number of shares of Company
Common Stock (or such other securities) credited to such Sub-Account as of the
last day on which such Common Stock (or such other securities) was publicly
traded by (ii) the highest of (a) the Market Price of such last trading day,
(b) the last offer price in any tender offer for the Common Stock of the
Company (or such other securities) which resulted in such Common Stock (or such
other securities) no longer being publicly traded, and (c) the cash price paid
pursuant to a merger or other acquisition of all of the outstanding capital
stock of the Company in which the consideration paid to shareholders of the
Company is comprised entirely of cash.
SECTION V
DISPOSITION OF MEMBER'S ACCOUNTS
5.1 Subject to the other provisions of this Section V, amounts
credited to a Member's Account, whether in the form of cash or Company Common
Stock, shall be paid to such Member as provided below. The amount credited to
such Account shall be paid either in one lump sum, or, in the sole discretion
of the Member, in no more than ten (10) equal annual installments (pro rata
from the Member's Cash Compensation Sub-Account and the Member's Stock
Compensation Sub-Account), as specified by such Member in his or her Initial
Election Form; or, in the case of a Member who was a Participant in the Plan
prior to the effective date of the amendment and restatement of the Plan in
1996, as most recently specified by such Member in an election form properly
filed with the Secretary of the Company prior to the effective date of such
Plan amendment and restatement, and no election or revocation form subsequently
filed by such member shall be effective to change or revoke such method of
distribution; and, provided further, that if the aggregate value then credited
to the Member's Account in the form of cash and Company Common Stock (or such
other securities as resulted from an adjustment pursuant to Section 4.5
hereof), based in the case of such Common Stock (or such other securities) on
the then current Market Price, is less than $50,000, the entire balance in such
Account shall be paid in a lump sum within the time period set forth below.
II-6
<PAGE> 34
If the first Triggering Event to occur is such Member's: (a) death,
such amounts shall be paid in a lump sum to such Member's designated beneficiary
or to such Member's estate, as applicable, within 30 days of such Member's
death; (b) Service Termination Date, such amounts (or, if such Member has
elected payment in installments as provided below, the first such installment)
shall be paid to such Member within 30 days of such Service Termination Date;
or, (c) Elective Distribution Date, such amounts (or, if such Member has elected
payment in installments as provided below, the first such installment) shall be
paid to such Member on such Elective Distribution Date, or, if such Elective
Distribution Date is not a Business Day, on the first Business Day occurring
after such Elective Distribution Date.
All amounts credited to the Member's Cash Compensation Sub-Account and
any cash balance in the Member's Stock Compensation Sub-Account shall be paid
in cash; and all amounts credited to the Member's Stock Compensation
Sub-Account as a number of shares of Company Common Stock (or such other
securities into which such shares were converted pursuant to an adjustment
under Section 4.5 hereof) shall be paid in the form of shares of Company Common
Stock (or such other securities as may result from an adjustment pursuant to
Section 4.5 hereof). All elections made pursuant to this Section 5.1 shall be
in writing on such form as may from time to time be prescribed by the Committee
and delivered to the Secretary of the Company. If the Member has failed to
elect a manner of payment (lump sum or installment) in such Member's Initial
Election Form, the Member's Account shall be paid in a lump sum in accordance
with the provisions of this Section 5.1.
5.2 If a Member dies prior to distribution of all the amounts
credited to his or her Account under the Plan, any amounts otherwise payable to
him or her under the Plan shall be distributed to such deceased Member's
designated beneficiary or beneficiaries, and any reference to a Member in this
Section V shall then be deemed to include such designated beneficiary or
beneficiaries. Notwithstanding anything to the contrary herein contained, any
amounts which would otherwise become payable in installments to a beneficiary
in accordance with the foregoing provision will instead be paid to such
beneficiary in a lump sum within the applicable time period provided in Section
5.1 hereof. All beneficiary designations shall be in such form and subject to
such limitations as may from time to time be prescribed by the Committee and
communicated in writing to the Secretary of the Company. A Member may from
time to time revoke or change any beneficiary designation by filing a new
written designation with the Secretary. If there is no effective beneficiary
designation filed with the Secretary at the time of the Member's death,
distribution of amounts otherwise payable to the deceased Member under this
Plan shall be paid to the Member's estate. If a beneficiary designated by the
Member to receive his or her benefits shall survive the Participant but die
before receiving distribution of the Participant's Account balance hereunder,
the balance thereof shall be paid to such deceased beneficiary's estate, unless
the deceased beneficiary designates otherwise by a written beneficiary
designation filed with the Secretary of the Company, in which case such
designation shall govern.
