SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act of
1934 (Amendment No. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to 240.14a-11(c) or 240.14a-12
HUGHES SUPPLY, INC.
(Name of Registrant as Specified in Its Charter)
Maguire, Voorhis & Wells, P.A., counsel to Registrant
(Name of Person(s) Filing Proxy Statement)
Payment of Filing Fee (Check the appropriate box):
[X] $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1),
14a-6(i)(2) or Item 22(a)(2) of Schedule 14A.
[ ] $500 per each party to the controversy pursuant to Exchange
Act Rule 14a-6(i)(3).
[ ] Fee computed on table below per Exchange Act Rules
14a-6(i)(4) and 0-11.
1) Title of each class of securities to which transaction applies:
___________________________________________________________
2) Aggregate number of securities to which transaction applies:
___________________________________________________________
3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which
the filing fee is calculated and state how it was determined:
__________________________________________________________
4) Proposed maximum aggregate value of transaction:
__________________________________________________________
5) Total fee paid:
__________________________________________________________
[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee
was paid previously. Identify the previous filing by registration
statement number, or the Form or Schedule and the date of its filing.
1) Amount Previously Paid:
___________________________________________
2) Form, Schedule or Registration Statement No.:
___________________________________________
3) Filing Party:
___________________________________________
4) Date Filed:
___________________________________________
HUGHES SUPPLY, INC.
20 North Orange Avenue
Suite 200
Orlando, Florida 32801
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
To Be Held May 21, 1996
To the Shareholders:
NOTICE IS HEREBY GIVEN that the Annual Meeting of Shareholders of
Hughes Supply, Inc., a Florida corporation, will be held in the principal
executive offices of the Company at 20 North Orange Avenue, Suite 200,
Orlando, Florida, on Tuesday, May 21, 1996, at 10:00 a.m., local time, for
the following purposes:
1. To elect 3 of the 10 directors of the Company;
2. To transact such other business as may properly come before the
meeting or any adjournment thereof.
The Board of Directors has fixed the close of business on March 22,
1996, as the record date for the determination of the holders of shares of
the Company's common stock entitled to notice of and to vote at the Annual
Meeting of Shareholders.
Whether or not you expect to attend the meeting, you are urged to
complete, sign, date and return the enclosed proxy in the enclosed
envelope.
By Order of the Board of Directors,
/s/ Robert N. Blackford
Robert N. Blackford, Secretary
Orlando, Florida
April 5, 1996
PLEASE FILL IN, DATE, SIGN AND PROMPTLY RETURN THE ENCLOSED PROXY IN THE
ENVELOPE PROVIDED WHICH REQUIRES NO POSTAGE IF MAILED IN THE UNITED STATES.
HUGHES SUPPLY, INC.
20 North Orange Avenue
Suite 200
Orlando, Florida 32801
________________
PROXY STATEMENT
Annual Meeting of Shareholders
To Be Held May 21, 1996
________________
This Proxy Statement and the accompanying form of proxy are furnished
in connection with the solicitation of proxies by and on behalf of the
Board of Directors of the Company for use at the Annual Meeting of
Shareholders to be held on May 21, 1996, or any adjournment thereof. The
Company's Annual Report to shareholders for the fiscal year ended January
26, 1996, accompanies this Proxy Statement. This Proxy Statement and the
accompanying Notice of Annual Meeting of Shareholders, form of proxy and
the Annual Report have been sent or given to shareholders of the Company
beginning approximately April 18, 1996.
The enclosed proxy is solicited on behalf of the Board of Directors of
the Company. It may be revoked by the shareholder at any time before it is
exercised by attending and voting in person at the meeting or by giving
written notice of revocation to the Company provided that such notice is
actually received by the Company prior to the date of the meeting. Any
shareholder of record on the record date attending the meeting may vote in
person whether or not such shareholder has previously filed a proxy. All
shares represented by properly executed proxies received in time for the
meeting will be voted as directed by the shareholders.
Solicitation of proxies will be made by mail. The total expenses of
such solicitation will be borne by the Company and will include
reimbursement paid to brokerage firms and others for their expense in
forwarding solicitation material regarding the Annual Meeting to beneficial
owners. Following the original solicitation by mail, further solicitation
in person or by telephone or telegraph, may be made by certain directors,
officers or regular employees of the Company who will not receive
additional compensation for soliciting proxies.
Only shareholders of record at the close of business on March 22, 1996
are entitled to receive notice of and to vote at the Annual Meeting or any
adjournment thereof. On March 22, 1996 there were 6,817,115 shares of the
Company's common stock outstanding. Each such share is entitled to one
vote.
ELECTION OF DIRECTORS
The Company's Board of Directors is divided into three approximately
equal classes of directors serving staggered three-year terms.
Approximately one-third of the Board is elected at each annual meeting.
Three of the Company's ten directors have been nominated for election at
the 1996 Annual Meeting. The present term of office of each of the other
seven directors continues after the 1996 Annual Meeting.
The present term of office of each of the directors in Class III
expires at the 1996 Annual Meeting. The following persons, each of whom is
presently serving as a director in Class III, have been selected by the
Board of Directors to be nominated for election as directors in Class III.
Nominees for Election as Directors
Class III (term of office expiring May, 1999)
John B Ellis
David H. Hughes
Vincent S. Hughes
A listing of the positions held in the Company, principal occupations,
the year and month service as a director began, and the shares of stock in
the Company beneficially owned by each nominee is set forth under
"Directors and Nominees for Election as Directors of the Company" following
this section.
It is the intention of the persons named in the accompanying form of
proxy to nominate, and unless otherwise directed, to vote such proxies for
the election of the nominees named above as directors in Class III. In the
event that any of the persons named above should become unable to accept
nomination for election, proxies will be voted for the election of such
other person or persons as the Board of Directors may recommend. The Board
of Directors has no reason to believe that any substitute nominees will be
required.
Directors and Nominees for Election as Directors of the Company
The following table lists by class each person named as a nominee for
election as director and each director whose present term continues after
the 1996 Annual Meeting. The table also includes the age, principal
occupation and business experience for the past five years, positions and
offices held with the Company, month and year service as a director began,
and the number and percentage of shares of common stock of the Company
beneficially owned as of March 15, 1996, for each such person. Unless
otherwise indicated by footnote, directors have sole voting and investment
power with respect to shares shown in the table as beneficially owned.
<TABLE>
<CAPTION>
Principal
Name, Age, Occupation and Shares of Stock
Positions and Business Beneficially Percent
Offices Held Experience for Served as Owned as of of
with the Company Past Five Years Director Since March 15, 1996 Class
Directors Class I
Term of Office Expires: May, 1997
<S> <C> <C> <C> <C>
Robert N. Attorney, Maguire December, 1970 23,937 (5) --- (6)
Blackford, 59, Voorhis & Wells,
Secretary, P.A.
Director(1)(2)
(3)(4)
A. Stewart Hall, President of the March, 1994 56,518 (7) --- (6)
Jr. 53, President, Company (March, (8)
Director(1) 1994-Date);
Executive Vice
President of the
Company (January,
1988-March, 1994)
Russell V. Hughes, Vice President of May, 1964 229,460 (7) 3.4 (6)
70, Vice the Company (8) (10) (11)
President,
Director (1) (9)
Donald C. Martin, Consultant to the August, 1993 259,397 (5) 3.8 (6)
59, Consultant, Company (July, (8)
Director(12) 1993-Date);
(13) President,
Electrical
Distributors,
Inc. (1963-June,
1993)
<CAPTION>
Principal
Name, Age, Occupation and Shares of Stock
Positions and Business Beneficially Percent
Offices Held Experience for Served as Owned as of of
with the Company Past Five Years Director Since March 15, 1996 Class
Directors Class II
Term of Office Expires: May, 1998
<S> <C> <C> <C> <C>
John D. Baker President, March, 1994 9,000 (5) --- (6)
II, 47, Florida Rock
Director Industries, Inc.
