<PAGE>
SCHEDULE 14A INFORMATION
===============================================================================
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 14A
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 (S) 240.14a-11(c) or (S) 240.14a-12
Kellwood Company
- --------------------------------------------------------------------------------
(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)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
-------------------------------------------------------------------------
(2) Aggregate number of securities to which transaction applies:
-------------------------------------------------------------------------
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which
the filing fee is calculated and state how it was determined):
-------------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
-------------------------------------------------------------------------
(5) Total fee paid:
-------------------------------------------------------------------------
[_] Fee paid previously with preliminary materials.
[_] Check box if any part of the fee is offset as provided by Exchange
Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee
was paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
-------------------------------------------------------------------------
(2) Form, Schedule or Registration Statement No.:
-------------------------------------------------------------------------
(3) Filing Party:
-------------------------------------------------------------------------
(4) Date Filed:
-------------------------------------------------------------------------
Notes:
Reg. (S) 240.14a-101.
SEC 1913 (3-99)
<PAGE>
[LOGO OF KELLWOOD APPEARS HERE]
1999
PROXY STATEMENT
<PAGE>
KELLWOOD COMPANY
600 Kellwood Parkway,
St. Louis County, Missouri 63017
1999 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 26, 1999, 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; and
2. 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 28, 1999 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, 1999.
By Order of the Board of Directors
Thomas H. Pollihan
Vice President, Secretary and
General Counsel
St. Louis, Missouri
July 15, 1999
<PAGE>
KELLWOOD COMPANY
600 Kellwood Parkway
St. Louis County, Missouri 63017
Approximate
mailing date:
July 15, 1999
PROXY STATEMENT
Annual Meeting of Shareowners--August 26, 1999
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 26, 1999. Only shareowners of record at the close of business
on June 28, 1999, 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 15,
1999. The Company's Annual Report (including financial statements) to its
shareowners for the fiscal year ended April 30, 1999, 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.
<PAGE>
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 nominee(s) for which voting
authority is being withheld.
The Company's management knows of no matter to be brought before the meeting
other than those referred to in 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 2000 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 17, 2000. Shareowners wishing to bring a proposal
before the 2000 Annual Meeting of Shareowners (but not include it in the
Company's Proxy Statement) must cause written notice of the proposal to be
received by the Secretary of the Company at the principal executive offices in
St. Louis by no later than June 1, 2000. 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 28, 1999 (the "record date"), the Company
had 27,723,131 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> <C>
Common Stock.......... GS Capital Partners, L.P. 1,676,306 6.04%
85 Broad Street
19th Floor
New York, NY 10004
Common Stock.......... The Prudential Insurance 1,252,912(*) 5.79%
Company of America
751 Broad Street
Newark, NJ 07102-3777
</TABLE>
- --------
(*) As reported on their Schedule 13G dated January 29, 1999, The Prudential
Insurance Company of America, a registered insurance company and
investment advisor, was the beneficial owner of 1,252,912 shares
representing 5.79% of the total shares outstanding on that day, and The
Prudential Insurance Company of America has sole voting power for 6,200
shares, shared voting power for 1,246,712 shares, sole dispositive power
for 6,200 shares, and shared dispositive power for 1,246,712 shares.
ELECTION OF DIRECTORS
(PROXY ITEM NO. 1)
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
2
<PAGE>
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 2001 Annual
Meeting of Shareowners and until their respective successors shall have been
elected and qualified. The persons 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 2001
Raymond F. Bentele, Age 62 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 Inc. (manufacturer of medical
products). Director of IMC Global, Inc. (food crop mineral nutrients). Director
of Leggett & Platt, Incorporated (manufacturer of components for the home
furnishings industry).
Member: Compensation and Stock Option, and Nominating Committees.
Edward S. Bottum, Age 65 Director of the Company since 1981. Retired Vice-
Chairman, Continental Bank Corporation from 1959 to 1990. Managing Director,
Chase Franklin Corporation (merchant banking) since April 1990. Trustee, The
Time Horizon Funds (mutual funds family) since July 1995. Chairman, Learning
Insights, Inc. (publisher of interactive multimedia training products) since
February 1996. Trustee, Pacific Innovations Trust (mutual fund for variable
annuities) since December 1996. Trustee, Underwriters Laboratories, Inc.
