HON INDUSTRIES INC, DEF 14A, 2000-03-10

HON INDUSTRIES INC
DEF 14A, 2000-03-10
OFFICE FURNITURE (NO WOOD)

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<PAGE>
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:
/X/ Preliminary Proxy Statement
/ / Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
/ / Definitive Proxy Statement
/ / Definitive Additional Materials
/ / Soliciting Material Pursuant to Section240.14a-11(c) or
Section240.14a-12

HON INDUSTRIES INC.
- - --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)

- - --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)

Payment of Filing Fee (Check the appropriate box):

/X/ No fee required.
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(1)
and 0-11.
(1) Title of each class of securities to which transaction applies:
-----------------------------------------------------------------------
(2) Aggregate number of securities to which transaction applies:
-----------------------------------------------------------------------
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which the
filing fee is calculated and state how it was determined):
-----------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
-----------------------------------------------------------------------
(5) Total fee paid:
-----------------------------------------------------------------------
/ / Fee paid previously with preliminary materials.
/ / Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was
paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
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(2) Form, Schedule or Registration Statement No.:
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(3) Filing Party:
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(4) Date Filed:
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<PAGE>
HON INDUSTRIES Inc.
414 EAST THIRD STREET -- P.O. BOX 1109
MUSCATINE, IA 52761-7109
319/264-7400

NOTICE OF ANNUAL MEETING OF SHAREHOLDERS

The 2000 Annual Meeting of Shareholders of HON INDUSTRIES Inc. (the "Company")
will be held at the Holiday Inn, Highways 61 and 38 North, Muscatine, Iowa, on
Monday, May 1, 2000, beginning at 10:30 a.m., in order:

1. To elect three Directors, each for a term of three years.

2. To adopt the First Amendment to the HON INDUSTRIES Inc. Executive Bonus
Plan to permit certain awards granted under the Plan to be exempt from
the $1 million deduction limit set forth in Section 162(m) of the
Internal Revenue Code.

3. To transact any other business that may properly be brought before the
meeting or any adjournment thereof.

The holders of record as of the close of business on March 1, 2000, of the
Company's Common Stock, par value $1.00 per share, are entitled to vote at the
meeting.

You are encouraged to attend the meeting. We want to keep you informed of the
Company's activities and progress.

BY ORDER OF THE BOARD OF DIRECTORS,

[SIGNATURE]

James I. Johnson
Vice President, General Counsel and Secretary
March 20, 2000

PLEASE MARK, SIGN, DATE, AND RETURN PROMPTLY THE ENCLOSED PROXY CARD IN THE
ENCLOSED POSTAGE PREPAID ENVELOPE, WHETHER OR NOT YOU PLAN TO ATTEND THE ANNUAL
MEETING.
<PAGE>
HON INDUSTRIES Inc.
414 EAST THIRD STREET
MUSCATINE, IOWA 52761

March 20, 2000

PROXY STATEMENT
FOR ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD MAY 1, 2000

This Proxy Statement is furnished by and on behalf of the Board of Directors of
HON INDUSTRIES Inc. (the "Company" or "HON INDUSTRIES") in connection with the
solicitation of proxies for use at the annual meeting of shareholders of the
Company to be held on May 1, 2000, at the Holiday Inn in Muscatine, Iowa, and at
any adjournment or postponement thereof (the "Annual Meeting").

There were 60,164,262 shares of the Company's common stock, par value $1.00 per
share (the "Common Stock"), outstanding (the "Outstanding Shares") as of the
close of business on March 1, 2000 ("Record Date"). Shareholders shall be
entitled to cast one vote per share for election of Directors and one vote per
share on all other matters.

This Proxy Statement and the enclosed proxy card will be first mailed on or
about March 20, 2000, to the holders of shares on the Record Date (the
"Shareholders" or, individually, "Shareholder").

A Shareholder who gives a proxy may revoke it at any time prior to its exercise
by filing with the Secretary a written revocation or a duly executed proxy
bearing a later date. The proxy will be suspended if the Shareholder attends the
meeting and elects to vote in person. Proxies that are signed but unmarked will
be voted as recommended by the Board of Directors.

The Company will treat abstentions and broker non-votes as present at the Annual
Meeting solely for purposes of determining whether or not a quorum exists. Such
non-votes will not be considered to be voting on the matters to which they
pertain and, thus, will not be counted in determining whether the election of
Directors or the adoption of the First Amendment to the HON INDUSTRIES Inc.
Executive Bonus Plan have been approved by the requisite vote of Shareholders.

Except as described below, the affirmative vote of the holders of two-thirds of
the total Outstanding Shares entitled to vote is required to adopt any motion or
resolution or to take any action at any meeting of shareholders. The affirmative
vote of the holders of a majority of the total Outstanding Shares entitled to
vote is required and will be sufficient to take any of the following actions
submitted to a vote of shareholders: (1) any amendment to the Company's Articles
of Incorporation which has been approved or recommended by the Board of
Directors, other than certain such amendments that would amend, limit or
conflict with certain provisions governing shareholder voting requirements and
the Company's Board of Directors (including removal and election); (2) the
election of a class of Directors at any annual meeting of shareholders if
(a) at the annual meeting of shareholders in the third preceding year, an
election of such class was held but no Director of such class was elected
because no candidate received the requisite two-thirds vote, and (b) the term of
such class of Directors was extended for an additional term of three years; and
(3) any other motion, resolution or action which has been approved or
recommended by the Board of Directors of the Company (other than any such
motion, resolution or action regarding (a) the election or removal of Directors,
(b) amendment of certain portions of the Articles of Incorporation, (c) any
Corporate Combination (as defined in the Company's Articles of Incorporation),
(d) any partial or complete liquidation of the Company, (e) any liquidating
dividend or distribution or (f) any dissolution of the Company).
<PAGE>
PROPOSAL NO. 1 - ELECTION OF DIRECTORS

At the Annual Meeting of Shareholders, three Directors are to be elected to hold
office each for a term of three years and until their successors are elected and
shall qualify. The Board of Directors recommends the election of the three
nominees listed below. The named proxies intend to vote for the election of the
three nominees. If, at the time of the meeting, any of such nominees should be
unable or decline to serve, the discretionary authority provided in the proxy
will be exercised to vote for a substitute or substitutes, unless otherwise
directed. The Board of Directors has no reason to believe that any substitute
nominee or nominees will be required.

Set forth below is certain information furnished to the Company by each nominee
and each Director continuing in office after the Annual Meeting.

NOMINEES FOR ELECTION

<TABLE>
<CAPTION>
COMMON STOCK
AS OF MARCH 1, 2000
--------------------------
AMOUNT AND
NOMINATED NATURE OF PERCENT
PRINCIPAL OCCUPATION AND BUSINESS DIRECTOR FOR TERM BENEFICIAL OF
NOMINEES EXPERIENCE DURING THE PAST FIVE YEARS AGE SINCE EXPIRING OWNERSHIP CLASS
<S> <C> <C> <C> <C> <C> <C>
Gary M. President and Chief Executive Officer, 56 -- 2003 -0- *
Christensen (1) since 1996, Pella Corporation (marketer
and manufacturer of windows and doors).

Robert W. Cox (2) Chairman Emeritus, Baker & McKenzie (an 62 1994 2003 4,525 *
international law firm). Director of
various corporations.

Lorne R. Executive Vice President, 1985-1993, The 66 1994 2003 14,823 *
Waxlax (3) Gillette Company (marketer and
manufacturer of personal care and use
products). Director of various
corporations.
</TABLE>

2
<PAGE>
INCUMBENT DIRECTORS

W August President and Chief Executive Officer, 59 1998 2001 2,725 *
Hillenbrand (6) since 1989, and Director since 1972,
Hillenbrand Industries, Inc. (marketer
and manufacturer of health care, funeral
service and high security products,
services and support programs).

Moe S. Nozari Executive Vice President, Consumer and 57 1998 2001 2,649 *
Office Markets since 1999; Group Vice
President, Consumer and Office Markets
Group, 1996-1999; Division Vice
President, Consumer Markets, 1993-1996,
3M (marketer and manufacturer of
consumer, industrial and life science
products).

Cheryl A. Francis Executive Vice President and Chief 46 1999 2002 993 *
Financial Officer since 1995,
R.R. Donnelley & Sons Company (provider
of printing and related services to the
merchandising, magazine, book, directory
and financial markets); Vice President
and Treasurer, 1993-1995,
FMC Corporation (producer of machinery
and chemicals).

Robert L. President since 1953, Robert L. Katz and 74 1995 2002 12,015 *
Katz (7) Associates (consultants on corporate
strategy); President since 1975, CalTex
Investment Management Co. (venture
capital firm).

Richard H. Vice Chairman since 1979, 67 1964 2002 3,239,989(9)(10) 5.4%
Stanley (8) HON INDUSTRIES Inc.; Chairman since
1998, and President, 1986-1998,
SC Companies, Inc. (private holding
company with subsidiaries offering
engineering, environmental, and
design-build services); Chairman since
1984, Stanley Consultants, Inc.
(international consultants engineering,
architecture, planning and management).
</TABLE>

3
<PAGE>

<TABLE>
<CAPTION>
COMMON STOCK
AS OF MARCH 1, 2000
--------------------------
AMOUNT AND
NATURE OF PERCENT
CONTINUING PRINCIPAL OCCUPATION AND BUSINESS DIRECTOR TERM BENEFICIAL OF
DIRECTORS EXPERIENCE DURING THE PAST FIVE YEARS AGE SINCE EXPIRES OWNERSHIP CLASS
<S> <C> <C> <C> <C> <C> <C>
Brian E. President, Xerox Technology Enterprises 52 1998 2002 6,151 *
Stern (11) since 1999; Senior Vice President of
Xerox Corporation 1996-1999; President,
Office Document Products Group,
1996-1999, and Corporate Vice President
of Xerox Corporation and President,
Personal Document Products Division,
1994-1996, Xerox Corporation (developer,
marketer, manufacturer, financier and
servicer of document processing products
and services).

Stanley M. Chairman Emeritus since 1996; Chairman, 76 1958 2000 2,807,411(9)(13) 4.7%
Howe (12) 1984-1996, HON INDUSTRIES Inc.
</TABLE>

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

* Less than 1 percent.

NOTES

(1) Mr. Christensen is also a director of Butler Manufacturing Company and
Brenton Banks Inc., each of which has a class of securities registered with
the Securities and Exchange Commission.

(2) Mr. Cox is also a director of Carey International, Inc. and
Homebase, Inc., each of which has a class of securities registered with the
Securities and Exchange Commission.

(3) Mr. Waxlax is also a director of Clean Harbors, Inc., Pennzoil-Quaker State
Company, BJ's Wholesale Club Inc. and Homebase, Inc., each of which has a
class of securities registered with the Securities and Exchange Commission.

(4) Mr. Michaels is also a director of Huffy Corporation and Snap-On
Incorporated, each of which has a class of securities registered with the
Securities and Exchange Commission.

