<PAGE> 1
SCHEDULE 14A
(Rule 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
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
/X/ Definitive Proxy Statement Rule 14a-6(e)(2))
/ / Definitive Additional Materials
/ / Soliciting Materials Pursuant to Rule 14a-11(c) or Rule 14a-12
Kellwood Company
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(Name of Registrant as Specified in Its Charter)
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(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)(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:
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(5) Total fee paid:
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/ / Fee paid previously with preliminary materials.
/ / Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
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(2) Form, Schedule or Registration Statement No.:
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(3) Filing Party:
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(4) Date Filed:
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<PAGE> 2
[LOGO]
KELLWOOD COMPANY
1997
PROXY STATEMENT
<PAGE> 3
KELLWOOD COMPANY
600 KELLWOOD PARKWAY, ST. LOUIS COUNTY, MISSOURI 63017
1997 Proxy Statement
and
Notice of Annual Meeting of Shareowners
NOTICE IS HEREBY GIVEN that the Annual Meeting of the Shareowners of
Kellwood Company, a Delaware corporation (hereinafter referred to as the
"Company"), will be held at 600 Kellwood Parkway, St. Louis County, Missouri,
on Thursday, August 28, 1997, at 9:00 A.M. for the following purposes:
1. To elect six members to the Board of Directors to hold office for a
period of two years and until their successors are duly elected and
qualified;
2. To consider and vote upon approval of the extension and amendment of
the Kellwood Company Corporate Development Incentive Plan;
3. To transact such other business as may properly come before the
meeting, and any adjournments thereof.
The Board of Directors has fixed the close of business on June 30, 1997 as
the record date for determining shareowners entitled to notice of the aforesaid
Annual Meeting and to vote thereat in person or by proxy.
The Proxy Statement is set forth following this Notice of Annual Meeting.
Also accompanying this Notice of Annual Meeting are a Proxy and the Company's
Annual Report for the fiscal year ended April 30, 1997.
By Order of the Board of Directors
/s/ Thomas H. Pollihan
Thomas H. Pollihan
Vice President, Secretary and
General Counsel
St. Louis, Missouri
July 17, 1997
<PAGE> 4
KELLWOOD COMPANY
600 KELLWOOD PARKWAY
ST. LOUIS COUNTY, MISSOURI 63017
APPROXIMATE
MAILING DATE:
JULY 17, 1997
PROXY STATEMENT
ANNUAL MEETING OF SHAREOWNERS--AUGUST 28, 1997
GENERAL INFORMATION
This Proxy Statement is furnished in connection with the solicitation of the
accompanying proxy card by the Board of Directors of Kellwood Company, a
Delaware corporation (the "Company"), for the Annual Meeting of Shareowners to
be held on August 28, 1997. Only shareowners of record at the close of business
on June 30, 1997, are entitled to notice of, and to vote (in person or by proxy)
at the meeting.
This Proxy Statement and proxy card are being mailed on or about July 17,
1997. The Company's Annual Report (including financial statements) to its
shareowners for the fiscal year ended April 30, 1997, accompanies this Proxy
Statement.
The expense of soliciting proxies for the meeting, including the cost of
preparing, assembling and mailing the notice, proxy and Proxy Statement and the
reasonable costs of brokers, nominees and fiduciaries in supplying proxies to
beneficial owners, will be paid by the Company. The solicitation will be made by
the use of the mails, through brokers and banking institutions, and by officers
and regular employees of the Company. In addition, the Company has engaged
Morrow & Co., Inc., a firm specializing in solicitation of proxies, to assist in
the current solicitation for an estimated fee of $4,500, plus reimbursement for
their out-of-pocket expenses.
VOTING PROCEDURES
Shareowners are entitled to one vote per share owned on the record date and,
with respect to the election of directors, shareowners have the right to
cumulative voting. Under cumulative voting, each shareowner is entitled to a
number of votes equal to the number of directors to be elected multiplied by the
number of shares he or she owns, and he or she may cast all of his or her votes
for one nominee or distribute them in any manner he or she chooses among any
number of nominees.
If the accompanying proxy card is signed and returned in time, the shares
represented thereby will be voted, unless otherwise indicated on the proxy card,
in accordance with the specifications thereon. If no contrary specification is
made, the proxies intend to vote the shares so represented to elect the largest
number of the nominees for directors named herein which can be elected under
cumulative voting. If no other persons are nominated for election to the Board,
votes represented by all properly executed proxy cards will be distributed in
approximately equal numbers among the nominees set forth below. If allocation is
necessary, the proxies will use their discretion in making the allocation among
nominees. Shareowners who do not wish to have their votes distributed in
approximately equal numbers among the nominees or do not want to grant the
proxies discretion to allocate, if allocation is deemed necessary by the
proxies, should mark their proxy cards to indicate how they wish to have the
proxies distribute their votes.
The proxies reserve the right not to vote and to return to a shareowner any
proxy card in which the authority to vote shares represented thereby is made
subject to any condition or conditions by such shareowner other than as
expressly provided for in the accompanying proxy card.
The six directors receiving the highest number of the votes at the meeting,
present in person or by proxy, will be elected. Those proxies containing
instructions to "Withhold Authority" to vote shares for one or all of the
nominees will be counted for the purpose of determining a quorum to transact
business, but not entitled to vote for the
1
<PAGE> 5
nominee(s) for which voting authority is being withheld. With respect to
proposal 2, abstentions will be counted in determining voting results, but
broker non-votes will not be counted.
The Company's management knows of no matter to be brought before the meeting
other than that referred to in Item 1 and 2 of the foregoing Notice of Annual
Meeting of Shareowners. However, if any other matters properly come before the
meeting, it is intended that the proxy cards in the accompanying form which are
duly signed and returned in time will be voted on those matters in accordance
with the judgment of the person or persons voting the proxy card. Any shareowner
who signs and returns a proxy card may revoke that proxy card at any time prior
to the voting thereof either by revoking the proxy card in person at the meeting
or by delivering a signed written notice of revocation to the office of the
Secretary of the Company before the meeting begins.
SHAREOWNER PROPOSALS
Shareowners wishing to include proposals in the Company's Proxy Statement
for the 1998 Annual Meeting of Shareowners must submit their proposals so that
they are received by the Secretary of the Company at the principal executive
offices in St. Louis by March 19, 1998. In addition, Section 2.10 of the
Company's By-Laws imposes certain time and information requirements on
shareowners wishing to bring business before a shareowner meeting.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
At the close of business on June 30, 1997 (the "record date"), the Company
had 21,316,455 shares outstanding. The table listed below contains information
concerning each person who is known by the Company to be the beneficial owner of
more than five percent of the Company's common stock. To the best of the
Company's knowledge, no other persons are beneficial owners of five percent or
more of the Company's shares.
<TABLE>
<CAPTION>
AMOUNT
AND NATURE
NAME AND ADDRESS OF BENEFICIAL PERCENT
TITLE OF CLASS OF BENEFICIAL OWNER OWNERSHIP OF CLASS
-------------- ------------------- ------------- --------
<S> <C> <C> <C>
Common Stock FMR Corp.
82 Devonshire Street
Boston, MA 02109 1,949,350<F1> 9.21%
Common Stock The Prudential Insurance
Company of America
751 Broad Street
Newark, NJ 07102-3777 1,175,132<F2> 5.56%
<FN>
- --------
<F1> As reported on their Schedule 13G dated February 14, 1997, FMR Corp., a
parent holding company, was the beneficial owner of 1,949,350 shares
representing approximately 9.21% of the total shares outstanding on that
day. The 1,949,350 shares include 1,550,700 shares beneficially owned by
its subsidiary, Fidelity Management & Research Company, a registered
Investment Advisor, and 398,650 shares beneficially owned by FMR's
subsidiary, Fidelity Management Trust Company, a bank. FMR Corp. has sole
voting power for 317,850 of the shares, shared voting power for none of the
shares and sole dispositive power for 1,949,350 shares.
