<PAGE>
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [_]
Check the appropriate box:
[_] Preliminary Proxy Statement
[_] CONFIDENTIAL, FOR USE OF THE
COMMISSION ONLY (AS PERMITTED BY
RULE 14A-6(E)(2))
[X] Definitive Proxy Statement
[_] Definitive Additional Materials
[_] Soliciting Material Pursuant to (S) 240.14a-11(c) or (S) 240.14a-12
Leggett & Platt, Incorporated
- --------------------------------------------------------------------------------
(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:
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(2) Aggregate number of securities to which transaction applies:
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(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):
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(4) Proposed maximum aggregate value of transaction:
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(5) Total fee paid:
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[_] Fee paid previously with preliminary materials.
[_] Check box if any part of the fee is offset as provided by Exchange
Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee
was paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
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(2) Form, Schedule or Registration Statement No.:
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(3) Filing Party:
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(4) Date Filed:
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Notes:
<PAGE>
[LEGGETT & PLATT, INCORPORATED LOGO]
March 31, 2000
Dear Shareholder:
The Board of Directors cordially invites you to attend the Annual Meeting of
Shareholders of Leggett & Platt, Incorporated on Wednesday, May 3, 2000, at
10:00 a.m. local time, at the Company's Cornell Conference Center, No. 1
Leggett Road, Carthage, Missouri.
The enclosed Proxy Statement contains two proposals from your Board of
Directors: the election of Directors and the ratification of the Board's
selection of PricewaterhouseCoopers LLP as the Company's independent
accountants for 2000.
I urge you to vote your proxy FOR each of the proposals.
We hope you will attend the Annual Meeting. If you cannot attend the
meeting, please vote your shares by using our new Internet voting procedures
or by returning the enclosed proxy card. You may cast your vote by Internet at
www.eproxy.com/leg. Specific instructions for voting by Internet are included
at the web site address. If you vote using the proxy card, please sign and
return it in the enclosed self-addressed, postage-paid envelope.
Sincerely,
LEGGETT & PLATT, INCORPORATED
/s/ Felix E. Wright
Felix E. Wright
President and Chief Executive
Officer
<PAGE>
Leggett & Platt, Incorporated
No. 1 Leggett Road
Carthage, Missouri 64836
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
To Be Held on Wednesday, May 3, 2000
NOTICE IS HEREBY GIVEN that the Annual Meeting of Shareholders of Leggett &
Platt, Incorporated (the "Company") will be held at the Company's Cornell
Conference Center, No. 1 Leggett Road, Carthage, Missouri, on Wednesday, May
3, 2000, at 10:00 a.m. local time:
1. To elect fourteen (14) Directors to hold office until the next Annual
Meeting of Shareholders or until their successors are elected and
qualified;
2. To ratify the selection of PricewaterhouseCoopers LLP as the Company's
independent accountants for the fiscal year ending December 31, 2000;
and
3. To transact such other business as may properly come before the meeting
or any adjournment thereof.
Shareholders of record at the close of business on March 8, 2000, are
entitled to vote at the Annual Meeting.
An Annual Report outlining the Company's operations during the fiscal year
ended December 31, 1999, accompanies this Notice of Annual Meeting and the
Proxy Statement.
By Order of the Board of Directors
Ernest C. Jett
Secretary
Carthage, Missouri
March 31, 2000
<PAGE>
Leggett & Platt, Incorporated
No. 1 Leggett Road
Carthage, Missouri 64836
ANNUAL MEETING -- MAY 3, 2000
PROXY STATEMENT
This statement is furnished in connection with the solicitation on behalf of
the Board of Directors of Leggett & Platt, Incorporated (the "Company") of
proxies to be voted at the Annual Meeting of Shareholders on May 3, 2000, for
the purposes set forth in the accompanying Notice of the meeting.
We wish that all of our shareholders could attend the Annual Meeting and
vote in person. However, since this may not be possible, the Board of
Directors is soliciting your proxy so that you will be represented and can
vote at the meeting.
This Proxy Statement and the enclosed Annual Report contain information
about matters to be voted on at the Annual Meeting, the Company, the Company's
independent accountants, and the Company's Directors and Executive Officers.
We hope this Proxy Statement is useful to you and helps you better understand
your Company. This Proxy Statement is first being sent or given to
shareholders on March 31, 2000.
You may cast your vote by Internet at www.eproxy.com/leg. Alternatively, you
may vote using the enclosed proxy card. If you vote using the proxy card,
please sign and return it in the enclosed self-addressed, postage-paid
envelope. If you vote by Internet, there is no need to mail the proxy card. If
you attend the Annual Meeting, you may vote in person.
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
----
<S> <C>
INFORMATION ABOUT THE MEETING AND VOTING................................... 2
PROPOSAL ONE--ELECTION OF DIRECTORS........................................ 3
PROPOSAL TWO--RATIFICATION OF SELECTION OF INDEPENDENT ACCOUNTANTS......... 5
INFORMATION REGARDING THE COMPANY, ITS DIRECTORS AND EXECUTIVE OFFICERS.... 6
Leggett & Platt, Incorporated Common Stock Performance Graph............. 6
Compensation Committee Report on Executive Compensation.................. 7
Executive Compensation and Related Matters............................... 10
Ownership of Common Stock................................................ 14
Compliance with Section 16(a) of the Securities Exchange Act of 1934..... 15
FINANCIAL DATA............................................................. 15
2001 SHAREHOLDER PROPOSALS................................................. 16
OTHER MATTERS.............................................................. 16
</TABLE>
1
<PAGE>
INFORMATION ABOUT THE MEETING AND VOTING
This Proxy Statement is furnished to shareholders of Leggett & Platt,
Incorporated in connection with the solicitation of proxies by the Company's
Board of Directors (the "Board") to be voted at the Annual Meeting of
Shareholders of the Company on May 3, 2000. The Board solicits your proxy on
the card enclosed or by Internet vote.
Right to Revoke Proxy; Voting of Proxy
Any shareholder giving the enclosed proxy or voting by Internet can revoke
it by (i) submitting a proxy (including a proxy via Internet) bearing a later
date, (ii) providing written notice of revocation to the Company at or prior
to the Annual Meeting, or (iii) attending the Annual Meeting and voting in
person. Unless the persons named in the proxy are prevented by circumstances
beyond their control from acting, the proxy will be voted at the Annual
Meeting in the manner specified in the proxy.
