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 (as permitted by
Rule 14a-6(e)(2)
[X ] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Section 240.14a-11(c) or Section
240.14a-12
Furniture Brands International, 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)(l)
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<PAGE>
the offsetting fee was paid previously. Identify the previous
filing by registration statement number, or the Form or
Schedule and the date of its filing.
1) Amount Previously Paid:
-----------------------------------------
2) Form, Schedule or Registration statement No.:
-----------------------------------------
3) Filing Party:
-----------------------------------------
4) Date Filed:
-----------------------------------------<PAGE>
FURNITURE BRANDS
INTERNATIONAL,INC.
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
The annual meeting of the stockholders of Furniture Brands
International, Inc. will be held at 10 a.m. on Wednesday, May 6, 1998,
at the Ritz-Carlton Hotel, 100 Carondelet Plaza, St. Louis, Missouri,
for the following purposes:
I. to elect nine directors;
II. to transact such other business as may
properly come before the meeting.
Stockholders of record at the close of business on March 9, 1998, will
be entitled to receive notice of and to vote during the 1998 annual
meeting and during any adjournment or adjournments thereof.
By order of the Board of Directors,
/s/ Lynn Chipperfield
Lynn Chipperfield,
Vice-President and Secretary
St. Louis, Missouri, March 25, 1998.
IMPORTANT
Whether or not you plan to attend the meeting, please complete,
date and sign the enclosed proxy form, and return it PROMPTLY
in the enclosed envelope, which requires no postage if
mailed in the United States.<PAGE>
PROXY STATEMENT
This proxy statement is furnished in connection with the
solicitation of proxies on behalf of the Board of Directors ("Board")
of Furniture Brands International, Inc. ("Company"), 101 South Hanley
Road, St. Louis, Missouri 63105, for use during the 1998 annual meeting
of stockholders and at any adjournments thereof, for the purposes set
forth in the accompanying notice of annual meeting of stockholders. The
cost of the solicitation will be borne by the Company and will consist
primarily of printing, postage and handling, including the expenses of
brokers, nominees and other fiduciaries in forwarding proxy materials
to beneficial owners; and directors, officers and other employees of
the Company may also solicit proxies personally or by telephone. In
addition, the Company has engaged Morrow & Co. to assist in the
solicitation from brokers, bank nominees and institutional holders for
a fee of $5,000 plus out-of-pocket expenses. The notice of meeting,
this proxy statement and the form of proxy are expected to be mailed to
stockholders on or about March 25, 1998. A copy of the Company's Annual
Report containing financial statements for the calendar year ended
December 31, 1997, is being mailed to all registered stockholders with
this proxy statement.
Voting Procedure
Stockholders of record at the close of business on March 9, 1998
("record date") are entitled to vote during the 1998 annual meeting and
may cast one vote for each share of the Company's common stock ("Common
Stock") held on the record date on each matter that may properly come
before the meeting. On the record date there were 52,127,055 shares of
Common Stock outstanding.
The holders of a majority of the outstanding shares of Common
Stock must be present or represented at the meeting for there to be a
quorum for the conduct of business. If a quorum is present and/or
represented at the meeting, then the nine nominees for director who
receive the highest numbers of votes of the votes cast will be elected,
and a majority of the votes cast will be required to take action on
such other matters as may properly come before the meeting. Shares
represented by proxies which are marked "withheld" as applied to voting
for directors or to deny discretionary authority on any other matters
will be counted as shares present for purposes of determining the
presence of a quorum; such shares will also be treated as shares
present and entitled to vote, which will have the same effect as a vote
against any such matters. Shares represented by proxy will be voted as
directed on the proxy forms and, if no direction is given, will be
voted in the election of directors for the persons nominated by the
Board and in the best judgment of the persons named in the proxies on
such other matters that may properly come before the meeting. Any
proxy given by a stockholder may be revoked at any time prior to its
use by execution of a later dated proxy, by a personal vote at the
meeting, or by written notice to the Secretary of the Company.
Security Ownership
Table 1 below sets forth information regarding the firm that has
reported beneficial ownership, including sole voting and investment
power except as otherwise indicated, of more than 5% of the Common
Stock.