<F2> As reported on their Schedule 13G dated February 10, 1997, The Prudential
Insurance Company of America, a registered insurance company and investment
advisor, was the beneficial owner of 1,175,132 shares representing 5.56% of
the total shares outstanding on that day, and The Prudential Insurance
Company of America has sole voting power for 19,300 shares, shared voting
power for 1,145,932 shares, sole dispositive power for 19,300 shares, and
shared dispositive power for 1,155,832 shares.
</TABLE>
ELECTION OF DIRECTORS
The Certificate of Incorporation of the Company provides that the Board of
Directors shall consist of not less than three nor more than 15 directors, with
the number of directors to be fixed by the Board, and that the Board shall be
divided into two classes, with one class being elected each year for a two-year
term. On November 21, 1995, the Board of Directors by resolution amended section
3.1 of the Company's By-laws fixing the number of directors at ten and,
accordingly, six directors are to be elected at the annual meeting to serve for
two years or until the 1999 Annual Meeting of Shareowners and until their
respective successors shall have been elected and qualified. The persons
2
<PAGE> 6
named as proxies in the accompanying proxy card have indicated that they intend
to vote for the election of the largest number of nominees set forth
hereinafter which they can elect under cumulative voting. For a discussion of
cumulative voting, see above.
In the event that any of the following nominees for election as director is
not available to serve as a director at the time of election at the meeting,
proxy cards may be voted for a substitute nominee as well as for the remaining
nominees named herein. However, the Company's management has no reason to
anticipate that any nominees will be unavailable.
NOMINEES FOR ELECTION TO SERVE UNTIL 1999
RAYMOND F. BENTELE, AGE 60
Director of the Company since 1993. President and Chief Executive Officer of
Mallinckrodt, Inc. from 1978 until retirement on November 30, 1992. Director of
Mallinckrodt Group Inc. (manufacturer of medical, specialty chemical and
veterinary products). Director of IMC Global, Inc. (food crop mineral
nutrients). Director of Leggett & Platt, Inc. (manufacturer of components for
the home furnishings industry).
Member: Compensation and Stock Option and Nominating Committees.
EDWARD S. BOTTUM, AGE 63
Director of the Company since 1981. Managing Director, Chase Franklin
Corporation (merchant banking) since April 1990. Chairman and Director, Geo. T.
Schmidt, Inc. (manufacturer of machines and dies) since 1991. Director, Azar Nut
Company (food processing) since 1991. Director, Wireless Data Corporation
(manufacturer of measurement instruments for harsh environments), January 1994
to September 1996. Trustee, 231 Funds (family of mutual funds), July 1993 to
July 1995. Trustee, The Time Horizon Funds (mutual funds family) since July
1995. Chairman, Learning Insights, L.L.C. (publisher of interactive multimedia
training products) since February 1996. Chairman, Pacific Innovations Trust
(mutual fund for variable annuities) since December 1996. Trustee, Underwriters
Laboratories, Inc. (product safety certification) since May 1997.
Member: Audit, Finance and Nominating Committees.
KITTY G. DICKERSON, PH.D., AGE 57
Director of the Company since 1991. Professor and Chair of the Department of
Textile and Apparel Management, University of Missouri, Columbia, Missouri from
1986 to Present.
Member: Audit Committee.
LEONARD A. GENOVESE, AGE 63
Director of the Company since 1995. President, Genovese Drug Stores, Inc.
since 1974. Chairman of the Board of Genovese Drug Stores, Inc. from 1978 to
present (chain drug stores). Director, TR Financial Corp. (banking) since 1993.
Director, Aid Auto Stores, Inc. (automotive parts supply) since 1995.
Member: Compensation and Stock Option Committee.
HAL J. UPBIN, AGE 58
Director of the Company since 1995. President and Chief Operating Officer of
the Company from November 22, 1994 to present. Executive Vice President
Corporate Development from May 28, 1992 to November 22, 1994. Vice President
Corporate Development from November 27, 1990 to May 27, 1992. President of
American Recreation Products, Inc. from March 1, 1989 to May 1, 1992, and
Director from May 1, 1991 to present. American Recreation Products, Inc. is a
wholly-owned subsidiary of the Company.
Member: Executive Committee.
3
<PAGE> 7
FRED W. WENZEL, AGE 81
Director of the Company since 1961. Chairman Emeritus since May 1, 1991.
Chairman of the Board from 1964 to April 30, 1991.
DIRECTORS CONTINUING TO SERVE UNTIL 1998
JERRY M. HUNTER, AGE 45
Director of the Company since 1994. Partner at Bryan Cave (law firm) from
December 1993 to present. General Counsel, National Labor Relations Board,
Washington, D.C., from November 1989 to November 1993. Director, Missouri
Department of Labor and Industrial Relations from 1986 to 1989. Labor Counsel,
Kellwood Company from November 1981 to May 1986.
Member: Audit Committee.
JAMES C. JACOBSEN, AGE 62
Director of the Company since 1975. Vice Chairman since November 22, 1994.
Executive Vice President Administration from May 31, 1989 to November 22, 1994.
Senior Vice President Finance-Administration from 1988 to 1989. Senior Vice
President Finance from 1986 to 1988.
Member: Executive and Finance Committees.
JAMES S. MARCUS, AGE 67
Director of the Company since 1965. A Limited Partner of The Goldman Sachs
Group, L.P. (investment bankers) since March 28, 1989. Director of American
Biltrite, Inc.
Member: Finance and Compensation and Stock Option Committees.
WILLIAM J. MCKENNA, AGE 70
Director of the Company since 1982. Chairman and Chief Executive Officer
since November 22, 1994. Chairman, President and Chief Executive Officer from
May 1, 1991 to November 22, 1994. Chief Executive Officer since 1984. President
from 1982 to November 22, 1994. Director of Genovese Drug Stores, Inc. and
United Missouri Bancshares, Inc.
Member: Executive and Nominating Committees.
COMPENSATION OF DIRECTORS
Directors who are employees of the Company receive no compensation for their
service as directors. Non-employee directors were compensated for their services
at the rate of $23,000 per annum. In addition, each non-employee director
receives $1,000 for each Board Meeting and $800 for each Committee meeting
attended, not to exceed $1,800 for any one day, and is reimbursed for expenses
incurred in attending those meetings.
Under the 1995 Stock Option Plan for Nonemployee Directors, each person who
remains or becomes a Nonemployee Director of the Company is granted an option to
purchase 1,000 shares of Common Stock on the first business day after the date
of the first annual meeting at which such person was elected or remained a
Nonemployee Director. The option price for each share granted to a Nonemployee
Director is 100% of the fair market value of the shares subject to option on the
date of the option grant. The option price may be paid by check or by the
delivery of shares of Common Stock then owned by the participant.
BOARD OF DIRECTORS AND COMMITTEES
The Board of Directors is responsible for establishing broad corporate
policies and for overseeing the general performance of the Company. The Board
meets regularly four times per year, and holds special meetings as required. In
fiscal 1997, the Board met five times.
4
<PAGE> 8
Each director spends considerable time in preparing for and attending Board
and Committee meetings. During the Company's most recent fiscal year, each
director attended at least 75% of the Board meetings and meetings of Committees
to which he or she was appointed, except Mr. Genovese, who had a medical
emergency.