5.3 The Company shall deduct from the distributions to be made to
a Member, or to his or her designated beneficiary or beneficiaries under this
Plan, any Federal, State, or local withholding or other taxes or charges which
the Company is from time to time required to deduct under applicable law. In
the event that the amount of any such required withholding exceeds the amount
then payable to the applicable Member in cash, the Company may condition the
delivery of any Company Common Stock (or other securities, as the case may be)
to such Member hereunder on the receipt by the Company from such Member of an
amount in cash sufficient to pay the taxes required to be withheld.
II-7
<PAGE> 35
SECTION VI
RIGHTS AND DUTIES OF PARTICIPANTS AND MEMBERS
6.1 A Member's interest in this Plan and that of his or her
designated beneficiary is an unsecured claim against the general assets of the
Company, and neither the Member nor any other person shall have any interest in
any fund or in any specific asset or assets of the Company by reason of any
amounts credited to any Account hereunder, or any right to receive any
distributions under the Plan, except as and to the extent expressly provided in
the Plan. The right of a Member to have any amount credited to his or her
Account, as the result of events such as the declaration of a dividend on
Company Common Stock, does not constitute the right of such Member to receive
any amount with respect to any Common Stock except as and to the extent set
forth herein. No Member shall have any rights as a Stockholder with respect to
any shares of Common Stock credited to such Member's Stock Compensation
Sub-Account until the date of issuance of a certificate for such shares to such
Member at the time of distribution of the Account.
6.2 Each Director shall be entitled to receive an updated copy of
the Plan and, so long as he or she remains a Member, shall be entitled to
receive copies of any amendments to the Plan within ten (10) days after their
adoption.
6.3 To the extent permitted by law, the right of any Member or any
beneficiary to receive any payment hereunder shall not be subject to
alienation, transfer, sale, assignment, pledge, attachment, garnishment, or
encumbrance of any kind. Any attempt to alienate, sell, transfer, assign,
pledge, or otherwise encumber any such payments, whether presently or
thereafter payable, shall be void. Any payments due hereunder shall not in any
manner be subject to debts or liabilities of any Member or beneficiary.
6.4 If any Member shall bring any legal or equitable action
against the Company by reason of being a Member under this Plan, or if it is
necessary for the Company to bring any legal or equitable action under this
Plan against any Member or any person claiming any interests by or through such
Member, the results of which shall be adverse to the Member or the person
claiming an interest by or through such Member, the cost of defending or
bringing such action shall be charged directly to and deducted from the Account
of the Member to the extent of the amount then or thereafter credited to such
Account.
6.5 Every person receiving or claiming payments under the Plan
shall be conclusively presumed to be mentally competent until the date on which
the Committee receives a written notice in a form and manner acceptable to the
Committee that such a person is incompetent and that a guardian, conservator,
or other person legally vested with the interest of his or her estate has been
appointed. In the event a guardian or conservator of the estate of any person
receiving or claiming payments under the Plan shall be appointed by a court of
competent jurisdiction, payments under this Plan may be made to such guardian
or conservator provided that the proper proof of appointment and continuing
qualification is furnished in a form and manner acceptable to the Committee.
Any such payments so made shall be a complete discharge of any liability or
obligation of the Company or the Committee regarding such payments.