(12)(14)
Clifford M. Retired (Since February, 1972 23,044 (5) --- (6)
Hames, 70, January, 1989);
Director formerly Vice
(3) Chairman of the
Board, Sun Bank,
National
Association
Herman B. Retired (Since October, 1985 28,596 (5) --- (6)
McManaway, 70, January, 1987);
Director formerly Vice
(2)(3)(15) President of
Ruddick
Corporation &
President of
Ruddick
Investment Co.
<CAPTION>
Directors Class III
Term of Office Expires: May, 1996*
<S> <C> <C> <C> <C>
*John B. Ellis, Retired (Since November, 1986 27,000 (5) --- (6)
71, Director January, 1986);
(2)(12)(16) formerly Senior
Vice President-
Finance and
Treasurer,
Genuine Parts
Company
*David H. Chairman of the August, 1968 333,151 (7) 4.9 (6)
Hughes, 52, Board and Chief (8) (10) (18)
Chairman of the Executive
Board, Chief Officer
Executive (November, 1986-
Officer and Date); President
Director of the Company
(1)(9)(17) (April, 1972-
March, 1994)
*Vincent S. Vice President April, 1966 330,276 (7) 4.8 (6)
Hughes, 55, Vice of the Company (8) (10) (18)
President,
Director (1)(9)
_______________________________
* Nominee for election as a director in Class III at the 1996 Annual
Meeting; present term of office as a director expires on May 21, 1996.
(1) Member Executive Committee.
(2) Member of Directors' Stock Option Plan Committee.
(3) Member of Audit Committee.
(4) Mr. Blackford is a member of a law firm which the Company has retained
during the last fiscal year and currently retains. See "Certain
Transactions with Management."
(5) Includes the number of shares subject to options granted under the
Directors' Stock Option Plan for nonemployee directors as follows:
Robert N. Blackford, 20,000; Donald C. Martin, 5,000; John D. Baker II,
5,000; Clifford M. Hames, 20,000; Herman B. McManaway, 14,000; John B.
Ellis, 20,000.
(6) Calculated on the basis of 6,817,015 shares of the Company's common
stock outstanding and, with respect to each Director, the shares subject
to options exercisable within 60 days which have been granted to such
director. Figures shown only for those directors whose beneficial
ownership of shares exceeds 1% of the common stock outstanding or deemed
to be outstanding for this calculation.
(7) The number of shares shown following the name of each person identified
below in this footnote may be deemed to be beneficially owned by such
person and is included in the number of shares shown to be beneficially
owned by such person in the above table. The following listing sets
forth the number of shares subject to options held by each of the
following persons under the Company's 1988 Stock Option Plan which are
exercisable within 60 days: A. Stewart Hall, Jr., 37,500; Russell V.
Hughes, 20,000; David H. Hughes, 37,500; Vincent S. Hughes, 20,000. The
aggregate number of shares credited to the accounts of each such person
under the Company's Employee Stock Ownership Plan ("ESOP") is as
follows: A. Stewart Hall, Jr., 2,575; Russell V. Hughes, 1,272; David
H. Hughes, 4,292; Vincent S. Hughes, 2,843. The indicated persons are
considered to have sole voting power and shared investment power with
respect to the shares credited to their accounts under the ESOP. Such
persons are also beneficiaries under the Company's Cash or Deferred
Profit Sharing Plan ("Plan") which holds 30,499 shares as unallocated
assets of the Plan. Such persons disclaim beneficial ownership of any
of the shares held by the Plan and none of such shares are included in
the table above as owned by such persons.
(8) The number of shares shown in the above table to be beneficially owned
includes shares held subject to shared voting power or shared investment
power as follows: (i) shared voting power: Russell V. Hughes, 189,033;
Donald C. Martin, 56,569; David H. Hughes, 129,070; Vincent S. Hughes,
147,033; (ii) shared investment power: A. Stewart Hall, Jr., 2,575;
Russell V. Hughes, 190,305; Donald C. Martin, 56,569; David H. Hughes,
133,362; Vincent S. Hughes, 149,876.
(9) Each of the indicated directors is an executive officer and director of,
and owns a one-third equity interest in, Hughes, Inc., a corporation to
which the Company makes payments for the lease of certain properties.
See "Certain Transactions with Management."
(10) Includes 40,645 shares held by Hughes, Inc., the corporation described
in footnote (9) above. Russell V. Hughes, David H. Hughes and Vincent
S. Hughes are considered to share voting and investment power with
respect to such shares and all such shares are reported in the table
above as beneficially owned by each such person.
(11) Does not include 21,263 shares owned in a trust by Mr. Hughes' wife as
to which shares Mr. Hughes disclaims beneficial ownership.
(12) Member 1988 Stock Option Plan Committee, Compensation Committee, and
Long-Term Incentive Plan Committee.
(13) Mr. Martin provides consulting services to the Company under a
Consulting Agreement and leases property to the Company under a Lease
Agreement. See "Certain Transactions with Management."
(14) Mr. Baker is also a director of Florida Rock Industries, Inc., and FRP
Properties, Inc.
(15) Mr. McManaway is also a director of Versa Technologies, Inc.
(16) Mr. Ellis is also a director of Interstate/Johnson Lane, Inc., Flowers
Industries, Inc., Oxford Industries, Inc., Scotty's, Inc., Intermet
Corporation, and Integrity Music, Inc., and a director emeritus of
Genuine Parts Company.
(17) David H. Hughes is also a director of SunTrust Banks, Inc. and Lithium
Technologies Corp.
(18) Includes 86,507 shares held by three trusts of which David H. Hughes and
Vincent S. Hughes are co-trustees. All of the shares held by these
trusts are included in the table above as beneficially owned by each
David H. Hughes and Vincent S. Hughes.
</TABLE>
Vote Required for Election as a Director
The affirmative vote of a plurality of the votes cast by the shares
entitled to vote at the 1996 Annual Meeting is required for the election of
the directors.
The Board of Directors recommends a vote FOR the election as a director
of each of the above nominees and all proxies will be voted in favor thereof
unless a contrary specification is made on the proxy by the shareholder.
Ownership of Securities by Certain Beneficial Owners
The following table sets forth information with respect to each person
believed by management to have been the beneficial owner of more than 5% of
the outstanding common stock of the Company as of April 5, 1996.
Name and Address of Amount and Nature of Percent of
Beneficial Owner Beneficial Ownership Class
The Employers' 921,062 Shares (1) 13.5 (2)
Retirement Plan of
Consolidated Electrical
Distributors, Inc.
1516 Pontius Ave #201
Los Angeles, California
90025
PVF Holdings, Inc. 669,956 Shares (3) 8.9 (4)
8505 Monroe Boulevard
Houston, Texas 77061
Ray A. Sparks 486,238 Shares (5) 6.7 (6)
1100 Old State Road
P O Box 729
Matoon, Illinois 61938
___________________
(1) Amendment No. 13 to Schedule 13D dated January 27, 1995, filed with the
Securities and Exchange Commission by The Employees' Retirement Plan of
Consolidated Electrical Distributors, Inc. (the "Plan"), reported
aggregate beneficial ownership of 921,062 shares. Of the shares
reported, 214,926 shares were reported as held by the Plan with sole
voting and dispositive power, and 706,136 shares were reported as held
with shared voting and dispositive power.
(2) Based upon total outstanding shares of 6,817,015 at March 15, 1996.