The Board has an Executive Committee, Finance Committee, Audit Committee,
Compensation and Stock Option Committee and Nominating Committee.
The Executive Committee, between Board meetings, has all the authority of
the Board of Directors in the management of the business affairs of the Company
(except for action relating to dividends, stock issuances, and certain
fundamental corporate changes). The Executive Committee did not meet during
fiscal 1997. On six occasions actions were taken by unanimous written consent
after the Committee reviewed proposals circulated to members. The members of the
Committee were W.J. McKenna, Chairman, J.C. Jacobsen and H.J. Upbin.
The Finance Committee's responsibilities are to study and suggest methods
for obtaining the future financing requirements of the Company. The Finance
Committee met three times during fiscal 1997. Members of the Committee were J.C.
Jacobsen, Chairman, E.S. Bottum and J.S. Marcus.
The Audit Committee's responsibilities include recommending to the Board of
Directors the independent accountants to be employed for the purpose of
conducting the annual examination of the Company's financial statements,
discussing with the independent accountants the scope of their examination,
reviewing the Company's financial statements and the independent accountants'
report thereon with Company personnel and the independent accountants, and
inviting the recommendations of the independent accountants regarding internal
controls and other matters. The Audit Committee met two times during fiscal
1997. Members of the Committee were E.S. Bottum, Chairman, K.G. Dickerson and
J.M. Hunter.
The Compensation and Stock Option Committee's responsibilities include
approving salaries of executives of the Company, administering and interpreting
compensation plans, and granting cash bonuses, stock bonuses and other benefits
under such plans. The Compensation and Stock Option Committee met two times
during fiscal 1997. Members of the Committee were J.S. Marcus, Chairman, R.F.
Bentele and L.A. Genovese.
The Nominating Committee makes recommendations to the Board with respect to
the size and composition of the Board. In addition, the Committee reviews the
qualifications of candidates, and makes recommendations to the Board with
respect to nominees, for election as directors. The Committee also considers
nominees recommended by shareholders. The By-laws require that notice of
nominations proposed by shareholders be received by the Secretary of the
Company, along with certain other specified material, not less than 60 days nor
more than 90 days prior to the meeting of shareholders at which directors are to
be elected. Any shareholder who wishes to nominate a candidate for election to
the Board should obtain a copy of the relevant section of the By-laws from the
Secretary of the Company. The Committee did not meet in fiscal 1997. Members of
the Committee were W.J. McKenna, Chairman, R.F. Bentele and E.S. Bottum.
5
<PAGE> 9
MANAGEMENT OWNERSHIP OF THE COMPANY'S STOCK
Under regulations of the Securities and Exchange Commission, persons who
have power to vote or to dispose of shares of the Company, either alone or
jointly with others, are deemed to be beneficial owners of those shares. The
following table shows, as of June 30, 1997, the beneficial ownership of each
present director and each nominee for director, and of all present directors and
executive officers as a group, of shares of the Company's common stock. This
information has been furnished to the Company by the individuals named. As shown
in the last column, in some cases a significant number of the shares indicated
in the center column as being beneficially owned are actually unissued shares
attributable to unexpired options for the Company's common stock which are
presently exercisable or first become exercisable within 60 days after June 30,
1997. With the exception of Mr. McKenna who owns approximately 1.4% of the
outstanding common stock of the Company, no nominee or present director owns
more than 1% thereof. All executive officers and directors as a group own
approximately 4.3% of the outstanding common stock.
<TABLE>
<CAPTION>
NUMBER OF SHARES
NUMBER OF INCLUDED IN PREVIOUS
SHARES COLUMN ATTRIBUTABLE
NAME OF INDIVIDUAL BENEFICIALLY TO UNEXPIRED
OR NUMBER IN GROUP OWNED OPTIONS TO PURCHASE
- ------------------ ------------ --------------------
<S> <C> <C>
R. F. Bentele................................ 3,750 3,000
E. S. Bottum................................. 5,650 3,000
K. G. Dickerson.............................. 3,600 3,000
L. A. Genovese............................... 3,845 2,000
J. M. Hunter................................. 3,000 3,000
J. C. Jacobsen............................... 130,276 65,010
J. S. Marcus................................. 3,900 3,000
W. J. McKenna................................ 296,116<F1> 210,293
H. J. Upbin.................................. 81,516 63,432
F. W. Wenzel................................. 200,784 3,000
All directors and executive officers as a
group (18 persons including those named)... 928,418 472,545
<FN>
- --------
<F1> Does not include 202 shares owned by Mr. McKenna's wife, 2,900 shares owned
by his daughter, and 2,900 shares owned by his son. Mr. McKenna disclaims
beneficial ownership of these shares.
</TABLE>
6
<PAGE> 10
COMPENSATION OF EXECUTIVE OFFICERS
The following table shows the amount of all compensation earned for services
in all capacities to the Company for the last three fiscal years for (i) the
Chief Executive Officer, and (ii) the other four most highly paid executive
officers (the "Named Officers") at April 30, 1997.
<TABLE>
SUMMARY COMPENSATION TABLE
<CAPTION>
LONG TERM COMPENSATION
--------------------------------------
ANNUAL COMPENSATION AWARDS PAYOUTS
------------------------------------ ------------------------- ----------- (I)
(A) (B) (C) (D) (E) (F) (G) (H)
OTHER ALL OTHER
ANNUAL RESTRICTED COMPEN-
NAME AND COMPEN- STOCK OPTIONS LTIP SATION
PRINCIPAL POSITION YEAR SALARY ($) BONUS ($) SATION ($) AWARD(S) ($)<F1> (#) PAYOUTS ($) ($)<F2>
------------------ ---- ---------- --------- ----------- ---------------- -------- ----------- ----------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
William J. McKenna 1997 $850,000 $425,000 0 $689,748 106,115 0 $ 4,800<F4>
Chairman, CEO and 1996 820,000 290,000 0 0 96,000 0 4,500<F4>
Director<F3> 1995 790,000 0 0 0 152,800 0 4,500<F4>
Hal J. Upbin 1997 500,000 300,000 0 303,518 41,560 0 4,400<F4>
President and Chief Operating 1996 450,000 150,000 0 0 30,000 0 5,500<F4>
Officer 1995 323,849 0 0 0 23,700 0 6,500<F4>
Enoch Harding, Jr. 1997 302,000 300,000 0 162,794 21,000 0 4,170<F4>
Executive Vice President 1996 275,000 200,000 0 0 15,000 0 4,838<F4>
Operations<F5> 1995 231,417 160,000 0 0 8,000 0 5,412<F4>
James C. Jacobsen 1997 360,000 145,000 0 242,774 33,250 0 3,900<F4>
Vice Chairman 1996 360,000 100,000 0 0 30,000 0 4,500<F4>
and Director 1995 360,000 0 0 0 30,800 0 6,600<F4>
John R. Henderson, 1997 191,000 48,000 0 77,246 10,000 0 3,960<F4>
Vice President 1996 185,000 15,000 0 0 12,000 0 4,625<F4>
Merchandising 1995<F6> N/A N/A N/A N/A N/A N/A N/A
<FN>
- --------
<F1> The restricted stock award attributable to the Named Executives for fiscal
years through April 30, 1997, including the awards in Column (f), which are
still subject to restrictions under the Corporate Development Incentive
Plan, valued at the closing price on April 30, 1997, are as follows: W.J.
