La-Z-Boy Incorporated PROXY
The undersigned hereby appoints Gerald L. Kiser and Patrick H. Norton, and
both of them Proxies with power of substitution to attend the Annual Meeting of
Shareholders of La-Z-Boy Incorporated to be held at the La-Z-Boy Incorporated
Auditorium, 1314 North Telegraph Road, Monroe, Michigan, July 26, 1999 at 11:00
o'clock A.M., Eastern Daylight Time, and any adjournment thereof, and thereat to
vote all shares now or hereafter standing in the name of the undersigned.
(Continued and TO BE SIGNED on other side)
- --------------------------------------------------------
Please mark your
vote as in this
example: [xx]
1. ELECTION OF DIRECTORS
WITHHOLD Authority Nominees:
FOR all nominees to vote for all James W. Johnston
listed to right nominees listed to right Gerald L. Kiser
H. George Levy, M.D.
John F. Weaver
[ ] [ ]
(INSTRUCTIONS: To withhold authority to vote for any individual nominees, write
that nominee's name on the line below.)
- --------------------------------------------
2. In their discretion, the Proxies are authorized to vote upon such
other business as may properly come before the meeting.
This proxy, when properly executed, will be voted in the manner directed by the
undersigned stockholder. If no direction is made, this proxy will be voted FOR
all director nominees listed.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
Please mark, sign, date and return the proxy card using the enclosed envelope.
SIGNATURE_____________________________________________ DATE__________________
Signature should agree with name(s) on stock
certificate.
SIGNATURE_____________________________________________ DATE__________________
Signature if held jointly
NOTE: When shares are held by joint tenants both should sign. When signing as
attorney, as executor, administrator, trustee or guardian, please give full
title as such. If a corporation, please sign in full corporate name by president
or other authorized officer. If a partnership, please sign in partnership name
by authorized person.
LA-Z-BOY INCORPORATED
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
To the Shareholders of Monroe, Michigan
La-Z-Boy Incorporated: June 25, 1999
Notice is hereby given that the annual meeting of shareholders of
La-Z-Boy Incorporated will be held at the La-Z-Boy Incorporated Auditorium, 1314
North Telegraph Road, Monroe, Michigan, on Monday, July 26, 1999 at 11:00
o'clock a.m., Eastern Daylight Time, for the following purposes:
(1) To elect four directors to three year terms scheduled for expiration in
2002;
(2) To transact such other business as may properly come before the meeting or
any adjournments thereof.
A copy of the Company's fiscal 1999 Annual Report, containing the
financial statements of the Company for the year ended April 24, 1999, is
enclosed herewith.
Only shareholders of record at the close of business on June 18, 1999
will be entitled to notice of, and to vote at, the meeting.
Shareholders, whether planning to attend in person or not, are urged to
date, sign, and return the enclosed proxy in the accompanying envelope, to which
no postage need be affixed if mailed in the United States. Even though you sign
and return the proxy, you may vote your shares in person by revoking the proxy
at the meeting.
BY ORDER OF THE BOARD OF DIRECTORS
Gene M. Hardy, Secretary
Monroe, Michigan
June 25, 1999
PROXY STATEMENT
This Proxy Statement is furnished in connection with the solicitation of
proxies by the Board of Directors of La-Z-Boy Incorporated ("the Company") to be
used at the annual meeting of shareholders to be held on Monday, July 26, 1999
and at any adjournments thereof. The meeting will be held at 11:00 a.m., Eastern
Daylight Time, at the La-Z-Boy Incorporated Auditorium, 1314 North Telegraph
Road, Monroe, Michigan. The Company's principal executive office is located at
1284 North Telegraph Road, Monroe, Michigan 48162.
Shares represented by properly executed proxies in the enclosed form will
be voted at the meeting in the manner specified therein. If no instructions are
specified in the proxy, the shares represented thereby will be voted FOR the
election of the director nominees identified in this Proxy Statement. The Board
of Directors knows of no business to be presented at the meeting other than the
election of directors and routine procedural matters. However, if any other
matters are properly presented to the meeting, it is intended that the persons
named in the enclosed form of proxy will vote upon the same and act in
accordance with their judgment. A proxy may be revoked at any time before it is
exercised by executing and returning a later-dated proxy or by giving notice to
the Company in writing or in the open meeting.
As of the close of business on June 18, 1999 (the record date for the
annual meeting), there were issued and outstanding 52,262,722 shares of the
Company's Common Stock ("common shares"), which is the only class of Company
equity securities outstanding. Each common share is entitled to one vote on each
matter to be presented at the meeting. Only shareholders of record at the record
date will be entitled to vote at the meeting.
SHARE OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
Under rules adopted by the Securities and Exchange Commission ("SEC"), a
person is deemed to be a beneficial owner of common shares if he or she has or
shares the right to vote the shares or if he or she has or shares the investment
power over the shares. There may be, therefore, more than one beneficial owner
with respect to any share or group of shares. A person may also be deemed to be
the beneficial owner if he or she is the settlor of a trust with a right to
revoke the trust and regain the shares or has the power to acquire shares under
outstanding options or has rights to convert other securities into common
shares.
Table I below identifies each person known to the Company to be a
beneficial owner of more than 5% of the Company's common shares and the number
of common shares owned by such person as of the record date for the annual
meeting, and Table II below provides information concerning the common shares
beneficially owned as of that date by each director and executive officer of the
Company and all directors and executive officers as a group. The share ownership
data in the tables concerning a given individual or entity in each case has been
provided to the Company by that person. Unless otherwise indicated by footnote,
each person named in a table has sole voting and investment power over the
shares shown for him.
TABLE I
Name and Address Number of Shares Percent of Class
Monroe Bank & Trust,
Monroe, Michigan 48161 11,859,137(1) 22.691%
- ----------
(1) The shares reported are held in various trusts of which Monroe Bank &
Trust is the trustee or a co-trustee. In such capacities, Monroe Bank & Trust
has sole or shared investment and/or voting power over these shares and
accordingly is deemed a beneficial owner of all of them.