(3) On March 27, 1996, the Company entered into an Asset Purchase Agreement
(the "Asset Agreement") with Jemison Investment Co., Inc., a Delaware
corporation ("Jemison"), PVF Holdings, Inc., a Texas corporation
("PVF"), Southwest Stainless, Inc., a Texas corporation ("Southwest"),
Multalloy, Inc., a New Jersey corporation ("Multalloy NJ"), Multalloy,
Inc., a Texas corporation ("Multalloy TX") and Houston Products &
Machine, Inc., a Texas corporation ("HPM"), providing for the
acquisition by the Company of substantially all of the assets,
properties, and business of Southwest, Multalloy NJ, Multalloy TX and
HPM (collectively the "Sellers"). All of the outstanding stock of the
Sellers is owned by PVF. Jemison currently owns 80.5% of the common
stock and all of the preferred stock of PVF, and the remaining 19.5% of
the common stock of PVF is owned by three members of PVF management (the
"Management Investors"). The aggregate consideration to be paid by the
Company to the Sellers for the acquisition will include 669,956 shares
of common stock of the Company, subject to increase or decrease as a
result of certain adjustment to be determined following the closing
date. The acquisition is scheduled to be consummated on approximately
May 13, 1996, subject to certain conditions. It is the understanding of
the Company that Jemison may cause the Sellers and PVF to be liquidated
into Jemison following consummation of the acquisition, with the result
that all of the common stock of the Company issued in the transaction
(other than shares possibly to be issued to the Management Investors)
would be owned by Jemison. The address of Jemison is 320 Park Place
Tower, Birmingham, Alabama, 35203. The beneficial ownership of the
shares reported is believed to include shared voting and dispositive
power.
(4) Based upon 7,486,971 shares including the 6,817,015 shares outstanding
at March 15, 1996, and 669,956 shares to be issued in the proposed
acquisition referred to in note (3) above.
(5) On April 4, 1996, the Company entered into an Acquisition Agreement with
Ray A. Sparks, individually and as custodian for Melinda Leigh Sparks
and as custodian for Megan Anne Sparks under the Illinois Uniform
Transfers to Minors Act, providing for acquisition by the Company of all
of the outstanding common stock of Electric Laboratories and Sales
Corporation, a Delaware corporation, and all of the outstanding common
stock of Elasco Agency Sales, Inc., an Illinois corporation, for
consideration consisting of 486,238 shares of common stock of the
Company, subject to increase or decrease as a result of certain
adjustments to be determined following the closing date. The
acquisition is scheduled to be consummated on April 26, 1996, subject to
certain conditions. The beneficial ownership of the shares reported is
believed to include sole voting and dispositive power.
(6) Based upon 7,303,934 shares including the 6,817,015 shares outstanding
as March 15, 1996, and 486,238 shares to be issued in the proposed
acquisition referred to in note (5) above.
Ownership of Securities by Officers and Directors
The following table indicates the beneficial ownership of common stock
of the Company as of March 15, 1996 of the Chief Executive Officer, each of
the Company's four most highly compensated executive officers other than the
Chief Executive Officer, and all directors (including nominees for election
as directors) and officers of the Company as a group.
Shares and Nature of
Beneficial Owner Beneficial Ownership Percent of Class
David H. Hughes 333,151(1) 4.9 (2)
A. Stewart Hall, Jr. 56,518(1) --- (2)
Gradie E. Winstead, Jr. 16,020(3) --- (2)
Clyde E. Hughes III 20,459(4) --- (2)
Jasper L. Holland, Jr. 26,378(5) --- (2)
All Directors and
Officers as a Group (18
persons)(1) 1,293,171(6) 18.2 (10)
(7)(8)(9)
(1) See "Directors and Nominees for Election as Directors of the Company"
for information concerning such beneficial owner's beneficial ownership
of shares of the Company.
(2) Calculated on the basis of 6,817,015 shares of the Company's common
stock outstanding and with respect to each of the persons noted above,
the shares subject to options exercisable within 60 days granted to such
person. Figures shown only for those persons whose beneficial ownership
of shares exceeds 1% of the common stock outstanding or deemed to be
outstanding for this calculation.
(3) Includes 550 shares held by the Company's ESOP and 14,000 shares
represented by options under the Company's 1988 Stock Option Plan which
are exercisable within 60 days. Mr. Winstead is considered to have sole
voting power with respect to 14,550 shares, sole investment power with
respect to 14,000 shares, shared investment power with respect to 2,020
shares, and shared voting power with respect to 1,470 shares.
(4) Includes 1,924 shares held by the Company's ESOP and 8,000 shares
represented by options under the Company's 1988 Stock Option Plan which
are exercisable within 60 days. Mr. Hughes is considered to have sole
voting power with respect to 19,726 shares, sole investment power with
respect to 17,802 shares, shared investment power with respect to 2,657
shares, and shared voting power with respect to 733 shares.
(5) Includes 2,568 shares held by the Company's ESOP and 20,000 shares
represented by options under the Company's 1988 Stock Option Plan which
are exercisable within 60 days. Mr. Holland is considered to have sole
voting power with respect to 26,378 shares, sole investment power with
respect to 23,810 shares, and shared investment power with respect
to 2,568 shares.
(6) Includes 86,507 shares held by three trusts of which David H. Hughes and
Vincent S. Hughes are co-trustees and with respect to which they share
voting and dispositive power and 40,645 shares owned by Hughes, Inc.
with respect to which David H. Hughes, Vincent S. Hughes and Russell V.
Hughes share voting and dispositive power. The multiple reporting of
beneficial ownership by the foregoing persons with respect to the shares
held by the three trusts and the shares owned by Hughes, Inc. set forth
in the tabular information under "Directors and Nominees for Election as
Directors of the Company" elsewhere in this Proxy Statement has been
eliminated from the group ownership shown in the table above.
(7) Includes an aggregate of 305,441 shares subject to options under the
Company's 1988 Stock Option Plan exercisable within 60 days held by
directors and officers of the Company as a group and 84,000 shares
subject to unexercised stock options under the Company's Directors'
Stock Option Plan held by nonemployee directors of the Company as a
group.
(8) Includes an aggregate of 19,377 shares credited to the accounts of
directors and officers of the Company under the ESOP.
(9) Sole voting power with respect to 937,060 shares, shared voting power
with respect to 356,111 shares, sole investment power with respect to
917,683 shares and shared investment power with respect to 375,488
shares.
(10) Calculated on the basis of 7,122,456 shares, including 6,817,015 shares
of the Company's common stock outstanding and 305,441 shares subject to
options which have been deemed outstanding for the purpose of computing
such percentage.
Board of Directors' Meetings and Attendance
During the last fiscal year, the Board of Directors of the Company held
a total of six meetings. Other than Mr. Herman B. McManaway, no member of
the Board attended fewer than 75% of the aggregate of (1) the total number of
meetings of the Board of Directors, and (2) the total number of meetings held
by all committees of the Board on which he served. Due to illness, Mr.
McManaway was unable to attend one board meeting and one committee meeting of
the committee on which he served.
Family Relationships Between Certain Directors
The following family relationships exist between directors of the
Company:
David H. Hughes and Vincent S. Hughes are brothers; and Russell V.
Hughes is a first cousin of David H. Hughes and Vincent S. Hughes.
Committees of the Board of Directors
The Board of Directors of the Company has standing Executive, Audit,
Compensation, 1988 Stock Option Plan, Long-Term Incentive Plan, and
Directors' Stock Option Plan Committees. Members of the standing committees
of the Board are indicated by the footnotes to the table under "Directors and
Nominees for Election as Directors of the Company" above. The Company does
not have a nominating committee.
The Executive Committee has authority to act on matters of general
corporate governance when the Board is not in session. The Executive
Committee did not meet during the last fiscal year.
The Audit Committee met two times during the last fiscal year. At its
meetings, the Committee considered the recommendations of the Company's
independent auditors with respect to internal accounting controls, reviewed
management's actions taken in response to such recommendations, reviewed the
reports of the Company's internal audit staff with respect to internal
controls, and reviewed the professional services provided by the independent
auditors together with the range of audit and nonaudit fees.
The Compensation Committee met two times during the last fiscal year and
reviewed and made recommendations to the Board of Directors with respect to
the compensation of members of the Company's executive management group.
Information with respect to the Committee's recommendation for the last
fiscal year is set forth elsewhere in this proxy statement under
"Compensation Committee Report on Executive Compensation."
The 1988 Stock Option Plan Committee met one time during the last fiscal
year to interpret the provisions of certain outstanding options. The
authority of the Committee to interpret the 1988 Stock Option Plan and make
recommendations to the Board concerning the granting of options was expanded
by an amendment to the Plan on March 12, 1996 granting to the Committee the
additional authority to exercise, solely within the discretion of the
Committee, the authority of the Board to determine the terms of and to make
the grant of options under the Plan.