McKenna, 32,690 shares at $776,388; H.J. Upbin, 13,297 shares at $315,804;
E. Harding, 6,432 shares at $152,760; J.C. Jacobsen, 11,767 shares at
$279,466; and J.R. Henderson, 3,052 shares at $72,485. The Corporate
Development Incentive Plan which provides a restricted stock award
contingent on the achievement of predetermined performance criteria based
on the Company's fiscal year performance, vests over a three-year period.
Dividends are paid on the restricted stock. The amounts shown in the table
represent the dollar value based on the stock price per share at award date
and do not reflect any payment to the individual.
<F2> Excludes income accrued for Executive Deferred Compensation Plan because at
prime plus 1% it is not above market rate.
<F3> W. J. McKenna has a contract of employment through November 30, 1997.
Effective May 1, 1997 his salary was increased to $900,000.
<F4> Employer matching 401(k) plan contribution.
<F5> By agreement with the Company, Mr. Harding will be paid a deferred
compensation benefit under a straight-life annuity of $1,032 per month upon
retirement, continuing during his lifetime.
<F6> Not an executive officer of the Company for this fiscal year.
</TABLE>
7
<PAGE> 11
The following two tables contain information covering stock options granted
during the fiscal year ended April 30, 1997, to the Named Officers and the
number and value of unexercised stock options held by those officers at the end
of the last fiscal year. No SARs were granted in conjunction with the options.
<TABLE>
OPTION GRANTS TABLE
OPTION GRANTS DURING 1997 FISCAL YEAR
<CAPTION>
INDIVIDUAL GRANTS
--------------------------------------------- POTENTIAL REALIZABLE VALUE
% OF TOTAL AT ASSUMED ANNUAL RATES OF
OPTIONS STOCK PRICE APPRECIATION
GRANTED TO EXERCISE OR FOR OPTION TERM
OPTIONS EMPLOYEES IN BASE PRICE EXPIRATION --------------------------
NAME GRANTED (#) FISCAL YEAR <F1> ($/SHARE) DATE 5% ($) 10% ($)
---- ----------- ---------------- ----------- ---------- ------ -------
<S> <C> <C> <C> <C> <C> <C>
William J. McKenna........... 100,390 25.03 $16.13 05/30/06 $1,018,363 $2,580,732
5,725 1.43 16.13 05/30/06 58,075 147,173
--------- --------- ---------- ----------
106,115 26.46 1,076,438 2,727,905
========= ========= ========== ==========
Hal J. Upbin................. 38,160 9.51 16.13 05/30/06 387,098 980,982
3,400 .85 16.13 05/30/06 34,490 87,404
--------- --------- ---------- ----------
41,560 10.36 421,588 1,068,386
========= ========= ========== ==========
Enoch Harding, Jr............ 17,000 4.24 16.13 05/30/06 172,449 437,020
4,000 1.00 16.13 05/30/06 40,576 102,828
--------- --------- ---------- ----------
21,000 5.24 213,025 539,848
========= ========= ========== ==========
James C. Jacobsen............ 26,620 6.64 16.13 05/30/06 270,035 684,322
6,630 1.65 16.13 05/30/06 67,255 170,438
--------- --------- ---------- ----------
33,250 8.29 337,290 854,760
========= ========= ========== ==========
John R. Henderson............ 8,000 1.99 16.13 05/30/06 81,153 205,657
2,000 .50 16.13 05/30/06 20,288 51,414
--------- --------- ---------- ----------
10,000 2.49 101,441 257,071
========= ========= ========== ==========
<FN>
- --------
<F1> Total options granted during 1997 were 401,000 shares to the Named Officers
and all other employees.
</TABLE>
<TABLE>
OPTION EXERCISES IN 1997 FISCAL YEAR
AND FY-END 04/30/97 VALUE TABLE
<CAPTION>
(a) (b) (c) (d) (e)
VALUE OF
UNEXERCISED
NUMBER OF IN-THE-MONEY
OPTIONS OPTIONS
AT FY-END (#) AT FY-END ($)
04/30/97 04/30/97
SHARES
ACQUIRED ON VALUE EXERCISABLE/ EXERCISABLE/
NAME EXERCISE (#) REALIZED ($) UNEXERCISABLE UNEXERCISABLE
---- ----------- ------------ ------------- -------------
<S> <C> <C> <C> <C>
William J. McKenna.................................... 45,000 $651,465 141,760/300,905 $542,753/1,444,987
Hal J. Upbin.......................................... 4,500 94,320 41,820/ 86,740 233,299/ 454,613
Enoch Harding, Jr..................................... 21,200 146,157 0/ 43,800 0/ 229,674
James C. Jacobsen..................................... 27,000 383,319 41,540/ 85,810 160,067/ 419,678
John R. Henderson..................................... 0 0 4,400/ 22,600 13,772/ 112,538
</TABLE>
8
<PAGE> 12
RETIREMENT PROGRAM
PENSION PLAN
The Kellwood Company Pension Plan is a defined benefit plan covering a
substantial number of all domestic employees of the Company and its
subsidiaries. The basic annual pension benefit under the Plan for service after
April 30, 1989 is equal to 12 times 0.5% of average monthly earnings times
credited service after April 30, 1989, plus 12 times 0.5% of average monthly
earnings, in excess of covered compensation, multiplied by years of credited
service commencing on or after May 1, 1989 up to 35 years. Covered compensation
is defined as the average social security wage base for the 35 years before an
employee reaches social security retirement age. Average monthly earnings under
the Plan is the average of an employee's monthly earnings defined under the Plan
paid during the highest paid five consecutive full calendar years within an
employee's credited service. The amount of final benefits is not and cannot
readily be calculated for each individual by the Plan's regular actuaries.
Plan participants as of April 30, 1989, who continued as employees after
April 30, 1989, will receive their amended accrued benefits as of April 30, 1989
plus benefits earned after that date. For employees earning $150,000 per year or
more, an amended accrued monthly benefit as of April 30, 1994 was calculated.
The amended accrued monthly benefits at April 30, 1994, for officers listed in
the Summary Compensation Table were as follows: W. J. McKenna, Chairman and
Chief Executive Officer, $9,333.49; H. J. Upbin, President and Chief Operating
Officer, $615.06; E. Harding, Jr., Executive Vice President Operations,
$1,766.95; J. C. Jacobsen, Vice Chairman, $5,560.28; and John R. Henderson, Vice
President Merchandising, $245.79. Upon retirement, Mr. Harding will also be paid
during his lifetime a deferred compensation benefit under a straight-life
annuity of $1,032 per month in recognition of his previous employment between
1972 and 1977. As of April 30, 1997, of the officers listed in the Summary
Compensation Table, Mr. McKenna, Mr. Upbin, Mr. Harding, Mr. Jacobsen and Mr.
Henderson have approximately three years of credited service subsequent to May
1, 1994. The table below is indicative of annual benefits for service after
April 30, 1989, using covered compensation for employees retiring at normal
retirement age in calendar 1997. Benefits for employees who retire in subsequent
years will be lower reflecting increases in the average social security wage
base.