If no specification is made on a proxy, the proxy will be voted FOR the
election of each nominee for Director in Proposal 1, FOR the ratification of
the selection of the Company's independent accountants in Proposal 2, and in
the discretion of the persons named as proxies on such other business as may
properly come before the meeting or any adjournment.
Solicitation of Proxies
The enclosed proxy is solicited by and on behalf of the Board. The expense
of soliciting proxies for the Annual Meeting, including the cost of mailing
and voting by Internet, will be borne by the Company. The Company will request
persons holding stock as beneficial owners, custodians, nominees or the like,
to send proxy materials to their principals requesting authority to vote the
proxies. The Company will reimburse such persons for their solicitation
expenses.
If necessary to assure sufficient representation at the meeting, employees
of the Company, at no additional compensation, will request the return of
proxies personally or by telephone, facsimile or the Internet.
Voting Securities Outstanding; Quorum
The only class of outstanding voting securities is the Company's $.01 par
value common stock ("Common Stock"). On March 8, 2000, there were 198,781,573
shares of Common Stock outstanding and entitled to vote. Only shareholders of
record at the close of business on March 8, 2000, are entitled to vote at the
Annual Meeting.
A majority of the outstanding shares of Common Stock present or represented
by proxy will constitute a quorum for the transaction of business at the
Annual Meeting. If a quorum is not present, the Annual Meeting may be
adjourned for not more than 90 days to reach a quorum.
Every shareholder has the right to vote, in person or by proxy, one vote per
share on all matters. Shares represented by proxies marked "Withhold
Authority" with respect to the election of Directors, and proxies marked
"Abstain" on the remaining proposals will be counted in determining whether a
quorum is present. Broker non-votes are also counted in determining whether a
quorum is present. "Broker non-votes" occur when a broker indicates on the
proxy that it lacks discretionary authority to vote on a particular matter for
beneficial owners who have not provided voting instructions. Votes withheld
(for the election of directors) have the effect of a vote "against," and
abstentions and broker non-votes have the effect of "no" votes.
2
<PAGE>
PROPOSAL ONE
ELECTION OF DIRECTORS
At the Annual Meeting, 14 Directors will be elected who will hold office
until the next Annual Meeting of Shareholders or until their successors are
elected and qualified. The persons named in the enclosed proxy intend to vote
for the election of the 14 nominees named below. Each of these nominees,
except Mr. Clark, was elected by the shareholders at the last Annual Meeting.
Richard L. Pearsall, a current Director of the Company, will be retiring as a
Director in May 2000 and will not stand for re-election. If any nominee named
below is not a candidate for election as a Director at the Annual Meeting (an
event which the Board does not anticipate), the proxy will be voted for a
substitute nominee, if any, designated by the Board.
Raymond F. Bentele, age 63, served as President and Chief Executive Officer
of Mallinckrodt, Inc. from 1981 until his retirement in 1992. He serves as a
director of Mallinckrodt, Inc., a manufacturer of medical and specialty
chemical products; Kellwood Company, an apparel and camping goods
manufacturer; and IMC Global, Inc., a producer of crop nutrient minerals. He
was first elected as a Director of the Company in 1995.
Ralph W. Clark, age 59, was a Vice President of International Business
Machines Corporation ("IBM") from 1988 until 1994, where he served as
Assistant General Manager of Application Software Group, President of the
General and Public Sector Division (a software division), and President of
Skill Dynamics, IBM's education division. He also served as Chairman of
Frontec AMT Inc., a software company, until his retirement in 1998. Mr. Clark
serves as a director of Computer Learning Centers, Inc., an educational and
training company for computer software and operations.
Harry M. Cornell, Jr., age 71, is Chairman of the Company's Board of
Directors. He previously served the Company as Chief Executive Officer until
May 1999. Mr. Cornell was first elected as a Director of the Company in 1958.
Robert Ted Enloe, III, age 61, is Managing General Partner of Balquita
Partners, Ltd., a family securities and real estate investment partnership. He
served as President of Liberte Investors, Inc. from 1975 until 1996 and was
Chief Executive Officer of Liberte Investors, Inc. from 1992 until 1996. Mr.
Enloe serves as a director of Compaq Computer Corporation, a computer
manufacturer; SIXX Holdings, Inc., an operator of Italian restaurants; Liberte
Investors, Inc., a holding company seeking acquisitions of operating
companies; and SierraCities.com, a commercial leasing firm. He was first
elected as a Director of the Company in 1969.
Richard T. Fisher, age 61, is Managing Director of CIBC Oppenheimer &
Company, an investment banking firm. He was first elected as a Director of the
Company in 1972.
Bob L. Gaddy, age 59, was elected Senior Vice President of the Company in
1996. Since that time, he has also served as Chairman and Chief Executive
Officer of Aluminum Products. Since 1993, Mr. Gaddy has served as Chairman of
the Board and Chief Executive Officer of Pace Industries, Inc., a wholly owned
subsidiary of the Company. Mr. Gaddy was first elected as a Director of the
Company in 1996.
David S. Haffner, age 47, was elected Chief Operating Officer of the Company
in 1999. He is the Company's Executive Vice President and previously served
the Company as Senior Vice President. Mr. Haffner was first elected as a
Director of the Company in 1995.
Thomas A. Hays, age 67, served as Deputy Chairman of May Department Stores
Company from 1993 until his retirement in April 1996. He was President of May
Department Stores Company from 1985 to 1993. Mr. Hays serves as a director of
Payless ShoeSource, Inc., a retail shoe chain, and Ameren Corporation, an
electric utility company. He was first elected as a Director of the Company in
1996.
3
<PAGE>
Robert A. Jefferies, Jr., age 58, is Senior Vice President, Mergers,
Acquisitions and Strategic Planning of the Company. He previously served the
Company as Senior Vice President, General Counsel and Secretary. Mr. Jefferies
was first elected as a Director of the Company in 1991.
Alexander M. Levine, age 68, is Managing Director of Waterline Capital LLC,
a venture capital investment firm. He previously served the Company as
Director of International Development and later as Special Advisor. He was
first elected as a Director of the Company in 1989.
Duane W. Potter, age 68, is Senior Vice President of the Company and
President-Foam Components Group. He previously served the Company as Senior
Vice President and President-Bedding Components Group. Mr. Potter was first
elected as a Director of the Company in 1996.