The Long-Term Incentive Plan Committee was established on January 25,
1996, pursuant to an amendment to the Senior Executives' Long-Term Incentive
Plan, to administer the Plan and any separate performance plans adopted
thereunder. It is the duty of the Committee to interpret the Plan and to
establish and administer separate performance plans under the Plan, including
the designation of applicable performance periods, the selection of
participants, the establishment and application of performance goals and the
determination of performance bonus payments under such plans. The Committee
did not meet during the last fiscal year.
The Directors' Stock Option Plan Committee has the authority to
interpret the provisions of the Directors' Stock Option Plan. The Committee
did not meet during the last fiscal year.
Cash Compensation of Directors
Nonemployee directors of the Company receive an annual retainer of
$15,000 and attendance fees of $1,000 for each Board meeting attended in
person or $250 for each Board meeting attended by conference telephone. For
each meeting of a committee of the Board such nonemployee directors receive
an attendance fee of $500 for attendance in person or $250 for attendance by
conference telephone. Directors who are employees of the Company do not
receive directors' or committee members' fees. John D. Baker II, Robert N.
Blackford, John B. Ellis, Clifford M. Hames, Herman B. McManaway and Donald
C. Martin served as nonemployee directors and received nonemployee director's
fees during the fiscal year ended January 26, 1996.
Directors' Stock Option Plan
Each of the nonemployee directors is a participant in the Company's
Directors' Stock Option Plan. Under the Plan options for the purchase of
common stock of the Company are granted to the participants on the date of
each annual meeting of the Board of Directors following each annual meeting
of the shareholders. Under the Plan approved by the shareholders in 1989
options with respect to an aggregate of 12,000 shares, equally divided among
the then participants, were granted to the participants in each of the years
1989 through 1993. The Plan was amended with shareholder approval in 1994 to
provide for the granting of options with respect to an aggregate of 15,000
shares, equally divided among the then participants in each of the years 1994
through 1998. Options granted under the Plan are granted for the purchase of
shares at a purchase price of 100% of the current market value of the
Company's common stock on the date of the grant and expire 10 years after the
date of the grant or earlier in the event of termination of service as a
nonemployee director or under other circumstances set forth in the Plan.
Such options are not incentive stock options within the meaning of Section
422A of the Internal Revenue Code. During the last fiscal year, options with
respect to an aggregate of 15,000 shares, divided equally between the 6
nonemployee directors, were granted at a purchase price of $19.25 per share.
The following table sets forth the aggregate numbers of shares of common
stock of the Company subject to stock options granted and outstanding as of
March 15, 1996, under the Directors' Stock Option Plan to the named
participants and to all such participants as a group, the average per share
exercise prices applicable to such shares, and the net values (market value
less exercise price) for such shares realized during the fiscal year ended
January 26, 1996.
Aggregate Net Value
Number of Average Realized During
Shares Subject Per Share Fiscal Year
Name of Person or to Options at Exercise Ended
Identity of Group January 26, 1996 Price January 26, 1996
John D. Baker II 5,000 $ 22.31 None
Robert N. Blackford 20,000 16.60 None
John B. Ellis 20,000 16.60 None
Clifford M. Hames 20,000 16.60 None
Donald C. Martin 5,000 22.31 None
Herman B. 14,000 16.73 $ 74,625
McManaway
All Participants 84,000 17.30 $ 74,625
as a Group
(6 persons)
EXECUTIVE COMPENSATION AND OTHER INFORMATION
Executive Officers
Executive officers are elected annually by the Board of Directors
following the Annual Meeting of Shareholders to serve for a one-year term and
until their successors are elected and qualified. The compensation of the
Company's executive officers is established by the Board of Directors after
receiving the recommendation of the Compensation Committee of the Board. The
following sets forth the name of each executive officer of the Company and
the principal positions and offices he holds with the Company. Each of these
officers has been employed by the Company or a subsidiary of the Company for
more than five years and unless otherwise indicated, has served as an
executive officer of the Company for at least five years.
Name Information About Executive Officers
David H. Hughes Chairman of the Board and Chief Executive
Officer since November, 1986. Until March,
1994, Mr. Hughes also served as President. He
is 52 years of age.
A. Stewart Hall, Jr. President and Chief Operating Officer since
March, 1994. Previously, Mr. Hall served as
Executive Vice President. He is 53 years of
age.
Russell V. Hughes Vice President since February, 1971. Mr.
Hughes is 70 years of age.
Vincent S. Hughes Vice President since April, 1972. Mr. Hughes
is 55 years of age.
Jasper L. Holland, Jr. Regional Vice President since June, 1994.
Previously, Mr. Holland served as a Vice
President. He is 54 years of age.
Clyde E. Hughes III Regional Vice President since June, 1994.
Previously, Mr. Hughes served as a Regional
Manager. He is 48 years of age.
James C. Plyler, Jr. Regional Vice President since February, 1996.
Previously, Mr. Plyler served as President of a
subsidiary operation. Mr. Plyler is 52 years
of age.
Kenneth H. Stephens Regional Vice President since June, 1994.
Previously, Mr. Stephens served as a Vice
President. He is 55 years of age.
Sidney J. Strickland, Jr. Vice President of Purchasing and
Administration since August, 1994.
Previously, Mr. Strickland served as Director
of Corporate Services and as Director of Human
Resources. Mr. Strickland is 46 years of age.
Gradie E. Winstead, Jr. Regional Vice President since June, 1994.
Previously, Mr. Winstead served as a Regional
Manager. Mr. Winstead is 46 years of age.
Peter J. Zabaski Regional Vice President since June, 1994.
Previously, Mr. Zabaski served as President of
a subsidiary operation. Mr. Zabaski is 47
years of age.
J. Stephen Zepf Treasurer and Chief Financial Officer since
April, 1984. Mr. Zepf is 46 years of age.
Report and Graph Not Incorporated in Previous Filings
Notwithstanding anything to the contrary set forth in 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
Compensation Committee Report on Executive Compensation and the Performance
Graph on page 18 shall not be incorporated by reference into any such
filings.
Compensation Committee Report on Executive Compensation
Introduction
The compensation of the Company's executive management group is
established annually by the Board of Directors acting upon the recommendation
of the Compensation Committee of the Board. The members of the Committee are
nonemployee directors appointed to the Committee by the Board immediately
following the Annual Meeting of Shareholders. Since the 1995 Annual Meeting,
the members consisted of John B. Ellis, John D. Baker II and Donald C.
Martin. During the last fiscal year, the executive management group
consisted of the executive officers of the Company and the President of a
subsidiary operation. The recommendations of the Committee with respect to
executive management compensation for the last fiscal year were made by the
Committee and adopted by the Board on January 26, 1995, and March 15, 1995.
Compensation Policy and Committee Recommendation
The goal of the Company's executive compensation policy is to attract,
retain and motivate qualified executive management under a competitive
compensation program which rewards individual performance and increases
shareholder value. To achieve this goal, the Committee evaluated the
respective positions, the competitive market for the required management
skills, individual performance and potential, and the potential for
motivating Company and individual performance. Before finalizing its
recommendation, the Committee also considered the recommendation of the
Company's Chief Executive Officer with respect to the compensation of each of
the other members of the executive management group.
Compensation Program
The main components of the Company's executive management compensation
program are base salaries, annual and long-term performance based incentive
bonus plans, stock plans, and retirement plans. Each of these components is
discussed in the remainder of this report.
Information with respect to the compensation paid to the Company's Chief
Executive Officer and the other four most highly compensated executive
officers of the Company for the last fiscal year and for each of the two
previous fiscal years, descriptions of certain of the compensation plans
referred to in this report, and a performance graph illustrating cumulative
share return with respect to the Company's common stock are set forth
elsewhere in this proxy statement following this Committee report.