<TABLE>
PENSION PLAN TABLE
<CAPTION>
YEARS OF SERVICE
---------------------------------------------------
REMUNERATION 5 10 15 20 30
- ------------ ------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C>
$ 50,000................................. $ 1,767 $ 3,535 $ 5,302 $ 7,070 $ 10,604
100,000................................. 4,267 8,535 12,802 17,070 25,604
160,000................................. 7,267 14,535 21,802 29,070 43,604
250,000................................. 7,267 14,535 21,802 29,070 43,604
350,000................................. 7,267 14,535 21,802 29,070 43,604
500,000................................. 7,267 14,535 21,802 29,070 43,604
750,000................................. 7,267 14,535 21,802 29,070 43,604
1,000,000................................ 7,267 14,535 21,802 29,070 43,604
1,300,000................................ 7,267 14,535 21,802 29,070 43,604
1,600,000................................ 7,267 14,535 21,802 29,070 43,604
</TABLE>
Section 401(a)(17) of the Internal Revenue Code limits annual earnings for
purposes of calculating benefits under Kellwood's pension plan to $160,000.
Section 415 of the Internal Revenue Code limits annual benefits payable from the
plan at age 65 to $125,000. However, benefits accrued prior to the enactment of
these limitations were not reduced accordingly.
REPORT OF THE COMPENSATION AND STOCK OPTION COMMITTEE ON
EXECUTIVE COMPENSATION
This Report and the following Performance Graph shall not be deemed to be
incorporated by reference by any general statement which incorporates by
reference this Proxy Statement into any filing under the Securities Act of 1933
or the Securities Exchange Act of 1934, and they shall not otherwise be deemed
filed under such Acts.
9
<PAGE> 13
OVERVIEW
The Company's Board of Directors has established a three member Compensation
and Stock Option Committee (the "Committee"). Each member of the Committee is
a non-employee director.
The Securities and Exchange Commission has adopted rules which are designed
to enhance disclosure of the policies of companies regulated by the Commission
in regard to executive compensation. In response to these rules the Committee
has prepared a report, as outlined below, on the Company's policies and
practices with respect to executive compensation.
The Company's executive officer compensation program consists of base
salary, annual cash incentive compensation, long-term incentive compensation in
the form of stock options and stock awards, and various benefits including
medical, pension, and 401(k) savings plans generally available to employees of
the Company.
COMPENSATION POLICIES
The Committee's executive compensation policies are designed to provide
competitive levels of compensation which integrate pay with the Company's annual
and longer term performance goals, reward above average performance, recognize
individual initiative and achievements, assist the Company in attracting and
retaining qualified executives and build the ownership of Company stock by key
managers. The Committee is of the view that stock ownership by management and
stock-based performance compensation arrangements are beneficial in aligning the
interests of management with the interests of the Company's shareowners which
ultimately enhances shareowner value. The Committee further believes that bonus
and other forms of incentive-based compensation encourage management to attain
preset commercial goals for the Company.
BASE SALARY
The Committee reviews each executive officer's salary annually and considers
recommendations submitted by the Chief Executive Officer. In determining
appropriate salary levels, the Committee considers a variety of sources,
including industry surveys, proxy statements, and outside consultants. The
Committee also considers the level and scope of responsibility, experience,
Company and individual performance, and internal equity. The Committee uses its
discretion to set executive compensation where in its judgment external,
internal, or an individual's circumstances warrant. By design, the Committee
strives to set executives' salaries at competitive market levels. Increases are
based on comparable companies' practices, the Company's achievement of its
financial plan, and the individual's performance. The salary increases in fiscal
1997 were based on the Committee's review of the return on equity, net earnings
as a percent of sales and earnings per share growth over the prior five years.
ANNUAL CASH INCENTIVES
Annual cash incentive compensation awards are made to executives to
recognize and reward corporate and individual performance. Goals for Company and
business unit performance are set at the beginning of each fiscal year. In
determining whether to award cash bonuses, the Committee compares the Company's
financial performance against its annual financial plan, considers individual
performance, and Company performance against that of peer companies. In
considering bonuses for executives other than Mr. McKenna, the Committee
considers bonus recommendations submitted by the Chief Executive Officer. The
Committee also receives an assessment of the performance of each executive from
Mr. McKenna and discusses the assessments with him. When assessing the
performance of Mr. McKenna, the Committee meets privately. Cash bonuses were
awarded within the policy guidelines of the annual cash bonus program. See
column (d) of the Summary Compensation Table.
ANNUAL STOCK INCENTIVES
The Committee administers the Company's Restricted Stock Compensation Plan
and the Corporate Development Incentive Plan, both of which award shares of the
Company's common stock. Under the Restricted Stock Compensation Plan, restricted
shares are granted to qualified employees and are released from restrictions
ratably over five years. Awards are limited to an aggregate of 25,000 shares for
any Plan year. In fiscal 1997, no awards were made to any executive officers.
10
<PAGE> 14
The Committee selects key corporate executives to be participants in the
Corporate Development Incentive Plan based upon its judgment of the executive's
ability to significantly affect major decisions and actions which influence the
continued profitable growth and development of the Company, the value of the
executive's continuing service and the probable detriment of his or her
employment by competitors. The Committee selects participants and sets the
performance goals which must be achieved during the measurement period. The
measures and objectives may be based on earnings per share, earnings before tax
and gains on sale of assets, or other criteria which the Committee establishes.
Payment of awards under the Plan are made in common stock. An award, if any, is
made to a participant by the Company at the time the Committee determines that
performance goals have been met. Restrictions on the shares lapse and shares are
transferred to the participants in installments over approximately three years,
provided the shares have not been forfeited. Awards granted to qualified
employees under the Plan are limited to an aggregate of 157,500 shares for any
Plan year. The shares covered by the awards may not be transferred, sold,
pledged or otherwise disposed of prior to the lapse of restrictions. A target
award level is established for each executive officer based on his or her level
of responsibility. Based on Company earnings, a participant may have the
opportunity to earn awards in excess of the targeted amounts for the Company's
outstanding performance. Threshold standards required to be met before any stock
bonus award is made are also established. In fiscal 1997, the performance goal
was exceeded and awards were made at 109% of the targeted award levels. See
column (f) of the Summary Compensation Table.
STOCK OPTIONS
The Committee administers the Company's 1995 Omnibus Incentive Stock Plan
which provides for awards of incentive stock options, non-qualified stock
options and stock appreciation rights. These awards directly relate the amounts
earned by the executives to the amount of appreciation realized by the Company's
shareowners over comparable periods. Stock options also provide executives with
the opportunity to acquire and build a meaningful ownership interest in the
Company. While the Company encourages stock ownership by executives, it has not
established any target levels for executive stock holdings. Awards are generally
made at a level calculated to be competitive. See the Option Grants During 1997
Fiscal Year Table.
The Committee considers stock option awards on an annual basis. These are
normally awarded in May. In determining the amount of options awarded, the
Committee generally establishes a level of award based on the position held by
the individual and his or her level of responsibility, both of which reflect the
executive's ability to influence the Company's long-term performance. The number
of options previously awarded to and held by executives are also reviewed but
are not an important factor in determining the size of the current award. The
number of options actually awarded in any year is based on an evaluation of the
individual's performance.
OTHER BENEFIT PROGRAMS
The Company has adopted an unfunded, unqualified deferred compensation plan
known as the Executive Deferred Compensation Plan (the "Plan") to provide
deferred compensation for a select group of management or highly-compensated
employees. The Plan allows employees to voluntarily defer compensation until
termination or retirement. Under the Plan, any employee whose base salary
exceeds a level set by the Plan Administrator may enroll in the Plan. The Plan
is administered by the Retirement Savings Plan Committee.
For any calendar year, a Participant may defer up to $60,000 in salary as
well as up to $60,000 in cash bonus. The Employer shall credit the deferred
amount to a separate bookkeeping account (the "Account") maintained by the
Plan Administrator in the name of the Participant. The Account shall be
increased monthly by an amount equal to one-twelfth of the sum of the prime rate
plus 1%.