(product safety certification) since May 1997. Director, CNA Income Shares,
Inc. (closed end fixed income fund) since April 1999. Director, Alleghany Asset
Management, Inc. (asset manager) since April 1999.
Member: Audit, Finance and Nominating Committees.
Kitty G. Dickerson, Ph.D., Age 59 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 65 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 (retail chain drug stores). Director, TR
Financial Corp. (banking) from 1993 to February, 1999. Director, Aid Auto
Stores, Inc. (automotive parts supply) from 1995 to December, 1998. Director,
The Stephan Company (hair care) since 1997. Director, Roslyn Bancorp Inc.
(banking) since February, 1999.
Member: Compensation and Stock Option Committee.
Martin J. Granoff, Age 62 Chairman of Val d'or Inc. (men's and women's
knitwear) since 1959. Chairman and Chief Executive Officer of Koret, Inc. from
December, 1997 to April, 1999. Chairman of the American Apparel Manufacturer's
Association from 1998 to 1999. Director, National Textiles since November, 1997
(spinning and knitting). Director, Manive Investment, LLC since September 1998
(biotechnology).
Hal J. Upbin, Age 60 Director of the Company since 1995. Chief Executive
Officer of the Company since November 25, 1997. President and Chief Operating
Officer of the Company from November 22, 1994 to
3
<PAGE>
November 25, 1997. 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.
DIRECTORS CONTINUING TO SERVE UNTIL 2000
Jerry M. Hunter, Age 47 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 64 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 69 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. (industrial and flooring products and
fashion jewelry).
Member: Compensation and Stock Option, and Finance Committees.
William J. McKenna, Age 72 Director of the Company since 1982. Chairman of
the Company from May 1, 1991 to present. Chairman and Chief Executive Officer
from November 22, 1994 to November 25, 1997. 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 $1,000 for each Committee
meeting attended, not to exceed $2,000 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 the 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. On May 28,
1998, the Board of Directors approved a grant of 100 shares of restricted
common stock to each Nonemployee Director to be issued out of shares held in
its treasury effective immediately following the Annual Meeting each year.
4
<PAGE>
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 1999 the Board met five times.
Fred W. Wenzel will not be seeking re-election to the Board of Directors and
his term will expire at the 1999 Annual Meeting of the Company. Mr. Wenzel has
served as a Director of the Company since 1961 and has been a principal
contributor to its development, high reputation and success. In light of his
valued experience, on May 27, 1999 the Board created the non-voting position of
Advisory Director to the Board and appointed Fred W. Wenzel to this position
effective August 26, 1999.
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, with the exception of Raymond F. Bentele and
Leonard A. Genovese, who each attended 72% of the meetings.
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 1999. On three 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 once during fiscal 1999. 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
1999. 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 1999. 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 1999.
Members of the Committee were W.J. McKenna, Chairman, R.F. Bentele and E.S.
Bottum.
5
<PAGE>
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 28, 1999, 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 28, 1999. With the exception of Mr. Granoff who owns
approximately 2.7% and Mr. McKenna who owns approximately 1.5% 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 7.3% of the outstanding common stock.
<TABLE>
<CAPTION>
Number of Shares
Number of Included in Previous
Shares Column Attributable
Name of Individual Beneficially to Unexpired Options
or Number in Group Owned to Purchase
- ------------------ ------------ --------------------
<S> <C> <C>
R. F. Bentele............................... 4,850 4,000
E. S. Bottum................................ 6,750 4,000
K. G. Dickerson............................. 4,500 3,500
L. A. Genovese.............................. 6,033 3,000
M. J. Granoff............................... 758,382(1) 0
E. Harding, Jr. ............................ 36,585 20,920
J. R. Henderson............................. 31,887 26,560
J. M. Hunter................................ 4,100 4,000
J. C. Jacobsen.............................. 148,566 79,590
J. S. Marcus................................ 5,000 4,000
W. J. McKenna............................... 417,071(2) 331,181
H. J. Upbin................................. 169,889 127,036
All directors and executive officers as a
group
(19 persons including those named)......... 2,030,626 788,247
</TABLE>
- --------
(1) Does not include 60,253 shares owned by Mr. Granoff's wife, 30,126 shares
held in trust for the benefit of his daughter, and 30,126 shares held in
trust for the benefit of his son. Mr. Granoff disclaims beneficial
ownership of these shares.
(2) Does not include 202 shares owned by Mr. McKenna's wife, 3,317 shares owned
by his daughter, and 3,317 shares owned by his son. Mr. McKenna disclaims
beneficial ownership of these shares.