Base Salaries
Base salaries are intended to establish a level of compensation which,
together with the other components of the compensation program, will help the
Company attract and retain the talent needed to meet the challenges of the
competitive industry in which it operates while maintaining an acceptable
level of fixed labor costs. The Committee's recommendation with respect to
base salaries was based upon the Committee's evaluation of the responsibility
and scope of each position, the level of pay for comparable positions in the
industry and, with respect to each member of the executive management group,
his performance over an extended period of time, and the value and potential
to him of other elements of the Company's compensation program.
Annual Incentive Plans
The Company's annual incentive plans are intended to motivate and reward
short-term performance by providing cash bonus payments based upon required
performance goals defined, depending upon the particular plan, as income
before taxes measured against the Company's profit plan, return on
investment, or return on investment and return on sales. Upon achievement of
the required performance goal the bonus paid to a participant is determined,
depending upon the particular plan, as a percentage of the base salary of the
participant or as the sum of a percentage of the funds available for the
payment of such bonus and a percentage of the participant's base salary up to
a designated maximum percentage of the participant's base salary. The
designation of the annual incentive plan participants, the definition of the
required performance goals, and the determination of bonuses to be paid upon
the achievement of the required performance goals are established annually by
the Board of Directors upon the recommendation of the Committee.
With respect to each specific annual incentive plan, the Committee
recommended ambitious performance goals which are sufficiently achievable
to provide a meaningful incentive for superior performance and recommended
as participants those executives who are in positions most responsible for
the success of the Company. Each of the members of the Company's executive
management group was recommended by the Committee and designated by the Board
as a participant in a specific annual incentive plan during the last fiscal
year.
Long-Term Incentive Plans
The Company's Chief Executive Officer, President, and Chief Financial
Officer also participate in certain Senior Executives' Long-Term Incentive
Plans which are intended to motivate and reward sustained performance. Under
each of these plans an incentive bonus is paid if a designated Company
earnings per share goal is met during the designated performance period of
three or more fiscal years. Such incentive bonus payments, in each case, are
determined by applying a percentage, based upon achievement of the Company's
applicable earnings per share goals, to the base salaries of the
participants.
During the last fiscal year the Board, upon the recommendation of the
Committee, adopted a performance plan under the Senior Executives' Long-Term
Incentive Bonus Plan for the three fiscal year period up to and including the
Company's fiscal year to be ended January 30, 1998. Under this performance
plan each participant would receive a bonus equal to a percentage of his base
salary for the final year of the performance period if, and to the extent,
the Company's earnings per share during the performance period reach or
exceed the required goal. Any such bonus would be payable in cash and common
stock. During the last fiscal year the designated officers also participated
in similar senior executives' long-term incentive plans adopted in previous
fiscal years.
Stock Plans
The Company's stock plans in the executive compensation program,
including the 1988 Stock Option Plan and the Employee Stock Ownership Plan,
are intended as incentives to enhance shareholder values by providing to plan
participants an opportunity to benefit from increases in the value of the
Company's common stock.
Participation under the 1988 Stock Option Plan is limited to selected
key employees of the Company and its subsidiaries. There were no options
granted during the last fiscal year.
The Employee Stock Ownership Plan is a broad based plan for the
employees of the Company and certain of its subsidiaries. The Company did
not make any discretionary contribution under the plan for the last fiscal
year.
Retirement Plans
The retirement plans in the Company's executive compensation program,
including the Supplemental Executive Retirement Plan and the Cash or Deferred
Profit Sharing Plan, are intended to encourage and reward long-time
employment with the Company.
The Supplemental Executive Retirement Plan was adopted on September 30,
1986. Six of the executive officers, all of those who were fifty five years
of age or younger on the date of adoption of the Plan, are participants under
the plan. During the last fiscal year, the Committee recommended, and the
Board approved, the addition of five executive officers to the Plan.
The Cash or Deferred Profit Sharing Plan is a contributory plan for the
benefit of substantially all employees of the Company. Each of the members
of the executive management group is a participant under the Plan.
Participants may make limited contributions under the Plan by salary
reduction. Contributions by the Company under the Plan include those
required to match a portion of a participant's contribution and may include
limited additional contributions within the discretion of the Board of
Directors. The Company's discretionary contribution to the Plan for the last
fiscal year is allocated among the Plan participants based upon the relative
salaries of the participants.
Compensation of the Chief Executive Officer
Mr. David H. Hughes, the Company's Chief Executive Officer, is eligible
to participate in the same components of the executive management
compensation program available to the other members of the executive
management group described above and the recommendation of the Compensation
Committee with respect to Mr. Hughes' compensation was determined in the
manner outlined above with respect to the executive management group. During
the last fiscal year the Committee recommended, and the Board approved and
implemented, an increase in Mr. Hughes' base salary from $210,000 to $240,000
in order to compensate him in a manner more consistent with his
responsibilities. The Committee believes that Mr. Hughes' base salary is
conservative in comparison to his peers in the industry. For the last fiscal
year Mr. Hughes' annual compensation was $360,000, including a bonus of
$120,000 earned under the annual incentive plan. Mr. Hughes also earned a
bonus payment under the senior executives' long-term incentive bonus plan for
the three fiscal year performance period ended January 26, 1996.
Submitted by the Compensation Committee of the Company's Board of
Directors.
John B. Ellis - Chairman
John D. Baker II
Donald C. Martin
Summary of Executive Compensation
The Company's compensation program for executive management includes
base salaries, annual and long-term performance based incentive bonus plans,
stock plans, and retirement plans. The compensation of each executive
officer was established by the Board of Directors acting upon the
recommendation of the Compensation Committee. With respect to each executive
officer, base salary and selected other components of the compensation
package are integrated on an individual basis in an effort to carry out the
Company's executive compensation policy.
The following table sets forth the annual, long-term and other
compensation for the Company's Chief Executive Officer and each of the other
four most highly compensated executive officers (the "named executives")
during the last fiscal year, as well as the total annual compensation paid to
each individual for the two previous fiscal years.
<TABLE>
Summary Compensation Table
<CAPTION>
Long-Term
Annual Compensation Compensation
Name/ Fiscal Salary Bonus LTIP All Other
Principal Position Year ($) ($) Payouts Compensation (1)
($)
<S> <C> <C> <C> <C> <C>
David H. Hughes/Chairman 1996 240,000 120,000 240,000 (2) 6,864
of the Board, and Chief 1995 210,000 105,000 -0-
Executive Officer 1994 180,000 90,000 -0-
A. Stewart Hall, Jr./ 1996 200,000 100,000 200,000 (2) 6,942
President and Chief 1995 180,000 90,000 -0-
Operating Officer 1994 150,000 75,000 -0-
Gradie E. Winstead, Jr./ 1996 120,000 108,963 -0- 6,516
Vice President 1995 100,000 60,000 -0-
1994 (3) (3) (3)
Clyde E. Hughes III/ 1996 126,500 100,004 -0- 6,716
Vice President 1995 115,000 69,000 -0-
1994 (3) (3) (3)
Jasper L. Holland, Jr./ 1996 132,000 72,939 -0- 5,566
Vice President 1995 120,000 72,000 -0-
1994 106,423 52,923 -0-
________________________
(1) Includes the amounts indicated below for the 1996 fiscal year: (I) the cost of premiums paid by the Company for life
insurance provided to the named executive, (ii), matching contributions made to the accounts of the named executive
in the Cash or Deferred Profit Sharing Plan, and (iii) Company discretionary contributions to the Cash or Deferred
Profit Sharing Plan.
Insurance Matching Discretionary
Executive Premium Contribution Contribution
(4)
David H. Hughes $ 920 $4,620 $1,324
A. Stewart Hall, Jr. 998 4,620 1,324
Gradie E. Winstead, Jr. 692 4,500 1,324
Clyde E. Hughes III 772 4,620 1,324
Jasper L. Holland, Jr. 1,182 3,060 1,324
(2) Bonus payments under the senior executives' long-term incentive bonus plan for the three fiscal year performance period
ended January 26, 1996.
(3) Messrs. Winstead and Hughes became executive officers on June 1, 1994.