(5) Includes 136,000 shares owned by Jachris L.L.C. Mr. Michaels is co-manager
of Jachris L.L.C., and, as such, shares voting and dispositive powers as to
the shares held by such entity. Mr. Michaels disclaims "beneficial
ownership" of such shares held by the company.

(6) Mr. Hillenbrand is also a director of DPL Inc., which is the parent company
of The Dayton Power and Light Company, and has a class of securities
registered with the Securities and Exchange Commission.

(7) Dr. Katz is also a director of Newell Rubbermaid Co., which has a class of
securities registered with the Securities and Exchange Commission. See
"Certain Relationships and Related Transactions."

(8) Mr. Stanley also serves as a Director of Dover Resources, Inc., a
subsidiary of Dover Corporation, a diversified manufacturer of industrial
products.

(9) Figures include shares held by or for the benefit of certain family members
of Mr. Howe, 664,014, and Mr. Stanley, 185,472. Each Director disclaims
"beneficial ownership" of such respective shares.

(10) Includes 16,144 shares beneficially and indirectly owned by Mr. Stanley as
co-trustee of the C. Maxwell Stanley and Elizabeth M. Stanley Real Estate
Trust. Also includes 1,513,104 shares owned by The Stanley Foundation and
1,292,500 shares owned by the Holthues Trust. Mr. Stanley is Chairman,
President and a director of The Stanley

4
<PAGE>
Foundation and President and a director of the Holthues Trust and, as
such, shares voting and dispositive powers as to shares held by such
entities, of which he disclaims "beneficial ownership."

(11) Mr. Stern is also a director of New England Business Service, Inc. and
Esselte Corporation, each of which has a class of securities registered
with the Securities and Exchange Commission.

(12) Mr. Howe is not standing for re-election as a Director of the Company.

(13) Includes 377,032 shares owned by The Howe Foundation. Mr. Howe is
President of The Howe Foundation and, as such, shares voting and
dispositive powers as to shares held by such entity. Mr. Howe disclaims
"beneficial ownership" of such shares held by the Foundation.

BENEFICIAL OWNERS OF COMMON STOCK

The following table sets forth information known as of March 1, 2000, with
respect to any person who is known to the Company to be the beneficial owner of
more than 5 percent of the Company's Common Stock. The table also includes any
non-Director executive officers included in the Summary Compensation Table. For
information regarding Director stock ownership, see "Election of Directors."

<TABLE>
<CAPTION>
NAME AND ADDRESS OF AMOUNT AND NATURE OF PERCENT
BENEFICIAL OWNER BENEFICIAL OWNERSHIP OF CLASS
<S> <C> <C> <C>
State Farm Insurance Companies 7,366,400 12.2%
One State Farm Plaza
Bloomington, Illinois 61701

Terrence L. and Loretta B. Mealy 3,434,008 5.7%
301 East Second Street
Muscatine, Iowa 52761

David C. Stuebe 10,119 *

James I. Johnson 1,825 *

Thomas K. Miller 14,748 *

David W. Strohl 5,123 *

All Directors and Officers as a Group(1) 6,356,900 10.6%
</TABLE>

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

* Less than 1 percent.

NOTES

(1) Includes shares held by or for the benefit of certain family members of
Mr. Howe (664,014), Mr. Michaels (136,000) and Mr. Stanley (185,472), as to
which they disclaim "beneficial ownership." See Note (5) and Note (9) of
"Election of Directors."

5
<PAGE>
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE

Section 16(a) of the Securities Exchange Act of 1934 requires the Company's
Directors and officers, and persons who own more than 10 percent of a registered
class of the Company's equity securities, to file with the Securities and
Exchange Commission initial reports of ownership and reports of changes in
ownership of Common Stock, and to furnish the Company with copies of all such
reports they file. To the Company's knowledge, based solely on a review of the
copies of such reports furnished to the Company and written representations that
no other Forms 5 were required, during the fiscal year ended January 1, 2000,
all Section 16(a) filing requirements applicable to its officers, Directors, and
greater than 10 percent beneficial owners were complied with, except Mr. Stern
inadvertently failed to timely file one report on Form 4 for July 1999 covering
one transaction in Company securities.

BOARD MEETINGS, COMMITTEES AND FEES

The Board of Directors held four regular meetings, and two special meetings
during the last fiscal year. The Board has three standing committees which deal
with audit matters, compensation, and corporate governance, including
nominations to the Board. Each Director has attended at least 75 percent of all
committee and Board meetings during the last fiscal year.

The Audit Committee consists of Cheryl A. Francis, W August Hillenbrand and
Robert L. Katz. It met four times during the last fiscal year. The Committee
recommends selection of independent auditors and verifies auditors' performance,
fees, and audit plans. The Committee also reviews the annual financial
statements, the auditors' management letter with both outside auditors and
management, the annual pension and profit-sharing audits, nonaudit services
provided by outside auditors, the Company's insurance coverage and any other
financial matters as directed by the Board.

The Human Resources and Compensation Committee is comprised of Lorne R. Waxlax,
Robert W. Cox and Richard H. Stanley. It met five times during the last fiscal
year. The Committee reviews executive compensation, benefit programs for all
employees, management's recommendations on election of officers and human
resources development.

The Public Policy and Corporate Governance Committee is comprised of Moe S.
Nozari, Stanley M. Howe and Brian E. Stern. It met four times during the last
fiscal year. The Committee monitors social accountability, recommends changes in
Board size, oversees committee jurisdiction and assignments and proposes
nominees for election to the Board of Directors. The Committee will consider
candidates for Board membership recommended in writing by shareholders by the
deadline for shareholder proposals. See "Deadline For Shareholder Proposals For
2001 Annual Meeting."

Each Non-employee Director receives an annual retainer of $20,000. Non-employee
Directors can acquire Common Stock in several ways. Under the amended and
restated 1997 Equity Plan for Non-Employee Directors of HON INDUSTRIES Inc. (the
"Director Plan"), Directors are entitled to receive up to 100 percent of their
retainers and other fees in the form of shares of Common Stock. Under the
Company's Directors Deferred Compensation Plan, each Director is provided with
the opportunity to defer cash compensation earned as a Director, including
retainer and committee fees, in accordance with the provisions of such plan.
Deferred compensation may be deferred in cash or in the form of shares of Common
Stock (determined by dividing the amount of the compensation deferred by the
fair market value per share of Common Stock on the date such compensation would
have otherwise been paid). In addition, each Non-employee Director is eligible
to receive awards of options to purchase Common Stock of the Company, restricted
stock or common stock grants, or any combination thereof, or such amounts as the
Board of Directors may authorize under the Director Plan. In 1999, each Non-
employee Director was granted 600 shares of Common Stock of the Company under
the Director Plan. All shares of Common Stock issued in lieu of cash retainer
amounts or other Directors' fees (as described below) have heretofore been
issued pursuant to the Company's amended and restated 1995 Stock-Based
Compensation Plan (the "Restated Stock-Based Compensation Plan") or the Director
Plan. Each Director also receives $1,000 for each regular or special Board
meeting, $1,000 for each special committee meeting, and $500 for each regular
meeting of a committee of which the Director is a member. Directors also receive
an additional $1,000 for each meeting attended if they are required to travel
six hours or

6
<PAGE>
more on a round-trip basis. Each Director receives a $500 fee for each Board or
committee meeting held by telephone conference or meetings attended at the
request of the Chairman of the Board. Directors are also paid travel and related
expenses for meetings attended. Directors who are employees of the Corporation
do not receive additional compensation for service on the Board of Directors.

CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

On November 15, 1995, Robert L. Katz and Associates, of which Dr. Katz is
President, entered into a one-year agreement with the Company to provide certain
consulting services for $5,000 per month. The agreement also provides for
reimbursement of travel expenses and other reasonable out-of-pocket costs
incurred on the Company's behalf and is automatically renewed each year unless
notice of cancellation is given no later than 90 days prior to the end of the
one-year term. The agreement has been renewed for 2000. In 1999, the Company
paid Robert L. Katz and Associates a total consulting fee of $60,000, plus
$13,854.09 of expense reimbursement, for services rendered.

REQUIRED VOTE

Approval of the election of the above nominees as Directors requires the
affirmative vote of the holders of two-thirds of the total Outstanding Shares
entitled to vote at the Annual Meeting.

RECOMMENDATION OF THE BOARD OF DIRECTORS

THE BOARD OF DIRECTORS OF THE COMPANY RECOMMENDS A VOTE FOR THE ELECTION OF THE
ABOVE NOMINEES AS DIRECTORS. PROXIES RECEIVED BY THE BOARD OF DIRECTORS WILL BE
SO VOTED UNLESS SHAREHOLDERS SPECIFY IN THEIR PROXIES A CONTRARY CHOICE.

7
<PAGE>
EXECUTIVE COMPENSATION

The following table sets forth the compensation awarded to, earned by, or paid
to the Company's Chief Executive Officer and the other four most highly
compensated executive officers of the Company (determined by reference to 1999)
for the years indicated:

SUMMARY COMPENSATION TABLE

<TABLE>
<CAPTION>
ANNUAL LONG-TERM
COMPENSATION COMPENSATION
------------ ------------
VESTED
AWARDS BENEFITS
----------------------- --------
OTHER SECURITIES
ANNUAL RESTRICTED UNDERLYING ALL OTHER
NAME AND COMPEN- STOCK OPTIONS/ LTIP COMPEN-
PRINCIPAL FISCAL SALARY(1) BONUS(2) SATION(3) AWARDS(4) SARS(5) VESTED(6) SATION(7)
POSITION YEAR ($) ($) ($) ($) (#) ($) ($)
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Jack D. Michaels 1999 527,500 483,834 16,241 75,000 259,479 158,268
Chairman, President and 1998 493,000 490,442 9,848 809,965 203,138
Chief Executive Officer 1997 471,667 490,196 16,836 45,000 465,283 234,368

David C. Stuebe 1999 255,000 125,083 14,511 30,000 129,739 58,878
Vice President and 1998 240,333 173,974 9,848 72,551
Chief Financial Officer 1997 227,333 174,030 10,632 15,000 82,639

James I. Johnson 1999 169,767 70,419 11,804 15,000 26,070
Vice President, General 1998 161,200 73,672 26,548 576
Counsel and Secretary(8) 1997 51,669 8,000

Thomas K. Miller 1999 161,083 62,029 32,792 11,250 64,869 28,474
Vice President, 1998 156,083 71,296 24,796 17,160 35,234
International 1997 152,333 71,572 15,248 7,000 39,628

David W. Strohl 1999 155,667 68,450 11,409 15,000 26,771
Vice President, 1998 149,333 67,709 9,821 31,439
Technical Development 1997 144,000 69,679 10,493 7,000 33,751
</TABLE>

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

NOTES

(1) These figures and others on this Table include amounts deferred, if any, in
respect of fiscal 1999, 1998, and 1997 compensation but do not include any
interest that may have accrued on any deferred compensation under the
Company's Salary Deferral Plan (the "Deferral Plan"). The Deferral Plan
permits a participant to elect to defer any combination of salary, bonus, or
LTIP income. The Deferral Plan provides for interest to be paid on any
deferred amounts at an annual rate, compounded monthly, equal to one percent
above the prime rate of The Northern Trust Company, Chicago, Illinois,
effective as of the first business day of the year.