Maurice E. Purnell, Jr., age 60, is a partner in the law firm of Locke
Liddell & Sapp LLP. He was first elected as a Director of the Company in 1988.
Alice L. Walton, age 50, is Chairman of Llama Company, an investment banking
firm. She served as Chief Executive Officer of Llama Company from 1990 to
1998. She was first elected as a Director of the Company in 1998.
Felix E. Wright, age 64, was elected Chief Executive Officer of the Company
in May 1999. He is Vice Chairman of the Company's Board of Directors and
serves as the Company's President. He previously served the Company as Chief
Operating Officer and Executive Vice President. He was first elected as a
Director of the Company in 1977.
Board Meetings and Committees
The Board held four meetings in 1999. All Directors attended at least 75% of
the aggregate of the Board meetings and the committees on which they served in
1999, except for Ms. Walton who was absent for two Board meetings and two
committee meetings.
The Board has an Executive Committee, an Audit Committee, a Compensation
Committee, and a Nominating Committee. Under present arrangements, non-
employee Directors receive a retainer of $19,000 per year and a fee of $3,000
for attending each regular or special meeting of the Board. Each employee
Director receives an annual retainer of $3,000. Non-employee Directors who
serve on Board committees receive additional fees for committee participation.
Committee chairmen receive a $1,000 annual retainer. Each committee member,
including chairmen, receive an attendance fee of $500 for each meeting held in
conjunction with a regular Board meeting and $1,000 for each meeting that is
not in conjunction with a regular Board meeting.
The Audit Committee consists of Messrs. Bentele, Fisher, Hays, Levine,
Pearsall, and Purnell and Ms. Walton. Mr. Bentele is Chairman. The Audit
Committee is responsible for (i) recommending to the Board the selection of
the Company's outside auditors, (ii) reviewing the audit scope and risk
assessment process, (iii) reviewing relationships that may affect the
independence of the outside auditors, (iv) reviewing any major internal
control or accounting issues of the Company, (v) reviewing and discussing with
management and the outside auditors the annual audited financial statements
included in the Company's 10-K, and (vi) reviewing the Company's compliance
with various laws and regulations. The Audit Committee held four meetings in
1999.
The Compensation Committee consists of Messrs. Enloe, Fisher and Pearsall.
Mr. Enloe is Chairman. The Compensation Committee is responsible for executive
compensation policies and approving compensation payable to the Executive
Officers of the Company. The Compensation Committee held two meetings in 1999.
The Nominating Committee consists of Messrs. Hays, Purnell and Wright. The
duties of the Nominating Committee are to review and recommend the size and
composition of the Board of Directors and its Committees. The Nominating
Committee will consider nominees recommended by shareholders. Any shareholder
who wishes
4
<PAGE>
to recommend a prospective nominee for the Board of Directors may do so by
submitting the candidate's name and other information, as provided by the
Company's Bylaws, to the Secretary of the Company at No. 1 Leggett Road,
Carthage, Missouri 64836. The Nominating Committee held one meeting by
telephone in 1999.
Vote Required for Election
The affirmative vote of a majority of the shares present in person or
represented by proxy and entitled to vote at the Annual Meeting will be
required for the election of Directors. The Board recommends that you vote FOR
the election of each of the Director nominees.
PROPOSAL TWO
RATIFICATION OF SELECTION OF INDEPENDENT ACCOUNTANTS
Upon recommendation of the Audit Committee, the Board has selected
PricewaterhouseCoopers LLP as the Company's independent accountants for the
fiscal year ending December 31, 2000. PricewaterhouseCoopers LLP, or its
predecessor Price Waterhouse, has been engaged as the Company's independent
accountants for each year beginning with the year ended December 31, 1991.
It is expected that representatives of PricewaterhouseCoopers LLP will be
present at the Annual Meeting. They will have an opportunity to make a
statement if they desire to do so and also will be available to respond to
appropriate questions.
Vote Required for Ratification
The affirmative vote of a majority of the shares present in person or
represented by proxy and entitled to vote at the Annual Meeting will be
required for the adoption of this proposal. The Board recommends that you vote
FOR the ratification of the selection of PricewaterhouseCoopers LLP.
5
<PAGE>
INFORMATION REGARDING THE COMPANY, ITS DIRECTORS AND EXECUTIVE OFFICERS
The following additional information about the Company and its Directors and
Executive Officers is provided below.
LEGGETT & PLATT, INCORPORATED
COMMON STOCK PERFORMANCE GRAPH
The Company became part of the Standard & Poor's 500 Stock Index during
1999. As a result, the Company is required by Securities and Exchange
Commission rules to compare its returns against both the S&P 500 Composite
Index and the index used by the Company in the immediately preceding year, the
New York Stock Exchange's Composite Index. The following graph compares the
cumulative total return to shareholders on the Company's Common Stock over the
five years ended December 31, 1999, to the returns on the S&P 500 Composite
Index, the NYSE Composite Index and a listing of peer companies in the SIC
Code 251 Household Furniture Index prepared and published by Media General
Financial Services of Richmond, Virginia (the "Peer Group"). Additional
information concerning the long-term performance of the Company can be found
in the Annual Report to Shareholders which accompanies this Proxy Statement.
LEGGETT & HOUSEHOLD NYSE MARKET S&P 500
YEAR PLATT, INC. FURNITURE INDEX INDEX
- ---- ---------- --------- ---------- --------
1994 100 100 100 100
1995 140.98 125.08 129.66 137.58
1996 204.72 158.98 156.20 169.17
1997 250.98 211.55 205.49 225.6
1998 267.14 232.97 244.52 290.08
1999 264.43 213.28 267.75 351.12
The comparison assumes separate $100 investments were made on December 31,
1994, in Company Common Stock, the S&P 500 Composite Index, the NYSE Composite
Index, and the Peer Group and that all dividends during the period have been
reinvested. Returns are at December 31 of each year. The impact of income
taxes is not reflected. The Peer Group consists of 15 companies in the
household furniture industry selected, prepared and published by Media General
Financial Services. This index is available to shareholders by contacting the
Company's Investor Relations Department (800-888-4569).
6
<PAGE>
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
The Company's Compensation Committee (the "Committee") establishes executive
compensation policies and approves compensation (including stock awards and
stock options) of the Executive Officers of the Company. The Committee
presently consists of Messrs. Enloe, Fisher, and Pearsall. Each is a non-
employee Director, and Mr. Enloe serves as Chairman.