TABLE II
Percent
Name and Address Number of Shares of Class (1)
---------------- ---------------- ------------
Gerald L. Kiser .................... 79,588(2) .152%
Patrick H. Norton .................. 277,234(3) .530%
Frederick H. Jackson ............... 865,175(4) 1.654%
Lorne G. Stevens ................... 40,500 .077%
Gene M. Hardy ...................... 518,904(5) .993%
H. George Levy ..................... 7,800 .015%
David K. Hehl ...................... 24,972(6) .048%
John F. Weaver ..................... 465,000(7) .890%
Rocque E. Lipford .................. 12,900(8) .025%
James W. Johnston .................. 964,610(9) 1.846%
All directors and executive officers
as a group (10 persons) .......... 2,443,683(10) 4.676%
- ----------
(1) For purposes of calculating the percentage of ownership of the group,
all shares subject to options held by any group member that currently are
exercisable or will become exercisable within 60 days of the date of this Proxy
Statement are treated as outstanding, but for purposes of calculating the
percentage of ownership of any individual group member only the optioned shares
held by that group member are treated as outstanding.
(2) Includes 31,702 shares subject to options exercisable currently or
within 60 days of this Proxy Statement.
(3) Includes 69,495 shares subject to options exercisable currently or
within 60 days of this Proxy Statement. Also includes 32,540 shares owned by Mr.
Norton's wife, as to which he disclaims beneficial ownership.
(4) Includes 43,575 shares subject to options exercisable currently or
within 60 days of the date of this Proxy Statement. Also includes 2,400 shares
owned by Mr. Jackson's wife, as to which he disclaims beneficial ownership, and
406,500 shares over which Mr. Jackson has shared investment power as a member of
the Investment Committee for the Company's Employee Profit Sharing Plan (the
"Profit Sharing Plan"), as to which he also disclaims beneficial ownership.
(5) Includes 12,726 shares subject to options exercisable currently or
within 60 days of the date of this Proxy Statement. Also includes 49,155 shares
owned by Mr. Hardy's wife, as to which he disclaims beneficial ownership, and
406,500 shares over which Mr. Hardy has shared investment power as a member of
the Investment Committee for the Profit Sharing Plan, as to which he also
disclaims beneficial ownership.
(6) Includes 5,616 shares owned by Mr. Hehl's wife, as to which he
disclaims beneficial ownership.
(7) Includes 46,800 shares owned by Mr. Weaver's wife, as to which he
disclaims beneficial ownership, and 406,500 shares over which Mr. Weaver has
shared investment power as a member of the Investment Committee for the Profit
Sharing Plan, as to which he also disclaims beneficial ownership.
(8) Includes 2,400 shares owned by Mr. Lipford's wife, as to which he
disclaims beneficial ownership.
(9) Includes 162,210 shares owned by Mr. Johnston's wife, as to which he
disclaims beneficial ownership.
(10) Shares reported above for more than one named individual are included
only once.
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934 requires the Company's
executive officers and directors, certain categories of over 10% owners of the
Company's common shares and, in some cases, persons who held such positions or
such ownership at any time during the Company's most recently ended fiscal year,
to file reports of ownership and changes in ownership with the SEC and the New
York Stock Exchange ("NYSE") and to furnish the Company with a copy of each
Section 16(a) form filed. Based solely on its review of the copies of such forms
received by it and written representations from certain reporting persons that
no Forms 5 were required, the Company believes that during the fiscal year ended
April 24, 1999 ("fiscal 1999"), all Section 16(a) filing requirements were
complied with in a timely fashion.
ELECTION OF DIRECTORS
The Company's Board of Directors is divided into three classes, two
consisting of three directors and one consisting of four directors. Directors
serve for three-year, staggered terms, such that the terms of office of
directors comprising one of the classes expires each year. This year, four
directors are to be elected, to serve until the Company's annual meeting of
shareholders in 2002 or until their successors are elected and qualified.
Pursuant to applicable Michigan corporate law, assuming the presence of a
quorum, directors will be elected at the meeting from among those persons duly
nominated by a plurality of votes cast by holders of the common shares who are
present in person, or represented by proxy, and entitled to vote at the meeting.
Thus, for this year, the nominees who receive the highest through fourth-highest
numbers of votes for their election as directors will be elected, regardless of
the number of votes which for any reason, including abstention, withholding of
authority, or broker non-vote, are not cast for the election of those nominees.
The Board's nominees for election as directors are the four current
directors whose terms are scheduled to expire at the 1999 annual meeting. In the
absence of other instruction, the persons named in the accompanying form of
proxy intend to vote in favor of these four nominees (or, if any such nominee
should become unable or unwilling to serve, which is not presently anticipated,
for such substitute nominee as is designated by the Board).
The table that follows provides background information concerning each of
the Board's nominees and each other director of the Company whose term of office
will continue beyond the 1999 annual meeting.
DIRECTOR NOMINEES FOR TERMS TO EXPIRE IN 2002
Director Business Experience
Name Age Since and Other Directorships
---- --- -------- -----------------------
John F. Weaver 82 1971 Mr. Weaver was elected Vice Chairman of
the Board of Monroe Bank & Trust in April
1997 and previously was Executive Vice
President and a Director of Monroe Bank &
Trust for more than five years.
James W. Johnston 60 1991 Mr. Johnston has been a self-employed
financial and business consultant and
private investor for more than five years.
H. George Levy, M.D. 49 1997 Dr. Levy has been a Doctor of
Otolaryngology for more than five years.
Gerald L. Kiser 52 1997 Mr. Kiser became Executive Vice President
and Chief Operating Officer of the Company
in April 1997. He was promoted to
President and Chief Operating Officer in
October 1997. Previously, he served as the
Company's Vice President-Operations (May
1996-April 1997), as its Vice President of
Engineering and Development for one year
and as Senior Vice President of Operations
of Kincaid Furniture Company for more than
five years.
DIRECTORS WITH TERMS EXPIRING IN 2000
Director Business Experience
Name Age Since and Other Directorships
---- --- -------- -----------------------
Lorne G. Stevens 71 1972 On April 30, 1988, Mr. Stevens retired
from the Company as Vice President of
Manufacturing, a position he had held for
more than five years.
Patrick H. Norton 77 1981 In October 1997, Mr. Norton was appointed
Chairman of the Board. Previously, he
served as Senior Vice President, Sales and
Marketing of the Company for more than five
years. Mr. Norton is a director of Culp,
Inc.
Frederick H. Jackson 71 1971 Mr. Jackson was appointed Executive
Vice President Finance of the Company in
October 1997, after holding the position
of Vice President Finance for more than
five years.
DIRECTORS WITH TERMS EXPIRING IN 2001
Director Business Experience
Name Age Since and Other Directorships
---- --- -------- -----------------------
Gene M. Hardy 62 1982 Mr. Hardy has been Secretary and Treasurer
of the Company for more than five years.
David K. Hehl 52 1977 Mr. Hehl has been a member in the public
accounting firm of Cooley Hehl Wohlgamuth
& Carlton P.L.L.C. since January 1995 and
previously was a partner of Cooley Hehl
Wohlgamuth & Carlton for more than five
years.