6.6 Each person entitled to receive a payment under this Plan,
whether a Member, a duly designated beneficiary, a guardian or otherwise, shall
provide the Committee with such information as it may from time to time deem
necessary or in its best interests in administering the Plan. Any such person
shall also furnish the Committee with such documents, evidence, data, or other
information as the Committee may from time to time deem necessary or advisable.
II-8
<PAGE> 36
SECTION VII
COMMITTEE
7.1 The Plan shall be administered by the Committee. A Member who
is also a member of the Committee shall not participate in any decision
involving an election made by him or relating in any way to his individual
rights, duties, and obligations as a Member under the Plan.
7.2 A majority of the Committee shall constitute a quorum for the
transaction of business. All actions taken by the Committee at a meeting shall
be by the vote of a majority of those present at such meeting, but any action
may be taken by the Committee without a meeting upon written consent signed by
all of the members of the Committee. No action by unanimous written consent
may be taken by the Committee in the event such action involves a Member who
is also a member of the Committee.
7.3 The Committee may from time to time establish rules and
regulations for the administration of the Plan and adopt standard forms for
such matters as elections, beneficiary designations, and applications for
benefits, provided such rules and forms are not inconsistent with the
provisions of the Plan.
7.4 All determinations of the Committee, irrespective of their
character or nature, including but not limited to, all questions of
construction and interpretations, shall be final, binding, and conclusive on
all parties. In constructing or applying the provisions of this Plan, the
Company shall have the right to rely upon a written opinion of legal counsel,
which may be independent legal counsel or legal counsel regularly employed by
the Company, whether or not any question or dispute has arisen as to any
distribution from the Plan.
7.5 The Company and/or the Committee may consult with legal
counsel, who may be independent counsel or counsel regularly employed by the
Company, with respect to its obligations and duties hereunder or with respect
to any action or proceeding or any other questions of law and shall not be
liable for any action taken or omitted by it in good faith pursuant to the
advice of such counsel.
7.6 The Committee shall be responsible for maintaining books and
records for the Plan. Said books and records shall only be open for
examination by a Member or a duly designated beneficiary to the extent that
they specifically involve the Account created for his or her benefit or any
payments which are to be made to him or her or to his or her beneficiary
hereunder. Each Member shall be notified annually of the balance in his or her
Account (including the balances in the Member's Cash Compensation Sub-Account
and Stock Compensation Sub-Account).
7.7 Neither the Committee nor any member of the Committee nor the
Company nor any other person who is acting on behalf of the Committee or the
Company shall be liable for any act or failure to act hereunder except for
gross negligence or fraud.
II-9
<PAGE> 37
SECTION VIII
AMENDMENT OR TERMINATION
8.1 The Company hereby reserves the right to amend, modify,
terminate, or discontinue the Plan at any time; provided however, no such
action shall reduce the amounts then credited to any Account of any Member, nor
change the time and manner of payment of such amount as set forth in Section V
hereof, without the consent of the Member concerned, or his or her beneficiary
if the Member is not living.
SECTION IX
CONSTRUCTION AND EXPENSE
9.1 Whenever the context so requires, words in the masculine
include the feminine and words in the feminine include the masculine, and the
definition of any term in the singular may include the plural.
9.2 All Expenses of administering the Plan shall be paid by the
Company except as expressly provided herein to the contrary.
9.3 The Plan shall be construed, administered, and governed in all
respects under and by the applicable laws of the State of Georgia.
IN WITNESS WHEREOF, the Company has caused this Plan, adopted by the
Board of Directors of the Corporation effective December 15, 1982, amended by
the Board of Directors of the Company on August 3, 1990, and authorized for
further amendment by the Board of Directors on February 6, 1996, subject to
approval by the stockholders of the Company on April 26, 1996, to be restated
and to be duly executed, sealed, and attested as of April 26, 1996.
Attested: HAVERTY FURNITURE COMPANIES, INC.
- --------------------------------- -------------------------------------
Christine M. Jones John E. Slater, Jr.