(2) The figures for bonuses reflect the awards of executive bonuses for the
relevant fiscal years under the Company's Executive Bonus Plan. The executive
bonuses are payable in February following the fiscal year for which they are
earned, subject generally to a participant's continued employment with the
Company at the time of payment.

(3) The figures in this column reflect cash profit-sharing payments, interest on
vested LTIP benefits, interest on deferred compensation and relocation
expenses. In the 1999, 1998, and 1997 fiscal years, the Company made the
following payments under the Cash Profit-Sharing Plan: Mr. Michaels - $12,782;
$9,848; $10,632; Mr. Stuebe - $12,782; $9,848; $10,632; Mr. Johnson - $11,804;
$-0-; $-0-; Mr. Miller - $11,156; $9,848; $10,632; and Mr. Strohl - $11,409;
9,821; $10,493. The Company's Cash Profit-Sharing Plan is generally applicable
to all members after completing one year of service.

8
<PAGE>
Cash profit-sharing is earned on a non-fiscal year cycle. Interest payments to
Mr. Michaels for LTIP benefits vested in fiscal years 1999 and 1997 were
$3,459 and $6,204, respectively; interest payments to Mr. Stuebe for an LTIP
benefit vested in fiscal year 1999 were $1,729; and interest payments to
Mr. Miller for LTIP benefits vested in fiscal years 1999 and 1997 were $865
and $4,616, respectively. In fiscal years 1999 and 1998, interest payments on
deferred compensation paid to Mr. Miller were $20,771 and $14,948,
respectively. The Company made a taxable relocation expense reimbursement of
$26,548 in the 1998 fiscal year for Mr. Johnson.

(4) The amounts shown in this column are based upon the closing price of the
Company's unrestricted Common Stock on February 11, 1998, the date the
restricted stock was granted. These shares were a one-time grant to make up a
short fall in retirement benefits due to the absence of an ERISA Supplemental
Retirement Plan at the Company prior to 1995. As of the end of fiscal 1999,
Mr. Michaels held an aggregate of 24,922 shares of restricted stock valued at
$546,726; and Mr. Miller held an aggregate of 528 shares of restricted stock
valued at $11,583. These restricted shares cannot be sold or otherwise
transferred while the participant is employed by the Company. Dividends are
paid on the restricted stock reported in this column.

(5) These numbers represent options for shares of the Common Stock of the
Company granted pursuant to the Company's Restated Stock-Based Compensation
Plan.

(6) These benefits vested in the designated fiscal periods. The 1997 LTIP
benefit for Mr. Michaels represents cumulative appreciation over a five-year
period starting January 1, 1993 on 300,000 units of permanent capital of HON
INDUSTRIES Inc. and, at the discretion of the Board of Directors, was paid in
full in fiscal 1998. The appreciation consisted of $62,880 in 1993, $84,442 in
1994, $73,495 in 1995, $113,746 in 1996 and $130,720 in 1997. The 1999 LTIP
benefits for Mr. Michaels, Mr. Stuebe, and Mr. Miller represent cumulative
appreciation over a five-year period starting January 1, 1995 on 200,000,
100,000, and 50,000 units, respectively, of permanent capital of HON
INDUSTRIES Inc. and, at the discretion of the Board of Directors, have been
wholly paid or deferred in fiscal 2000. The appreciation for Mr. Michaels
consisted of $32,860 in 1995, $50,857 in 1996, $58,446 in 1997, $62,308 in
1998, and $55,008 in 1999. The appreciation for Mr. Stuebe consisted of
$16,430 in 1995, $25,428 in 1996, $29,223 in 1997, $31,154 in 1998 and $27,504
in 1999. The appreciation for Mr. Miller consisted of $8,215 in 1995, $12,714
in 1996, $14,611 in 1997, $15,577 in 1998 and $13,752 in 1999. See discussion
of Executive Long-Term Incentive Compensation Plan in the "Report of the Human
Resources and Compensation Committee of the Board of Directors of the Company
on Executive Compensation."

(7) Included are Company contributions to the HON Members Company Ownership Plan
and the HON INDUSTRIES Inc. Profit-Sharing Retirement Plan, as well as the
dollar value of Company-paid life insurance under the HON INDUSTRIES Inc.
Flexible Benefits Plan, all of which are generally applicable to all members.
The amounts paid under the HON Members Company Ownership Plan for the 1998 and
1997 fiscal years were as follows: Mr. Michaels - $838; $3,211; Mr. Stuebe -
$660; $3,211; Mr. Miller - $458; $3,211; and Mr. Strohl - $436; $3,211.
Amounts paid under the HON Members Company Ownership Plan in 1998 were lower
than in prior years because the shares of Common Stock reserved for issuance
under this plan were exhausted prior to the end of the year and the Company
determined not to make additional contributions. This plan was merged into the
HON INDUSTRIES Inc. Profit-Sharing Retirement Plan and that plan was amended
to add substitute benefits. The amounts paid under the HON INDUSTRIES Inc.
Profit-Sharing Retirement Plan for the 1999, 1998, and 1997 fiscal years were
as follows: Mr. Michaels - $16,010; $15,056; $13,634; Mr. Stuebe - $16,010;
$15,396; $13,634; Mr. Johnson - $16,010; $-0-; $-0-; Mr. Miller - $16,010;
$15,781; $13,634; and Mr. Strohl - $16,010; $15,824; $13,634. The dollar value
of Company-paid life insurance under the HON INDUSTRIES Inc. Flexible Benefits
Plan in the 1999, 1998, and 1997 fiscal years were as follows: Mr. Michaels -
$1,184; $1,404; $1,404; Mr. Stuebe - $772; $900; $900; Mr. Johnson - $309;
$576; $-0-; Mr. Miller - $731; $1,404; $900; and Mr. Strohl - $699; $873;
$524. This column also includes amounts equal to the value of Company Common
Stock paid in respect of the 1999, 1998, and 1997 fiscal years under the
Company's ERISA Supplemental Retirement Plan ("ESRP"), as follows:
Mr. Michaels - $141,074; $185,840; $216,119; Mr. Stuebe - $42,096; $55,595;
$64,894; Mr. Johnson - $9,751; $-0-; $-0-; Mr. Miller - $11,733; $17,591;
$21,883; and Mr. Strohl - $10,062; $14,306; $16,382. Under this Plan, certain
executives receive certain benefits in the form of Company Common Stock equal
in value to benefits they would have received under certain Company ERISA
plans and the Company's Cash Profit-Sharing Plan but for a $150,000 earnings
cap for years prior to 1997 and a $160,000 earnings cap for 1997, 1998 and
1999. The number of shares of Company Common Stock to be paid is determined by
dividing the value of such benefits by the average of the closing prices of a
share of the

9
<PAGE>
Company's Common Stock for each trading day of the last calendar quarter of
the most recent calendar year immediately preceding the date of payment, with
cash payable in lieu of any fractional share. The amount included in this
column as compensation under the ESRP is equal to the closing price of the
shares on the date they are paid. The shares for 1999 were paid on March 1,
2000. The Common Stock is issued under the Company's Restated Stock-Based
Compensation Plan, and may not be transferred while the recipient remains
employed by the Company.

(8) Mr. Johnson was employed by the Company commencing on September 8, 1997.

STOCK OPTIONS

The following table contains information concerning the grant of stock options
under the Company's Restated Stock-Based Compensation Plan to the Named
Executive Officers for the year ended January 1, 2000, all of which are
reflected in the Company's Summary Compensation Table.

OPTION/SAR GRANTS IN LAST FISCAL YEAR

<TABLE>
<CAPTION>
INDIVIDUAL GRANTS
--------------------------------------------------------------- POTENTIAL REALIZABLE VALUE
PERCENT OF AT ASSUMED ANNUAL RATES
TOTAL OF STOCK PRICE
NUMBER OF OPTIONS/ APPRECIATION
SECURITIES SARS FOR OPTION TERM(3)
UNDERLYING GRANTED TO EXERCISE OR ---------------------------
OPTION/SARS EMPLOYEES IN BASE PRICE 5% 10%
NAME GRANTED(1)(#) FISCAL YEAR ($/SHARE)(2) EXPIRATION DATE ($) ($)
---- ------------- ------------ ------------ ----------------- ------------ ------------
<S> <C> <C> <C> <C> <C> <C>
Jack D. Michaels 75,000 27.9% $23.47 February 10, 2009 1,107,012 2,805,385
David C. Stuebe 30,000 11.2% 23.47 February 10, 2009 442,805 1,122,154
James I. Johnson 15,000 5.6% 23.47 February 10, 2009 221,402 561,077
Thomas K. Miller 11,250 4.2% 23.47 February 10, 2009 166,052 420,808
David W. Strohl 15,000 5.6% 23.47 February 10, 2009 221,402 561,077
</TABLE>

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

(1) The options were granted pursuant to the Company's Restated Stock-Based
Compensation Plan, which was approved by the Shareholders. All options granted
under the Restated Stock-Based Compensation Plan in 1999 are non-qualified
stock options. No stock appreciation rights were granted under the Restated
Stock-Based Compensation Plan in 1999.

(2) The average of the high and low transaction prices of a share of Common
Stock on February 10, 1999, the date of grant, was $23.47 per share. The
exercise price may be paid (a) in cash, or (b) in shares of Common Stock
valued at fair market value on the date of delivery, or (c) by authorizing the
Company to withhold shares of Common Stock which would otherwise be delivered
upon exercise of the option, having a fair market value equal to the purchase
price payable by reason of the exercise, or by a combination of (a), (b) or
(c). The options become exercisable at the end of four years after the grant
date. Upon a change in control (as defined in the Restated Stock-Based
Compensation Plan), all options then outstanding become immediately
exercisable in full and remain exercisable for the remaining term of the
option. Those participants who terminate employment due to disability may
exercise options, which are vested as of the date of disability until the
earlier of the expiration date of the option or the first anniversary of the
date of disability. The representative of participants whose employment is
terminated due to death may exercise options, which are vested as of the date
of death until the earlier of the expiration date of the option or the first
anniversary of the date of death. Those participants who terminate employment
due to retirement may exercise options which are vested as of the date of
retirement until the earlier of the expiration of the option, or, the third
anniversary of the date of retirement. Those participants who terminate
employment for any other reason (except termination "for cause" in which case
no additional exercise period is provided) may exercise options which are
vested as the date of termination until the earlier of the expiration of the
option or the end of the 30th day following the date of termination. Except as
set forth above, all options terminate upon termination of employment.