(4) Contribution estimated as named person's prorata plan interest, as last calculated by the plan trustee, applied to the
Company's aggregate contribution of $600,000 for the fiscal year ended January 26, 1996.
</TABLE>
Bonus Plans
The Company has annual incentive plans for members of its executive
management, and for its sales, branch and department managers and other key
employees. Bonuses are awarded under the annual incentive plans upon
achievement of required performance goals by applying the percentage
provided for under such plans to the base salaries of members of its
executive management. Individual bonuses may also be awarded to executive
management and other key employees by the Board of Directors based upon job
performance or other criteria within the discretion of the Board.
The Company also has long-term performance based incentive bonus plans
to provide incentive compensation to reward selected key senior executives
for achieving specified Company performance goals. The Chief Executive
Officer, the President, and the Chief Financial Officer are the selected
participants in the senior executives' long-term incentive bonus plans for
fiscal years 1996, 1997 and 1998. Each of these plans is a performance
plan providing for the payment of an incentive bonus at the end of the
three fiscal year performance period if the Company earnings per share
criteria in the plan are met.
The senior executives' long-term incentive bonus plan for fiscal year
1996 was adopted on August 24, 1993 and approved by the shareholders at the
1994 annual meeting. The plan provided for payments based upon cumulative
growth in the Company's earnings per share during the three year period
commencing with the fiscal year ended January 28, 1994 and ending with the
fiscal year ended January 26, 1996. Under the plan, each of the
participants was to receive a bonus of from 25% to 100% of base salary for
the final year of the three year performance period if the Company achieved
the required earnings per share for the period. The Company achieved the
earnings required for the payment of bonuses equal to 100% of the base
salary for each participant. The payouts under the plan aggregated
$550,000 and, in accordance with the plan, were paid one half in cash and
one half in shares of the Company valued as the fair market value of the
stock on the last day of the 1996 fiscal year.
The senior executives' long-term incentive bonus plan for fiscal year
1997 and 1998 were adopted by the Board of Directors on May 24, 1994, and
March 15, 1995, respectively and were incorporated into the Senior
Executives' Long-Term Incentive Bonus Plan approved by the shareholders at
the 1995 annual meeting. Each such plan provides for payments based upon
cumulative growth in the Company's earnings per share during the three
fiscal year performance periods ending with January 31, 1997 and January
30, 1998, respectively. Under each of the plans, the participants would
receive a bonus of from 25% to 100% of base salary for the final year of
the performance period if the Company achieves the required earnings per
share for such performance period. Any bonus earned would be paid in equal
portions of cash and shares of the Company at the fair market value on the
final day of the applicable performance period.
The following table provides information concerning estimated future
payouts to the Company's Chief Executive Officer and the only other
participant among the Company's other four most highly compensated
executive officers under the senior executives' long-term incentive bonus
plan for fiscal year 1998. If fully diluted earnings per share falls
between the minimum earnings requirement for a bonus payment and the
earnings requirement for the maximum permissible bonus payment, the amount
of the bonus payment is prorated between the minimum ("threshold") bonus
payment and the maximum permissible bonus payment.
<TABLE>
Long-Term Incentive Plans - Awards in Last Fiscal Year
Estimated Future Payouts under Non-Stock
Price-Based Plans (1)
________________________________________
<CAPTION>
Performance or
Number of Other Period
Rights Until Maturation Threshold Maximum
Name (#) or Payout ($) ($)
<S> <C> <C> <C> <C>
David H. Hughes 1 3 years 74,358 297,432
A. Stewart Hall, Jr. 1 3 years 61,236 244,944
__________________________
(1) Based on estimated base salary levels for final year of performance period. If earnings per share fall between the amount
required for a threshold bonus payment and the amount required for the maximum permissible bonus payment, the amount of the
bonus payment is prorated accordingly.
</TABLE>
Under the Senior Executives' Long-Term Incentive Bonus Plan, as
amended January 25, 1996, the Compensation Committee of the Board of
Directors, in its sole discretion, may establish separate performance plans
and designate the performance periods, goals, participants, and bonus
payments to be made under such plans if the required performance goals are
achieved.
1988 Stock Option Plan
The Company's 1988 Stock Option Plan presently authorizes the granting
of options, in addition to those presently outstanding, for the purchase up
to 527,519 shares of the Company's common stock to key executive,
management, and sales employees. Under the Plan, options may be granted at
prices not less than market value on the date of grant, but prices for
incentive stock options granted to employees who own more than 10% of the
Company's common stock are at least 110% of such market value. Options may
be granted from time to time through May, 1998. Such options may be
exercisable for up to 10 years from the date of grant, except in the case
of employees owning more than 10% of the Company's common stock, for whom
incentive stock options may be exercisable only up to 5 years from the date
of grant. The Plan permits the granting of both incentive stock options
and other stock options and the granting of options with cash surrender
rights comparable to stock appreciation rights ("SAR's"). No options other
than incentive stock options have been granted under the Plan nor have any
options been granted with SAR's. Under the terms of the Plan, as amended
March 12, 1996, the 1988 Stock Option Plan Committee of the Board of
Directors has the authority, solely within its discretion, to determine the
terms of and to make grants of any additional options under the Plan.
During the last fiscal year, no options were granted to any of the
executive officers of the Company.
The following table summarizes options exercised during the fiscal
year ended January 26, 1996 and presents the value of unexercised options
held by the named executives at fiscal year end.
<TABLE>
Aggregated Option Exercises in Last Fiscal Year and
Fiscal Year-End Option Values
<CAPTION>
Number of
Securities Value of
Underlying Unexercised
Unexercised In-the-Money
Shares Options at Options at
Acquired January 26, 1996 January 26, 1996
on Value (#) ($)
Exercise Realized Exercisable (E) / Exercisable (E) /
Name (#) ($) Unexercisable (U) Unexercisable (U)
<S> <C> <C> <C> <C> <C> <C>
David H. 7,470 102,712 37,500 (E) 473,438 (E)
Hughes -0- (U) -0- (U)
A. Stewart 6,070 79,669 37,500 (E) 473,438 (E)
Hall, Jr. -0- (U) -0- (U)
Gradie E. 1,470 20,764 14,000 (E) 207,250 (E)
Winstead, Jr. 6,000 (U) 121,500 (U)
Clyde E. -0- -0- 8,000 (E) 131,500 (E)
Hughes III 6,000 (U) 121,500 (U)
Jasper L. 2,610 34,256 20,000 (E) 252,500 (E)
Holland, Jr. -0- (U) -0- (U)
</TABLE>
Employee Stock Ownership Plan
The Company has a noncontributory, trusteed Employee Stock Ownership
Plan ("ESOP") covering employees of the Company and certain of its
subsidiaries who have attained the age of 21 and completed at least 12
months of service. SunTrust Banks is trustee of the ESOP. The ESOP is
administered by an administrative committee appointed by the Company's
Board of Directors. Contributions by the Company, which may consist of
cash, stock of the Company, or other property acceptable to the trustee,
are made at the discretion of the Company's Board of Directors, but may not
exceed the maximum amount deductible for federal income tax purposes.
Allocations of contributions are made to the accounts of active
participants on the basis of their compensation. Vested percentages of
their accounts (valued in accordance with the ESOP) are distributed to
participants upon termination of employment. Vested percentages are based
upon periods of service as follows: less than 3 years, 0%; 3 years, 20%; 4
years, 40%; 5 years, 60%; 6 years, 80%; 7 years or more, 100%. No
contribution was made by the Company to the ESOP for the fiscal year ended
January 26, 1996.