6
<PAGE>
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, 1999.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
Long Term Compensation
-----------------------------------
Annual Compensation Awards Payouts
-------------------------------- ----------------------- -----------
(a) (b) (c) (d) (e) (f) (g) (h) (i)
Name and Other Annual Restricted All Other
Principal Salary Compensation Stock Options LTIP Compensation
Position Year ($) Bonus ($) ($) Award(s) ($)(1) (#) Payouts ($) ($)(2)
--------- ---- --------- --------- ------------ --------------- ------- ----------- ------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
William J. McKenna
Chairman, and
Director(3)............ 1999 $ 900,000 $ 590,000 0 $ 229,345 61,900 0 $ 17,482(4)
1998 900,000 450,000 0 582,384 76,000 0 969,478(5)
1997 850,000 425,000 0 689,748 106,115 0 4,800(6)
Hal J. Upbin President
and Chief Executive
Officer(7)............. 1999 $ 725,000 $ 500,000 0 $ 278,662 50,000 0 $ 4,608(6)
1998 570,833 400,000 0 343,332 79,000 0 4,608(6)
1997 500,000 300,000 0 303,518 41,560 0 4,400(6)
Enoch Harding, Jr.
Executive
Vice President
Operations(8).......... 1999 $ 360,000 $ 375,000 0 $ 113,248 13,600 0 $ 4,550(6)
1998 327,000 350,000 0 144,804 16,000 0 4,992(6)
1997 302,000 300,000 0 162,794 21,000 0 4,170(6)
James C. Jacobsen Vice
Chairman and Director.. 1999 $ 370,000 $ 188,100 0 $ 128,223 18,200 0 $ 4,608(6)
1998 370,000 175,000 0 198,660 23,000 0 4,474(6)
1997 360,000 145,000 0 242,774 33,250 0 3,900(6)
John R. Henderson Vice
President
Merchandising.......... 1999 $ 250,000 $ 104,300 0 $ 46,875 9,800 0 $ 4,762(6)
1998 240,000 60,000 0 64,020 10,000 0 4,963(6)
1997 191,000 48,000 0 77,246 10,000 0 3,960(6)
</TABLE>
- --------
(1) 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 of $23.94 per
share at the June 1, 1999 award date. The restricted awards attributable to
the Named Executives for prior fiscal years and in escrow as of April 30,
1999, excluding the awards in Column (f), which are still subject to
restrictions under the Corporate Development Incentive Plan, valued at the
closing price of $25.75 on April 30, 1999, are as follows: W. J. McKenna,
26,862 shares at $691,697; H. J. Upbin, 13,799 shares at $355,324; E.
Harding, Jr., 6,507 shares at $167,555; J. C. Jacobsen, 9,311 shares at
$239,758, and J. R. Henderson, 2,981 shares at $76,761.
(2) Excludes income accrued for Executive Deferred Compensation Plan because at
prime plus 1% it is not above market rate.
7
<PAGE>
(3) W. J. McKenna was also Chief Executive Officer until November 25, 1997. He
has a contract of employment through November 30, 1999.
(4) W.J. McKenna received a lump sum payment under the required minimum
distribution rules of the Kellwood Company Pension Plan for his 16.9 years
of service. This number includes $12,874 lump sum payable April 1, 1999 and
$4,608 employer matching 401(k) plan contribution.
(5) At the age of 70 1/2, W. J. McKenna was eligible for a lump sum payment
under the required minimum distribution rules of the Kellwood Company
Pension Plan for his 15.9 years of service. This number includes $964,870
lump sum payable April 1, 1998 and $4,608 employer matching 401(k) plan
contribution.
(6) Employer matching 401(k) plan contribution.
(7) H. J. Upbin has a contract of employment through November 30, 1999.
Effective May 1, 1999, his salary was increased to $850,000.
(8) By agreement with the Company, E. Harding will be paid a deferred
compensation benefit under a straight-life annuity of $1,032 per month upon
retirement, continuing during his lifetime.
The following two tables contain information covering stock options granted
during the fiscal year ended April 30, 1999, to the Named Officers and the
number and value of unexercised stock options held by those officers at the end
of the last fiscal year. No SARs were granted in conjunction with the options.