Set out below is the report of the Committee concerning compensation of the
Executive Officers of the Company for the fiscal year ended December 31, 1999.
General Policies
The compensation of Company executives is designed to attract, retain, and
motivate high quality Executive Officers while at the same time aligning the
interests of the Executive Officers with the interests of the shareholders.
Executive compensation is determined by both Company performance generally and
the executive's individual contribution. Ownership of Common Stock by
Executive Officers is strongly encouraged because it focuses the Company's
executives on the significance of maximizing shareholder value.
Determination of Salaries Generally
The Committee annually reviews the Executive Officers' salaries and, if
warranted, approves management recommended changes. Management recommendations
are made by the Chief Executive Officer and are developed in consultation with
the Company's Human Resources Department. Merit increase guidelines are
prepared annually by Company management, approved by the Compensation
Committee, and apply to Company managers generally. The Committee's review of
management recommendations, although largely subjective and informal, takes
into consideration the Company's performance over the preceding year and each
executive's individual performance and contribution related to the executive's
particular business unit or function, as well as the contribution by the
executive or the business unit to overall Company performance. The Committee
believes the Company's executive salaries generally have been set at
conservative levels given the executives' responsibilities, experience, length
of service, skills, and performance.
Salaries of Chief Executive Officers
In May 1999, Mr. Cornell was succeeded by Mr. Wright as the Company's Chief
Executive Officer. Mr. Cornell did not receive a salary increase during 1999.
While he is no longer the Chief Executive Officer, Mr. Cornell continues to
serve as the Company's Chairman of the Board. Mr. Wright's 1999 salary for
serving as Chief Executive Officer was 8.6% higher than the salary he received
as the Company's President and Chief Operating Officer in 1998. Mr. Wright's
salary increase for 1999 was based primarily on the Company's performance in
1998 and his promotion to Chief Executive Officer. For the year ended December
31, 1998, the Company experienced record net earnings of $1.24 per share
representing an increase of 14.8% over 1997. For the same period, the
Company's sales increased 15.9% from $2.909 billion to $3.370 billion. The
Company's return on average equity for 1998 was 19%.
Employment contracts with certain Executive Officers, including Mr. Cornell
and Mr. Wright, are described in this Proxy Statement under Change-in-Control
Arrangements and Employment Contracts. Under Mr. Wright's employment contract,
his annual percentage increase in salary must, unless waived by him, be at
least equal to the percentage increases over the previous year (to the extent
not attributable to additional responsibilities) of the five highest-paid
executives other than Mr. Wright. This contractual provision did not affect
his salary increase for 1999.
7
<PAGE>
Determination of Bonuses Generally
Bonuses may be awarded under the Company's 1999 Key Officers Incentive Plan
(the "Bonus Plan"). All Bonus Plan bonuses (except for a 10% discretionary
portion) are directly tied to a pre-established formula. The formula is based
on (i) after-tax returns on the Company's adjusted average equity ("ROAAE")
and (ii) EBIT (earnings before interest and taxes) returns on adjusted net
assets ("ROANA"). ROAAE and ROANA are given equal weight in the formula.
The size of each participant's bonus is determined by applying the bonus
formula to a percentage of the participant's salary (the "target percentage").
Target percentages appearing in the Summary Compensation Table were
established upon the adoption of the Bonus Plan in 1999. These percentages are
consistent with the target percentages previously established under the
Company's Key Management Incentive Compensation Plan (the "Incentive Plan"), a
plan which is substantially similar to the Bonus Plan and remains in operation
for other Company employees. If threshold ROAAE or ROANA levels are met, a
portion of the applicable target percentage becomes payable. This portion
increases as the returns increase above the thresholds. Total bonuses to all
Bonus Plan and Incentive Plan participants may not exceed 4% of EBIT.
The bonus may be greater than 100% of the target percentage, subject to the
overall EBIT limit on bonuses. In 1999, thresholds were exceeded and total
bonuses for Executive Officers were 167.9% of their 1998 target percentages.
Total bonus payments were well below the overall EBIT limits in 1999.
Thresholds and performance criteria in 1999 for the Bonus Plan were the same
as the criteria in 1997 and 1998 for the Incentive Plan, and are anticipated
to be the same in 2000.
Bonuses of Chief Executive Officers
Mr. Cornell's bonus was 60% of his salary for 1999, prorated for the portion
of the year during which he served as Chief Executive Officer. Mr. Cornell's
target percentage has not changed in 22 years. The target percentage for Mr.
Wright also was 60% of his 1999 salary. Mr. Wright's target percentage was
increased to 60% in 1997. The bonuses of Messrs. Wright and Cornell were
determined by the application of the bonus formula in the same manner as other
bonuses were determined under the Bonus Plan.
Stock Options
Options to purchase the Company's Common Stock tie the interests of the
Company executives directly to the performance of the Company's Common Stock.
Stock options represent a significant portion of the overall compensation
package of each Executive Officer and a large group of other Company managers.
Only through enhancing shareholder wealth will the Company's Executive
Officers and other managers receive the full potential of this important part
of their compensation package. Approximately 1,600 employees, including
Executive Officers, presently hold stock options. The "Option Grants in 1999"
table located on page 11 provides a description of the options granted to each
of the five most highly compensated Executive Officers during 1999.
Other Stock-Based Compensation
In addition to stock options, the Company has other compensation plans that
encourage executive ownership of Company Common Stock. Under various stock
purchase plans, Executive Officers and more than 8,000 other employees
contribute their own funds toward the purchase of Common Stock.
All of the Company's Executive Officers participate in the Company's
Executive Stock Purchase Program ("ESPP"). The purpose of the ESPP is to
assist Company management employees in saving for their retirement while
building a long-term stake in the Company.
8
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Under the ESPP, the Company grants cash awards in the amount of 50% of an
executive's "Eligible Contributions" to the Company's 1989 Discount Stock Plan
(the "Stock Plan"), plus an additional amount which is withheld to pay a
portion of the executive's federal and state taxes attributable to the cash
awards ("tax offset bonus"). The Stock Plan is a plan qualified under Section
423 of the Internal Revenue Code ("Code") under which employees may purchase
Company Common Stock at a discount. "Eligible Contributions" are contributions
made by the executive to the Stock Plan, limited to 5.7% of his compensation
above his compensation base (in most cases $22,821). In addition, the ESPP
provides for an additional cash award in the amount of 50% of Eligible
Contributions plus a tax offset bonus if performance criteria are met for the
year in question. The performance criterion in 1999 was a 12.5% return on
average equity, the same as the goal in 1997 and 1998. The performance goal
was met in 1999.