(3) Calculated on option terms of ten years beginning February 10, 1999, through
February 10, 2009, with annual compounding. The dollar amounts under these
columns are the result of calculations at the 5 percent and 10 percent

10
<PAGE>
rates set by the Securities and Exchange Commission and therefore are not
intended to forecast possible future appreciation of the Common Stock of the
Company. The Company did not use an alternative formula for a grant date
valuation, as the Company is not aware of any formula, which will determine
with reasonable accuracy a present value based on future unknown or volatile
factors.

OPTION EXERCISES AND HOLDINGS

The following table sets forth information with respect to the Named Executive
Officers concerning the exercise of options and the unexercised options held as
of January 1, 2000. None of the Named Executive Officers exercised any stock
options.

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

<TABLE>
<CAPTION>
NUMBER OF SECURITIES VALUE OF UNEXERCISED
UNDERLYING UNEXERCISED IN-THE-MONEY
OPTIONS/SARS OPTIONS/SARS AT FISCAL
AT FISCAL YEAR-END(1) (#) YEAR-END(2) ($)
--------------------------- ---------------------------
NAME EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- - ---- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C>
Jack D. Michaels -0- 120,000 N/A N/A
David C. Stuebe -0- 45,000 N/A N/A
James I. Johnson -0- 23,000 N/A N/A
Thomas K. Miller -0- 18,250 N/A N/A
David W. Strohl -0- 22,000 N/A N/A
</TABLE>

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

(1) The number of unexercised options includes non-qualified stock options
granted under the Company's Restated Stock-Based Compensation Plan. No SARs
were issued or outstanding as of January 1, 2000 under the Restated
Stock-Based Compensation Plan.

(2) As of January 1, 2000, the per share exercise price of the unexercised
options outstanding exceeded fair market value of a share of the underlying
Common Stock represented by the option.

11
<PAGE>
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 SECURITIES
EXCHANGE ACT OF 1934, AS AMENDED, THAT MIGHT INCORPORATE FUTURE FILINGS,
INCLUDING THIS PROXY STATEMENT, IN WHOLE OR IN PART, THE FOLLOWING PERFORMANCE
GRAPH AND THE REPORT OF THE HUMAN RESOURCES AND COMPENSATION COMMITTEE OF THE
BOARD OF DIRECTORS OF THE COMPANY ON EXECUTIVE COMPENSATION SHALL NOT BE
INCORPORATED BY REFERENCE INTO ANY SUCH FILINGS.

PERFORMANCE GRAPH
COMPARISON OF FIVE YEAR CUMULATIVE TOTAL RETURN AMONG
S & P 500 INDEX, HISTORIC OFFICE FURNITURE INDUSTRY GROUP,
OFFICE FURNITURE INDUSTRY GROUP, AND THE COMPANY

TOTAL RETURN
STOCK PRICE PLUS REINVESTED DIVIDENDS

EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC

<TABLE>
<CAPTION>
1994 1995 1996 1997 1998 1999
<S> <C> <C> <C> <C> <C> <C>
HON INDUSTRIES $100.00 $95.16 $135.13 $241.26 $204.18 $214.00
S & P 500 $100.00 $137.44 $168.90 $225.17 $289.43 $350.00
Historic OFIG* $100.00 $107.56 $164.69 $250.58 $259.89 $256.00
OFIG** $100.00 $109.04 $199.18 $306.24 $232.76 $205.00
</TABLE>

* The Historic Office Furniture Industry Group is a composite peer index
constructed by the Company and weighted by market capitalization, which includes
the following companies, but from which the Company has been excluded: Herman
Miller, Inc.; Kimball International, Inc.; La-Z-Boy Inc.; Shelby Williams
Industries, Inc. and TAB Products Company. On June 15, 1999, Shelby Williams
Industries, Inc. was acquired by Falcon Products Inc., and is no longer
separately reported and returns for the Office Furniture Industry Group do not
include Shelby Williams Industries Inc. after this date.

** This year the Company is revising its Office Furniture Industry Group. The
revised Office Furniture Industry Group is a composite peer index constructed by
the Company and weighted by market capitalization, which includes the following
companies, but from which the Company has been excluded: Herman Miller, Inc.;
Kimball International, Inc.; Teknion Corporation and Steelcase Inc. The Company
has removed Shelby Williams Industries, Inc. from the revised Office Furniture
Industry Group due to its acquisition by Falcon Products Inc. The Company has
replaced TAB Products Company and La-Z-Boy Inc. with Teknion Corporation and
Steelcase Inc. because the Company believes the businesses of both

12
<PAGE>
Teknion Corporation and Steelcase Inc. are more closely aligned to the business
of the Company. Teknion Corporation could not previously be included because
information was not available prior to its Initial Public Offering on July 17,
1998, and returns for the revised Office Furniture Industry Group do not include
Teknion Corporation prior to the third quarter of 1998. Steelcase Inc. could not
previously be included because information was not available prior to its
Initial Public Offering on February 18, 1998, and returns for the revised Office
Furniture Industry Group do not include Steelcase Inc. prior to the second
quarter of 1998.

The Total Return assumes $100.00 invested in the Company's Common Stock on
January 1, 1994 and in each of the S & P 500 Index, the Historic Office
Furniture Industry Group Stocks, and the Office Furniture Industry Group Stocks
on December 31, 1993. It includes reinvestment of dividends and is based on the
closing stock price on the last trading day of the Company's fiscal quarter. The
Company has reported quarterly data (instead of annual data as reported in the
past) because the Company believes quarterly data more precisely captures the
total return on investment. On June 15, 1999, Shelby Williams Industries, Inc.
was acquired by Falcon Products Inc., and returns for the Historic Office
Furniture Industry Group do not include Shelby Williams Industries, Inc. after
this date. Information for Teknion Corporation is not available prior to its
Initial Public Offering on July 17, 1998, and returns for the Office Furniture
Industry Group do not include Teknion Corporation prior to the third quarter of
1998. Information for Steelcase Inc. is not available prior to its Initial
Public Offering on February 18, 1998, and returns for the Office Furniture
Industry Group do not include Steelcase Inc. prior to the second quarter of
1998.

The comparative performance of the Company's Common Stock against the indexes as
depicted in this graph is dependent on the price of stock at a particular
measurement point in time. Since individual stocks are more volatile than
broader stock indexes, the perceived comparative performance of the Company's
Common Stock may vary based on the strength or weakness of the stock price at
the new measurement point used in each future proxy statement graph. For this
reason, the Company does not believe that this graph should be considered as the
sole indicator of Company performance.

REPORT OF THE HUMAN RESOURCES AND COMPENSATION COMMITTEE
OF THE BOARD OF DIRECTORS OF THE COMPANY
ON EXECUTIVE COMPENSATION

OVERALL POLICY. The Company's executive compensation program is designed to be
linked to Company performance. To this end, the Company has developed an overall
compensation strategy and specific compensation plans that tie executive
compensation to the Company's success in meeting its business goals and
objectives.

The executive compensation strategy is designed to: (i) ensure the total program
will be able to attract, motivate, and retain executives of the highest quality;
(ii) relate total compensation to individual executive performance and the
performance of the business unit he or she manages; and (iii) provide incentives
for high levels of performance.

The Company also believes executive compensation should be subject to
independent review. All matters pertaining to executive compensation are
submitted to the non-employee Directors of the Board for approval following
review and recommendation by the Human Resources and Compensation Committee (the
"Committee"). The Committee is comprised of three non-employee Directors and met
five times during fiscal 1999.

Operating within the framework of a statement of duties and responsibilities
established by the Board of Directors, the Committee's role is to assure the
Company's: (1) compensation strategy is aligned with the long-term interest of
the shareholders; (2) compensation structure is fair and reasonable; and
(3) compensation reflects both Company and individual performance. In
discharging its responsibilities, the Committee utilizes broad-based,
comparative compensation surveys of the manufacturing industry developed by
independent professional organizations.

In 1993, changes were made to the federal corporate income tax law that limit
the ability of public companies to deduct compensation in excess of $1 million
paid annually to each of the chief executive officer and the other four most
highly compensated executive officers. There are exemptions from this limit,
including exemptions for compensation that is based

13
<PAGE>
on the attainment of performance goals that are established by the Committee and
approved by the Company's shareholders.

EXECUTIVE COMPENSATION PROGRAM. The Company's executive compensation program
consists of the following components:

BASE SALARY. Base salaries are initially determined by evaluating the duties
and level of responsibilities of a position, the experience of a candidate, his
or her prior compensation, and compensation for positions having similar scope
and accountability within the Company and comparable companies. In general, the
Company uses as a guide the middle range of base compensation in surveys of the
manufacturing industry. While some of the companies in the peer group chosen for
comparison of shareholder returns in the Performance Graph on page 13 may be
included in the surveys considered by the Committee in setting executives'
salaries, there is no set peer group against which those salaries are measured.
Instead, the Company reviews broader-based data for the manufacturing industry
and, when available, industry specific data relative to a particular position.
Salary reviews are conducted periodically for executive officers by considering
an executive's performance, changes in his or her responsibilities, and by
reference to salary surveys for comparably situated executives with companies of
similar size in the manufacturing industry. Each executive's performance and
compensation is reviewed at least annually. However, an executive may receive a
merit increase in base salary more often than annually if the executive's base
salary is well below the middle range of survey data for that executive's
position; in the event of a promotion or significant increase in job
responsibilities; or as a result of superior performance. Alternatively, if an
executive has reached his or her maximum performance potential, or his or her
base salary reaches a level that is well over the middle of the range of survey
data, merit increases to base salary may occur less frequently than on an annual
basis.

EXECUTIVE BONUS PLAN. For fiscal 1999, there were 80 participants in the
Company's Executive Bonus Plan, as amended ("Bonus Plan"). The purpose of the
annual incentive bonus program is to motivate and reward executive management so
that they consistently achieve specific financial and non-financial objectives.
These objectives include, for example, achievement of annual profitability and
return on asset goals by operating units and meeting personal achievement
objectives established for each participant based upon the participant's
position and responsibilities. A target bonus level, stated as a percent of
annual base salary, is established for each participant and approved by the
Committee and the Board. The Bonus Plan objectives are reviewed and approved
annually by the Chairman, President and Chief Executive Officer and the Vice
President, Member and Community Relations, and are then approved by the
Committee and the Board. Bonuses are normally awarded annually based upon
achievement of Bonus Plan objectives measured over the Company's fiscal year.
The bonus awards for each fiscal year for participants are approved by the
Committee and the Board of Directors.

In order to earn and receive payment, the participant must be employed with the
Company through the date of payment. Bonuses are awarded and paid in cash. In
lieu of cash payments, participants may elect to take shares of the Company's
Common Stock pursuant to the terms of the Restated Stock-Based Compensation
Plan. The Bonus Plan provides that any award will be paid by March 1 of the next
succeeding year.

An amendment to the Bonus Plan, which would (a) permit certain awards granted
under the Bonus Plan to be exempt from the $1 million deduction limit set forth
in Section 162(m) of the Internal Revenue Code, and (b) permit the Committee to
require payment of any bonus award (or a portion) in the form of Bonus Stock
issued under (and as defined in) the Restated Stock-Based Compensation Plan, is
being submitted to the Company's shareholders at the Annual Meeting. See
"Proposal No. 2."