Rocque E. Lipford 60 1979 Mr. Lipford has been a senior member in
the law firm of Miller, Canfield, Paddock
and Stone, P.L.C., since January 1994 and
previously was a partner of Miller,
Canfield, Paddock and Stone for more than
five years. Mr. Lipford is a director of
Monroe Bank & Trust.
DIRECTORS' MEETINGS AND CERTAIN STANDING COMMITTEES
During fiscal 1999, the Board of Directors held eight meetings. Each
director attended at least 75% of the total number of Board meetings and at
least 75% of the total number of standing committee meetings on which he served
that were held during that fiscal year. All directors are in regular touch with
the Company's affairs.
The standing committees of the Board of Directors include an Audit
Committee, a Compensation Committee, and a governance committee known as the
Committee on the Board. The Board also maintains a subcommittee of the
Compensation Committee (the "Compensation Subcommittee") as a standing
committee.
The Audit Committee, which held two meetings during fiscal 1999, currently
consists of Mr. Hehl, Chairman, Dr. Levy and Messrs. Weaver, Stevens and
Lipford. None of them is an employee of the Company or any Company subsidiary
(an "employee director"). The functions of the Audit Committee are to recommend
to the Board of Directors the firm of independent accountants to serve the
Company each fiscal year, to review the scope, fees and results of the audit by
independent accountants, and to review the adequacy of the Company's system of
internal accounting controls and the scope and results of internal auditing
procedures.
The Compensation Committee, which held three meetings during fiscal 1999,
currently consists of Mr. Weaver, Chairman, Dr. Levy, and Messrs. Hehl and
Lipford, none of whom is an employee director. The Compensation Subcommittee,
which met three times during the fiscal year, currently consists of Mr. Hehl and
Dr. Levy, both of whom are also "Non-Employee Directors" as defined in SEC Rule
16b-3 and "outside directors" as defined in regulations of the Department of the
Treasury promulgated under Section 162(m) of the Internal Revenue Code. Since
its establishment in September 1996, the Compensation Subcommittee has been
responsible for administering the Company's stock-based employee incentive
plans. The functions of the Compensation Committee include recommending to the
Board of Directors the cash and other remuneration of the officers of the
Company (except for remuneration under plans administered by the Compensation
Subcommittee), recommending to the Board the remuneration of the members of the
Board and its committees and subcommittees, and administering the Company's cash
incentive compensation plans.
The Committee on the Board, which was established in December 1997, held
three meetings during fiscal 1999. Its current members are Dr. Levy, Chairman,
and Messrs. Johnston and Lipford, none of whom is an employee director. One of
the functions of this committee is to identify, evaluate, and recommend
candidates to the Board of Directors for the Board's slate of nominees for
shareholder election as directors or for appointment to fill vacancies on the
Board. It also considers and makes recommendations to the Board on other matters
relating to the Board's practices, policies, and procedures, as well as
concerning the desirable size, structure, and composition of the Board and its
committees. The deliberations of the committee include assessing whether the
professional experience and expertise of the individual directors or proposed
directors, in light of the overall mix of experience, expertise, and
independence among the directors, will enable the Board to assist the Company in
developing long term strategic and financial goals and monitoring the Company's
progress toward achieving such goals. The committee also considers director
succession planning, in light of expected future needs of the Board and the
Company, and the application of policies pertaining to tenure on the Board.
When formulating a proposed slate of director nominees for election at an
annual meeting of shareholders, in addition to considering prospective
candidates identified by the committee's own members or referred to it by other
Board members, management, or outside sources, the Committee on the Board will
consider candidates recommended by shareholders. A shareholder desiring to
recommend a candidate for consideration by the committee should send the
recommendation to the Secretary of the Company at least 90 days prior to the
first anniversary of the prior year's annual meeting. The recommendation should
include or be accompanied by a description of the candidate's qualifications for
Board service, the candidate's consent to be considered as a nominee and to
serve on the Board if nominated and elected, and addresses and telephone numbers
for contacting the candidate and the proposing shareholder for additional
information. For information concerning the requirements for a shareholder's own
nomination of director candidates, see "Shareholder Proposals and Director
Nominations for Next Annual Meeting."
DIRECTOR COMPENSATION
Employee directors receive a fee of $300 for each Board meeting attended.
All other directors receive annual retainers of $15,000 and a fee of $450 for
each Board meeting and each Board committee or subcommittee meeting attended,
including telephonic meetings.
In addition, pursuant to the Company's Restricted Stock Plan for Non-
Employee Directors, each director who is not an employee director receives an
initial grant of 30-day options on 4,500 common shares upon first becoming a
director and a subsequent grant of 30-day options on 600 common shares at the
beginning of each fiscal year while he continues as a director. The plan
contemplates a present sale of the optioned shares at 25% of market value, but
provides restrictions on the transfer or other disposition of the shares by the
grantee during the restricted time, which expires upon the earliest to occur of
the following events: death or disability, retirement from the Board, change of
control, or termination of the grantee's service as a director with the consent
of a majority of the Company's employee directors, all as defined in the plan.
EXECUTIVE COMPENSATION
Summary Information
The following table sets forth summary information for fiscal 1999 and
the preceding two fiscal years with respect to the compensation paid to or
earned by each of the Company's four executive officers (the "named
executives").
<TABLE>
SUMMARY COMPENSATION TABLE
Long-Term
Annual Compensation Compensation
- ----------------------------------------------------------------------- ------------------------------------
Awards Payouts
------ -------
Incentive Long-Term
Stock Incentive
Other Annual Option Plan All Other
Name and Principal Salary(1) Bonus(1) Compensation(2) Grants(3) Payouts(4) Compensation(5)
Position Year $ $ $ # $ $
- -------------------- ---- --------- -------- --------------- --------- ---------- ---------------
<S> <C> <C> <C> <C> <C> <C> <C>
Gerald L. Kiser 1999 336,200 290,907(6) (7) 27,600 122,119 40,331(8,9)
President (since October 1998 294,524 133,139(6) (7) 28,800 54,133 66,751(8,9)
1997; previously Executive 1997 190,469 90,022 15,600 17,490 39,053
Vice President) and Chief
Operating Officer
Patrick H. Norton 1999 303,848 262,322 27,600 234,844 78,280
Chairman of the Board (since 1998 292,499 131,318 28,800 121,569 71,189
October 1997; previously, 1997 291,496 153,778 30,000 63,600 67,219
Senior Vice President
Sales & Marketing)
Frederick H. Jackson 1999 303,852 262,322 27,600 234,844 78,354
Executive Vice President 1998 292,453 131,318 28,000 121,569 71,246
Finance and Chief Financial 1997 291,496 153,778 30,000 63,600 66,951
Officer
Gene M. Hardy 1999 158,900 95,473(6) (7) 9,000 67,635 46,387(8)
Secretary and Treasurer 1998 156,300 54,060(6) (7) 9,750 33,259 45,358(8)
1997 141,486 57,543 8,790 17,490 36,424
</TABLE>
- --------------
(1) Includes, where applicable, amounts electively deferred by a named
executive under the Company's Matched Retirement Savings Plan, which is a
so-called "401(k) plan," and directors' fees paid to a named executive for
attendance at Board of Directors' meetings.