Certain Executive Officers, including Mr. Wright, may participate only
partially in the ESPP. For this reason they receive awards of Company Common
Stock under the Company's 1989 Flexible Stock Plan. These stock awards are
designed to be substantially similar to participation in the ESPP.
Other Matters
Due to limitations imposed by the Code, Mr. Cornell, Mr. Wright and other
Executive Officers have been unable for several years to fully participate in
the Company's tax-qualified Retirement Plan. For this reason the Committee
approved payments to these Executive Officers in 1999 to compensate them for
the reductions (through 1999) of their retirement benefits resulting from
their inability to fully participate in the Retirement Plan.
Section 162(m) of the Code generally disallows a tax deduction to public
companies for compensation over $1 million paid to any of the Company's Chief
Executive Officer and four other most highly compensated Executive Officers.
Certain performance-based compensation, however, is specifically exempt from
the deduction limit. In 1999, the Company adopted the Bonus Plan which is
intended to comply with Section 162(m). No Executive Officer of the Company
received compensation in 1999 which exceeded the $1 million threshold.
R. Ted Enloe, III (Chairman)
Richard T. Fisher
Richard L. Pearsall
9
<PAGE>
EXECUTIVE COMPENSATION AND RELATED MATTERS
The following table sets forth a summary of certain compensation provided to
the Company's five most highly compensated Executive Officers for each of the
three years in the period ended December 31, 1999.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
Long-Term
Annual Compensation Compensation
----------------------------------- ------------
Securities All Other
Name and Principal Other Annual Underlying Compensation
Position Year Salary Bonus Compensation Options(#) (6)
------------------ ---- -------- -------- ------------ ------------ ------------
<S> <C> <C> <C> <C> <C> <C>
Harry M. Cornell, Jr.... 1999 $620,885 $513,157 -0- 120,869(1) $210,446
Chairman of the Board 1998 $667,231 $654,810 -0- 55,200(1) $219,520
1997 $603,577 $684,786 -0- 39,892(1) $199,993
Michael A. Glauber...... 1999 $304,890 $248,717 -0- 49,563(2) $ 75,335
Senior Vice President, 1998 $294,423 $219,110 -0- 12,829(2) $ 69,692
Finance and
Administration 1997 $259,654 $223,117 -0- 29,116(2) $ 57,163
David S. Haffner........ 1999 $435,566 $399,123 -0- 118,527(3) $ 97,426
Executive Vice
President and 1998 $393,385 $290,887 -0- 33,655(3) $ 85,262
Chief Operating Officer
and 1997 $343,577 $294,682 -0- 37,570(3) $ 73,242
Director
Robert A. Jefferies,
Jr..................... 1999 $388,422 $314,377 -0- 83,490(4) $ 85,328
Senior Vice President, 1998 $376,846 $277,287 -0- 22,884(4) $ 79,930
Mergers, Acquisitions
and 1997 $339,177 $286,263 -0- 60,749(4) $ 69,757
Strategic Planning and
Director
Felix E. Wright......... 1999 $652,874 $709,084 -0- 452,412(5) $189,157
President and Chief
Executive 1998 $620,308 $614,514 -0- 38,788(5) $174,052
Officer and Vice 1997 $530,116 $617,430 -0- 76,304(5) $141,632
Chairman
of the Board
</TABLE>
- ---------------------
(1) 1999 includes stock options for 18,494 shares awarded Mr. Cornell in lieu
of $251,618 of 1999 bonus. 1998 includes stock options for 50,004 shares
awarded in lieu of $654,810 of 1998 bonus. 1997 includes stock options for
39,892 shares awarded in lieu of $684,786 of 1997 bonus. (The bonus
foregone is also shown in the "Bonus" column.)
(2) 1999 includes stock options for 1,063 shares awarded Mr. Glauber in lieu
of $15,085 of 1999 salary. 1998 includes stock options for 12,542 shares
awarded in lieu of $215,307 of 1998 salary. 1997 includes stock options
for 14,116 shares awarded in lieu of $176,300 of 1997 salary. (The salary
and bonus foregone are also shown in the "Salary" and "Bonus" columns.)
(3) 1999 includes stock options for 29,336 shares awarded Mr. Haffner in lieu
of $399,123 of 1999 bonus and 19,091 shares awarded in lieu of $250,000 of
1999 salary. 1998 includes stock options for 19,091 shares awarded in lieu
of $250,000 of 1998 bonus and 14,564 shares awarded in lieu of $250,000 of
1998 salary. 1997 includes stock options for 8,006 shares awarded in lieu
of $100,000 of 1997 salary and 14,116 shares awarded in lieu of $250,000
of 1997 bonus. (The salary and bonus foregone are also shown in the
"Salary" and "Bonus" columns.)
(4) 1999 includes stock options for 22,215 shares awarded Mr. Jefferies in
lieu of $315,474 of 1999 salary. 1998 includes stock options for 22,198
shares awarded in lieu of $373,129 of 1998 salary. 1997 includes stock
options for 26,916 shares awarded in lieu of $336,177 of 1997 salary and
18,833 shares awarded in lieu of $286,263 of 1997 bonus. (The salary and
bonus foregone are also shown in the "Salary" and "Bonus" columns.)
10
<PAGE>
(5) 1999 includes stock options for 52,118 shares awarded Mr. Wright in lieu
of $709,084 of 1999 bonus and 50,294 shares awarded in lieu of $658,614 of
1999 salary and certain other benefits. 1998 includes stock options for
46,927 shares awarded in lieu of $614,514 of 1998 bonus and 35,960 shares
awarded in lieu of $616,711 of 1998 salary. 1997 includes stock options
for 40,336 shares awarded in lieu of $503,768 of 1997 salary and 35,968
shares awarded in lieu of $617,430 of 1997 bonus. (The salary and bonus
foregone are also shown in the "Salary" and "Bonus" columns.)