EXECUTIVE LONG-TERM INCENTIVE COMPENSATION PLAN. There are currently 7
participants in the Company's Executive Long-Term Incentive Compensation Plan
("LTIP"), including operating company presidents and certain key corporate
officers. Its purpose is to focus the attention of senior executives on the
long-term financial performance of the Company and to strengthen the ability of
the Company to attract, motivate and retain senior executives of high caliber.

Awards made under the LTIP are in the form of rights to the appreciation, over a
five-year period (unless otherwise designated by the Board of Directors), in the
value of units of permanent capital of the Company and/or one of its

14
<PAGE>
operating companies. Appreciation is measured on a net cumulative basis over the
award period. Under the LTIP, permanent capital may be defined by the Board of
Directors and generally means total assets less current liabilities (excluding
current portions of long-term debt and capital lease obligations). Appreciation
is defined as after-tax net income exclusive of non-operating items such as
gains and losses from sales of assets and sales, transfers, or redemption of
permanent capital, and certain other extraordinary and non-operating items. Each
unit of permanent capital is equal to one dollar. The size of an award is
dependent upon the impact the participant has on the long-term realization of
Company or business unit, or both, sales and profits. Maximum amounts are not
specified, but are dependent upon the net cumulative appreciation or net growth
in the permanent capital of the relevant business unit during the period, which
is itself based on such business unit's financial and business performance and
is governed by such practical limitations as the size of the market, the rigors
of competition and the business unit's manufacturing capacity. The ultimate
value of an award payment, which is equal to the net cumulative appreciation, if
any, on units of permanent capital, is dependent on the financial performance of
the Company or the applicable business unit, or both.

Rights to award payments become vested, unless participant's employment has been
terminated previously, at the end of the award period or on death, disability,
retirement at age 62 or change in corporate control. Award payments are made in
cash in three equal installments over three fiscal years unless the Board of
Directors approves a different payment schedule. In lieu of payments,
participants may elect to receive shares of the Company's Common Stock pursuant
to the terms of the Restated Stock-Based Compensation Plan.

In 1999, an LTIP award was made to one participant. That participant is not an
executive officer.

RESTATED STOCK-BASED COMPENSATION PLAN. The Restated Stock-Based Compensation
Plan authorizes, among other things, the grant of stock options and SARs to
participants, including the Company's executives. The grant of stock options and
SARs is intended to further the growth, development, and financial success of
the Company by providing additional incentives to key employees and assist them
to become owners of capital stock of the Company and thus to benefit directly
from its growth, development and financial success. Stock option grants will
also enable the Company to attract and retain the services of executives
considered essential to the long-range success of the Company by providing them
with a competitive compensation package and an opportunity to become owners of
capital stock of the Company.

As of the fiscal year ended 1999, there were 17 participants in the Restated
Stock-Based Compensation Plan, of which 16 received stock option awards in 1999.
Awards were based on market survey data on long-term incentive compensation for
executives in similar positions and individual performance of each participant.
The Company's policy is that participants receiving grants under the Restated
Stock-Based Compensation Plan do not receive awards under the LTIP in the same
year. Stock option grants are generally made to those individuals who have the
ability through their leadership, strategic planning and actions to impact the
long-term performance of the Company and, consequently, its stock price.

EXECUTIVE STOCK OWNERSHIP POLICY. The Company has adopted an Executive Stock
Ownership Policy based upon the belief that key executives who can impact
shareholder value through their achievements should own significant amounts of
the Company Common Stock. Under this Policy, guidelines are provided for
participants to acquire and hold a recommended amount of Common Stock of the
Company based on their position, responsibilities, length of service and
compensation level. Such Common Stock ownership will align the interests of key
executives with shareholder interests and provide a personal benefit for the
success of the Company. The exercise of vested stock options provides one of
several means by which key executives can satisfy this Policy.

CHIEF EXECUTIVE OFFICER COMPENSATION. In determining Jack D. Michaels'
compensation, the Committee considers, in a manner consistent with the base
salary guidelines applied to executive officers of the Company as described
above, the Company's success in implementing strategies for long-term growth and
profitability and in meeting its performance goals in the areas of revenue,
profitability, return on equity, growth, financial soundness, member relations
and corporate citizenship, as well as the assessment of the Committee and the
Board of Directors of Mr. Michaels' individual performance. The Committee also
considers the compensation levels of chief executive officers as shown by
reputable independent surveys for organizations of equivalent size in the
manufacturing industry. Overall, profitable sales growth,

15
<PAGE>
return on equity and achievement of long-term initiatives related to strategic
business objectives are the primary measures of the Chief Executive Officer's
performance.

In November 1999, Mr. Michaels' base salary was increased from $518,000 to
$575,000. The Committee reviewed survey data for comparable positions within the
manufacturing industry and considered recommendations from Towers Perrin, an
independent professional compensation expert, as part of an overall executive
competitive compensation assessment performed in 1999 at the direction of the
Committee.

In the 1999 fiscal year, the Company's net sales increased to $1.79 billion,
compared to $1.69 billion in 1998, while the Business and Institutional
Furniture Manufacturers Association reported that overall office furniture
industry sales decreased slightly in 1999 compared to 1998. Net income and
earnings per share were $99.9 million and $1.64 per share, respectively,
compared to $106.3 million and $1.72 per share in 1998. The Company's return on
average shareholders' equity was 20.7 percent in fiscal 1999. The 1999 net
income, earnings per share, and return on equity amounts are prior to a one-time
charge for closing three plants in the first quarter of 1999.

Under the Bonus Plan, Mr. Michaels received an award of $483,834 in respect of
fiscal 1999 compared to an award of $490,442 for fiscal 1998. This award
reflected the Committee's judgment regarding the level of achievement by
Mr. Michaels of the financial and personal goals established for him by the
Board for 1999. It further reflected the successful attainment of other
strategically important objectives and Mr. Michaels' leadership in positioning
the Company for profitable growth in the future.

Mr. Michaels received a grant of 75,000 stock options in fiscal year 1999.
Mr. Michaels did not receive an award in fiscal year 1999 under the LTIP.

HUMAN RESOURCES AND
COMPENSATION COMMITTEE
Lorne R. Waxlax, Chairperson
Robert W. Cox
Richard H. Stanley

COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION

During fiscal 1999, the Human Resources and Compensation Committee was comprised
of Messrs. Waxlax and Stanley and, for part of the year, Messrs. Cox and
Hillenbrand, none of whom is a current or former officer of the Company. There
are no interlocking board memberships between officers of the Company and any
member of the Committee.

16
<PAGE>
PROPOSAL NO. 2 - ADOPTION OF THE FIRST AMENDMENT TO THE HON INDUSTRIES INC.
EXECUTIVE BONUS PLAN

Section 162(m) of the Internal Revenue Code, as amended (the "Code") disallows a
publicly held corporation's deduction for compensation in excess of $1 million
(per taxable year) paid to the corporation's five most highly compensated
executives unless certain exceptions are satisfied. One of these exceptions
allows for the deduction of compensation in excess of $1 million where a number
of criteria are satisfied. These include (i) payment only on satisfaction of one
or more pre-established, non-discretionary, objective, performance goals;
(ii) awards being granted at the discretion of a compensation committee
comprised of two or more "outside directors"; (iii) shareholder approval after
disclosure of material terms; and (iv) payment of awards only after
certification by the compensation committee that material terms were satisfied.

The Board of Directors has unanimously approved and adopted, subject to the
approval of the Company's shareholders at the Annual Meeting, the First
Amendment (the "First Amendment") to the HON INDUSTRIES Inc. Executive Bonus
Plan (the "Bonus Plan"). The First Amendment is intended to amend the Bonus Plan
to permit certain awards granted under the Bonus Plan to be exempt from the $1
million deduction limit set forth in Section 162(m) of the Code.

Under the Bonus Plan, prior to its amendment by the First Amendment, none of the
awards granted thereunder qualify as performance-based compensation under
Section 162(m) of the Code, because the Bonus Plan was not approved by
shareholders. The Board of Directors has decided to seek shareholder approval
for the First Amendment so that compensation granted to certain participants
pursuant to the Bonus Plan can qualify for tax deductibility under Section
162(m). Shareholder approval of the Bonus Plan, as amended by the First
Amendment, will not otherwise alter the Executive Compensation Philosophy and
Practices set by the Human Resources and Compensation Committee of the Board of
Directors, which is further described within these proxy materials in the
section titled "Report of the Human Resources and Compensation Committee of the
Board of Directors of the Company."

The Bonus Plan, as amended by the First Amendment, would continue to provide for
awards that do not qualify for the exemption under Code Section 162(m) with
respect to Qualifying Participants (as defined below), as well as with respect
to current Plan participants who are not Qualifying Participants. However, the
Bonus Plan would also permit issuance of awards that would be exempt under
Section 162(m) with respect to the Chief Executive Officer of the Company and
with respect to certain other Plan participants who may be designated from time
to time by the Board (each a "Qualifying Participant"). This is accomplished by
the First Amendment's introduction into the Bonus Plan of an exclusive list of
performance criteria that may be used as award factors with respect to each
Qualifying Participant, the attainment of which determines whether and to what
degree an award under the Bonus Plan will be granted. These performance criteria
will be measured in terms of a number of pre-established, enumerated objectives,
which may be corporation-wide objectives, objectives related to the business
unit within the Company or the subsidiary of the Company by which the Qualifying
Participant is employed, or objectives related to the individual performance of
the Qualifying Participant. The Committee, in its discretion, may modify such
performance criteria as the Committee deems appropriate; provided, however, that
no modification may be made if the effect would be to cause an award made to a
Qualifying Participant to fail to qualify for the performance-based compensation
exception to Section 162(m) of the Code.

The First Amendment also amends the Bonus Plan to establish an absolute ceiling
of $2 million that a Qualifying Participant may receive as an annual bonus award
under the Bonus Plan based on the performance criteria intended to satisfy the
requirements of Code Section 162(m).

The affirmative vote of a majority of the shares of Common Stock represented in
person or by proxy is required for approval of the First Amendment. The
following summary of the principal provisions of the Bonus Plan, as amended by
the First Amendment, is not intended to be exhaustive and is qualified in its
entirety by the terms of the Bonus Plan and the First Amendment, copies of which
are set forth as Exhibits A and B to this Proxy Statement. Capitalized terms not
otherwise defined herein shall have the same meanings as defined in the First
Amendment. Except as otherwise provided in the First Amendment, the provisions
of the Bonus Plan shall remain in full force and effect.

17
<PAGE>
PRINCIPAL PURPOSE OF THE FIRST AMENDMENT

The principal purpose of the First Amendment is to provide Qualifying
Participants with a meaningful annual incentive opportunity geared to the
achievement of specific corporate, operating group or individual performance
goals, while satisfying the requirements for performance-based compensation
under Code Section 162(m).