(2) As permitted by SEC rules, does not include the Company's cost of
providing perquisites or other personal benefits to named executives, which in
each case and for each fiscal year did not exceed the lesser of $50,000 or 10%
of the named executive's total salary and bonus for the year.
(3) All reported option grants have been adjusted to reflect the
three-for-one split of the Company's common shares that occurred on
September 14, 1998 (the "September 1998 stock split").
(4) All amounts reported in this column relate to performance awards under
the Company's Performance Plan, which is more fully discussed below under "Long-
Term Incentive Compensation Target Awards." As explained there, all performance
awards under that plan are made as grants of common shares or of discounted
30-day options to purchase common shares. The dollar amounts reported in this
table have been determined by multiplying the number of shares or options
granted by the NYSE closing price for a common share on the pertinent grant
date, reduced, where applicable, by the option exercise price.
(5) Totals in this column include amounts allocated for named executives
to the Company's Supplemental Executive Retirement Plan ("SERP") and/or the
Profit Sharing Plan, earnings credited to them under the SERP, and the cash
value at date of contribution of Company matching contributions made for their
accounts under the Matched Retirement Savings Plan, which were made in the form
of common shares. Set forth below is a breakdown of these amounts for fiscal
1999. For information concerning other 1999 amounts included in this column for
certain executives, see note (8).
Amounts allocated to the SERP Earnings credited on supplemental
and/or the Profit Sharing Plan: retirement balances under the SERP:
Gerald L. Kiser $-0- Gerald L. Kiser $ 8,653
Patrick H. Norton $45,150 Patrick H. Norton 31,660
Frederick H. Jackson 45,150 Frederick H. Jackson 31,496
Gene M. Hardy -0- Gene M. Hardy 11,943
Contributions under the Matched
Retirement Savings Plan:
Gerald L. Kiser $1,474
Patrick H. Norton 1,470
Frederick H. Jackson 1,708
Gene M. Hardy 1,444
(6) Does not include a bonus paid to the executive due to his participation
during the year in the Company's Personal Executive Life Insurance Program (the
"Insurance Program"), which bonus is included for him under "All Other
Compensation" and further discussed in note (8).
(7) Does not include an amount akin to a partial tax "gross up" that the
executive received due to his participation in the Insurance Program, which
amount is included for him under "All Other Compensation" and further discussed
in note (8).
(8) The fiscal 1999 and prior year totals reported for Messrs. Kiser and
Hardy also include certain amounts related to their participation in the
Insurance Program. Under the Insurance Program, a participating employee
receives supplemental life insurance intended to provide benefits to the
employee after his retirement and/or to his spouse or other beneficiary upon his
death. An employee participating in the Insurance Program is not eligible to
receive further Company contributions for his account under the Profit Sharing
Plan or the SERP (which contributions are not currently taxable to the employee)
but does receive an annual bonus (which is currently taxable) in an amount equal
to the amount of premiums payable by him during the year on his insurance policy
under the program plus an additional 32% of that premium amount, which has the
effect of a partial "gross up" to the employee for the taxes payable on the
bonus. The program-related bonuses (including tax gross ups) for Messrs. Kiser
and Hardy were $30,204 and $33,000, respectively, in fiscal 1999. Under certain
limited circumstances, some or all of the tax gross up portions of the
program-related bonuses paid to a participating employee would be repayable to
the Company out of policy proceeds, but the Company considers such repayment in
most cases to be a remote possibility at best.
(9) In addition to the bonus payments described in note (8), in most cases
(including Mr. Kiser's case but not including Mr. Hardy's case), during the
early years of an Insurance Program participant's policy, a portion of the
premiums on the policy are paid by the Company. The full amount of these
Company-paid premiums is repayable to the Company--generally upon the later of
seven years after purchase of the participant's policy or his or her retirement,
but also upon his or her death or other termination of employment if that were
to occur earlier. For purposes of this table, $19,295 has been included in this
column for Mr. Kiser as the estimated value to him of the premiums paid by the
Company during fiscal 1999, and the fiscal 1998 total shown for him in this
column also includes an estimated amount for the value to him of premiums so
paid. The fiscal 1999 amount has been calculated as if the payments were
advanced to Mr. Kiser on an interest-free basis from the time they were paid
until May 2004 (the seventh anniversary of the policy issuance date), and the
fiscal 1998 amount was similarly calculated. Depending on the time at which Mr.
Kiser actually leaves the Company's employ, the actual value he ultimately
receives from these premium payments may be significantly less or significantly
more than the amounts that have been estimated.
Options
The following table shows all stock options granted to named executives
during fiscal 1999 and the potential realizable value of those grants, assuming
stock price appreciation rates of 5% and 10% annually over the five-year term of
the options. All amounts reported in this table reflect the September 1998 stock
split.