(6) The majority of All Other Compensation represents awards under the
Company's Executive Stock Purchase Program ("ESPP") and Flexible Stock
Plan which replace benefits not available to the Executive Officers under
the Company's tax-qualified defined contribution plan. The amounts
disclosed for 1999 include: life insurance premiums (Cornell -- $1,713,
Wright -- $768); disability insurance premiums (Glauber -- $5,663, Haffner
-- $4,939, Jefferies -- $4,075); ESPP and stock awards (Cornell --
$177,808, Glauber -- $61,587, Haffner -- $90,175, Jefferies -- $69,520,
Wright -- $153,096); payments made to compensate for reductions in
retirement benefits resulting from inability to fully participate in the
Company's tax-qualified defined benefit retirement plan (Cornell --
$23,941, Glauber -- $4,035, Haffner -- $1,124, Jefferies -- $7,683, Wright
-- $30,351); and life insurance income (Cornell -- $6,984, Glauber --
$4,050, Haffner -- $1,188, Jefferies -- $4,050, Wright -- $4,941).
Stock Option Information
The following table provides information concerning stock options granted
during the year ended December 31, 1999, to the Executive Officers named
above.
OPTION GRANTS IN 1999
<TABLE>
<CAPTION>
% of
Total
Options Market Potential Realizable Value at
Granted Price Assumed Annual Rates of
to Exercise on Stock Price Appreciation
Options Employees Price Date for Option Term(1)
Granted in Fiscal ($ per of Expiration ------------------------------
Name (#) Year Share) Grant Date 0% 5% 10%
- ---- ------- --------- -------- ------ ---------- -------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
H. Cornell, Jr.......... 50,004(2) 3.4% $ 3.85 $19.25 3/22/2014 $770,062 $1,808,613 $3,828,408
18,494(4) $ 4.00 $20.00 12/12/2014 $295,904 $ 694,978 $1,471,105
102,375 $20.00 $20.00 4/11/2004 $ 0 $ 565,686 $1,250,019
M. Glauber.............. 48,500 1.0% $20.00 $20.00 4/11/2004 $ 0 $ 267,993 $ 592,195
D. Haffner.............. 19,091(2) 3.0% $ 3.85 $19.25 3/22/2014 $294,001 $ 690,509 $1,461,646
19,091(3) $ 3.85 $19.25 3/22/2014 $294,001 $ 690,509 $1,461,646
29,336(4) $ 4.00 $20.00 12/12/2014 $469,376 $1,102,405 $2,333,531
14,700(5) $ 4.00 $20.00 12/12/2014 $235,200 $ 552,405 $1,169,311
70,100 $20.00 $20.00 4/11/2004 $ 0 $ 387,347 $ 855,935
R. Jefferies, Jr........ 28,783(5) 1.8% $ 4.00 $20.00 12/12/2014 $460,528 $1,081,624 $2,289,543
61,275 $20.00 $20.00 4/11/2004 $ 0 $ 338,583 $ 748,180
F. Wright............... 46,927(2) 10.9% $ 3.85 $19.25 3/22/2014 $722,676 $1,697,320 $3,592,826
50,294(3) $ 3.85 $19.25 3/22/2014 $774,528 $1,819,102 $3,850,611
52,118(4) $ 4.00 $20.00 12/12/2014 $833,888 $1,958,520 $4,145,724
50,563(5) $ 4.00 $20.00 12/12/2014 $809,008 $1,900,085 $4,022,032
150,000 $20.00 $20.00 4/11/2004 $ 0 $ 828,845 $1,831,530
200,000 $20.00 $20.00 4/11/2009 $ 0 $2,515,579 $6,374,970
</TABLE>
- ---------------------
(1) These dollar amounts represent a hypothetical increase in the price of the
Common Stock from the date of option grant until their expiration date at
the rate of 0%, 5% and 10% per annum compounded.
(2) Stock option grant in lieu of 1998 bonus. The options are vested but do
not become exercisable until March 23, 2000.
11
<PAGE>
(3) Stock option grant in lieu of 1999 salary. The options are vested but do
not become exercisable until March 23, 2000.
(4) Stock option grant in lieu of 1999 bonus. The options are vested but do
not become exercisable until December 13, 2000.
(5) Stock option grant in lieu of 2000 salary. The options vest as salary is
earned but do not become exercisable until December 31, 2000.
The table below provides information concerning stock options exercised
during the year ended December 31, 1999, by the five named Executive Officers
and stock options held by them as of December 31, 1999.
OPTION EXERCISES IN 1999 AND 12/31/99 OPTION VALUES
<TABLE>
<CAPTION>
Value of Unexercised In-
Number of Unexercised the- Money Options at
Shares Options at 12/31/99 12/31/99
Acquired Value ------------------------- -------------------------
Name On Exercise Realized Exercisable Unexercisable Exercisable Unexercisable
- ---- ----------- ---------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Harry M. Cornell, Jr.... 29,932 $ 478,912 231,094 179,623 $3,397,627 $1,449,177
Michael A. Glauber...... 48,678 $ 873,187 205,562 68,500 $3,063,106 $ 410,856
David S. Haffner........ 121,032 $2,160,797 274,088 172,318 $4,566,869 $1,881,310
Robert A. Jefferies,
Jr..................... 96,348 $1,673,442 328,396 110,058 $5,504,009 $ 931,124
Felix E. Wright......... 248,596 $4,386,696 392,932 552,820 $6,606,626 $4,036,874
</TABLE>
Retirement Plan
The Company has a voluntary, tax-qualified, defined benefit pension plan
(the "Retirement Plan"). The Retirement Plan requires a contribution from
participating employees of 2% of base salary. Employees are not allowed to
discontinue contributions to the Retirement Plan while still in the employ of
the Company. Normal retirement benefits are equal to 1% of the employee's
career average earnings times the number of years the employee was a
participant in the Retirement Plan. Earnings for purposes of the Retirement
Plan include only salary or wages.
The estimated annual benefits payable upon normal retirement are listed
below for the named Executive Officers.
<TABLE>
<CAPTION>
Projected Annual
Executive Officer Retirement Benefit
----------------- ------------------
<S> <C>
Harry M. Cornell, Jr...................................... $67,388
Michael A. Glauber........................................ $40,276
David S. Haffner.......................................... $53,516
Robert A. Jefferies, Jr................................... $38,585
Felix E. Wright........................................... $48,361
</TABLE>
As described below, Messrs. Cornell and Wright are entitled to supplemental
pension payments. If Mr. Cornell retired at December 31, 2000, his estimated
annual supplemental pension payment would be $741,940. If Mr. Wright retired
at December 31, 2000, his estimated annual supplemental pension payment would
be $385,036. Messrs. Cornell and Wright's annual pension payments are based
upon 65% and 35%, respectively, of the average of their highest consecutive
five-year earnings.