Supplemental Executive Retirement Plan
The Company has Supplemental Executive Retirement Plan Agreements with
certain of its executive officers providing for the payment by the Company
to each such executive officer in the event of such executive officer's
employment with the Company until retirement, or until the date of
disability preceding disability retirement, of supplemental retirement
compensation in addition to any compensation paid under the Company's other
benefit programs. Supplemental retirement compensation will be based upon
the salary portion of such executive officers then annual compensation (not
including any bonus or other compensation), for the final year of
employment prior to retirement, or final year of employment prior to the
disability preceding disability retirement ("final salary"), and will be
payable monthly following such retirement for a period of 15 years. The
rate per annum of supplemental retirement compensation in the case of
retirement or disability retirement at age 65 shall be equal to 35% of
final salary or, in the case of early retirement or early disability
retirement with the approval of the Company prior to age 65 but not earlier
than age 55 shall be reduced proportionately to from 96% of 35% of final
salary upon retirement at age 64 to 60% of 35% of final salary upon
retirement at 55. Death benefits are payable under each of the Agreements
in the event of death while employed by the Company prior to retirement or
during continued disability which commenced while in the employ of the
Company but prior to disability retirement. Death benefits are payable
monthly for a period of 10 years after death at the rate per annum equal to
35% of final base salary. Benefits under the Supplemental Executive
Retirement Plan Agreements are totally nonvested, unfunded retirement and
death benefits.
Cash or Deferred Profit Sharing Plan
The Company has a contributory, trusteed Cash or Deferred Profit Sharing
Plan for the benefit of substantially all employees of the Company and its
subsidiaries. SunTrust Banks, Inc. is trustee of the Plan. The Plan is
administered by an administrative committee appointed by the Company's
Board of Directors. Eligible employees may contribute to the Plan by
salary reduction, and before imposing federal income taxes, from 2% to 15%
of their cash compensation up to a maximum of $7,000 per year as adjusted
for inflation ($ 9,500 for 1996). On employee contributions of up to 3% of
the employee's cash compensation, the Company will contribute a matching
contribution of 50% of the employee's contribution. Additional
discretionary contributions by the Company, which may be either a fixed
dollar amount or a percentage of profits, may be made to the Plan at the
discretion of the Company's Board of Directors, but all employee and
Company contributions may not exceed the maximum amount deductible for
federal income tax purposes. Allocations of discretionary Company
contributions are made to the accounts of active participants on the basis
of their compensation. The full amounts credited to their accounts (valued
in accordance with the Plan) are distributed to participants upon their
death or retirement. For participants who cease to be employees prior to
death or retirement, the amounts distributed are 100% of the participant's
contribution account and the vested percentage of the participant's Company
contribution account based upon the participant's period of service as
follows: less than 3 years, 0%; 3 years, 20%; 4 years, 40%; 5 years, 60%;
6 years, 80%; 7 years or more, 100%. For the fiscal year ended January 26,
1996, all contributions by the Company to the Plan were made to match
contributions by employees and a contribution of $ 600,000 was made by the
Company to the Plan for the period.
Other Benefits
The Company provides $250,000 life insurance policies for members of
its executive management, and $100,000 life insurance policies for other
key employees.
Shareholder Return
The following graph compares during the five year period ended January
26, 1996, the yearly percentage change in the cumulative total shareholder
return on the Company's common stock with the cumulative total return of
the S&P SmallCap 600 and the cumulative total return of an industry group
consisting of those peer group companies identified in the graph which have
been selected by the Company as reporting companies whose lines of business
are comparable to those of the Company.
COMPARISON OF FIVE YEAR CUMULATIVE TOTAL RETURN*
AMONG HUGHES SUPPLY, INC., THE S & P SMALLCAP 600 INDEX
AND A PEER GROUP
Total Return - Data Summary
Cumulative Total Return
1/91 1/92 1/93 1/94 1/95 1/96
Hughes Supply, Inc. 100 98 116 205 151 246
PEER GROUP 100 112 179 226 215 371
S & P SMALLCAP 600 100 149 172 204 187 247
Industry Peer Group
* $100 INVESTED ON 01/31/91 IN STOCK OR INDEX- Davis Water & Waste Ind.
INCLUDING REINVESTMENT OF DIVIDENDS FOR Noland Company
THE MEASUREMENT PERIOD ENDING Watsco, Inc.
JANUARY 31, 1996 Rexel (formerly Wilcox & Gibbs)
Compensation Committee Interlocks and Insider Participation in Compensation
Decisions
Mr. Donald C. Martin, a nonemployee director member of the
Compensation Committee, provides consulting services to the Company under a
Consulting Agreement and leases property under a Lease Agreement with the
Company. Information with respect to the Consulting Agreement and the
Lease Agreement is set forth under "Certain Transactions with Management"
in this Proxy Statement.
As indicated in the Compensation Committee Report on Executive
Compensation set forth elsewhere in this proxy statement, David H. Hughes,
the Chief Executive Officer of the Company, consulted with the Committee
with respect to the compensation of the executive management group and
submitted to the Committee his recommendation for compensation of the other
members of the group. Mr. Hughes, who is not a member of the Compensation
Committee, consulted with the Committee and provided his recommendation at
the Committee's request.
Certain Transactions with Management
The Company and certain of its subsidiaries occupy buildings and
properties under leases with Hughes, Inc., a company of which David H.
Hughes, Vincent S. Hughes, and Russell V. Hughes are the officers and
directors, and in which each owns a one-third interest. During the last
fiscal year 18 such leases were in effect with respect to 15 locations in
Florida and one in Georgia. Each of these leases was entered on or prior
to March 11, 1992 and most of such leases will expire on or after March 31,
1998. Such leases typically relate to branch facilities including
buildings ranging in size from approximately 15,000 to approximately 45,000
square feet together with outside parking and storage areas ranging in size
from approximately 35,000 square feet to several acres. The two largest
buildings leased from Hughes, Inc. were the approximately 108,000 square
foot Orlando Electric sales branch facility and the approximately 64,000
square foot Orlando Plumbing sales branch facility.
Under leases in effect during the fiscal year ended January 26, 1996,
the Company and its subsidiaries made rental payments to Hughes, Inc.
aggregating $1,310,150. The Company also pays for real estate taxes,
building insurance, and repairs other than structural repairs with respect
to the leased properties under the leases. During the last fiscal year the
Company paid real estate taxes and building insurance on the leased
properties of $266,961 and $26,268, respectively. Maintenance repairs
which were paid for by the Company during the last fiscal year were not
substantial and were, in the opinion of management, normal for the types of
properties leased.
During the fiscal year ended January 26, 1996, the Company and its
subsidiaries also made rental payments to Hughes, Inc. of approximately
$196,196 for the use of an aircraft belonging to Hughes, Inc.
Donald C. Martin, a member of the Board of Directors, is a party to a
consulting agreement and a lease agreement with the Company entered into
under the terms of the Acquisition Agreement dated June 30, 1993 between
Mr. Martin and the other stockholders of Electrical Distributors, Inc.
("EDI") pursuant to which EDI was acquired as a subsidiary of the Company.
Under the consulting agreement Mr. Martin has provided and will
provide consulting services to the Company as required for the five year
period which began July 1, 1993 for annual compensation of $50,000, the
paid to him during the last fiscal year.
Separate lease agreements with Mr. Martin relate to two buildings in
Atlanta, Georgia which continue to be occupied by a branch facility of the
Company. One of the leases, which is for a term until June 30, 1998,
relates to an approximately 32,780 square foot building with approximately
60,000 square feet of outside parking and storage space. The other lease,
which was executed July 1, 1994 for term expiring June 30, 1996, relates to
an approximately 22,400 square foot building with approximately 30,000
square feet of outside parking and storage space.
Under leases in effect during the fiscal year ended January 26, 1996,
the Company made rental payments to Mr. Martin aggregating $194,096. The
Company also pays for real estate taxes, building insurance, and repairs
other than structural repairs with respect to the leased properties under
the leases. During the last fiscal year the Company paid real estate taxes
and building insurance on the leased properties of $19,510 and $4,422
respectively. Maintenance repairs which were paid for by the Company
during the last fiscal year were not substantial and were, in the opinion
of management, normal for the types of properties leased.
Certain of the Company's subsidiaries occupy buildings and properties
under leases with Union Warehouse & Realty Co. ("Union") and Monoca Realty
Co. ("Monoca"), entities in which James C. Plyler, Jr., a Vice President of
the Company, and members of his immediate family own an equity interest.