The executive officers participate in various health, life and disability
insurance programs, pension plan and a retirement savings 401(k) plan, that are
generally made available to all salaried employees. Executive officers also
receive certain traditional perquisites that are customary for their positions.
The Committee believes that the overall program it has adopted, with its
emphasis on long term compensation, serves to focus the efforts of the Company's
executives on the attainment of a sustained high rate of Company growth and
profitability for the benefit of the Company and its stockholders.
11
<PAGE> 15
COMPENSATION FOR THE CHIEF EXECUTIVE OFFICER
The Company's Chief Executive Officer, W. J. McKenna, has an Employment
Agreement. Effective May 1, 1997, his salary was increased to $900,000 which is
comparable to the compensation paid by companies of similar size. Mr. McKenna
has had an Employment Agreement with the Company since 1982 which was extended
to November 30, 1997.
The Committee approved a cash bonus to Mr. McKenna of $425,000 for fiscal
1997.
In approving the salary increase and the bonus for fiscal 1997 and the grant
of stock options in fiscal 1997 to Mr. McKenna, the Committee took into account
the level and scope of his responsibilities and contributions to the Company.
COMPANY POLICY ON QUALIFYING COMPENSATION
Internal Revenue Code Section 162(m), adopted in 1993, provides that
publicly-held companies may not deduct in any taxable year compensation in
excess of $1,000,000 paid to the CEO and other executive officers which is not
"performance based" as defined in Section 162(m). The Committee will continue
to monitor the effect of this new provision on the Company's existing
compensation plans and will take appropriate action if warranted in the future
to maintain the deductibility of payments under the plan.
COMMITTEE COMPOSITION
This Report is submitted by the members of the Committee as of April 30,
1997.
Raymond F. Bentele
Leonard A. Genovese
James S. Marcus, Chairman
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
Except as stated below, there are no interlocks or insider participation
with any executive officers of the Company or with the members of the Committee,
Messrs. Bentele, Genovese and Marcus. Mr. Genovese, a Director, is Chairman of
the Board and President of Genovese Drug Stores, Inc. Mr. McKenna serves as a
Director on that Board.
Jerry M. Hunter was elected a director at the Annual Meeting of Shareowners
held on August 25, 1994. Mr. Hunter is a partner in the law firm of Bryan Cave
in St. Louis, Missouri. The services of the law firm have been retained during
the last fiscal year and during the current fiscal year. Fees paid by the
Company to Bryan Cave did not exceed five percent of the law firm's gross
revenues for that firm's last fiscal year.
12
<PAGE> 16
PERFORMANCE GRAPH
The following graph compares the performance of Kellwood common shares with
that of the S&P 500 and S&P Apparel Indices. The graph plots the growth in value
of an initial $100 investment over the indicated time periods, with dividends
reinvested.
[GRAPH]
<TABLE>
- ----------------------------------------------------------------------------
<CAPTION>
4/92 4/93 4/94 4/95 4/96 4/97
- ----------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Kellwood Co. $100 $97 $132 $101 $95 $143
S&P 500 Index $100 $109 $115 $135 $176 $220
S&P Textile Index $100 $100 $87 $85 $104 $133
- ----------------------------------------------------------------------------
Note: Total return assumes reinvestment of dividends.
</TABLE>
OTHER OFFICER AGREEMENTS
The Company has agreements with Messrs. McKenna, Jacobsen, and several of
the other officers providing for compensation in connection with termination of
employment following a Change in Control, as well as if all or substantially all
of the Company's assets are sold by the Company, or the Company is liquidated or
ceases to function as a going concern. These agreements provide for the payment
of a lump sum within five days of the date of termination equal to the sum of
(a) two times the officer's highest base salary in effect during the fiscal year
in which the date of termination occurs, (b) two times the officer's average
annual incentive awards during the last three full fiscal years, (c) the
incentive award which, pursuant to any benefit plan of the Company, had accrued
or would have accrued to the officer during the last full fiscal year, and (d)
the last bonus award earned by the officer under the Company's annual bonus
program.
13
<PAGE> 17
COMPLIANCE WITH SECTION 16(A) OF THE EXCHANGE ACT
The Securities Exchange Act of 1934 requires all executive officers and
directors to report any changes in the ownership of common stock of the Company
to the Securities and Exchange Commission, the New York Stock Exchange and the
Company.
Based solely upon a review of these reports and written representations that
no additional reports were required to be filed in fiscal 1997, the Company
believes that all reports were filed on a timely basis.
APPROVAL OF THE COMPANY'S
CORPORATE DEVELOPMENT INCENTIVE PLAN, AS AMENDED
(PROXY ITEM NO. 2)
APPROVAL
A proposal to approve the Corporate Development Incentive Plan, as Amended
(the "Plan") will be presented to shareowners at the Annual Meeting. On May
29, 1997, the Board of Directors approved the Plan, as approved and recommended
by the Compensation and Stock Option Committee of the Board (the "Committee").
The Board of Directors believes that the Plan provides a means of attracting
and retaining key employees and officers and provides incentives to participants
to improve the Company's long-term growth and profitability. The Plan is also
designed to align the interests of the participants with those of the
shareowners.
The Plan was originally known as the Key Executive Long-Term Incentive Plan
of 1983, and it was approved by the shareowners at the August 1983 annual
shareowners meeting. The Plan was later amended and renamed the Corporate
Development Incentive Plan. Other than by stock splits, no new shares have been
added to the Plan since 1983.
The Plan is being submitted for shareowner approval because of the expanded
business criteria upon which performance goals can be formulated to meet the
requirements of Section 162(m) of the Internal Revenue Code (the "Code"). If
the Plan is not approved by the shareowners, the Plan will remain in effect
except as to amendments specifically relating to Section 162(m) of the Code.
A summary of the essential features of the Plan is provided below, but is
qualified in its entirety by reference to the full text of the Plan, which is
included as Appendix A hereto.
SHARES AVAILABLE FOR ISSUANCE
The total number of shares of common stock which were originally reserved
for issuance under the Plan is 787,500 shares, subject to anti-dilution
provisions. No more than 157,500 shares of stock may be subject to awards in any
one fiscal year and no more than 50,000 shares may be awarded to any participant
in any fiscal year. As of June 30, 1997, 290,754 shares remained available for
issuance under the Plan.
ADMINISTRATION
The Plan is administered by the Committee. The Committee consists entirely
of directors of the Company who are not officers or employees of the Company or
any subsidiary. The Committee selects the employees of the Company or any
subsidiary who will receive awards, determines the size of the award and
establishes the performance required for the award to be earned by a participant
and the other terms and conditions of the award.
TARGETED CRITERION
The Committee will establish performance measures and objectives based on
one or more of the following criteria: earnings per share, return on assets or
equity, cash flow, revenue or income growth, earnings before income taxes (but
excluding any gain on the sale of assets), economic value added or such other
criteria as the Committee may from time to time establish. At the end of the
performance period, the Committee shall determine the level of performance of
each participant and shall certify the number of shares earned. Certificates
representing the shares earned shall be issued in the name of each participant
and delivered to an escrow agent to be paid out 25% on a date selected by the
Committee in the calendar year in which the award is earned and the remaining
75% in three equal
14
<PAGE> 18
annual installments in the succeeding three calendar years. The escrowed shares
are forfeited if the participant terminates employment for any reason other
than death, disability or retirement.
TAX CONSEQUENCES
No taxable income is realized at the time an employee is designated as a
participant in the Plan or at the time the Committee certifies that a number of
shares have been earned by the participant. The participant will normally
realize taxable income at the time shares are actually delivered out of escrow
in an amount equal to the fair market value of the shares on the date of
delivery and the Company will be entitled to a deduction at the same time and
for the same amount.