OPTION GRANTS TABLE
OPTION GRANTS DURING 1999 FISCAL YEAR
<TABLE>
<CAPTION>
Potential Realizable
Value at Assumed
Annual Rates of Stock
Price Appreciation
Individual Grants for Option Term
----------------- ---------------------
% of Total
Options Exercise
Options Granted to or Base
Granted Employees in Price Expiration
Name (#) Fiscal Year(1) ($/Share) Date 5% ($) 10% ($)
---- ------- ----------------- -------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C>
William J. McKenna...... 58,300 17.51 $32.28 05/28/08 $1,183,532 $2,999,302
3,600 1.08 32.28 05/28/08 73,083 185,206
------ ----- ---------- ----------
61,900 18.59 1,256,615 $3,184,508
====== ===== ========== ==========
Hal J. Upbin............ 47,300 14.21 32.28 05/28/08 960,224 2,433,396
2,700 .81 32.28 05/28/08 54,812 138,904
------ ----- ---------- ----------
50,000 15.02 1,015,036 2,572,300
====== ===== ========== ==========
Enoch Harding, Jr....... 10,000 3.00 32.28 05/28/08 203,007 514,460
3,600 1.08 32.28 05/28/08 73,083 185,206
------ ----- ---------- ----------
13,600 4.08 276,090 699,666
====== ===== ========== ==========
James C. Jacobsen....... 17,900 5.38 32.28 05/28/08 363,383 920,884
300 .09 32.28 05/28/08 6,090 15,434
------ ----- ---------- ----------
18,200 5.47 369,473 936,318
====== ===== ========== ==========
John R. Henderson....... 8,300 2.49 32.28 05/28/08 168,496 427,002
1,500 .45 32.28 05/28/08 30,451 77,169
------ ----- ---------- ----------
9,800 2.94 198,947 504,171
====== ===== ========== ==========
</TABLE>
- --------
(1) Total options granted during 1999 were 332,950 shares to the Named Officers
and all other employees.
8
<PAGE>
OPTION EXERCISES IN 1999 FISCAL YEAR
AND FY-END 04/30/99 VALUE TABLE
<TABLE>
<CAPTION>
(a) (b) (c) (d) (e)
Value of Unexercised
Number of In-the-Money
Options Options
at FY-End (#) at FY-End ($)
04/30/99 04/30/99
------------------------- -------------------------
Value
Shares Acquired Realized
Name on Exercise (#) ($) Exercisable/Unexercisable Exercisable/Unexercisable
---- --------------- -------- ------------------------- -------------------------
<S> <C> <C> <C> <C>
William J. McKenna...... 2,405 39,138 252,618 / 255,329 1,326,619 / 937,703
Hal J. Upbin............ 10,500 155,234 92,184 / 154,876 478,257 / 312,602
Enoch Harding, Jr....... 7,900 125,731 6,200 / 46,600 14,910 / 153,602
James C. Jacobsen....... 23,100 322,248 54,540 / 74,710 305,036 / 274,038
John R. Henderson....... 0 0 17,200 / 29,600 92,264 / 83,276
</TABLE>
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 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.
On April 1, 1998, W. J. McKenna was paid a lump sum from the Kellwood Company
Pension Plan in the amount of $964,870. This payment was made under the minimum
distribution rules which require distribution of pension benefits to employees
upon reaching age 70 1/2. This payment included his amended accrued monthly
benefit at April 30, 1994 in the amount of $9,333.49. On April 1, 1999, W. J.
McKenna received an additional minimum distribution in the amount of
$12,874.19, for his Service beyond age 70 1/2 and will continue to receive a
yearly distribution as long as he accrues Credited Service under the Pension
Plan. The amended accrued monthly benefits at April 30, 1994 for the remaining
officers listed in the Summary Compensation Table were as follows: 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, 1999, of the
officers listed in the Summary Compensation Table, Mr. McKenna, Mr. Upbin, Mr.
Harding, Mr. Jacobsen and Mr. Henderson have approximately five 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 1999. Benefits for
employees who retire in subsequent years will be lower reflecting increases in
the average social security wage base.
9
<PAGE>
PENSION PLAN TABLE
<TABLE>
<CAPTION>
Years of Service
--------------------------------------
Remuneration 5 10 15 20 30
------------ ------ ------- ------- ------- -------
<S> <C> <C> <C> <C> <C>
$50,000.................................. $1,674 $ 3,347 $ 5,021 $ 6,884 $10,041
100,000.................................. 4,174 8,347 12,521 16,694 25,041
125,000.................................. 5,424 10,847 16,271 21,694 32,541
150,000.................................. 6,674 13,347 20,021 26,694 40,041
160,000.................................. 7,174 14,347 21,521 28,694 43,041
200,000.................................. 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 $130,000. 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.
