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SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. )
Filed by the Registrant [_]
Filed by a Party other than the Registrant [X]
Check the appropriate box:
[X] Preliminary Proxy Statement [_] Confidential, for Use of the
Commission Only (as permitted by
Rule 14a-6(e)(2))
[_] Definitive Proxy Statement
[_] Definitive Additional Materials
[_] Soliciting Material Pursuant to Section 240.14a-11(c) or Section 240.14a-12
The May Department Store Company
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(Name of Registrant as Specified In Its Charter)
May Company Independent Shareholders' Committee
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(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[_] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
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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:
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May Company Independent Shareholders' Committee
2100 L Street, NW
Suite 210
Washington, DC 20037
Dear May Company Shareholder:
We wish to make you aware that we are sponsoring two shareholder proposals
that will be considered at the 1997 annual meeting of The May Department Stores
Company. The first is an anti-poison pill proposal. It will be presented in the
form of an amendment to the By-Laws which, if passed, will require recission of
the Company's current poison pill rights plan and require shareholder approval
before this type of anti-takeover device can be authorized in the future.
Our second proposal asks the Board of Directors to strengthen the Company's
sourcing policies and monitor its suppliers more closely. Over the past two
years, the May Company has received merchandise which has been produced by
suppliers tied to worker abuse and sweatshop scandals. Publicity surrounding
these violations has had a negative impact on our Company's image. We believe
the May Company's policies which require its contractors and vendors to operate
legally are inadequate because they rely heavily on written representations by
our Company's suppliers. We believe a system that includes closer monitoring of
May Company contractors is prudent, and represents a "best practice"
incorporated by other major retailers.
To ensure success in the future, the May Company must receive a strong
message from its shareholders at this time. We find the Company's corporate
governance structures to be overprotective of management and out of step with
many well-run corporations today. In the area of sourcing policy, the Company's
program is often ineffective. Our Company needs to improve in both of these
areas, for good business and ethical reasons, and to enhance shareholder value.
We urge you to review the proxy materials carefully and to vote your shares
at this year's Annual Meeting. Thank you for your consideration.
Sincerely,
May Company Independent Shareholders' Committee
Michael R. Zucker
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PRELIMINARY COPIES
May Company Independent Shareholders' Committee
2100 L Street, NW
Washington, DC 20037
Suite 210
(202) 785-5690
PROXY STATEMENT
OF
MAY COMPANY INDEPENDENT SHAREHOLDERS' COMMITTEE
IN CONNECTION WITH THE
1997 ANNUAL MEETING OF SHAREHOLDERS
OF THE MAY DEPARTMENT STORES COMPANY
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April __, 1997
The May Company Independent Shareholders' Committee (the "Independent
Shareholders' Committee") is furnishing this Proxy Statement in connection with
the solicitation of proxies for use at the Annual Meeting (the "Annual Meeting")
of Shareholders of The May Department Stores Company ("May Company" or the
"Company") to be held on Friday, May 23, 1997 at the [Civic Center, St. Louis,
Missouri at 11:00 a.m. C.S.T.] or at any adjournment thereof. Copies of this
Proxy Statement and form of proxy are being mailed by the Independent
Shareholders' Committee to shareholders on or about April __, 1997. The mailing
address of the principal executive offices of the Company is 611 Olive Street,
St. Louis, Missouri, 63101-1799.
The Independent Shareholders' Committee will make the following two
proposals at the Annual Meeting:
1. Requiring the elimination of the Company's "poison pill" rights plan through
an amendment to the Company's By-Laws.
2. Strengthening the Company's Vendor Responsibility program through closer
monitoring of vendors and contractors, and effectively communicating the
Company's Vendor Standards of Conduct to employees producing merchandise for
sale in May Company stores.
The Independent Shareholders' Committee urges all shareholders to attend
the meeting in person. If you are unable to attend in person and wish to have
your shares voted, please sign and date the enclosed proxy and return it in the
postpaid envelope as promptly as possible. By returning the enclosed proxy,
shareholders will be able to vote on all matters described in Management's proxy
statement, including the election of its nominees to the Board of Directors.