Table 1
Shares Percent
Class of Beneficially of
Name and Address Stock Owned (a) Class(a)
---------------------------------------------------------------------
Mellon Bank Corporation (b) Common 2,619,727 5.03%
One Mellon Bank Center
Pittsburgh, PA 15258
------------------
(a) Shares beneficially owned, above and below, are as of January
31, 1998 and as defined by Securities and Exchange Commission
("SEC") Rule 13d-3 which provides in part that persons are
deemed the beneficial owners of securities if they have or
share the power to vote or dispose of the securities or if
they have the right to acquire the securities within the next
sixty days. Accordingly, included, above and below, in shares
beneficially owned are shares of Common Stock that may be
purchased upon exercise of exercisable stock options, and such
shares as may be so purchased were deemed to be outstanding
for purposes of calculating percentages of outstanding shares.
(b) Sole voting power as to 2,043,841 shares and shared voting
power as to 20,000 shares. Sole dispositive power as to
2,439,827 shares and shared dispositive power as to 160,400
shares.
----------------
Table 2 below sets forth information regarding the beneficial
ownership of Common Stock by directors, nominees for directors,
executive officers named in the Summary Compensation Table below
("Named Executive Officers"), and all directors and executive officers
as a group (17 persons) as of January 31, 1998. Except as noted
below, all such persons possessed sole voting and investment power
with respect to the shares listed. An asterisk (*) in the column
listing the percentage of class indicates that the person
beneficially owned less than 1% of the Common Stock as of January 31,
1998.<PAGE>
Table 2
Directors, Nominees Shares
for Directors and Class of Beneficially Percent of
Named Executive Officers Stock Owned (a)(b) Class
---------------------------------------------------------------------
K. B. Bell Common 1,209 *
M. S. Gross Common 7,209 *
W. G. Holliman Common 195,000 *
B. A. Karsh Common 11,209 *
B. B. Kincaid Common 150,000 *
D. E. Lasater Common 6,480 *
L. M. Liberman Common 13,537 *
R. B. Loynd Common 271,400 *
M. Portera Common 0 *
A. E. Suter Common 3,809 *
F. B. Starr Common 79,999 *
K. S. Tyler, Jr. Common 50,058 *
Directors and
Executive Officers
as a group
(17 persons) Common 1,090,745 2.1%
-----------------
(a) The shares listed as beneficially owned by Mr. Holliman consist
of 30,000 shares and exercisable stock options to purchase
165,000 additional shares; the shares listed as beneficially
owned by Messrs. Kincaid and Starr consist of exercisable stock
options to purchase such shares; the shares listed as
beneficially owned by Mr. Liberman include 1000 shares owned in
partnership and 10,537 shares owned in trust; the shares listed
as beneficially owned by Mr. Loynd consist of 71,400 shares and
exercisable stock options to purchase 200,000 additional
shares; the shares listed as beneficially owned by Mr. Tyler
consist of 58 shares, with respect to which Mr. Tyler has
shared investment power only, and exercisable stock options to
purchase 50,000 additional shares.
(b) The shares listed as beneficially owned by directors and
executive officers as a group consist of 155,646 shares, and
exercisable stock options to purchase 935,099 additional
shares.
---------------
I. Election Of Directors
Nominees
Nine directors are to be elected during the 1998 annual meeting to
serve, subject to their earlier death, resignation or removal, for
terms of one year, ending at the 1999 annual meeting or until their
successors are elected and qualify. Certain information regarding the
nine nominees is presented below. Should any nominee become unable or
unwilling to serve, an event not anticipated to occur, proxies (except
proxies marked to the contrary) will be voted for another person
designated by the Board unless the Board shall have reduced the number
of directors to be elected. <PAGE>
Company
Name, Age, Principal Occupation Director
or Position, Other Directorships Since
---------------------------------------------------------------------
Katherine Button Bell, 39 1997
President and Owner of Button
Brand Development, Inc., a
marketing consulting company
Wilbert G. Holliman, 60 1996
President and Chief Executive Officer
of the Company
Director of BancorpSouth, Inc.