ELIGIBILITY

The Chief Executive Officer and certain other executives of the Company and of
selected subsidiaries of the Company who may be designated from time to time by
the Board of Directors qualify as Qualifying Participants. For 2000, the Chief
Executive Officer is the only Qualifying Participant under the Bonus Plan.

ADMINISTRATION AND AMENDMENTS

The Bonus Plan will continue to be administered by the Human Resources and
Compensation Committee of the Board of Directors or another committee appointed
by the Board to administer the Bonus Plan (the "Committee"). The Committee will
consist of at least three persons who are "non-employee directors" within the
meaning of Rule 16b-3 promulgated under Section 16 of the Securities and
Exchange Act of 1934 and "outside directors" within the meaning of Code Section
162(m). The Committee will administer the Bonus Plan in accordance with rules
that it may establish from time to time consistent with the terms of the Bonus
Plan, as amended by the First Amendment. The determination of the Committee as
to any disputed question arising under the Bonus Plan is binding. Awards to
Qualifying Participants under the Bonus Plan, as amended by the First Amendment,
are intended to qualify as performance-based compensation under Section 162(m)
of the Code, and the Bonus Plan is to be construed, applied and administered by
the Committee accordingly. Except in certain instances involving a Change in
Control (as described below), the Board may terminate or amend the Bonus Plan at
any time, but the Board must obtain the approval of the Company's shareholders
for any amendment that would otherwise cause Awards to Qualifying Participants
under the Bonus Plan to fail to qualify as an exemption from Section 162(m) of
the Code.

AWARDS TO QUALIFYING PARTICIPANTS UNDER THE BONUS PLAN

There are two types of awards that may be granted to Qualifying Participants
under the Bonus Plan, as amended by the First Amendment: awards based on
personal objective achievement factors that are based on performance goals and
objectives for individual Qualifying Participants ("Personal Objective
Achievement Awards") and awards based on profit achievement factors that are
based on performance goals and objectives for the Company as a whole or for any
of its business units ("Profit Achievement Awards" and, together with the
Personal Objective Achievement Awards, "Awards"). The Board may grant Awards
that are intended to qualify as performance-based compensation under Section
162(m) of the Code ("Qualifying Awards") to Qualifying Participants or Awards
not intended to so qualify ("Non-Qualifying Awards") to both Qualifying
Participants and participants other than Qualifying Participants.

PERSONAL OBJECTIVE ACHIEVEMENT AWARDS. Not later than 90 days after the
beginning of each fiscal year of the Company, the Committee will establish in
writing the personal objective achievement factors for each Qualifying
Participant. The personal objective achievement factors are designed to measure
a participant's management effectiveness for the applicable fiscal year.
Qualifying personal objective achievement factors include results of customer
satisfaction surveys, employee turnover, safety record, management of
acquisitions, increased inventory turns, product development and liability,
research and development integration, proprietary protections, legal
effectiveness, handling federal securities law or environmental issues,
manufacturing efficiencies, distribution efficiencies, member productivity,
system review and improvement, service reliability, and cost management.

PROFIT ACHIEVEMENT AWARDS. Not later than 90 days after the beginning of each
fiscal year, the Committee will establish in writing the profit achievement
factors for each Qualifying Participant. Profit achievement factors are designed
to measure business performance for the applicable fiscal year. Qualifying
profit achievement factors include operating expense ratios, total stockholder
return, return on sales, operating income, operating profit, return on equity,
return of capital, return on assets, return on investment, net income, operating
income, earnings per share, improved asset management, improved

18
<PAGE>
gross margins, generation of free cash, revenues, market share, stock price,
cash flow, retained earnings, aggregate product price and other product price
measures.

The maximum individual Awards payable to any Qualifying Participant is $2
million for any fiscal year.

ADJUSTMENTS TO AWARD FACTORS. Neither the factors upon which Qualifying
Personal Objective Achievement Awards or Qualifying Profit Achievement Awards
are based nor the amounts payable upon attainment of those factors may be
adjusted after they have been established for any fiscal year by the Committee
if the proposed adjustment would cause the corresponding Awards to fail to
satisfy the requirements for the qualified performance-based compensation
exception to Section 162(m) of the Code. The Committee may adjust any other
personal objective achievement or profit achievement factor, provided that no
adjustment may be based upon the failure, or the expected failure of a
participant, the Company or a business unit of the Company, to attain or exceed
a personal objective achievement or profit achievement factor.

PAYMENT OF AWARDS. Unless a participant elects to receive an Award in the form
of shares of Common Stock (described below), each Award is payable to the
participant in cash and is based upon the degree of achievement of the
applicable personal objective achievement and profit achievement factors during
the applicable fiscal year.

Each award granted under the Company's current Bonus Plan and each Award granted
under the Bonus Plan, as amended by the First Amendment, for a specified fiscal
year shall be paid by the last day of the Company's February fiscal month
following the end of the Company's fiscal year for which the Award was made,
provided, that the participant's employment with the Company or a subsidiary has
not been terminated for a reason that would cause the Participant's Award to be
forfeited.

BONUS STOCK. The Bonus Plan, as amended by the First Amendment, provides that
the Committee may approve the payment of any bonus award (or portion thereof)
for a fiscal year in the form of shares of Company Common Stock ("Bonus Stock")
issued pursuant to the Company's existing Restated Stock-Based Compensation
Plan. Such payment in the form of Bonus Stock may be made, with the Committee's
approval, at the participant's request in the amount indicated by the
participant. Additionally, the Committee may require up to 50% of any such bonus
award to be paid in the form of Bonus Stock in the event that the Committee
determines, in its sole discretion, that the participant's respective stock
ownership level under the Company's existing Executive Stock Ownership Policy
does not reflect appropriate progress toward such participant's five-year goal
thereunder. The number of shares of Bonus Stock to be paid to the participant
will be determined by dividing the cash amount to be paid by the average closing
prices of a share of the Company's Common Stock for the 20 trading days
immediately preceding the date of such payment, with cash paid in lieu of any
fractional share. All income tax and other employment tax withholding shall be
made pursuant to the terms of the Restated Stock-Based Compensation Plan.

EFFECT OF TERMINATION OF EMPLOYMENT

If a participant's employment with the Company or one of its subsidiaries is
terminated during a fiscal year by reason of death, disability or Retirement,
the participant (or the participant's estate) will receive a Personal Objective
Achievement or Profit Achievement Award that is prorated for the portion of the
fiscal year that the participant was employed by the Company.

If a participant's employment is terminated for any reason other than death,
disability or Retirement, the participant's rights to any Personal Objective
Achievement or Profit Achievement Award for that fiscal year will be forfeited.
The Committee may, however, in its discretion, decide to pay the participant a
prorated Personal Objective Achievement or Profit Achievement Award for the
portion of the fiscal year that the participant was employed by the Company,
unless the participant was terminated for cause as determined by the Committee.

TERMINATION OF PARTICIPATION

The Committee may not at any time on or after the date of a Change in Control
(as defined in the Bonus Plan) terminate or adjust any participant's
participation with respect to the current fiscal year.

19
<PAGE>
EFFECT OF CHANGE IN CONTROL

In the event of a Change in Control, the maximum Personal Objective Achievement
or Profit Achievement Awards for the fiscal year then in progress, prorated for
the number of days in the fiscal year that have elapsed as of the date of the
Change in Control, will be paid immediately in cash and participants will not be
able to elect to receive their Awards in the form of Bonus Stock. Any adjustment
or termination of a participant's participation in the Bonus Plan that occurs at
any time on or after the 90th day preceding a Change in Control shall be of no
effect. A definition of "Change in Control" has been specifically included in
the Bonus Plan and can be found in the full text of the Bonus Plan attached
hereto as Exhibit A.

TRANSFER RESTRICTIONS

Except as otherwise determined by the Committee, no right or interest of any
participant in the Bonus Plan may be assigned or transferred except by will or
the laws of descent and distribution, nor may any such right or interest be
subject to any lien, directly, by operation of law or otherwise, including
execution, levy, garnishment, attachment, pledge or bankruptcy.

EFFECTIVE DATE

The Bonus Plan, as amended by the First Amendment, became effective as of
January 1, 2000, but if the First Amendment is not approved by the Company's
shareholders at the Annual Meeting, no Qualifying Awards will be paid under the
Bonus Plan to any Qualifying Participant.

FEDERAL INCOME TAX CONSEQUENCES

The following is a brief summary of certain of the federal income tax
consequences of certain transactions under the Bonus Plan, as amended by the
First Amendment, based on federal income tax laws in effect on January 1, 2000.
This summary is not intended to be complete and does not describe state or local
tax consequences.

TAX CONSEQUENCES TO PARTICIPANTS

CASH AWARDS. A participant receiving Awards in the form of cash will recognize
taxable income upon the grant of such cash in the amount delivered by the
Company.

BONUS STOCK. A participant receiving Awards in the form of Bonus Stock will
recognize taxable income upon the grant of such shares in an amount equal to the
fair market value of such shares delivered by the Company. Upon disposition of
such shares, any appreciation (or depreciation) in the value of the shares after
the date of grant will be taxed as either short-term or long-term capital gain
(or loss) depending on the holding period.

TAX CONSEQUENCES TO THE COMPANY OR A SUBSIDIARY

To the extent that a participant recognizes ordinary income in the circumstances
described above, the Company or subsidiary for which the participant performs
services will be entitled to a corresponding deduction provided that, among
other things, the income meets the test of reasonableness, is an ordinary and
necessary business expense, is not an "excess parachute payment" within the
meaning of Section 280G of the Code and is not disallowed by the $1 million
limitation on certain executive compensation under Section 162(m) of the Code.
Under the Bonus Plan, as amended by the First Amendment, Qualifying Awards (both
Personal Objective Achievement and Profit Achievement) are intended to qualify
as performance-based compensation under Section 162(m) of the Code.

BONUS PLAN BENEFITS

Because future Awards are subject to the discretion of the Committee, it is not
possible to determine all amounts that may be awarded in the future under the
Bonus Plan, as amended by the First Amendment. However, the following chart
illustrates the amount and type of Non-Qualifying Awards that have been granted
under the Bonus Plan for the 1999 fiscal year and illustrates the amount and
type of Awards that would be made under the Bonus Plan, as amended by the First
Amendment, for 2000 assuming 100% attainment of all personal objective
achievement and targeted profit achievement factors.

20
<PAGE>
BONUS PLAN BENEFITS

<TABLE>
<CAPTION>
NUMBER OF
DOLLAR VALUE ($) SHARES
-------------------- -------------------
NAME 1999 2000 1999 2000
- - ---- -------- --------- -------- --------
<S> <C> <C> <C> <C>
Jack D. Michaels, Chairman, President and Chief Executive 483,834 575,000 N/A N/A
Officer...................................................

David C. Stuebe, Vice President and Chief Financial 125,083 195,000 N/A N/A
Officer...................................................

James I. Johnson, Vice President, General Counsel and 70,419 86,250 N/A N/A
Secretary.................................................