Vice President and Secretary President and Chief Executive Officer
[Corporate Seal]
II-10
<PAGE> 38
APPENDIX III
<TABLE>
<S> <C> <C>
PROXY - SOLICITED BY BOARD OF DIRECTORS HAVERTY FURNITURE COMPANIES, INC. 1996 ANNUAL MEETING OF STOCKHOLDERS
The undersigned stockholder(s) in HAVERTY FURNITURE COMPANIES, INC., hereby appoints and constitutes CHRISTINE M. JONES,
DENNIS L. FINK, A. DANA ATWELL and MICHAEL J. BARBERA, or any one of them, but if more than one present, a majority of
them present, to act as lawful attorney and proxy of the undersigned, with the power of substitution for and in the
name, place and stead of the undersigned, to vote at the annual meeting of stockholders of the Company to be held on
April 26, 1996, at the Harbor Court Hotel, 550 Light Street, Baltimore, Maryland 21202, at 11:00 A.M., or any
adjournment thereof, for the following purposes and upon any other matters that may come before the meeting or any
adjournment thereof, with all the powers the undersigned would possess if personally present, hereby revoking all
previous proxies:
PROPOSAL 1 1. To elect nine directors of the Company for terms of one year, and until their successors are elected and
TO BE VOTED qualified:
ON ONLY BY [ ] FOR all nominees listed (except as [ ] WITHHOLD AUTHORITY to vote
HOLDERS OF marked to the contrary) for all nominees listed
CLASS A
COMMON STOCK Rawson Haverty John E. Slater, Jr. John Rhodes Haverty, M.D. Clarence H. Smith Fred J. Bates
Lynn H. Johnston Clarence H. Ridley Rawson Haverty, Jr. Frank S. McGaughey, III
(INSTRUCTION: To withhold authority to vote for any individual nominee, write that nominee's name on
the space provided below.)
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PROPOSAL 2 2. To elect four directors of the Company for terms of one year, and until their successors are elected
TO BE VOTED and qualified:
ON ONLY BY [ ] FOR all nominees listed (except as [ ] WITHHOLD AUTHORITY to vote
HOLDERS OF marked to the contrary) for all nominees listed
COMMON STOCK
William A. Parker, Jr. Robert R. Woodson L. Phillip Humann John T. Glover
(INSTRUCTION: To withhold authority to vote for any individual nominee, write that nominee's name on the
space provided below.)
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PROPOSALS 3. To approve the Directors' Compensation Plan, as set forth in the Proxy Statement as Appendix I, to provide
3 AND 4 for the payment of all or a portion of the annual retainer fees paid to directors in shares of the Company's
TO BE Common Stock.
VOTED ON [ ] FOR [ ] AGAINST [ ] ABSTAIN
BY ALL
STOCKHOLDERS 4. To approve the Directors'Deferred Compensation Plan as Amended and Restated, as set forth in the Proxy
Statement as Appendix II.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
(Continued and to be signed and dated on the reverse side)
- ------------------------------------------------------------------------------------------------------------------------------------
PROXY - SOLICITED BY BOARD OF DIRECTORS (Continued from other side) 1996 ANNUAL MEETING OF STOCKHOLDERS
5. In their discretion, the Proxies are authorized to vote upon such other business as may properly be
brought before the meeting or any adjournment thereof.
THIS PROXY, WHEN PROPERLY EXECUTED, WILL BE VOTED IN THE MANNER DIRECTED HEREIN BY THE UNDERSIGNED STOCKHOLDER(S). THE
BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" EACH OF THE ABOVE PROPOSALS. IF NO DIRECTION IS MADE, THIS PROXY WILL BE
VOTED "FOR" PROPOSALS 1, 2, 3 AND 4.
Please date and sign exactly as name(s) appears on
reverse side. When signing as an attorney,
administrator, trustee or guardian, please give full
title as such. If a corporation, please sign in full
corporate name by President or other authorized
officer. If a partnership, please sign in partnership
name by authorized person. For joint accounts, each
joint owner should sign.
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Signature
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Signature
Date
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</TABLE>