Bruce A. Karsh, 42 1992
President and Principal of Oaktree Capital
Management, LLC, an investment management firm
Director of Littelfuse, Inc. and Triangle
Pacific Corporation
Brent B. Kincaid, 67 1997
President and Chief Executive Officer of
Broyhill Furniture Industries, Inc., a
subsidiary of the Company
Donald E. Lasater, 72 1970
Retired, formerly Chairman of the Board
and Chief Executive Officer of
Mercantile Bancorporation, Inc., a bank
holding company
Lee M. Liberman, 76 1985
Retired from and currently a consultant to
Laclede Gas Company, a gas public utility,
of which he was formerly Chairman of the
Board and Chief Executive Officer
Director of CPI Corporation, D.T. Industries,
Inc. and Falcon Products Company
Richard B. Loynd, 70 1987
Chairman of the Board of the Company
Director of Converse Inc. and
Emerson Electric Co.
Malcolm Portera, 52
President of Mississippi State University
Albert E. Suter, 62 1997
Senior Vice Chairman and Chief Administrative
Officer of Emerson Electric Co., a manufacturer
of electrical, electromechanical and electronic
products and systems
Director of Emerson Electric Co. and
NationsBank Corporation<PAGE>
Each of the director nominees has held the same position or other
executive positions with the same employer during the past five years
except: Mr. Karsh who has been associated with Oaktree Capital
Management, Inc. since 1995 and prior thereto was Managing Director of
Trust Company of the West; Ms. Bell who has been associated with
Button Brand Development, Inc. since 1994 and prior thereto was
Executive Director of Marketing Communications for Converse Inc.; and
Mr. Portera who became President of Mississippi State University in
1998 and prior thereto, from 1996 until 1998 was owner of Portera and
Associates, which provided business development and strategic planning
consulting services to state and local industrial development
organizations and from 1993 until 1996 was Vice Chancellor for
External Affairs of the University of Alabama System.
Compensation and Organization of Board of Directors
There were seven meetings of the Board during the year ended
December 31, 1997, and all nominees who were directors during 1997
were present for at least 75% of the meetings of the Board and
committees of the Board on which they served. Each director who is
not an employee of the Company or of a subsidiary of the Company is
paid a monthly fee of $2,000 and a fee of $1,000 plus expenses for
each meeting of the Board attended, plus an annual award of restricted
shares of Common Stock with a market value on the date of the award of
$25,000. Such restricted stock does not vest and cannot be sold until
the director's retirement or earlier death or disability. There is
also a one year vesting period in the event of resignation for a
reason other than retirement, death or disability. In addition, for
attending a meeting of a committee of the Board each is paid a fee of
$700 plus expenses if the director is a member of the committee, or
$950 plus expenses if the director is the Chairman of the committee.
Such fees are not paid to directors who are employees of the Company
or a subsidiary of the Company.
In addition, the Company has a retirement plan for non-employee
directors. Under the plan, a director who is not an employee of the
Company or of a subsidiary of the Company and who has reached age 62
or older and has served as a director for at least five years will,
after termination of service as a director, receive for life a
percentage of the monthly fee for directors in effect at the time of
termination of service. Such percentage is 50% for five years'
service and increases 10% for each additional year of service to 100%
for ten or more years' service. Currently, only Messrs. Lasater and
Liberman will qualify for benefits under this plan after termination
of service as a director. Participation in and benefits under the
plan have been frozen and there will be no further vesting or new
participants added.
The Board has a number of standing committees, including an Audit
Committee and an Executive Compensation and Stock Option Committee.
The Board does not currently have a Nominating Committee.
The Audit Committee, which currently consists of Mr. Liberman,
Chairman, Messrs. Lasater and Karsh and Ms. Bell, and which met nine
times during the year ended December 31, 1997: recommends the
selection and retention of independent accountants; reviews auditing
and financial accounting and reporting matters, the adequacy of<PAGE>
internal accounting controls and asset security, audit fees and
expenses, and compliance with the code of corporate conduct; and
counsels regarding auditing and financial accounting and reporting
matters.