<TABLE>
OPTION GRANTS IN LAST FISCAL YEAR
Potential Realizable Value at
Assumed Annual Rates of Stock Price
Individual Grants (1) Appreciation for Option Terms ($)(2)
---------------------------------------------- ---------------------------------------
5% Per Year 10% Per Year
% of Total ------------------- -------------------
Options Options Granted Exercise or Price Aggregate Price Aggregate
Granted To Employees Base Price Expiration Per Share Value Per Share Value
Name (#) In Fiscal Year ($/SH) Date ($/SH) ($) ($/SH) ($)
---- ------- --------------- ----------- ---------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Gerald L. Kiser 27,600 6.54 17.5833 7/26/03 4.86 134,079 10.73 296,278
Patrick H. Norton 27,600 6.54 17.5833 7/26/03 4.86 134,079 10.73 296,278
Frederick H. Jackson 27,600 6.54 17.5833 7/26/03 4.86 134,079 10.73 296,278
Gene M. Hardy 9,000 2.13 17.5833 7/26/03 4.86 43,722 10.73 96,613
</TABLE>
- ---------------
(1) All of the above options are options to purchase common shares that
were granted under the Company's 1997 Incentive Stock Option Plan. Normally,
options granted under this plan first become exercisable with respect to one-
fourth of the optioned shares on each of the first, second, third, and fourth
anniversaries of the date of the grant and, once exercisable, remain exercisable
until after the fifth anniversary of the date of grant. However, under the terms
of the plan, in the event of a grantee's death or his or her retirement at or
after age 65 (or earlier with the Company's consent), each of his or her then
outstanding options would become immediately exercisable in full and continue to
be exercisable for one year thereafter or, if earlier, the option's scheduled
expiration date. In addition, pursuant to the agreements described below under
"Certain Agreements," if a change of control were to occur, each then
outstanding option granted to a named executive also would become exercisable in
full. Termination of a named executive's employment under any circumstances
other than those described above would cause all of his then outstanding options
to terminate immediately.
(2) The 5% and 10% rates of appreciation used in this table are required by
rules of the SEC and are not intended to forecast possible future actual
appreciation, if any, in the Company's stock prices. It is important to note
that options have potential value for a named executive only if the common share
price advances beyond the exercise price shown in the table during the effective
five-year option period.
The following table provides information as to stock options exercised by
named executives in fiscal 1999 and the value of the remaining options held by
them at the end of that fiscal year. Information in the table on option
exercises that occurred before the September 1998 stock split has been adjusted
to reflect that stock split.
<TABLE>
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR
AND FISCAL YEAR-END OPTION VALUES
Value of Unexercised
Number of Securities Underlying Unexercised In-The-Money Options/SARS
Shares Options/SARs at Fiscal Year-End At Fiscal Year-End(2)
Acquired Value ------------------------------------------- -------------------------
On Exercise Realized Exercisable/Unexercisable Exercisable/Unexercisable
Name # $(1) # $
---- ----------- -------- ------------------------- -------------------------
<S> <C> <C> <C> <C>
Gerald L . Kiser 8,280 73,830 31,702/60,188 265,664/260,161
Patrick H. Norton 28,800 289,200 69,495/71,325 620,812/357,938
Frederick H. Jackson 54,720 548,220 43,575/71,325 361,612/357,938
Gene M. Hardy 15,420 154,344 12,726/22,674 104,584/110,775
</TABLE>
- ----------
(1) Based on the NYSE closing market price of the Company's common shares
on the date of exercise, minus the exercise price. An individual, upon exercise
of an option, does not receive cash equal to the amount contained in the Value
Realized column of this table. No cash is realized until the shares received
upon exercise of an option are sold.
(2) Based on the NYSE closing market price of the Company's common shares
at the end of fiscal 1999 ($19.00), minus the exercise price.
Long-Term Incentive Compensation Target Awards
Under the Company's 1993 Performance-Based Stock Plan, as currently in
effect (the "Performance Plan"), prior to or early in each fiscal year employees
selected by the Board committee or subcommittee then charged with administering
the Performance Plan (the "Administrative Committee," which since 1997 has been
the Compensation Subcommittee and prior to that time was the Compensation
Committee) may be granted contingent awards ("Target Awards") the potential
payouts on which ("Performance Awards") are linked to achievement by the end of
a three-year cycle consisting of that and the next two Company fiscal years (a
"Performance Cycle") of performance goals established by the Administrative
Committee when the Target Awards are granted. All Performance Awards under this
plan are structured as options to purchase or outright grants of Company common
shares. For each recipient of a Target Award for a given Performance Cycle, his
maximum Performance Award potential, which is awarded after the end of the cycle
if all performance goals are achieved, is a grant of shares equal to four times
the base number of shares established by the Administrative Committee with
respect to that Target Award; the minimum potential Performance Award, for
achievement of only one performance goal during the cycle, is a 30-day option to
purchase the base number of shares at 50% of their fair market value at date of
grant of the Target Award.
Early in fiscal 1999, the Administrative Committee granted Target Awards
to certain employees, including all named executives, for the Performance Cycle
ending April 28, 2001 (the "2001 cycle"). As has been the case since the first
grant of Target Awards under the Performance Plan, for the 2001 cycle the
Administrative Committee established four uniform financial goals for all Target
Award recipients, each relating to the operating performance of the Company and
its subsidiaries for that cycle. One of these goals relates to sales growth, the
second to earnings before income taxes, the third to operating profit margin,
and the fourth to return on total capital.
The table that follows provides information concerning the Target Awards so
granted to named executives. All reported numbers have been adjusted to reflect
the September 1998 stock split.
LONG-TERM INCENTIVE PLAN -- AWARDS IN LAST FISCAL YEAR
Number of Performance
Performance Period Until
Shares(1) Maturation Threshold Target Maximum
Name # Or Payout #(2) #(3) #(4)
---- ----------- ------------ --------- ------ -------
Gerald L. Kiser 3,278 (5) 3,278 6,555 13,110
Patrick H. Norton 3,278 (5) 3,278 6,555 13,110
Frederick H. Jackson 3,278 (5) 3,278 6,555 13,110
Gene M. Hardy 1,163 (5) 1,163 2,325 4,650
- ---------------
(1) Numbers reported are the base numbers of shares subject to Target
Awards granted.
(2) Numbers reported are the numbers of shares that would become subject to
30-day option if only one performance goal is achieved. The per share exercise
price for any such option would be 50% of the "Fair Market Value" (as defined in
the Performance Plan) of a common share at the date of grant of the Target
Awards.
(3) Numbers reported are the numbers of shares that would become subject to
30-day option if two performance goals are achieved. The per share exercise
price for each such option would be 25% of Fair Market Value of a common share
at the date of grant of the Target Awards. For achievement of three performance
goals, an outright grant of 150% of the same number of shares would be made.
Under the terms of the Performance Plan, if a Target Award grantee's employment
terminates due to death, or if termination is due to disability (as therein
defined) or retirement with the consent of the Company and the terminated
employee subsequently dies before the end of the Performance Cycle, his or her
estate administrator may elect to receive a Performance Award prior to the end
of the cycle. If the election is made, the estate would receive either a 30-day
option on the number of shares shown in this column, as if two Performance Goals
had been met, or an outright grant of that number of shares, depending upon
whether employment termination occurred during the first or second half of the
Performance Cycle. Termination of the grantee's employment due to death,
disability, or consensual retirement otherwise has no effect on any outstanding
Target Awards of the grantee, but termination for any other reason automatically
cancels such awards.