Change-in-Control Arrangements and Employment Contracts
Messrs. Cornell, Jefferies and Wright are parties to severance benefit
agreements with the Company. The severance benefit agreements have no fixed
expiration dates. Messrs. Cornell, Jefferies and Wright are parties to
employment contracts with the Company that expire on May 10, 2000, December
31, 2006, and October 1, 2002, respectively, subject to certain provisions
which allow earlier termination in the event of total disability and for
12
<PAGE>
cause. Under Mr. Jefferies and Mr. Wright's employment contracts, compensation
levels are at the discretion of the Company's Compensation Committee subject
to the provision that annual percentage increases in salary must, unless
waived by the executive, be at least equal to percentage increases over the
previous year (to the extent increases were not attributable to additional
responsibilities) of the salaries of the Company's five highest paid
executives other than the executive and the Company's Chief Executive Officer.
Mr. Cornell and Mr. Wright are entitled to a supplemental pension in
addition to the pension each is entitled to under the Retirement Plan. Mr.
Cornell is entitled to the supplemental pension upon termination of
employment, while Mr. Wright is entitled to the supplemental pension beginning
the later of termination of employment or the expiration of any consulting
agreement (as described below). The supplemental pension will be for life or
15 years, whichever is longer. Annual pension payments are based on the
average of each executive's highest consecutive five-year earnings ("Average
Earnings"). These payments are 65% and 35% of Average Earnings for Mr. Cornell
and Mr. Wright, respectively. While each of Mr. Cornell and Mr. Wright
receives supplemental pension payments, the Company will provide each of them
and his respective dependents with life, hospitalization, and medical
insurance benefits.
If either Mr. Jefferies or Mr. Wright is terminated without cause, each is
entitled to continue to receive his total compensation at the time of his
termination until the earlier of five years after termination or December 31,
2006, in the case of Mr. Jefferies, and October 1, 2002, in the case of Mr.
Wright.
Mr. Cornell and Mr. Wright may elect to enter into two-year consulting
agreements within 120 days after termination of employment, except in the case
of total disability or termination for cause. Mr. Cornell will be paid for
consulting services in amounts equal to 100% for the first year and 75% for
the second year of his total 1998 compensation. Mr. Wright will be paid an
amount equal to 60% of Average Earnings for each year of his consulting
agreement.
In the event of a hostile change-in-control, Mr. Jefferies may elect to
enter into a consulting agreement in which he will be paid an amount equal to
100% for the first year and 75% for the second year of total cash compensation
in the year immediately preceding termination.
The severance benefit agreements entitle the covered executives to severance
benefits if, during any 36-month period following a change-in-control of the
Company, (i) the executive's employment is terminated by the Company (except
for cause or disability), or (ii) the executive terminates his employment for
"good reason." The severance benefits include the payment in 36 monthly
installments of an amount equal to three times the executive's annual salary
plus bonus. The severance benefits also include participation in certain
fringe benefits, the immediate vesting of stock options, and the purchase by
the Company of all Common Stock offered by the executive to the Company. All
amounts received by the executive as cash compensation from a new full time
job will reduce the cash severance payments dollar for dollar. Similarly, any
fringe benefits the executive receives from his new job will reduce any fringe
benefits the Company is then providing. However, the executive is not required
to mitigate the severance benefits he obtains.
The agreements further provide that within one year following a change-in-
control opposed by a majority of the Directors, the executive may elect to
terminate his employment for any reason and receive, in lieu of the benefits
described above, a lump sum payment equal to 75% of the executive's cash
compensation preceding the year of termination and certain fringe benefits for
one year.
If Mr. Cornell, Mr. Wright or Mr. Jefferies elects to take the severance
benefits provided, he will forfeit his right to enter into the two-year
consulting agreement with the Company described above.
Related Transactions
In 1999, Mr. Cornell leased to the Company, on a month-to-month basis,
certain real estate located in Keystone, Colorado for $1,925 per month.
13
<PAGE>
Pace Industries, Inc., a subsidiary of the Company, leases its corporate
offices in Fayetteville, Arkansas as a sublessee for a portion of the space
under a lease held by Gaddy Investment Company ("GICO"), a corporation
controlled by Mr. Gaddy. Mr. Gaddy is the Chairman and 100% stockholder of
GICO. Rental expense under this lease was $196,661 for 1999. Management
believes that the terms of this lease agreement are at least as favorable as
could have been obtained from unaffiliated third parties.
During 1999, Mr. Gaddy, either personally or through GICO or Vestamerica,
Inc., an entity wholly owned by him, paid Pace Industries, Inc. $98,088 for
airplane usage.
Locke Liddell & Sapp LLP performed legal services for the Company in 1999,
and it is anticipated that they will perform legal services for the Company in
2000. Mr. Purnell is a partner in Locke Liddell & Sapp LLP.
In 1999, the Company purchased shares of Common Stock from several of its
Executive Officers and Directors. These purchases were made at prevailing
market prices at the time of purchase. Most of the purchases were made in
connection with the exercise of non-qualified stock options by the Executives.
Details of the purchases are set out below.
<TABLE>
<CAPTION>
Number Market Price
Purchase Date Name of Shares per Share
------------- ---- --------- ------------
<S> <C> <C> <C>
February 17 Robert G. Griffin 2,512 $21.1875
May 12 Ernest C. Jett 7,500 $26.3125
May 25 Duane W. Potter 16,375 $25.4375
June 1 Michael A. Glauber 4,000 $26.3750
July 7 Ernest C. Jett 3,711 $27.625
October 18 Robert G. Griffin 1,332 $22.00
</TABLE>
OWNERSHIP OF COMMON STOCK
The table below sets forth the beneficial ownership of Common Stock on
February 21, 2000, by the Company's Directors, the five most highly
compensated Executive Officers, and all Directors and Executive Officers as a
Group.