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PLEASE SIGN, DATE AND RETURN TODAY THE ENCLOSED BLUE PROXY CARD TO:
MAY COMPANY INDEPENDENT SHAREHOLDERS' COMMITTEE
2100 L STREET, NW
SUITE 210
WASHINGTON, DC 20037
(202) 785-5690
RESOLUTIONS PROPOSED BY THE INDEPENDENT SHAREHOLDERS' COMMITTEE
Independent Shareholders' Committee Proposal: Anti-Poison Pill By-Law
------------------------------------------------------------------------
Amendment
---------
(Proposal #___ on the Proxy Card)
We propose that the shareholders of the Company adopt the following
resolution:
"RESOLVED, that pursuant to Section 109 of the Delaware General
Corporation Law and Article XIII of the Company's By-Laws, the
shareowners of The May Department Stores Company (the "Company")
hereby amend the Company's By-Laws to add the following article, such
amendment to be effective immediately upon approval by holders of a
majority of the outstanding shares of stock present, in person or by
proxy, at the meeting of shareowners at which such resolution is
proposed:
The Company shall not adopt or maintain any rights plan or similar
agreement, commonly referred to as a "poison pill," which is designed
to impede, or has the effect of impeding, the acquisition of
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a block of stock in excess of a specified threshold and/or merger or
other transaction between a significant shareowner and the Company,
unless such plan or agreement has theretofore been approved by holders
of a majority of the outstanding shares of stock at a general or
special meeting of shareowners, and the Company shall redeem any such
plan or agreement in effect as of the date of adoption of this Article
of the By-Laws, including without limitation the Company's 1994 Rights
Agreement. Anything to the contrary notwithstanding, this Article may
not be amended, modified or repealed, except by holders of a majority
of the outstanding shares of stock."
This proposal, if passed, would require the Company to do the following:
. ELIMINATE THE POISON PILL CURRENTLY IN PLACE; AND
. OBTAIN SHAREHOLDER APPROVAL FOR ANY FUTURE POISON PILL.
The proposal is an amendment to the Company's By-Laws and, if passed, would be
binding on the Company.
THE COMPANY'S POISON PILL RIGHTS PLAN IS A MANAGEMENT ENTRENCHING ANTI-TAKEOVER
DEVICE.
We believe poison pills are devices designed to entrench management because
they deter takeover attempts and effectively prevent a change in control of the
Company that does not have the approval of the Board of Directors. We do not
believe a poison pill is the most effective or desirable tool for ensuring that
all shareholders benefit from a potential change in control of the Company.
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The Company's Board of Directors first adopted a rights agreement, more
commonly known as a poison pill, in 1986. Such rights agreement originally had a
ten-year term; however, in 1994 the Company amended and extended such rights
agreement through 2004. The amended and extended rights agreement is referred to
herein as the "Rights Agreement." In both instances, the Board of Directors
acted without seeking shareholder approval.
Under the Rights Agreement, one right has been declared for each Common
Share outstanding. Each right entitles shareholders to purchase, under certain
conditions, one four-hundredth of a share of the Company's Junior Participating
Preference Shares at a purchase price of $150. The rights will be exercisable if
a person or group acquires beneficial ownership of 20% or more of the Company's
outstanding Common Stock or has announced a tender offer upon consummation of
which said person or group would own 20% or more of the Company's outstanding
Common Stock. Rights held by the 20%-or-more holder will become void. The rights
will expire on August 31, 2004, unless redeemed earlier by the Board of
Directors. The Company may redeem the rights for $.01 per share subject to
adjustment. For a more complete summary of the Rights Agreement, see the
Company's Report on Form 8-K dated September 2, 1994, which is incorporated
herein by reference.
POISON PILLS ARE UNPOPULAR WITH SHAREHOLDERS AND CAN NEGATIVELY AFFECT
SHAREHOLDER VALUE.
Poison pill rights plans such as our Company's are among the most unpopular
corporate governance features with shareholders. Proposals to redeem or require
shareholder approval of poison pills have won consistently high levels of
support among shareholders in recent years. In 1996, anti-poison pill proposals
received on average 53.4% shareholder support, according to a report dated
February 21, 1997 issued by the Investor Responsibility Research Center.