Mr. Plyler owns a 12.35 % equity interest and members of his immediate
family own the remaining equity interest in Union. Monoca is a general
partnership in which Mr. Plyler owns a 25% equity interest and members of
his immediate family own an additional 50% equity interest.
During the last fiscal year 11 such leases were in effect with
respect to 6 locations in North Carolina and 5 locations in South Carolina.
Each of these leases was entered prior to February 1, 1996 when Mr. Plyler
became a Vice President of the Company. All of such leases will expire on
February 1, 1998. Such leases typically relate to branch facilities
including buildings ranging in size from approximately 12,000 to
approximately 35,000 square feet together with outside parking and storage
areas ranging in size from approximately 25,000 to approximately 75,000
square feet. The two largest facilities leased from Union or Monoca were
the approximately 61,650 square foot branch facility with approximately
92,300 square feet of outside parking and storage, and approximately 45,000
square foot central distribution facility with approximately 217,000 square
feet of outside parking and storage, located, in each case, in Monroe,
North Carolina.
Under leases in effect during the fiscal year ended January 26, 1996,
subsidiaries of the Company made rental payments to Union and Monoca
aggregating $522,280. The tenant also pays for repairs other than
structural repairs with respect to the leased properties under the leases.
Maintenance repairs which were paid for by the subsidiaries during the last
fiscal year were not substantial and were, in the opinion of management,
normal for the types of properties leased.
A subsidiary of the Company occupies an approximately 8,200 square
foot building with approximately 10,000 square feet of outside parking and
storage space in Clarksville, Tennessee under a 3 year lease with Peter J.
Zabaski, a Vice President of the Company. Under the lease, which was
executed on February 1, 1995 for a 3 year term commencing on that date, the
tenant pays annual rental of $27,600 and the cost of real estate taxes,
building insurance and repairs other than structural repairs. During
the last fiscal year the Company paid $27,600 in rent, and real estate
taxes and building insurance of $338 and $601, respectively. Maintenance
repairs which were paid for by the Company during the last fiscal year
were not substantial and were, in the opinion of management, normal for the
types of properties leased.
The Company believes that the terms of the transactions described
above are at least as favorable to the Company as those which could have
been obtained from unrelated parties.
Mr. Robert N. Blackford, Secretary and a director of the Company, is a
member of the law firm of Maguire, Voorhis & Wells, P.A., which serves as
general counsel to the Company.
Compliance with Section 16(a) of the Securities Exchange Act of 1934
Section 16(a) of the Securities Exchange Act of 1934 requires the
Company's directors, executive officers, and persons who own beneficially
more than ten percent of a registered class of the Company's equity
securities, to file with the Securities and Exchange Commission (the "SEC")
and the New York Stock Exchange initial reports of ownership and reports of
changes in ownership of common stock and other equity securities of the
Company. Directors, executive officers and greater than ten-percent
shareholders are required by SEC regulation to furnish the Company with
copies of all Section 16(a) reports they file.
To the Company's knowledge, based solely on review of the copies of
such reports furnished to the Company and written representations that no
other reports were required, during the fiscal year ended January 26, 1996,
its directors, officers and greater than ten-percent beneficial owners
complied with all applicable Section 16(a) filing requirements.
OTHER BUSINESS
Management knows of no business which will be presented for action at
the meeting other than as set forth in this Proxy Statement, but if any
other matters properly come before the meeting, it is the intention of the
persons named in the accompanying proxy to vote such proxy on such matters
in accordance with their best judgment.
Shareholder Proposals
Proposals of shareholders intended to be presented at the 1997 Annual
Meeting of Shareholders must be received by the Company, for possible
inclusion in the Company's Proxy Statement and form of proxy relating to
that meeting, not later than January 3, 1997. Shareholder proposals should
be made in compliance with applicable legal requirements and be furnished
to the President by certified mail, return receipt requested.
Independent Accountants
The firm of Price Waterhouse served as the Company's independent
auditors for the year ended January 26, 1996. Representatives of Price
Waterhouse are expected to be present at the annual meeting of
shareholders, where they will have an opportunity to make a statement if
they desire to do so, and will be available to respond to appropriate
questions.
On May 24, 1994, the Board of Directors appointed Price Waterhouse as
auditors for the three fiscal year period commencing with the Company's
fiscal year ending January 27, 1995 succeeding the previous auditors,
Coopers & Lybrand, whose term of engagement expired at the conclusion of
the fiscal year ended January 28, 1994. Price Waterhouse was selected by
the Board upon the recommendations of the Audit Committee following
considerations of proposals submitted at the Committee's request by a
number of independent accounting firms including, among others, Coopers &
Lybrand and Price Waterhouse. The reports of Coopers & Lybrand on the
financial statements of the Company for the fiscal years ended January 29,
1993 and January 28, 1994 did not contain any adverse opinion, disclaimer
of opinion, qualification or modification, as to uncertainty, audit scope,
or accounting principle and there was no disagreement between the Company
and such auditors on any matter of accounting principles or practices which
if not resolved to their satisfaction would have caused such auditors to
make a reference thereto in their report on the financial statements for
either of such years.
IT IS IMPORTANT THAT PROXIES BE RETURNED PROMPTLY; THEREFORE, SHAREHOLDERS
WHO DO NOT EXPECT TO ATTEND THE 1996 ANNUAL MEETING IN PERSON ARE REQUESTED
TO FILL IN, SIGN AND RETURN THE PROXY FORM AS SOON AS POSSIBLE.
By Order of the Board of Directors,
/s/ Robert N. Blackford
Robert N. Blackford, Secretary
Orlando, Florida
April 5, 1996
APPENDIX A - PROXY CARD
HUGHES SUPPLY, INC.
Orlando, Florida
PROXY-ANNUAL MEETING OF SHAREHOLDERS - MAY 21, 1996
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned shareholder of HUGHES SUPPLY, INC. (the "Company"),
revoking previous proxies, acknowledges receipt of the Notice of Annual
Meeting of Shareholders and Proxy Statement dated April 5, 1996, and
hereby appoints DAVID H. HUGHES, ROBERT N. BLACKFORD and VINCENT S. HUGHES,
and each of them, the true and lawful attorneys and proxies of the
undersigned, with full power of substitution and revocation to attend the
Annual Meeting of Shareholders of the Company to be held at Hughes Supply,
Inc., 20 North Orange Avenue, Suite 200, Orlando, Florida, on Tuesday, May
21, 1996, at 10:00 a.m., local time, and at any adjournment or adjournments
thereof, with all powers the undersigned would possess if personally
present. The undersigned authorizes and instructs said proxies to vote all
of the shares of stock of the Company which the undersigned would be
entitled to vote if personally present as follows:
(To be Signed on Reverse Side)
Please mark your
[X] votes as in this
example.
VOTE FOR all
nominees listed at right,
except vote withheld VOTE
from the following WITHHELD
nominees (if any). from all nominees
1. Election of Nominees: John B. Ellis
Directors [ ] [ ] David H. Hughes
Class III(Term Vincent S. Hughes
of Office will
expire May, 1999)
To withhold authority to vote for any individual
nominee, write that name from the list at right
on the line below.
__________________________________________
2. In their discretion, upon such other business as may properly
come before the meeting or any adjournment thereof.
No. of Shares __________
This proxy, when properly executed, will be voted in the manner
directed herein by the undersigned shareholder. If no direction is
made, this proxy will be voted FOR the election of each of the
nominees as directors. The Board of Directors favors a vote FOR
such election.
PLEASE RETURN IN STAMPED ENVELOPE ENCLOSED.
__________________________ DATED_____, 1996 ____________ DATED _____, 1996
SIGNATURE OF SHAREHOLDER SIGNATURE, IF HELD JOINTLY
IMPORTANT: Please date this proxy and sign exactly as name(s) appear hereon.
If stock is held jointly, signatures should include both names.
Executors, administrators, trustees, guardians, and others
signing in a representative capacity should give full titles.