(4) Numbers reported are the numbers of shares that would be awarded, in
the form of an outright grant, if all performance goals are achieved. Under the
terms of the Performance Plan, the holder of a Target Award also will be deemed
automatically to have earned and been granted the same Performance Award if a
person or group becomes an Acquiring Person (as defined in the Performance Plan)
or certain changes in the composition of the Board of Directors occur while the
Target Award is outstanding. The same effect upon then-outstanding Target Awards
also will result, if, while there is an Acquiring Person, any of certain other
significant transactions involving the Company should occur, unless the
transaction has been approved by a majority of Directors who were Board members
before the Acquiring Person became such.
(5) The Performance Cycle until maturation or payout is the three-year
period ending April 28, 2001.
Certain Agreements
The Company recognizes that establishing and maintaining a strong
management team are essential to protecting and enhancing the interests of the
Company and its shareholders. In order to assure management stability and the
continuity of key management personnel, the Company has entered into change in
control agreements with certain key employees including, among others, all
executive officers. The employees eligible for change in control agreements are
those selected by the Compensation Committee. These agreements, which were
unanimously approved by the Board of Directors, provide that if any of such
persons is terminated, other than for cause, disability, death or retirement,
within three years after a change in control of the Company, that person shall
be entitled to receive a lump sum severance payment equal to three times the sum
of (i) his annualized salary and (ii) an amount equal to the average bonus paid
to the employee in the previous three years, as well as certain other payments
and benefits, including continuation of employee welfare benefit payments, and
reimbursement of certain legal fees and expenses incurred by such employee in
connection with enforcing such agreement following a change in control. In
consideration of the foregoing, each of such persons agrees to remain in the
employ of the Company during the pendency of any proposal for a change in
control of the Company. The agreements expire December 31, 1999 and are
automatically renewed for additional one-year periods unless either party gives
90 days' notice that it does not wish to extend the agreement. In the event of a
change in control, the agreements are automatically extended for 36 months.
Certain Transactions
Palm Beach Furniture Company ("Palm Beach"), which has been a La-Z-Boy
dealer since 1991, currently operates three La-Z-Boy Furniture Galleries in
southeast Florida. Since December 1996, Palm Beach has been 100% owned by CFO
Frederick H. Jackson's wife, Jeanne C. Jackson, and before that time, it was 50%
owned by their son, Frederick H. Jackson III. The younger Mr. Jackson currently
manages Palm Beach and has done so since it commenced operations. Except for
providing inventory financing on normal trade terms, the Company has never
provided any financial assistance to Palm Beach.
Last July, the Company, for credit reasons, terminated its dealer
arrangements with another, unrelated dealer that had operated three other
La-Z-Boy Furniture Galleries in southeast Florida--one on leased premises owned
by a subsidiary of the Company and two on premises leased from third parties. In
connection with the dealer termination, the lease from the Company subsidiary
also was terminated, and Company subsidiaries took over the operations of all
three stores pending identification of an acceptable substitute dealer, and
pursuant to the Company's then-existing credit arrangements with the former
dealer, also took over the inventory and other assets of the business, including
the former dealer's lessee interests in the properties leased from third
parties.
One of these leases calls for rental payments of $100,000 per year. The
term of that lease expires on December 31, 2011. The Company has expended
approximately $320,000 for leasehold improvements since taking over that lease.
The other lease is scheduled to expire at the end of this month and is not being
renewed. Instead, the Company has leased a larger, substitute facility in a more
desirable location. The new lease is a triple net lease for a 5 1/2-year lease
term, commencing August 1, 1999, with options to renew for up to 15 more years.
Base rent under that is $242,800 per year for the initial term, with higher
subsequent rent if the options are exercised. The Company anticipates that
approximately $300,000 in leasehold improvements will be needed in connection
with commencing retail operations at that facility.
Management of the Company believes that the southeast Florida market has
growth potential for the Company's products, but that this potential would
improve if dealer operations were more consolidated, which would permit dealer
advertising costs and other fixed dealer costs to be spread over a larger volume
of business. Accordingly, late last month the Company's Board approved in
principle a proposal for Palm Beach to take over the operations formerly
conducted by the Company's terminated southeast Florida dealer.
Final documentation of this transfer of operations has not yet been
completed, and some features of the transactions involved remain to be decided.
However, in general, it is expected that the two leased stores will be sublet to
Palm Beach on a pass-through basis, the Company will finance the cost of the
expected leasehold improvements to the new leased property, taking back an
8-year promissory note from Palm Beach bearing simple interest at 7% per year
with payments of principal and interest due annually, and Palm Beach also will
agree to repay the Company its costs for the leasehold improvements already made
to the other leased property, providing another 8-year promissory note for that
obligation on the same terms.
In addition, the owned property either will be sold to Palm Beach for fair
market value following an appraisal by an independent third party (with the
Company retaining a right of first refusal with respect to any subsequent sale),
or will be leased to Palm Beach on rental terms to be negotiated, subject to
Board approval. If the property is purchased and if requested by Palm Beach, the
Company will finance the purchase over 10 years, taking back an 8% simple
interest promissory note, with principal payments amortized over 20 years and a
balloon payment at the end of the 10-year term, and a first mortgage on the
property.
All of the foregoing is subject to Board approval of the finalized terms of
the documentation for the transactions involved including documentation
providing normal security and cross-collateralization for all indebtedness now
or hereafter owned by Palm Beach to the Company, prohibiting the incurrence of
other mortgages or liens against any of Palm Beach's property without the
Company's consent, and prohibiting the transfer of any ownership of Palm Beach
other than to the younger Mr. Jackson.
PERFORMANCE COMPARISON
Performance Graph
The following graph provides an indicator of the return for the Company's
last five fiscal years that would have been realized (assuming reinvestment of
dividends) by an investor who invested $100 on April 30, 1994 in each of (i) the
New York Stock Exchange Index, (ii) a Peer Group of publicly traded furniture
industry companies, and (iii) the Company's common shares. Further information
concerning the composition of the Peer Group is provided after the graph.
Comparison of Total return to Shareholders
[PERFORMANCE GRAPH]
1994 1995 1996 1997 1998 1999
---- ---- ---- ---- ---- ----
La-Z-Boy Inc. $100.00 $82.49 $94.41 $103.66 $175.83 $190.81
Peer Group 100.00 81.53 100.25 129.90 257.11 209.01
NYSE Market Index 100.00 111.92 144.57 174.19 245.15 260.64
Composition of Peer Group Index
The Peer Group consists of nine public companies operating primarily in the
residential segment of the furniture industry and are as follows: Bassett
Furniture, Bush Industries, Chromcraft Revington, Inc., Ethan Allen Interiors,
Flexsteel Industries, Furniture Brands International, LADD Furniture, Pulaski
Furniture, and Stanley Furniture. In the graph above, the stock performance of
each company in the Peer Group has been weighted according to its relative stock
market capitalization for purposes of arriving at group averages.