Thomas K. Miller, Vice President, International............. 62,029 82,000 N/A N/A

David W. Strohl, Vice President, Technical Development...... 68,450 79,000 N/A N/A

Executive Group............................................. 896,383 1,157,400 N/A N/A

Non-Executive Directors..................................... N/A N/A N/A N/A

Non-Executive Officer Employee Group........................ N/A N/A N/A N/A
</TABLE>

RECOMMENDATION OF THE BOARD OF DIRECTORS

THE BOARD OF DIRECTORS OF THE COMPANY RECOMMENDS A VOTE FOR THE PROPOSAL TO
APPROVE THE FIRST AMENDMENT TO THE BONUS PLAN. PROXIES RECEIVED BY THE BOARD OF
DIRECTORS WILL BE SO VOTED UNLESS STOCKHOLDERS SPECIFY IN THEIR PROXIES A
CONTRARY CHOICE.

CHANGE IN CONTROL EMPLOYMENT AGREEMENTS

The Company has entered into change in control employment agreements with
corporate officers and certain other key employees. According to the agreements,
a change in control occurs when a third person or entity becomes the beneficial
owner of 20 percent or more of the Company's Common Stock or more than one-third
of the Company's Board of Directors is composed of persons not recommended by at
least three-fourths of the incumbent Board of Directors, or upon the occurrence
of certain business combinations involving the Company. Upon a change in
control, a two-year employment contract between the Company and each such
executive becomes effective, and all his or her benefits become vested under
Company plans. In addition, the executive becomes entitled to certain benefits
if, at any time within two years of the change in control, any of the following
occurs: (i) employment is terminated by the Company for any reason other than
cause or disability of the executive, or (ii) employment is terminated by the
executive for good reason, as such terms are defined in the agreement. In such
circumstances, the executive is entitled to receive his or her annual salary
through the date of termination, a bonus equal to the average of the executive's
annual bonuses for the prior two years prorated based on the length of
employment during the year in which termination occurs, and a severance payment
equal to two times the sum of (i) the executive's annual base salary and
(ii) the average of the executive's annual bonuses for the prior two years. The
executive will also be entitled to a continuation of certain employee benefits
for two years, or longer if comparable benefits are not otherwise available to
the executive. The executive will be entitled to receive reimbursement for any
legal fees and expenses, plus interest thereon, that may be incurred in
enforcing or defending his or her employment agreement. All of the executive
officers named in the Summary Compensation Table have executed such agreements.

INDEPENDENT AUDITORS

Representatives of Arthur Andersen LLP, the Company's independent auditors, are
expected to be present at the Annual Meeting. They will have an opportunity to
make a statement if they so desire and will be available to respond to
appropriate questions.

21
<PAGE>
DEADLINE FOR SHAREHOLDER PROPOSALS FOR 2001 ANNUAL MEETING

Proposals by shareholders intended to be presented at the 2001 Annual Meeting
must be received at the Company's executive offices no later than November 22,
2000, to be included in the proxy statement and proxy form. All shareholder
notice of proposals submitted outside the processes of Rule 14a-8 of the General
Rules and Regulations under the Securities Exchange Act of 1934, as amended,
must be received by March 2, 2001 to be considered for presentation at the
Annual Meeting of Shareholders in 2001. In addition, any shareholder proposals
must comply with the informational requirements contained in the Company's
By-laws in order to be presented at the 2001 Annual Meeting.

OTHER MATTERS

The Board of Directors knows of no other matters that will be brought before the
Annual Meeting, but, if other matters properly come before the meeting, it is
intended that the persons named in the proxy will vote the proxy according to
their best judgment.

The entire cost of soliciting proxies for the Annual Meeting is paid by the
Company. No solicitation other than by mail is contemplated.

ON WRITTEN REQUEST TO THE UNDERSIGNED AT 414 EAST THIRD STREET, P.O. BOX 1109,
MUSCATINE, IA 52761-7109, THE COMPANY WILL PROVIDE, WITHOUT CHARGE TO ANY
SHAREHOLDER, A COPY OF ITS ANNUAL REPORT ON FORM 10-K, INCLUDING FINANCIAL
STATEMENTS AND SCHEDULES, FILED WITH THE SECURITIES AND EXCHANGE COMMISSION FOR
THE COMPANY'S MOST RECENT FISCAL YEAR.

Information set forth in this proxy statement is as of March 1, 2000, unless
otherwise noted.

James I. Johnson
Vice President, General Counsel and Secretary
March 20, 2000

THE ANNUAL REPORT TO SHAREHOLDERS OF THE COMPANY FOR THE FISCAL YEAR ENDED
JANUARY 1, 2000, WHICH INCLUDES FINANCIAL STATEMENTS, IS BEING MAILED TO
SHAREHOLDERS OF THE COMPANY TOGETHER WITH THIS PROXY STATEMENT. THE ANNUAL
REPORT DOES NOT FORM ANY PART OF THE MATERIAL FOR THE SOLICITATION OF PROXIES.

22
<PAGE>
EXHIBIT A

EXECUTIVE BONUS PLAN
HON INDUSTRIES INC.

As adopted on May 1, 1974, and amended on
April 20, 1976, April 19, 1977, January 31, 1983,
February 5, 1985, November 4, 1986, July 7, 1988
May 4, 1992, November 2, 1992, February 8, 1993,
February 14, 1994, November 14, 1994,
May 8, 1995, and November 11, 1996

1. PURPOSE. The purpose of the Executive Bonus Plan (the "Plan") is to
encourage a consistently high standard of excellence and continued employment by
officers and selected other executives of the Corporation and any subsidiary,
which elects to participate in the Plan (an "electing Subsidiary"). The Plan
shall be operated at all times in conformance with applicable government
regulations. (As amended January 31, 1983, May 4, 1992, and November 11, 1996.)

2. PARTICIPANTS. For any fiscal year, each person who is an officer as of
the end of such fiscal year of HON INDUSTRIES Inc. (the "Corporation") or any
electing Subsidiary, and each other executive of the Corporation or any electing
Subsidiary as is selected by the Board of Directors of the Corporation ("Board")
as of the end of such fiscal year, shall be eligible to be Participants in the
Plan. (As amended April 20, 1976, April 19, 1977 and November 11, 1996.)

3. PAYMENT. Upon final determination of bonus awards by the Board or, to
the extent delegated by the Board for a fiscal year, the Human Resources and
Compensation Committee of the Board ("Committee"), the bonus awards shall be
paid in full in cash, subject to Section 3(c), as follows:

a. Any bonus award for a fiscal year ending prior to December 28, 1996,
to the extent not already paid to the Participant, shall be paid to the
Participant (or, as applicable, the Participant's estate) in a single sum
payment not later than March 14, 1997, provided that (A) the Participant is
employed by the Corporation or an electing Subsidiary on the date of payment
or (B) the Participant's employment with the Corporation and each electing
Subsidiary terminated due to death, disability, retirement after age 55
pursuant to established retirement policies of the Corporation (a
"Retirement"), or for any other reason (except a termination for cause, as
determined by the Committee) after a Change in Control (as defined below).

b. Effective for each fiscal year ending on or after December 28, 1996,
each bonus award for such fiscal year shall be paid not later than the last
day of the Corporation's February fiscal month following the end of the
Corporation's fiscal year for which the bonus award is made, provided,
subject to Section 4, that the Participant is employed by the Corporation or
an electing Subsidiary on such date.

c. At the Participant's request, the Committee may approve payment of
all or a portion of any bonus award or a fiscal year under Section 3(a) or
3(b) in the form of shares of Bonus Stock issued pursuant to (and as defined
in) the Corporation's Stock-Based Compensation Plan. The number of shares of
Bonus Stock to be paid shall be determined by dividing the cash amount of
the bonus award under the Plan (or, portion thereof, as elected by the
Participant) for a fiscal year by the average closing prices of a share of
the Corporation's common stock for the 20 trading days immediately preceding
the date of such payment, with cash paid in lieu of any fractional share.
All Federal, state and local income tax and other employment tax withholding
shall be made pursuant to Section 5.5 of the Stock-Based Compensation Plan.

(As amended January 31, 1983, May 8, 1995, and November 11, 1996.

d. As used in the Plan, "Change in Control" means (i) the acquisition
by any individual, entity or group (within the meaning of Section
13(d)(3) or 14(d)(2) of the Securities Exchange Act of 1934, as amended (the
"Exchange Act")) (a "Person") of beneficial ownership (within the meaning of
Rule 13d-3 promulgated under the Exchange Act)

A-1
<PAGE>
of 20% or more of either (a) the then outstanding shares of common stock of
the Corporation (the "Outstanding Corporation Common Stock") or (b) the
combined voting power of the then outstanding voting securities of the
Corporation entitled to vote generally in the election of directors (the
"Outstanding Corporation Voting Securities"); provided, however, that for
purposes of this subsection (i), the following acquisitions shall not
constitute a Change in Control: (A) any acquisition directly from the
Corporation, (B) any acquisition by the Corporation, (C) any acquisition by
any employee benefit plan (or related trust) sponsored or maintained by the
Corporation or any corporation controlled by the Corporation or (D) any
acquisition by any corporation pursuant to a transaction which complies with
clauses (A), (B) and (C) of subsection (iii) of this Section 3(d); or
(ii) individuals who, as of the date hereof, constitute the Board (the
"Incumbent Board") cease for any reason to constitute at least two-thirds of
the Board; provided, however, that any individual becoming a director
subsequent to the date hereof whose election, or nomination for election by
the Corporation's shareholders, was approved by a vote of at least
three-quarters of the directors then comprising the Incumbent Board shall be
considered as though such individual were a member of the Incumbent Board,
but excluding, for this purpose, any such individual whose initial
assumption of office occurs as a result of an actual or threatened election
contest with respect to the election or removal of directors or other actual
or threatened solicitation of proxies or consents by or on behalf of a
Person other than the Board; or (iii) consummation of a reorganization,
merger or consolidation or sale or other disposition of all or substantially
all of the assets of the Corporation (a "Business Combination"), in each
case, unless, following such Business Combination, (A) all or substantially
all of the individuals and entities who were the beneficial owners,
respectively, of the Outstanding Corporation Common Stock and Outstanding
Corporation Voting Securities immediately prior to such Business Combination
beneficially own, directly or indirectly, more than 50% of, respectively,
the then outstanding shares of common stock and the combined voting power of
the then outstanding voting securities entitled to vote generally in the
election of directors, as the case may be, of the corporation resulting from
such Business Combination (including, without limitation, a corporation
which as a result of such transaction owns the Corporation or all or
substantially all of the Corporation's assets either directly or through one
or more subsidiaries) in substantially the same proportions as their
ownership, immediately prior to such Business Combination of the Outstanding
Corporation Common Stock and Outstanding Corporation Voting Securities, as
the case may be, (B) no Person (excluding any corporation resulting from
such Business Combination or any employee benefit plan (or related trust) of
the Corporation or such corporation resulting from such Business
Combination) beneficially owns, directly or indirectly, 20% or more of,
respectively, the then outstanding shares of common stock of the corporation
resulting from such Business Combination or the combined voting power of the
then outstanding voting securities of such corporation except to the extent
that such ownership existed prior to the Business Combination and (C) at
least a majority of the members of the board of directors of the corporation
resulting from such Business Corporation were members of the Incumbent Board
at the time of the execution of the initial agreement, or of the action of
the Board, providing for such Business Combination; or (iv) approval by the
shareholders of the Corporation of a complete liquidation or dissolution of
the Corporation.