Shareholders owning a majority of the shares voted approved anti-poison pill
resolutions at eight companies. At five of these companies -- Rowan Companies,
Inc., Baker Hughes Incorporated, Fleming Companies, Inc., Rite Aid Corporation
and Super Valu Inc. -- more than two-thirds of the shares voted were cast in
favor of anti-pill resolutions.
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We believe poison pill plans such as our Company's have a negative effect
on shareholder value. Numerous studies support our conclusion. A 1986 study by
the Office of the Chief Economist of the Securities and Exchange Commission
states that "the stock returns evidence suggests that the effect of poison pills
to deter prospective hostile takeover bids outweighs the beneficial effects that
might come from increased bargaining leverage of the target management." The
Analysis Group, Inc. released a report in 1991 which concluded the adoption of
poison pills had a significant negative effect on company stock price over time.
Finally a 1991 study by Professor John Pound of Harvard and Lilli A. Gordon of
The Gordon Group found a correlation between high corporate performance and the
absence of poison pills.
THE MAY COMPANY'S CORPORATE GOVERNANCE PERFORMANCE IS POOR.
Our Company has historically been a stable and profitable corporation.
Surprisingly the Company's corporate governance practices limit shareholder
control to an unusual extent. The May Company currently has a classified board
of directors, does not have a confidential voting policy, does not allow
cumulative voting, and the Board has authorized the Company's anti-takeover
poison pill rights plan on two separate occasions without shareholder
approval. We believe our Company's performance not only makes management-
entrenching devices such as these unnecessary, but reflects a lack of
accountability to shareholders that clashes with the Company's strengths in
other areas. As a retailer that has for years been ahead of the curve
strategically, our Company should also seek to be a leader in the area of
corporate governance.
Despite repeated majority votes on precatory, or voluntary, resolutions on
poison pills, a number of companies have chosen to ignore the wishes of
shareholders to eliminate or prevent the creation of these devices without
shareholder approval. Proposals like the Independent Shareholders' Committee,
which seek to eliminate and prevent poison pills by amending company by-laws,
have been proposed at several companies over the last few years, including
Fleming Companies, Inc., Wallace Computer Services, Harrah's Entertainment Inc.,
and Whitman Corporation. We believe a binding
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amendment to the By-Laws to immediately eliminate our Company's Poison Pill is
the best way to increase Board accountability and shareholder value.
LEGAL ISSUES RELATING TO THE ANTI-POISON PILL PROPOSAL.
An anti-poison pill proposal with nearly identical provisions to those of
this resolution was found to be legally valid under Oklahoma Corporation Law in
a ruling by the U.S. District Court for the Western District of Oklahoma earlier
this year (IBTGF v. Fleming Companies, Inc., No.Civ-96-1650-A (1997)). The
---------------------------------
Court required Fleming to include in its proxy statement for its 1997 Annual
Meeting a proposal to adopt a by-law requiring the Board of Directors to redeem
the existing poison pill and to submit any successor poison pill to a
shareholder vote.
While the Fleming decision is not binding on the Delaware courts, and the
Delaware courts have not, to our knowledge, considered the validity of this or
any similar by-law, we believe the anti-poison pill by-law proposed by the
Independent Shareholders' Committee is legally valid under Delaware General
Corporation Law ("DGCL"). Section 109(a) of the DGCL gives stockholders the
power to "adopt, amend or repeal by-laws." Section 109(b) of the DGCL states:
"The by-laws may contain any provision, not inconsistent with law or with the
certificate of incorporation, relating to the business of the corporation, the
conduct of its affairs, and its rights or powers or THE RIGHTS OR POWERS OF ITS
STOCKHOLDERS, DIRECTORS, officers or employees" (emphasis added). Accordingly,
we believe that Section 109 of the DGCL unambiguously grants stockholders the
authority to adopt by-laws such as the one proposed.