JOINT REPORT ON EXECUTIVE COMPENSATION
The compensation of the executives named in the Summary Compensation Table
of this Proxy Statement, as well as that of the other senior executives at the
Company and subsidiaries, is determined by the Compensation Committee of the
Company's Board of Directors (hereafter referred to in this section of the Proxy
Statement as the "Committee") and the Compensation Subcommittee (hereafter
referred to in this section as the "Subcommittee"). The Subcommittee is charged
with administering the Company's stock-related employee plans in which executive
officers may participate; the Committee determines all executive officer
compensation not assigned to the Subcommittee.
The report in this section is a joint report by the Subcommittee and the
Committee concerning the policies followed and decisions made with respect to
the compensation of executive officers for fiscal 1999. The Subcommittee
provides information concerning decisions made by the Subcommittee only; the
Committee provides all other information.
Compensation Philosophy
The Company's executive compensation programs are premised on the
conviction that the interests of executives should be closely aligned with those
of the Company's shareholders. The members of the Subcommittee and of the
Committee as a whole believe that to further that objective a substantial
portion of the aggregate potential compensation of executive officers should be
directly and materially linked to the Company's operating performance.
Consequently, a significant portion of each executive's total compensation is
placed at risk and linked to the accomplishment of specific results which will
benefit the shareholders in both the short- and long-term. Since achievement of
performance objectives over time is a primary determinant of share price,
executive compensation is weighted heavily on the basis of performance and
achievement of these goals. Under this performance orientation:
* Executives are motivated to improve the overall performance and profitability
of the Company by rewarding them when specific, measurable results have been
achieved.
* Incentive awards on the basis of executives' performance and contribution
against short- and long-term goals further encourage accountability.
* In years when corporate performance has been superior, executives will be well
compensated, which will permit the Company to attract and retain the talent
needed to lead and grow its business; conversely, in years of below average
performance, compensation declines below competitive benchmarks.
* The compensation strategy will support business goals and direction and
specifically link executive and shareholder interests through equity-based plans
linked to the common shares.
* The Company's compensation policy will maximize growth-driven financial
performance, balancing appropriately the short- and long-term goals of the
Company.
Compensation Plan Overview
For a number of years, the Committee's practice in carrying out its duties
has been to review the executive compensation programs of furniture
manufacturers and other manufacturing companies of similar size whose executives
have similar responsibilities and operations. Included in this review process
are the companies in the peer group then being used by the Company for stock
performance comparison in its proxy materials (the "Peer Group"). Regular
features of this review process also have been analyses of such compensation
data and recommendations presented by a compensation consultant retained by the
Company to assist the Committee to assure itself that the Company's total
compensation program is properly integrated with the Company's annual and longer
term objectives and is competitive with the compensation programs of other
companies with which the Company must directly compete for executive talent.
The Committee again engaged in such a review process with respect to its
fiscal 1999 compensation decisions concerning executive officers, using the
services of Frederic W. Cook & Co. ("Cook") as compensation consultant to the
Committee. Since membership on the Subcommittee is drawn solely from Committee
members, the Subcommittee also had the benefit of Cook's services during this
review process.
Those services included review with Cook of a report summarizing its
findings after an overall review of the Company's executive compensation
programs. The scope of Cook's review included base salary, annual bonus, long-
term incentive, and special benefits and perquisites for the Company's top four
officers. All competitive comparisons were made against a group of 17 furniture
manufacturing companies (including, where available, companies in the Peer
Group). Overall, Cook deemed the Company's executive compensation program
generally complete, in line with competitive practices, and reasonable versus
the comparison group, given the Company's relative size and performance. For
fiscal 1999, Cook made the following recommendations with respect to Messrs.
Kiser and Norton and the other named executives: (1) increase base salaries
within a conservative range of 0 to 5%, (2) maintain the target cash bonus
opportunity under the Company's management incentive plan and (3) grant stock
options and Target Awards under the Performance Plan according to guidelines
provided by Cook.
The chief components of the Company's executive compensation program are
salary, annual cash incentive bonuses, and long-term incentives utilizing
stock-based awards. The Subcommittee made all decisions concerning stock-based
awards for fiscal 1999; the Committee made all other decisions concerning the
fiscal 1999 compensation of executives. In making those decisions, both the
Committee and the Subcommittee considered the components identified above as a
whole and sought to balance the total compensation package between the more
stable salary portion and the "at risk" incentive portions so that a substantial
percentage of the total potential compensation of each executive would be
dependent on the achievement of Company short- and long-term strategic goals and
increases in the value of the Company's common shares. Information concerning
other factors bearing on particular components of fiscal 1999 executive
compensation is provided below. The 1999 salary, bonus, and long-term incentive
awards to Messrs. Kiser and Norton were determined based on the same policies
and after consideration of the same factors as were applied with respect to the
other executives of the Company.
Salary
In considering adjustments to the salaries of executive officers for fiscal
1999, the Committee toward the start of the year reviewed with Cook the results
of its executive compensation review. The actual salary amounts established for
Messrs. Kiser, Norton, and the other named executives (all of which are reported
in the Summary Compensation Table above) were based solely on that review and
Cook's salary recommendations described above.
Short-Term Incentive Awards
Annually, the Committee establishes short-term performance criteria for the
Company's management incentive plan. Performance criteria include such areas as
growth in revenue and improved earnings. The specific focus and weighting of the
criteria are based on the Committee's assessment of the key short-term
priorities of the Company. The performance criteria are established at the start
of the fiscal year or as shortly thereafter as possible. The award paid is based
on actual results compared to the established performance targets. For fiscal
1999, the maximum award opportunity established by the Committee was 100% of
salary for Messrs. Kiser, Norton and Jackson, and 70% of salary for Mr. Hardy.
The performance criteria for fiscal 1999 were improvement in sales revenue and
pretax income. One-third of the award was based on sales revenue and two-thirds
was based on pretax income. This weighting is the result of the Committee's
continuing emphasis on improving earnings.
For fiscal 1999, the Company's consolidated sales revenue increased 16%
over fiscal 1998, and the Company's pretax income for fiscal 1999 increased 33%
over fiscal 1998. Based on the sliding scale of performance goals established
towards the start of the fiscal year, each named executive, including Messrs.