<TABLE>
<CAPTION>
Common Stock
-----------------------
Beneficially % of
Directors and Executive Officers Owned(1) Class(2)
-------------------------------- ------------ --------
<S> <C> <C>
Raymond F. Bentele, Director........................... 9,577 --
Ralph W. Clark, Nominee for Director................... 0 --
Harry M. Cornell, Jr., Chairman of the Board........... 5,340,584 2.71%
Robert Ted Enloe, III, Director........................ 12,809 --
Richard T. Fisher, Director............................ 116,800 --
Bob L. Gaddy, Senior Vice President and Chairman and
Chief Executive Officer
of Aluminum Products and Director..................... 1,442,195(3) .73%
Michael A. Glauber, Senior Vice President, Finance and
Administration........................................ 555,019 .28%
David S. Haffner, Executive Vice President and Chief
Operating Officer and Director........................ 829,956 .42%
Thomas A. Hays, Director............................... 28,757 --
Robert A. Jefferies, Jr., Senior Vice President,
Mergers, Acquisitions and Strategic Planning and
Director.............................................. 832,315 .42%
Alexander M. Levine, Director.......................... 1,053,648 .54%
Richard L. Pearsall, Director.......................... 954,762 .49%
Duane W. Potter, Senior Vice President and Director.... 579,031 .29%
Maurice E. Purnell, Jr., Director...................... 19,506 --
Alice L. Walton, Director.............................. 232,587 .12%
Felix E. Wright, President and Chief Executive Officer
and Director.......................................... 2,758,433(4) 1.40%
All Executive Officers and Directors as a Group (21
Persons).............................................. 15,223,168 7.65%
</TABLE>
14
<PAGE>
In addition, Herbert C. Casteel, Frank E. Ford, Jr., and Jack B. Morris,
Advisory Directors of the Company, beneficially owned 91,624, 809,103, and
3,620,875 shares, respectively, of Common Stock which represents .05% .41% and
1.84%, respectively, of the total outstanding Common Stock.
- ---------------------
(1) The shares shown above as beneficially owned include those shares the
following persons have the right to acquire within 60 days from February
21, 2000, by way of option exercise: Mr. Bentele--5,577; Mr. Cornell--
281,098; Mr. Enloe--8,809; Mr. Ford--5,676; Mr. Gaddy--282,884; Mr.
Glauber--208,562; Mr. Haffner--315,270; Mr. Hays--8,757; Mr. Jefferies--
331,396, Mr. Potter--125,918; Mr. Purnell--9,506; Ms. Walton--5,079; Mr.
Wright--533,071; and all Executive Officers and Directors as a group (21
Persons)--2,352,826.
(2) Beneficial ownership of less than .1% of the class is not shown.
(3) Includes 8,849 shares held by a private charitable foundation of which Mr.
Gaddy is co-trustee. He shares voting and investment power of these
shares.
(4) Includes 78,230 shares held as Trustee for the Felix S. Wright Revocable
Trust and 74,216 shares held as Trustee for the Opal Wright Revocable
Trust.
Security Ownership of Certain Beneficial Owners
The Company knows of no beneficial owner of more than 5% of its Common Stock
as of February 21, 2000, except as set out below.
<TABLE>
<CAPTION>
Percent
Name and Address Amount and Nature of of
of Beneficial Owner Beneficial Ownership(1) Class
- ------------------- ----------------------- -------
<S> <C> <C>
FMR Corp........................................ 20,398,738 10.39%
82 Devonshire Street
Boston, MA 02109
</TABLE>
- ---------------------
(1) FMR Corp. has sole dispositive power with respect to 20,398,738 shares and
sole voting power with respect to 880,758 shares. This information is
based on Amendment No. 5 to Schedule 13G of FMR Corp., dated February 11,
2000, which reported beneficial ownership as of December 31, 1999.
COMPLIANCE WITH SECTION 16(a) OF THE SECURITIES EXCHANGE ACT OF 1934
Section 16(a) of the Securities Exchange Act of 1934 requires the Company's
Executive Officers and Directors to file reports of ownership and changes in
ownership of Common Stock with the Securities and Exchange Commission and the
New York and Pacific Stock Exchanges. The Company must identify in its Proxy
Statement those individuals for whom one of these reports was not filed in a
timely manner.
Felix E. Wright became trustee of 78,230 shares as a result of the death of
his father. These shares became reportable on Mr. Wright's Form 5 for the year
ended December 31, 1999, which was due on February 14, 2000. Due to an error
by Company personnel, Mr. Wright's Form 5 did not reflect the ownership of
these shares. An amended Form 5 was filed promptly after the error was
discovered.
FINANCIAL DATA
The Company's Annual Report containing financial statements of the Company
for the year ended December 31, 1999, has been enclosed in the same mailing
with this Proxy Statement.
15
<PAGE>
2001 SHAREHOLDER PROPOSALS
Shareholder proposals must conform to the Company's Bylaws and the
requirements of the Securities and Exchange Commission ("SEC"). If a
shareholder intends to present a proposal at the 2001 Annual Meeting, SEC
rules require that the Company receive the proposal by December 1, 2000, for
possible inclusion in the Proxy Statement. The Company will determine whether
to include a proposal in the Proxy Statement in accordance with SEC rules
governing the solicitation of proxies.
If a shareholder intends to nominate a candidate for Director, the Company's
Bylaws require that the Company receive timely notice of the nomination. A
nomination for the 2001 Annual Meeting will be considered timely if it is
received by February 2, 2001. The notice of nomination must describe various
matters specified in the Company's Bylaws, including the name and address of
the shareholder making the nomination, the number of shares held by the
shareholder, each proposed nominee, each of their occupations, and certain
other information.
If a shareholder intends to bring other business before the 2001 Annual
Meeting, the Company's Bylaws require that the Company receive notice between
January 10, 2001, and January 30, 2001. The notice must include a description
of the proposed business, the name and address of the shareholder and number
of shares held, any material interest of the shareholder in the business, and
other matters specified in the Company's Bylaws. The nature of the business
also must be appropriate for shareholder action under applicable law.
The Bylaw requirements also apply in determining whether notice is timely
under SEC rules relating to the exercise of discretionary voting authority.
Each notice must be given to the Secretary of the Company, whose address is
No. 1 Leggett Road, Carthage, Missouri 64836.
OTHER MATTERS
The Board does not know of any other matters which may come before the
Annual Meeting. However, if any other matters are properly brought before the
meeting, the persons named in the accompanying proxy intend to vote the proxy
in accordance with their judgment. The proxy gives them discretionary
authority to vote on any additional matters that come before the meeting.
By Order of the Board of Directors
Ernest C. Jett
Secretary
Carthage, Missouri
March 31, 2000
16