The Executive Compensation and Stock Option Committee, which
currently consists of Mr. Lasater, Chairman, and Messrs. Gross, Karsh
and Suter, and which met four times during the year ended December 31,
1997: reviews and recommends compensation of officers and directors;
administers supplementary retirement, performance incentive and stock
option plans; and counsels regarding compensation of other key
employees, management development and succession, and major personnel
matters.
Certain Business Relationships
The Company was a party to a Consulting Agreement with Apollo
Advisors, L.P. ("Apollo") pursuant to which Apollo provided corporate
advisory, financial and other consulting services to the Company.
$250,000 in fees plus out-of-pocket expenses were paid during the year
ended December 31, 1997. The Consulting Agreement was terminated by
agreement between the Company and Apollo on June 27, 1997.
Executive Compensation
The following table shows compensation awarded to, earned by or
paid to the Chief Executive Officer and the four most highly
compensated executive officers of the Company other than the Chief
Executive Officer who were serving at December 31, 1997.<PAGE>
<TABLE>
<CAPTION>
SUMMARY COMPENSATION TABLE
Long-Term
<S> <C> <C> <C> <C> <C> <C> <C>
Compensation
-------------
Annual Compensation / Awards /
----------------------------------------------/------------/
/ Other / / All
/ Annual / Securities/ Other
Name and / Salary Bonus Compensation / Underlying/ Compensation
Position Year / $ $ $ / Options # / $(a)
--------------------------------------------------------------------------------------------------------
Wilbert G. Holliman 1997 750,000 505,172 0 0 98,842
President and Chief 1996 130,000 1,189,765 0 250,000 35,626
Executive Officer(b)
Richard B. Loynd 1997 1,000,000 250,000 0 0 92,078
Chairman of the 1996 710,000 514,324 0 0 71,730
Board (c) 1995 683,000 945,384 0 0 70,647
Brent B. Kincaid 1997 309,528 256,854 0 0 5,081
President, Broyhill 1996 282,453 260,000 0 50,000 5,114
Furniture Industries, 1995 266,667 223,077 0 0 5,006
Inc. (d)
Frederick B. Starr 1997 301,004 200,721 0 0 0
President, Thomasville 1996 289,235 80,140 0 200,000 0
Furniture Industries,
Inc. (d) (e)
K. Scott Tyler, Jr. 1997 182,500 395,172 0 0 28,242
President, The Lane 1996 170,000 372,695 0 50,000 28,242
Company, Incorpora- 1995 155,000 284,175 0 0 28,242
ted (f)
-----------------
</TABLE>
(a) Amounts shown for 1997 consist of the following: life insurance
premiums for Mr. Loynd $92,078; annual contribution to the
Broyhill Furniture Industries, Inc. Profit Sharing Retirement
Plan for Mr. Kincaid $4,781; "split dollar" life insurance
premiums, substantial percentages of which will be recovered at
age 65 or death of the executive,for Mr. Holliman and Mr. Tyler
$98,542 and $28,242 respectively; and a matching contribution of
$300 to a 401(k) savings plan for Mr. Holliman and Mr. Kincaid.
(b) Mr. Holliman, who became Chief Executive Officer of the Company
on October 1, 1996, has an employment agreement with the Company
for a term of three years beginning on January 1, 1997 at
an initial salary of $750,000 per year with an initial target
incentive bonus of 50% of base salary under the Furniture Brands
Executive Incentive Plan. If Mr. Holliman serves three years,
at age 65 he will be entitled to a bonus payment of $1,000,000
per year for three years.
(c) Mr. Loynd has an employment agreement with the Company for a
term of three years beginning on January 1, 1997 pursuant to
which he will receive $1,000,000 per year in salary.
(d) Mr. Kincaid has an employment agreement with Broyhill Furniture
Industries, Inc. ("Broyhill"), dated August 1, 1996 pursuant to
which he will continue as an employee of Broyhill at full pay
and with full benefits through July 31, 1999. Mr. Kincaid also
has a consulting agreement with Broyhill, dated May 15, 1995 and
amended on January 29, 1998, whereby he is entitled to receive
$4,167 per month from the date of his retirement until the date
of his death or for a term of ten years from the date of his
death, whichever is later.
(e) The Company acquired Thomasville Furniture Industries, Inc.