Kiser and Norton, was awarded a cash incentive bonus award equal to the fiscal
1999 total reported for him under "Bonus" in the Summary Compensation Table.
Those incentive bonuses were determined exclusively based on the Company's
performance for the fiscal year using the system described above.
In addition to their cash incentive bonuses under the management incentive
program, Mr. Kiser and Mr. Hardy received the additional fiscal 1999 cash
bonuses discussed in note (8) to the Summary Compensation Table due to their
participation in the Company's Personal Executive Life Insurance Program.
Long-Term Incentives
The Company has long recognized the importance of linking executive
compensation and value created for shareholders. Consequently, stock-based
awards are an important component of executive compensation and one that
particularly links executive compensation to the maximization of shareholder
value. For fiscal 1999, awards under the 1997 Incentive Stock Option Plan and
awards under the Company's Performance Plan both were used to further these
objectives with respect to executive officers. Awards under the Company's 1997
Restricted Share Plan also were available for that purpose; however, consistent
with the practice followed in prior years, the Subcommittee decided not to make
any grants under the 1997 Restricted Share Plan to any executive officer or any
other employee eligible to participate in the Performance Plan.
When considering the fiscal 1999 grant of options to executive officers
under the 1997 Incentive Stock Option Plan, the Subcommittee primarily was
concerned with achieving an appropriate balance between such stock-based awards
and the other components of their compensation for the fiscal year. Toward that
end, the Subcommittee relied on the survey data provided by Cook concerning the
practices in this area followed by other companies (including companies in the
Peer Group, as well as other potential competitors for executives) and their
recommendations for achieving comparable allocation results, which were based on
that data and their respective analyses and estimates of the present and
potential future value of the Company's stock-based awards. In addition, the
Subcommittee considered the compensation opportunity that had been afforded
executives early in the fiscal year through the grant of Target Awards under the
Performance Plan for the Performance Cycle ending in 2001 and the availability
of the Performance Plan for subsequent grants of Target Awards to executives.
Based on those factors, the Subcommittee determined to grant incentive stock
options on 5,955 common shares and nonqualified stock options on 21,645 common
shares to Mr. Kiser, incentive stock options on 5,955 common shares and
nonqualified stock options on 21,645 common shares to Mr. Norton, and incentive
and/or nonqualified stock options on an aggregate 36,600 common shares to the
other named executives.
The Performance Awards under the Performance Plan reported as 1999 long-
term incentive plan payouts in the Summary Compensation Table were awarded to
the named executives after the close of fiscal 1999 for the three-year
Performance Cycle then ended (the "1999 cycle"). As administrator of that plan
when the Target Awards for that cycle were made, the Compensation Committee had
established four performance goals for each of those Target Awards. As new
administrator of the Performance Plan, the Subcommittee determined after the
close of fiscal 1999 that three of those goals had been achieved. Accordingly,
since each named executive had been a recipient of a Target Award for the 1999
cycle, each of them received an award of common shares equal to three times the
base number of shares reflected in his Target Award for the 1999 cycle.
The Compensation Committee
John F. Weaver, Chairman
David K. Hehl*
Rocque E. Lipford
H. George Levy, M.D.*
-------------------
*Member of the Compensation Subcommittee
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
As indicated above, the current members of the Compensation Committee are
Mr. Hehl, Dr. Levy and Messrs. Lipford and Weaver, and the current members of
the Compensation Subcommittee are Mr. Hehl and Dr. Levy. No one other than
the current members served on either the Compensation Committee or the
Compensation Subcommittee at any time during fiscal 1999.
The law firm of Miller, Canfield, Paddock and Stone, P.L.C., of which
Rocque E. Lipford is a senior member, provides legal services to the Company and
has done so for the past 18 years.
MISCELLANEOUS
Independent Accountants
The Board of Directors, at the recommendation of its Audit Committee, has
reappointed the firm of PricewaterhouseCoopers LLP ("PricewaterhouseCoopers") as
the Company's independent accountants. Prior to its merger with Coopers &
Lybrand in calendar 1998 to form PricewaterhouseCoopers, Price Waterhouse LLP
had served as independent accountants for the Company continuously since 1968.
A representative of PricewaterhouseCoopers is expected to attend the annual
meeting, will have an opportunity to make a statement at the meeting if he or
she desires to do so, and will be available to answer appropriate questions that
may be raised by shareholders at the meeting.
Shareholder Proposals and Director Nominations for Next Annual Meeting
Any shareholder of the Company who desires to submit a proposal for
inclusion in the Company's proxy materials for its annual meeting of
shareholders to be held in calendar year 2000 (the "calendar 2000 annual
meeting") must submit the proposal to the Company no later than February 26,
2000. Even if a proposal is submitted by that date, the Company will have the
right to omit the proposal from its proxy materials if the proposal does not
otherwise satisfy the requirements for inclusion of SEC Rule 14a-8.
Any shareholder proposal for the calendar 2000 annual meeting that is
submitted outside the processes of Rule 14a-8 will be considered "untimely" for
purposes of SEC Rule 14a-4(c)(1) if it is not submitted to the Company on or
before May 11, 2000. Management proxies for the calendar 2000 annual meeting may
confer discretionary authority to vote on any such untimely proposal without
express direction from shareholders giving the proxies.
Under the Company's Bylaws, a shareholder desiring to nominate one or more
candidates for election to the Board at the calendar 2000 annual meeting must
deliver notice to the Secretary no later than May 2, 2000. The notice must set
forth for each proposed nominee his or her name, age, residence and business
address, and principal occupation, the number of shares of Company capital stock
beneficially owned by the nominee, and all other information concerning the
nominee that would be required by SEC rules in a proxy statement soliciting
proxies for election of the nominee.
Any shareholder proposal or nomination should be sent to the Company's
principal offices in Monroe, Michigan, addressed to the attention of the
Secretary.
Costs of Proxy Solicitation
The total expense of soliciting proxies pursuant to this Proxy Statement
will be paid by the Company. That expense is expected to be limited to the cost
of preparing and mailing this Proxy Statement and accompanying documents.
Please execute and return the accompanying proxy, so that your shares may
be voted at the meeting.
BY ORDER OF THE BOARD OF DIRECTORS
Gene M. Hardy, Secretary
Monroe, Michigan
June 25, 1999
A copy of the Company's Form 10-K Annual Report for the fiscal year ended
April 24, 1999, may be obtained by writing the Secretary's office.