We also believe that the authority granted to directors in Section 141(a)
is not exclusive. Section 141(a) states: "The business and affairs of every
corporation organized under this chapter shall be managed by or under the
direction of a board of directors, EXCEPT AS MAY BE OTHERWISE PROVIDED IN THIS
CHAPTER or in its certificate of incorporation" (emphasis added). We believe
Section 141(a) does not invalidate the proposed anti-poison pill by-law because
such a reading of this section wo uld make meaningless Section 109's
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broad grant of authority for stockholders to adopt by-laws relating to the
powers of stockholders or directors.
In our opinion the proposed anti-poison pill by-law is also consistent with
Delaware case law regarding the fiduciary duties of boards of directors. We
believe it is inherent in the Delaware scheme of corporate law that while the
board is entitled to exercise its judgement in responding to a tender offer or
other takeover bid, its judgement must be exercised within the framework of
statutes, charter provisions and by-laws which in certain instances limit the
actions that directors may take.
WE URGE YOU TO VOTE FOR THIS PROPOSAL.
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Independent Shareholders' Committee Proposal: Strengthening May Company's
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Vendor Responsibility Program
-----------------------------
(Proposal #__ on the Proxy Card)
We propose that the shareholders of the Company adopt the following
resolution:
"RESOLVED, that the shareholders of The May Department Stores Company
(the "Company" or "May Company") hereby request that the Board of
Directors review compliance with its "Vendor Standards of Conduct,"
and prepare a report at reasonable expense, which would be available
to shareholders by November 1997. The report should describe the
Company's current and future compliance efforts and plans. We further
request that our Company add the following compliance related measures
to its vendor policies:
1. Establish independent monitoring mechanisms in conjunction with
non-governmental organizations, including allowing direct access to
employees who make Company products;
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2. Strengthen internal monitoring procedures; and
3. Translate "Vendor Standards of Conduct" into the language of
employees of Company suppliers and require suppliers to distribute
these documents to employees."
THE MAY COMPANY'S VENDOR STANDARDS AND RETAILER RESPONSIBILITY HAVE BECOME
VISIBLE PUBLIC ISSUES.
On August 2, 1995, the issue of retailer responsibility for vendor conduct
was thrust powerfully before the public eye when state and federal investigators
raided a barbed wire-enclosed compound in El Monte, California. Inside they
found sixty-six Thai immigrant workers who had been held against their will as
virtual slave laborers, sewing clothes for as little as fifty cents per hour.
Shortly thereafter, then-U.S. Secretary of Labor Robert Reich announced that six
of the May Company's department store chains may have received apparel made in
the El Monte factory. The freed workers later found garments they had sewn in
the El Monte sweatshop on sale at May Company Stores in the Los Angeles area.
Since these revelations, the use of suppliers who operate illegal sweatshop
factories in the United States and abroad has become an issue of increasing
importance to the American consumer. Last year's furor around the conditions of
workers producing Wal-Mart's Kathy Lee Gifford line, and the Department of
Labor's high-profile "No Sweat" campaign, have given these problems further
prominence. Customers have responded by expressing their emphatic distaste for
workplace abuses. A November 1996 Marymount University study reported that
nearly 80% of shoppers would avoid a retailer who sold clothes made in
sweatshops.
The results of an investigation of contractors utilized by the May Company
has convinced us that the Company must take immediate and dramatic steps to
improve its sourcing practices and enforcement
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of its Vendor Standards of Conduct. Otherwise we believe the Company's business
reputation and shareholder value will continue to be put at risk by unscrupulous
suppliers and public scandals.
SWEATSHOPS AND THE MAY COMPANY'S PRIVATE LABEL MERCHANDISE PROGRAM -- A KEY
CORPORATE ASSET AT RISK.
The sale of apparel is the lifeblood of our Company's business.
Traditionally, apparel has accounted for over three-quarters of all sales in the
department store industry. Key to our Company's apparel program are its
proprietary brands, or private labels, which play an important role in
differentiating the May Company store chain's image to the buying public. May
Company's private label apparel program also represents a sales powerhouse for
our firm. Last year it accounted for over $1.8 billion in revenues and 15% of
total sales. Over half of these sales were concentrated in just five private
label lines -- three in men's apparel and two in womenswear.