("Thomasville") on December 29, 1995.
(f) Mr. Starr retired as President and Chief Executive Officer of
Thomasville on January 1, 1998. Pursuant to the terms of his
employment agreement with Thomasville, dated August 1, 1996, Mr.
Starr will continue as an employee of Thomasville at full pay
and with full benefits through July 31, 1999.
(g) Mr. Tyler retired as President and Chief Executive Officer of
The Lane Company, Incorporated ("Lane") on February 10, 1998.
Pursuant to the terms of his employment agreement with Lane,
dated August 1, 1996, Mr. Tyler will continue as an employee of
Lane at full pay and with full benefits through July 31, 1999.
--------------------
Executive Compensation and Stock Option Committee
Report on Executive Compensation
Among its responsibilities, the Executive Compensation and Stock
Option Committee ("Committee") of the Company's Board of Directors
("Board") reviews the compensation of the executive officers of the
Company and the officers of its primary operating companies and makes<PAGE>
recommendations to the Board concerning compensation matters for
executive officers. The Committee also administers the Company's
stock option program. The Committee consists entirely of outside
directors.
In its deliberations the Committee is guided by certain
fundamental considerations, including:
- the need to attract and to retain talented key executives;
- the need to provide both short- and long-term incentives to
focus executive performance on the achievement of company
objectives; and
- the need to provide compensation opportunities that align
executive compensation with the interests of the
stockholders.
Based on these objectives, the executive compensation program has
been designed to generate compensation from several sources, including
salaries, annual cash incentive awards, long-term incentive
opportunities, and other benefits typically offered to executives by
major corporations. In designing and administering the components of
the executive compensation program, the Committee strives to balance
short- and long-term incentive objectives and to employ prudent
judgment when establishing performance criteria, evaluating
performance and determining actual incentive payments.
Early in 1997, base salary rates of Mr. Loynd, Mr. Holliman and
other Named Executive Officers were increased. Mr. Loynd's annual
salary was set at $1,000,000 for the year. Mr. Holliman's annual
salary was set at $750,000 per year when he became Chief Executive
Officer of the Company on October 1, 1996, subject to annual review by
the Committee. The Committee makes its compensation decisions based
on an analysis of the Company's performance, an evaluation of
comparative compensation information, and an evaluation of the
performance of executive officers. The Company's performance is
evaluated on the basis of criteria such as return on shareholder's
equity, return on assets and increase in earnings per share. The
increase in annual salary rates for all Named Executive Officers as a
group, were based on recommendations of Mr. Holliman and were designed
to adjust for inflation. Mr. Loynd's total compensation (salary and
bonus) in 1996 was $1,224,324. He did not participate in the annual
incentive plan during 1997, but he was awarded a special bonus for
1997 in the amount of $250,000 in recognition of his contributions in
several strategic areas. Payment of this special bonus was deferred
pursuant to an agreement for payment after all or any portion of that
bonus amount becomes immediately deductible as compensation expense by
the Company for federal income tax purposes. Mr. Loynd's total
compensation of $1,250,000 for 1997 represented an increase of 2.1%
over the preceding year. His salary was based on the recommendation
of Mr. Holliman and was approved by the Committee.
Existing annual incentive plans for key personnel (including Mr.
Holliman and other Named Executive Officers) were continued in effect
during 1997. Those plans utilized sales and earnings as objectives,
with earnings generally weighted more heavily. Under the provisions
of the plan applicable in 1997 to key personnel (including Mr.
Holliman) based at the corporate offices, plan participants could earn
a bonus equal to percentages of their base salaries (the target
percentage of Mr. Holliman being 50%) depending totally upon the
Company's degree of achievement against budgeted objectives (sales and
net earnings) which were met in 1997. Target percentages were payable
when objectives were met; lower or greater percentages (to a maximum
of 150% of target) were payable for degrees of achievement below or
above budgeted objectives.
For 1997, Mr. Holliman earned a bonus of $404,138 under the
annual incentive plan (which represented 107.7% of the target bonus
amount under the plan). The Committee also awarded him an additional
bonus in the amount of $101,034 under the discretionary provisions of
the incentive plan in recognition of his contributions in strategic
areas.