(As amended November 4, 1986, July 7, 1988, November 14, 1994 and November 11,
1996.)

4. TERMINATION OF EMPLOYMENT. The following provisions shall apply for any
fiscal year commencing after December 28, 1996:

a. If a Participant's employment with the Corporation and each electing
Subsidiary is terminated during a fiscal year by reason of death, disability
or Retirement, the Participant, or the Participant's estate, shall receive a
bonus award for such fiscal year, determined as if the Participant had
remained employed for such entire fiscal year, prorated for the number of
days during such fiscal year that have elapsed as of the Participant's
termination, and subject to the first sentence of Section 4(b).

b. If a Participant's employment with the Corporation and each electing
Subsidiary is terminated during a fiscal year for any reason other than
death, disability or Retirement, the Participant's rights to any bonus award
for such fiscal year will be forfeited. However, the Committee may, in its
discretion, determine to pay a prorated bonus award for the portion of such
fiscal year during which the Participant was employed by the Corporation or
an electing Subsidiary, except that in no event shall any such prorated
bonus award be paid in the event of termination for cause, as determined by
the Committee. (As amended November 11, 1996.)

A-2
<PAGE>
5. CHANGE IN CONTROL. For fiscal years commencing after December 28, 1996,
in the event of a Change in Control (as defined above), the maximum bonus award
for the fiscal year then in progress, prorated for the number of days in such
fiscal year that have elapsed as of the date of the Change in Control, shall be
paid immediately in cash, without regard to Section 3(c). Any adjustment or
termination of a Participant's participation in the Plan that occurs at any time
on or after the 90th day preceding a Change in Control shall be of no effect.
(As amended November 11, 1996.)

6. ADMINISTRATION. The Board shall have full power to interpret and
administer this Plan from time to time in accordance with the By-laws of the
Corporation, except to the extent provided in the Corporation's Stock-Based
Compensation Plan or to the extent that the Board may have delegated its powers
to the Committee. Decisions of the Board or the Committee shall be final,
conclusive and binding upon all parties. The Committee shall consist of two or
more "non-employee directors" within the meaning of Rule 16b-3 as promulgated
pursuant to Section 16 of the Securities Exchange Act of 1934. (As amended
May 8, 1995, and November 11, 1996.)

7. COST. Each electing Subsidiary shall reimburse the Corporation for the
amount of such bonus awards, which shall be awarded and paid to Participants for
services to such electing Subsidiary, as determined by the Board.

8. AMOUNT OF INDIVIDUAL BONUS. For fiscal years beginning after December
28, 1996, the bonus award for each fiscal year for any Participant shall be
determined by the Board, or, to the extent delegated by the Board for a fiscal
year, by the Committee, no later than the first meeting of the Board that occurs
during the fiscal year following the year for which the bonus award is made. (As
amended April 20, 1976 and November 11, 1996.)

9. GENERAL PROVISIONS.

a. The Company shall have the right to deduct any Federal, state or
local taxes applicable to payments under the Plan. The Committee may permit
Participants to satisfy withholding obligations by electing to have shares
of Bonus Stock withheld.

b. Except as otherwise determined by the Committee, no right or
interest of any Participant in this Plan shall be assignable or transferable
except by will or the laws of descent and distribution, nor shall any such
right or interest, be subject to any lien, directly, by operation of law or
otherwise, including execution, levy, garnishment, attachment, pledge or
bankruptcy.

c. Except as provided in Sections 4 and 5, the Board may terminate or
amend the Plan at any time.

A-3
<PAGE>
EXHIBIT B

FIRST AMENDMENT TO THE
HON INDUSTRIES INC.
EXECUTIVE BONUS PLAN

The HON INDUSTRIES Inc. Executive Bonus Plan (the "Plan"), as amended, is hereby
further amended, as follows:

1. Effective January 1, 2000, the first sentence of Section 3(c) of the
Plan is hereby amended to read as follows:

The Committee may require payment of any bonus award (or portion thereof) for a
fiscal year under Section 3(a) or 3(b) in the form of shares of Bonus Stock
issued pursuant to (and as defined in) the Corporation's Stock-Based
Compensation Plan (1) at the Participant's request, in the amount indicated by
such Participant, subject to the Committee's approval, or (2) in the amount of
up to 50% of such bonus award in the event that the Committee determines, in its
sole discretion, that the Participant's respective stock ownership level under
the Executive Stock Ownership Policy does not reflect appropriate progress
toward such Participant's five-year goal thereunder.

2. Effective January 1, 2000, a new Section 10 is hereby added to the Plan,
immediately following Section 9 of the Plan, to read as follows:

10. SPECIAL PROVISION FOR QUALIFYING PARTICIPANTS.

a. This Section 10 shall apply with respect to any bonus award made
under the Plan with respect to the Chief Executive Officer of the
Corporation and any other Participant designated by the Board from time to
time (each a "Qualifying Participant"). Not later than the 90th day after
the commencement of the fiscal year for which the bonus award is made, in
addition to any other performance criteria established by the Committee, the
Committee shall establish in writing Profit Achievement Factors and Personal
Objective Achievement Factors (collectively, "Qualifying Factors") for each
Qualifying Participant. The maximum bonus award payable to a Qualifying
Participant for such fiscal year based on the degree of attainment of such
Qualifying Factors shall not exceed $2 million. Subject to Sections 4 and 5,
the Committee may adjust any Qualifying Factor that has been established for
any fiscal year, provided that no such adjustment shall be permitted if it
would cause the Award based on such Qualifying Factor to fail to satisfy the
requirements for performance-based compensation under Code Section 162(m).
Subject to Sections 4 and 5, the Committee may adjust any other performance
criteria established for any fiscal year, provided that no such adjustment
may be based upon the failure, or the expected failure, to attain or exceed
a Qualifying Factor. In no event shall any bonus award relating to
performance criteria other than Qualifying Factors be dependent upon the
attainment of, or failure to obtain, a bonus award based on Qualifying
Factors.

b. The administration of all aspects of the Plan applicable to bonus
awards relating to Qualifying Factors is intended to comply with the
exception from Section 162(m) of the Internal Revenue Code of 1986, as
amended, for qualified performance-based compensation and shall be
construed, applied and administered accordingly.

c. For purposes of this Section, (1) "Profit Achievement Factors" shall
mean an objective performance goal based on one or more of the following:
operating expense ratios, total stockholder return, return on sales,
operating income, operating profit, return on equity, return on capital,
return on assets, return on investment, net income, operating income,
earnings per share, improved asset management, improved gross margins,
generation of free cash, revenues, market share, stock price, cash flow,
retained earnings, aggregate product price and other product price measures,
and (2) "Personal Objective Achievement Factors" shall mean an objective
performance goal based on one or more of the following: results of customer
satisfaction surveys, results of employee surveys, employee turnover, safety
record, management of acquisitions, increased inventory turns, product
development and liability, research and development integration, proprietary
protections, legal effectiveness, handling Federal securities law or
environmental issues, manufacturing efficiencies, distribution efficiencies,
member productivity, system review and improvement, service reliability,
cost management.

B-1
<PAGE>
d. This Section 10 shall become effective as of January 1, 2000,
provided, however, that no bonus award relating to Qualifying Factors shall
be paid under the Plan to any Qualifying Participant unless, prior to such
payment, the provisions of this Section 10 are approved by the holders of a
majority of the securities of the Company present, or represented, and
entitled to vote at a meeting of stockholders duly held in accordance with
the laws of the State of Iowa.

3. Except as otherwise set forth herein, the Plan shall remain in full
force and effect.

Executed this day of , 2000.

HON INDUSTRIES INC.
By: ___________________________________

Its _________________________________

B-2
<PAGE>

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

HON INDUSTRIES INC.
COMMON STOCK PROXY SOLICITED BY BOARD OF DIRECTORS FOR ANNUAL MEETING
OF SHAREHOLDERS ON MAY 1, 2000.

The undersigned acknowledges receipt of a Notice of Annual Meeting and Proxy
Statement dated March 20, 2000, and appoints Jack D. Michaels and James I.
Johnson, or either of them, with full power of substitution, as the proxies
and attorneys of the undersigned, to vote all shares of common stock, par
value $1.00 per share, of HON INDUSTRIES Inc. which the undersigned is
entitled to vote at the annual meeting of shareholders of HON INDUSTRIES Inc.
to be held at Muscatine, Iowa, on May 1, 2000, at 10:30 a.m. and any
adjournment thereof. The proxies are directed to vote as checked on the
reverse side on the proposed matters or otherwise in their discretion.

The Board of Directors knows of no other matters that may properly be, or
that are likely to be, brought before the meeting. However, if any other
matters are properly brought before the meeting or any adjournment thereof,
the proxies will vote on such matters in their discretion.

YOU ARE ENCOURAGED TO SPECIFY YOUR CHOICES BY MARKING THE APPROPRIATE BOXES,
SEE REVERSE SIDE. THE PROXIES CANNOT VOTE YOUR SHARES UNLESS YOU SIGN AND
RETURN THIS CARD.
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THIS PROXY, WHEN PROPERLY EXECUTED, WILL BE VOTED AS SPECIFICALLY DIRECTED
HEREIN. IF NO DIRECTIONS ARE GIVEN, THIS PROXY WILL BE VOTED FOR THE
PROPOSALS.

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FOR WITHHELD FOR ALL
1. ELECTION OF DIRECTORS FOR THREE-YEAR TERMS: ALL ALL EXCEPT VOTE WITHHELD FROM THE
FOLLOWING NOMINEE(S):
NOMINEES: GARY M. CHRISTENSEN, ROBERT W. COX, / / / / / /
AND LORNE R. WAXLAX.
-----------------------------------
(NOMINEE EXCEPTION)
2. ADOPTION OF THE FIRST AMENDMENT TO THE FOR AGAINST ABSTAIN
HON INDUSTRIES INC. EXECUTIVE BONUS PLAN. / / / / / /
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PLEASE DATE, SIGN, AND MAIL IN ENCLOSED RETURN ENVELOPE. Dated ________________________ ,2000
_____________________________________________________________
_____________________________________________________________
Signature(s) of Shareholder(s)
/ / Individual / / Corporation / / Partnership
/ / Other ___________________________________________________

(Please date this proxy and sign exactly as your name or
names appear hereon. If you sign as attorney, executor,
administrator, trustee, guardian, custodian, or corporate
official, please give your full title in such capacity.)
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