Section 162(m) of the Code denies a deduction to any publicly-held
corporation for compensation paid to the five highest-paid employees in a
taxable year to the extent that the compensation exceeds $1 million.
"Performance-based compensation" is exempt for these purposes. Awards under
the Plan will be "performance based", if the performance criteria and the other
material terms of the Plan are approved by the shareowners, since the earning
of the awards is contingent upon the attainment of specified objective goals
relating to financial, operational and other measures.
VOTE REQUIRED
The vote of a majority of the shares present and voting at the meeting is
required for the approval of the Plan extension and amendment.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE CORPORATE DEVELOPMENT
INCENTIVE PLAN, AS AMENDED.
INDEPENDENT ACCOUNTANTS
The Audit Committee recommended to the Board and the Board approved on May
29, 1997, the retention of Price Waterhouse LLP to serve as the Company's
independent accountants for fiscal year 1998.
Representatives of Price Waterhouse LLP will be present at the annual
meeting with the opportunity to make a statement if they so desire and will be
available to respond to appropriate questions.
Thomas H. Pollihan
Vice President, Secretary and
General Counsel
St. Louis, Missouri
July 17, 1997
15
<PAGE> 19
APPENDIX A
KELLWOOD COMPANY
CORPORATE DEVELOPMENT INCENTIVE PLAN, AS AMENDED
1. PURPOSE
A. To cause the interests of key executives and stockholders to coincide by
basing certain of the executive long-term incentives on the achievement of
long range corporate goals.
B. To provide meaningful incentive to Participants to improve the Company's
long-term growth and profitability.
C. To encourage Participants to enhance the growth and profitability of the
entire Company rather than concentrating efforts on only a specific
segment of the Company.
D. To encourage acceptance and continuation of employment.
2. NAME OF PLAN
The Plan shall be known as the Kellwood Company Corporate Development
Incentive Plan, as amended.
3. DEFINITIONS
The following words and phrases, when used in this Plan, shall have the
meanings indicated herein:
<TABLE>
<C> <C> <S>
(1) Award: A number of Shares in Stock earned by a Participant under the Plan.
(2) Change in Control: Change in Control of the Company shall be defined to have occurred if (i) any
"person" (as such term is used in Section 13(d) and 14(d) of the Exchange
Act) is or becomes the "beneficial owner" (as defined in Rule 13d-3 under the
Exchange Act), directly or indirectly, of securities of the Company
representing 25% or more of the combined voting power of the Company's then
outstanding securities; or (ii) during any period of two consecutive years,
individuals who, at the beginning of the two year period, were members of the
Board cease for any reason to constitute at least a majority of the Board.
(3) Committee: The Compensation and Stock Option Committee of the Company's Board of
Directors, comprised of non-employee directors, none of whom shall be eligible
to participate in this Plan.
(4) Company: Kellwood Company.
(5) Disability: A physical or mental condition, which in the judgment of the Committee, based
on medical evidence acceptable to the Committee, would result in a Participant
being determined to be totally and permanently disabled under normal Company
policy.
(6) Employer: Kellwood Company and each of its subsidiaries, affiliates and related companies
to which the Plan has been extended by the Committee.
(7) Escrow Agent: The Escrow Agent selected by the Committee to receive and hold Stock awarded
under the Plan.
(8) Participant: An Employee of the Employer selected by the Committee to whom an Award has been
made under the provisions of the Plan. A Participant will be selected by the
Committee in its sole discretion, based upon the Committee's judgment of the
employee's ability to significantly affect major decisions and actions which
influence the continued profitable growth and development of the Company, the
value of the employee's continuing service and the probable detriment of his or
her employment with competitors.
A-1
<PAGE> 20
(9) Retirement: The termination of a Participant's employment with all Employers after (a) he
has fulfilled all requirements for a pension under any pension or retirement
plan of an Employer or (b), if he is not a participant under any such plan of
an Employer, he is terminated after having attained the Company's Normal
Retirement Date as defined by the Kellwood Company Pension Plan.
(10) Shares or Stock: Shares of the Company's common stock.
(11) Targeted Criterion: The level of performance during a performance period designated by the
Committee which must be met for the full amount of an Award to be earned by a
Participant. The measures and objectives may be based on earnings per share,
return on assets or equity, cash flow, revenue or income growth, earnings
before income taxes but excluding any gain on the sale of assets, economic
value added or on other criteria which the Committee establishes.
(12) Targeted Shares: The number of Shares which a Participant can earn at 100% of the Targeted
Criterion.
</TABLE>
4. SHARES RESERVED FOR AWARDS
The total number of Shares reserved for distribution as Awards under this
Plan shall be 787,500 shares, subject to adjustment as provided in Section 9
hereof. No more than 157,500 Shares of Stock shall be subject to Awards in
any one Fiscal Year. The maximum number of Shares subject to an Award to any
Participant in any fiscal year shall be 50,000 Shares.
5. AWARD PROCEDURE
A. The Committee, upon the recommendation of the Chief Executive Officer,
shall determine each Participant, each Participant's Targeted Shares and
shall make Awards to the Participants in accordance with further
provisions of the Plan.
B. The Committee shall determine the following at the time of setting the
Targeted Criterion:
1. The Targeted Criterion level for the performance period necessary for a
Participant to receive any Award.
2. The Targeted Criterion level for the performance period necessary to
meet the Targeted Shares.
3. Any known or anticipated Board actions or changes in tax laws or
regulations which are to be excluded, if any, from the Targeted
Criterion levels identified by the Committee.
C. The Committee shall determine the following at the time of making each
Award:
1. The extent that the Targeted Criterion of the Company have been met.
2. The number of Shares awarded.
6. ADJUSTMENTS TO TARGETED CRITERION
The Committee shall have the power, exercisable at its sole discretion, to
adjust the Targeted Criterion to reflect any major alterations in the course
of the business or to exclude the effects of any action by the Board or of
any changes in the tax laws or regulations which impact significantly on the
Targeted Criterion and which were not anticipated on the date a
Participant's Targeted Shares were determined. However, the Committee may
not exercise its discretion to increase the amount of any Award to a
Participant who is a "covered employee" under Section 162(m) of the
Internal Revenue Code.
7. PAYMENT
A. The payment of a Participant's Award shall be made in Company Stock.
B. The Company shall place in escrow with the escrow agent, in the name of
the Participant, 100% of the stock earned by the Participant under this
Plan. The restrictions on the Stock placed in escrow shall lapse, and the
Stock shall be transferred to the Participant from the escrow at the rate
of 25% a year, with the first release on
A-2
<PAGE> 21
the date selected by the Committee in the year of the award, and the
remaining 75% in three equal installments commencing on the first
business day in June of the year following the calendar year in which the
award is earned and on each first business day of each June thereafter.
C. In the event of the death, Disability or Retirement of a Participant
during the performance period, the Participant or his beneficiary shall be
entitled to receive a pro rata portion of the Award which would otherwise
have been due to him had he remained an Employee until the end of the
performance period based on the number of full months during which the
Participant was employed during the performance period.
D. In the event of Disability of a Participant, any stock which was in escrow
as of the date of the Participant's Disability shall be released from
escrow in accordance with the release dates at the same rate as if the
Participant continued as an Employee.