The Committee believes that management's ownership of a
significant equity interest in the Company is a major incentive in
building stockholder value and aligning the long-term interests of
management and the stockholders. Stock options are therefore granted
as the Company's only long-term incentive program. No options were
granted to Named Executive Officers during 1997.
Donald E. Lasater, Chairman Bruce A. Karsh
Michael S. Gross Albert E. Suter
Compensation Committee Interlocks and Insider Participation
Mr. Gross, a director and member of the Executive Compensation
and Stock Option Committee of the Board, is associated with Apollo.
The Company was a party to a Consulting Agreement with Apollo pursuant
to which Apollo provided corporate advisory, financial and other
consulting services to the Company. $250,000 in fees plus out-of-
pocket expenses were paid during the year ended December 31, 1997.
The Consulting Agreement was terminated by agreement between the
Company and Apollo on June 27, 1997. The Company believes that the
terms of this agreement were as favorable to the Company as could have
been received from unaffiliated third parties. Mr. Loynd, Chairman of
the Board of the Company, serves on the Board of Directors of Emerson
Electric Co. one of whose executive officers, Albert E. Suter, is a
member of the Executive Compensation and Stock Option Committee.
The following table contains information concerning stock options
exercised during the year ended December 31, 1997 and unexercised
stock options held as of December 31, 1997 pursuant to the 1992 Plan.
No stock options were granted to Named Executive Officers during the
year ended December 31, 1997.<PAGE>
<TABLE>
<CAPTION>
<S><C> <S> <C> <C> <C> <C> <C> <C>
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR
AND FY-END OPTION VALUES
Number of Securities Valueof Unexercised
Underlying Unexercised In-the-MoneyOptions
Shares Options at FY-End at FY-End (a)
Acquired Value
on Exercise Realized Exercisable Unexercisable Exercisable Unexercisable
Name # $ # # $ $
W.G. Holliman 0 0 155,000 245,000 2,055,345 2,154,805
R.B. Loynd 0 0 250,000 0 4,279,250 0
B.B. Kincaid 0 0 140,000 60,000 2,233,270 726,880
F.B. Starr 0 0 39,999 160,001 557,923 2,231,769
K.S. Tyler, Jr. 8,750 98,368 71,250 60,000 1,056,476 726,880
------------------------
(a) Based on the $20.50 per share closing price of the Common Stock on the New
York Stock Exchange on December 31, 1997.
-----------------------------
</TABLE>
Retirement Plans
Mr. Loynd is a participant in that segment of the Furniture Brands
Retirement Plan which applies to corporate office employees. The plan
is a noncontributory, defined benefit pension plan designed to provide
retirement benefits upon normal retirement at age 65. Covered
remuneration is base salary and incentive compensation and, based on
straight life annuity, annual benefits at normal retirement equal to the
sum of 1.1% of final average compensation (the highest five consecutive
calendar years of the last 10 years) multiplied by credited service up
to a maximum of 35 years and 0.45% of final average compensation in
excess of "covered compensation" as defined by the IRS multiplied by
credited service up to a maximum of 35 years, without deduction for
Social Security benefits. Mr. Loynd has ten years credited service
under the plan and estimated annual benefits payable to Mr. Loynd at
retirement, including benefits payable from supplemental plans as
described below, is $199,927 assuming continuation of current covered
remuneration.
Mr. Holliman is a participant in that segment of the Furniture
Brands Retirement Plan which applies to corporate office employees as
described above for Mr. Loynd. In addition, Mr. Holliman was a
participant, and has a frozen benefit, in the segment of the Furniture
Brands Retirement Plan which applies to employees of The Lane Company,
Incorporated as described below for Mr. Tyler. Mr. Holliman has ten
years of credited service under the corporate office plan, and 28 years
under the Lane Company plan, which service includes service with the<PAGE>
Lane Company prior to its acquisition by the Company. Estimated annual
benefits payable to Mr. Holliman from these plans, including benefits
payable from supplemental plans as described below, is $245,676,
assuming continuation of current covered compensation.