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
10
<PAGE>
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 1998 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
A Performance Management and Incentive Compensation Plan is extended to
executives, managers and professionals whose positions have a significant
impact on the Company's operating results. Annual cash incentive compensation
awards are made to participants to recognize and reward corporate, business
unit and individual performance. Goals for Company, business unit and
individual executive's 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
business unit and individual performance, and Company performance against that
of peer companies. The amount of any award is determined by the combined
financial results of the Company and the business unit, and the achievement of
the individual's personal objectives. In considering bonuses for executives
other than Mr. Upbin, 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. Upbin and discusses the assessments
with him. When assessing the performance of Mr. Upbin, 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 1999, no awards were made to any
executive officers.
The Committee selects key 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 and before adjustments for non-recurring and
extraordinary items, 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
11
<PAGE>
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
1999, the performance goal was exceeded and awards were made at 103% 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 1999 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 $84,000 in salary as
well as up to $84,000 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.
Compensation for the Chief Executive Officer
During fiscal 1999, W. J. McKenna served as Chairman from May 1, 1998 to
April 30, 1999.
W. J. McKenna, has an Employment Agreement with the Company, and 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, 1999.
12
<PAGE>
The Committee approved a cash bonus to Mr. McKenna of $590,000 for fiscal
1999.
H. J. Upbin has an Employment Agreement with the Company for a two-year term
extending to November 30, 1999 and effective May 1, 1999, his salary was
increased to $850,000.
The Committee approved a cash bonus to Mr. Upbin of $500,000 for fiscal
1999.
In approving the salary increase and the bonus for fiscal 1999 and the grant
of stock options in fiscal 1999 to Mr. McKenna and Mr. Upbin, the Committee
took into account the level and scope of their 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,
1999.
Raymond F. Bentele
Leonard A. Genovese
James S. Marcus, Chairman
Compensation Committee Interlocks and Insider Participation
There are no interlocks or insider participation with any executive officers
of the Company or with the members of the Committee.
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.
13
<PAGE>
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.
<TABLE>
<CAPTION>
4/94 4/95 4/96 4/97 4/98 4/99
---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C>
Kellwood Co................................... $100 $76 $72 $108 $148 $123
S&P 500 Index................................. $100 $117 $153 $191 $270 $329
S&P Apparel Index............................. $100 $97 $119 $153 $186 $143
</TABLE>
--------
Note: Total return assumes reinvestment of dividends
14
<PAGE>
Other Officer Agreements
The Company has agreements with Messrs. McKenna, Upbin, Jacobsen, Harding,
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.
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 1999, the Company
believes that all reports were filed on a timely basis, with the exception of
Gerald M. Chaney, who filed his initial Form 3 subsequent to the deadline.
15
<PAGE>
INDEPENDENT ACCOUNTANTS
The Audit Committee recommended to the Board and the Board approved on May
27, 1999, the retention of PricewaterhouseCoopers LLP to serve as the Company's
independent accountants for fiscal year 2000.
Representatives of PricewaterhouseCoopers 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 15, 1999
16
<PAGE>
PROXY PROXY
KELLWOOD COMPANY
Proxy Solicited on Behalf of the Board of Directors
For the Annual Meeting of Shareholders -- August 26, 1999
WILLIAM J. MCKENNA, THOMAS H. POLLIHAN, 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 26, 1999, 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,
M.J. Granoff, H.J. Upbin
2. 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, all as set forth in the notice of annual meeting dated
July 15, 1999, 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 reverse side.)
- --------------------------------------------------------------------------------
<PAGE>
KELLWOOD COMPANY
PLEASE MARK VOTE IN OVAL IN THE FOLLOWING MANNER USING DARK INK ONLY. [X]
[ ]
1. Election of Directors--
Nominees: R. F. Bentele, E.S. Bottum, K. G. Dickerson, L.A. Genovese,
M. J. Granoff, H. J. Upbin
For Withhold For All
All All (Except nominee(s) written below)
[_] [_] [_]
________________________________________________________________________________
Dated: _____________________________, 1999
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.