E. In the event of the death of a Participant, any Stock which was in escrow
as of the date of the Participant's death, shall be released and delivered
to such one or more beneficiaries as the Participant may have designated
in writing and filed with the Secretary of the Committee. Beneficiaries
may be named contingently or successively and may share in different
portions, if so designated by the Participant. If no beneficiary has been
designated, delivery shall be made to the estate of the decedent.
F. In the event of Retirement of a Participant, any Stock which was in escrow
as of the date of the Participant's Retirement, shall be immediately
released from escrow and delivered to the Participant.
G. If a Participant's employment is terminated as a result of a sale of part
of the Company, the Committee, in its sole discretion, may accelerate the
release of any Stock from escrow.
8. FORFEITURES
Upon the termination of employment of a Participant from the services of all
Employers due to any reason other than death, Disability, or Retirement, any
Stock in escrow on the date of termination shall be forfeited by the
Participant, except as provided in Section 7, G. Any Stock forfeited
hereunder shall be available for further awards under the Plan.
9. CHANGE IN CAPITALIZATION
A. In the event of any Stock dividend, split-up, reclassification or other
changes in the Stock, the Committee shall make such adjustments in the
Targeted Shares, Stock in escrow, reserved Shares and maximum Shares
awarded to any Participant as it deems equitable to accomplish the purpose
of the Plan. A Committee's determination as to any adjustments shall be
final and conclusive.
B. Each participant who receives an Award of Stock under the Plan shall be
entitled to dividends on the Shares and to all the rights of a stockholder
with respect to the Stock from the date Stock was issued and placed in
escrow. Any Stock received as a result of a Stock dividend or Stock split,
or otherwise in respect of any restricted Stock, shall be subject to the
same restrictions as the original Stock and placed in escrow.
10. ADMINISTRATION AND INTERPRETATION OF THE PLAN
The Committee shall have full responsibility for the administration of the
Plan and may establish rules deemed by it to be appropriate to carry out the
purposes of the Plan. The decision of the Committee with respect to
selection of Participants, the amount of Targeted Shares and Awards, and the
interpretation of the Plan shall be conclusive and binding on all parties.
11. MISCELLANEOUS
A. By acceptance of any Award under this Plan, the Participant agrees that
the value of any Stock issued to him pursuant to an Award is special
compensation and that the value of the Stock will not be taken into
account in determining the amount of any pension or other retirement
benefits under any Employer's retirement program, the amount of life
insurance coverage under any Employer's program, or be considered as
"income" in determining the gross monthly indemnity under any Employer's
long-term disability benefit program.
A-3
<PAGE> 22
B. No interest of a Participant may be sold, donated, pledged, or otherwise
assigned or transferred in whole or in part, except by will or the laws of
descent and distribution.
C. Participation in the Plan does not give a Participant any right to be
retained as an Employee of any Employer.
D. The delivery of any Stock under the Plan to a Participant may also be
subject to such other provisions as the Committee determines appropriate,
including any which may be considered necessary to comply with federal or
state securities laws or stock exchange requirements or withholding tax
requirements.
12. ADOPTION OF AMENDMENTS OR TERMINATION OF THE PLAN
The Committee shall have the right to amend or modify this Plan from time to
time, or to terminate this Plan entirely or to suspend the establishment of
Targeted Shares; provided, however, no amendment or modification of this
Plan or its termination shall affect or impair the provisions of any Award
theretofore made without the written consent of each Participant whose Award
would be affected or impaired by the amendment, modification or termination.
13. IMMEDIATE RELEASE FROM ESCROW
Notwithstanding the other provisions of this Plan, (i) upon a Change in
Control of the Company, or (ii) pursuant to a resolution of the Committee
passed after commencement of a tender offer or other acquisition plan or
program by any person which, if consummated in accordance with its terms,
would result in a Change in Control of the Company; then all restrictions on
Stock in escrow shall immediately lapse, and the Stock shall be released
from escrow and transferred to the Participants.
14. WITHHOLDING
When a participant is required to pay to the Company an amount to be
withheld under applicable tax laws in connection with the release of Shares
under the Plan, the Committee may, in its discretion and subject to such
rules as it may adopt, permit the Participant to satisfy the obligation, in
whole or in part, by electing to have the Company withhold Shares having a
fair market value equal to the amount required to be withheld. The election
must be irrevocable and made on or before the date that the amount of tax to
be withheld is determined (the "Tax Date"). The fair market value of the
shares to be withheld is the average of the high and low market price of the
Common Stock on the New York Stock Exchange on the Tax Date. Fractional
amounts will be paid in cash.
A-4
<PAGE> 23
PROXY KELLWOOD COMPANY PROXY
PROXY SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
FOR THE ANNUAL MEETING OF SHAREHOLDERS - AUGUST 28, 1997
WILLIAM J. MCKENNA, THOMAS H. POLLIHAN, JANE B. CAMPBELL, and each of them, are
hereby appointed proxies of the Shareowner(s) signing the reverse side hereof,
with power of substitution acting by a majority of the proxies present and
voting, or if only one proxy is present and voting then acting by that one, to
vote the shares of Kellwood Company common stock which the Shareowner(s) is
(are) entitled to vote, at the ANNUAL MEETING OF SHAREOWNERS to be held at
600 Kellwood Parkway, St. Louis, Missouri on August 28, 1997, at 9:00 A.M.,
and at any adjournment thereof, with all the powers the signing Shareowners
would possess if present. The proxies are instructed to vote as specified on
the REVERSE SIDE.
1. ELECTION OF DIRECTORS: FOR the maximum number of nominees listed below
(except as indicated on the reverse side) who
(as selected by the Proxies in their discretion)
may be elected pursuant to cumulative voting.
R. F. Bentele, E. S. Bottum, K. G. Dickerson,
L. A. Genovese, H. J. Upbin, F. W. Wenzel
2. Approval of the extension and amendment of the Kellwood Company Corporate
Development Incentive Plan.
3. In their discretion any other matter that may properly come before the
meeting or any adjournment thereof.
The shares represented by this Proxy will be voted as specified by the
Shareowner(s), but if no specification is made, this Proxy will be voted FOR
the election of Directors and FOR each of the matters set forth ABOVE, all as
set forth in the notice of annual meeting dated July 17, 1997, and the
accompanying Proxy Statement. Discretion will be used with respect to voting
any other matters that properly come before the meeting.
(Continued and to be signed on the reverse side.)
<PAGE> 24
KELLWOOD COMPANY
PLEASE MARK VOTE IN OVAL IN THE FOLLOWING MANNER USING DARK INK ONLY.
1. ELECTION OF DIRECTORS- For Withhold For All
Nominees: R.F. Bentele, E.S. Bottum, All All (Except for
K.G. Dickerson, L.A. Genovese, / / / / nominee(s)
H.J. Upbin, F.W. Wenzel written
below)
/ /_________
2. Approve the extension and amendment For Against Abstain
of the Kellwood Company Corporate / / / / / /
Development Incentive Plan.
Dated:___________________________, 1997
Signature(s)___________________________
_______________________________________
NOTE: Please sign exactly as name
appears hereon. Joint owners
should each sign. When signing
as attorney, executor,
administrator, trustee or
guardian, please give full title
as such.
- -------------------------------------------------------------------------------
/ / FOLD AND DETACH HERE / /
YOUR VOTE IS IMPORTANT!
PLEASE COMPLETE, DATE, SIGN AND MAIL THIS PROXY PROMPTLY IN THE
ENCLOSED POSTAGE-PREPAID ENVELOPE.
<PAGE> 25
Appendix
Page 13 of the printed proxy contains a performance graph. The information
contained in the graph is depicted in the table that immediately follows the
graph.