Mr. Tyler is a participant in that segment of the Furniture Brands
Retirement Plan which applies to employees of The Lane Company,
Incorporated and its subsidiaries. The plan is a noncontributory,
defined benefit pension plan designed to provide retirement benefits
upon normal retirement at age 65. Covered remuneration is base salary
and incentive compensation and, based on a straight life annuity, annual
benefits at normal retirement are equal to the greater of (a) the sum of
0.65% of an average of the highest five consecutive years (of the last
10 years) of covered remuneration and 0.65% of the said average in
excess of the greater of (i) 10,000 or (ii) 50% of "covered
compensation" as defined by the IRS, multiplied by years of credited
service (not to exceed 35 years), without deduction for Social Security
benefits, or (b) $28 multiplied by years of credited service. Mr. Tyler
had 29 years credited service under the plan, and estimated annual
benefits at normal retirement, including benefits payable from
supplemental plans as described below, of $222,874.
Mr. Starr became a participant in that segment of the Furniture
Brands Retirement Plan which became applicable to employees of
Thomasville Furniture Industries, Inc. effective January 1, 1997. The
Plan is a noncontributory, defined benefit pension plan designed to
provide retirement benefits upon normal retirement at age 65. Covered
remuneration is base salary and incentive compensation and, based on
straight life annuity, annual benefits at normal retirement are the sum
of 1.4% of final average compensation (the highest five consecutive
calendar years of the last 10 years) multiplied by total Thomasville
service; less 1.4% of Primary Social Security multiplied by total
Thomasville service with a maximum offset of 50% of Social Security,
less his accrued benefit as of December 29, 1995. The accrued benefit at
December 29, 1995 is the benefit amount Mr. Starr accrued under the
predecessor plan prior to the acquisition of Thomasville Furniture
Industries, Inc. by the Company. Mr. Starr retired effective December
31, 1997, at which time he had 39 years credited service under the plan.
Due to changes in the applicable laws and regulations concerning maximum
recognizable compensation to be considered for qualified plan purposes
since December 31, 1993, the offset calculated as of December 29, 1995
exceeds the estimated benefits payable from the Furniture Brands
Retirement Plan. Mr. Starr will not receive a retirement benefit from
the Furniture Brands Retirement Plan.
Benefits payable pursuant to provisions of Company-sponsored
retirement plans may be limited by applicable laws and regulations.
Supplemental retirement plans have been adopted providing for payments
from general funds to certain executives, including the Chairman of the
Board and Named Executive Officers, of any retirement income that would
otherwise be payable pursuant to the retirement plans in the absence of
any such limitations. With respect to Mr. Loynd, following retirement
he will also receive under the supplemental plan an amount equal to the
difference, if any, between (i) the benefits he would have received had<PAGE>
he continued until retirement as a participant in the Converse Inc.
Retirement Plan (in which Mr. Loynd was formerly an active participant)
and (ii) the total of the benefits he will receive from the Converse
Inc. Retirement Plan and the Furniture Brands Retirement Plan. With
respect to Messrs. Tyler and Kincaid, the supplemental plans provide for
payments, commencing at age 65 after 30 or more years service, equal to
the differences, if any, between (i) the total of the straight life
annuities from their base retirement plans plus social security benefits
and (ii) 50% of an average of the highest five consecutive years (of the
last 10 years) of covered remuneration.
Incentive Agreements
Each of the Named Executive Officers (except Mr. Loynd), is a
participant in an annual incentive compensation plan under which the
officer may earn a bonus during and payable following the close of the
calendar year ending December 31, 1998, contingent upon the achievement
of certain financial objectives by the Company as a whole for Mr.
Holliman and by their respective operating companies for Messrs.
Kincaid, Starr and Tyler.
Performance Graph
The following graph shows the cumulative total stockholder returns
(assuming reinvestment of dividends) following assumed investment of
$100 in shares of the Common Stock that were outstanding on December 31,
1992. The indices shown below are included for comparative purposes
only and do not necessarily reflect the Company's opinion that such
indices are an appropriate measure of the relative performance of the
Common Stock.
<TABLE>
<CAPTION>
<C> <S> <C> <S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
/12/31/92 / 12/31/93 / 12/31/94 / 12/31/95 / 12/31/96 / 12/31/97/
--------------------------------------------------/---------/----------/----------/----------/----------/---------/
/Furniture Brands International Common Stock o/ 100 / 140 / 120 / 160 / 248 / 364 /
/S&P 500 Index o/ 100 / 107 / 105 / 141 / 170 / 223 /
/Dow Jones Home Furnishings & Appliances Index +/ 100 / 142 / 113 / 130 / 137 / 182 /
------------------------------------------------------------------------------------------------------------------
</TABLE>
Independent Accountants
The selection by the Board of KPMG Peat Marwick LLP, certified
public accountants ("Peat Marwick"), as independent auditors for
calendar year 1997 was ratified by the stockholders during the annual
meeting on April 29, 1997. Upon recommendation of its Audit
Committee, the Board has continued the engagement of Peat Marwick as
independent auditors for 1998. A formal statement by representatives
of Peat Marwick is not planned for the annual meeting on May 6, 1998;
however, as in years past, representatives of Peat Marwick are
expected to be present during the annual meeting and to be available
to respond to appropriate questions.<PAGE>
II. Stockholder Proposals
Neither the Board nor management knows of any matters other than
those items set forth above that will be presented for consideration
during the 1998 annual meeting. However, if other matters should
properly come before the meeting, it is intended that the persons
named in the proxies will vote, act and consent in accordance with
their best judgment with respect to any such matters.
Stockholder proposals submitted for inclusion in the Company's
proxy materials for the 1999 annual meeting should be addressed to the
Secretary of the Company and must be received at the Company's
executive offices not later than November 17, 1998. Upon receipt of
any such proposal, the Company will determine whether or not to
include such proposal in the proxy statement and proxy form in
accordance with SEC regulations governing the solicitation of proxies.
By order of the Board of Directors
/s/ Lynn Chipperfield
Lynn Chipperfield,
Vice-President and Secretary
St. Louis, Missouri, March 25, 1998.<PAGE>
<TABLE>
<CAPTION>
<S> <C> <S> <C> <S> <C> <S> <C> <S> <C> <S> <C> <S> <C> <S> <C>
I. Election of Directors FOR all nominees ---- WITHHOLD AUTHORITY to vote ---- *EXCEPTIONS ----
listed below / / for all nominees listed below / / / /
/ / / / / /
---- ---- ----
Nominees: K.B. Bell, W.G. Holliman, B.A. Karsh, B.B. Kincaid, D.E. Lasater, L.M. Liberman, R.B. Loynd,
M. Portera and A.E. Suter
(INSTRUCTION: To withhold authority to vote for any individual nominee, mark the "Exceptions" box and write that
nominee's name in the space provided below.)
*Exceptions
-------------------------------------------------------------------------------------------------------
II. In their discretion, upon such other matters
as my property come before the meeting.
Change of Address and ----
or Comments Mark Here / /
/ /
----
Please sign exactly as name appears hereon.
Executors, Administrators, Trustees, etc.
should so indicate.
Dated: , 1998
---------------------------
---------------------------------------
Signature
---------------------------------------
Signature
Votes MUST be indicated ----
Sign, Date and Return the Proxy Card Promptly Using the Enclosed Envelope. (x) in Black or Blue ink. / /
/ /
----
----------------------------------------------------------------------------------------------------------------------
</TABLE>
FURNITURE BRANDS INTERNATIONAL, INC.
Proxy for 1998 Annual Meeting of Stockholders
Proxy Solicited on Behalf of the Board of Directors
The undersigned hereby appoints R.B. Loynd, W.G. Holliman
and L. Chipperfield, and each of them, with power of
substitution, proxy or proxies to represent the undersigned,
and to vote all shares of Common Stock the undersigned would
be entitled to vote, at the Annual Meeting of Stockholders of
Furniture Brands International, Inc. to be held on May 6,
1998, and at any adjournment thereof, upon the items set forth
in the proxy statement for the meeting and identified below.
The Board of Directors recommends a vote FOR
(Continued, and to be signed and dated on the reverse side)
FURNITURE BRANDS INTERNATIONAL, INC.
P.O. BOX 11246
NEW YORK, N.Y. 10203-0246<PAGE>