Our company has invested heavily in building one of the retail industry's
strongest private label programs. It has an extensive merchandising and product
development operation which employs over 500 personnel and operates overseas
offices in ten different countries. Because this private label program enables
our Company to perform many of the design, sourcing and marketing functions that
would otherwise be performed by outside designers, it earns significantly
higher margins than traditionally branded goods. In general, mark-up on private
label apparel is estimated to be 60% higher than on "outside brands."
The May Company's private label program directly involves our Company in
the garment manufacturing process, from the selection of factories to the
monitoring of quality assurance. According to our Board, the Company "inspect(s)
each factory and subcontractor factory of a supplier of the Company's private
label merchandise before an initial order is placed." We believe that along
with this level of operational involvement comes a necessary responsibility to
assure the fair treatment of the workers who make apparel bearing our Company's
brands. Our directors claim to share this goal. They state that a purpose of
our Company's sourcing policy is to ensure that
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"the merchandise sold in [the Company's] stores is manufactured in
accordance with all applicable laws, including those relating to the rights
and welfare of the workers producing the merchandise."
However, recent reports we have received of workplace abuses at May Company
contractors have led us to believe that this responsibility is not being
adequately met. This information was obtained through interviews and field
investigations conducted in the United States and Honduras by the staff of
UNITE, which is a member of the Independent Shareholders' Committee, and in
Indonesia by local non-governmental organizations.
Y.P.S. INTERNATIONAL, MANHATTAN: Workers at Y.P.S., a factory which
produced women's jackets for the May Company's Amanda Smith and Lord and
Taylor labels, claim that they were illegally denied back wages and
overtime, and subjected to physical abuse and sexual harassment. Workers
also reported that the company employed workers as young as 13 and 14 years
old. In 1994, Y.P.S. was cited by the Department of Labor for $129,544 in
wage and hour violations.
PT SANDRAFINE AND PT YOTAH MEGAH, INDONESIA: Reports from these overseas
factories, which have exported garments to May, revealed child labor, sub-
minimum wages and strip-searches of workers. In addition, the PT Sandrafine
factory has a widely-reported history of strikes, the latest occurring in
April 1996, when workers protested the company's refusal to pay the minimum
wage.
PARAISO, HONDURAS: Workers at this factory, who have produced menswear
under May's Claybrooke label have complained of being forced to work 15-
hour days, and being exposed to life-threatening conditions. In September
1996, a female worker at the Paraiso factory filed a complaint with a
leading human rights agency charging the plant's personnel manager with
attempted rape.
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NORTON MCNAUGHTON, NEW YORK: The exclusive manufacturer of May's Pant-her
line of women's clothing, Norton McNaughton is a major New York apparel
firm with an extensive history of contracting work to factories which
violate wage and hour laws. Our company is McNaughton's most important
customer, accounting for 38% of sales in 1994.
Workers employed at McNaughton contractors in Brooklyn report not only
failure to pay legally-required overtime, but use of illegal homework
networks as well. Since 1992 state and federal investigators have
repeatedly linked Norton McNaughton to contractors who fail to pay overtime
and minimum wage, yet our Company has continued to maintain its
relationship with this vendor.
STRONGER MEASURES ARE NEEDED TO IMPROVE ENFORCEMENT OF MAY'S VENDOR STANDARDS.
The May Company needs to take immediate and effective action to protect
both its private labels and its stores from association with such abuses. Our
directors agree that "strengthening [the Company's] existing policies and
practices and enhancing its monitoring of compliance by its suppliers" is in the
interest of shareholders.
However, our Company's current practices, which rely heavily on contractors' and
vendors' written promises of ethical behavior, are clearly insufficient. May
needs to adopt effective structures to monitor vendors' actual treatment of
their workers. Our resolution proposes that three meaningful measures be taken
to achieve these goals:
. ESTABLISH MECHANISMS FOR INDEPENDENT MONITORING OF VENDORS BY NON-
GOVERNMENTAL ORGANIZATIONS (NGO'S): We believe monitoring by local NGO's
is more effective than the Company's current practice of commissioning
one-time
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inspections by outside accounting firms which may lack continuing
relationships with workers or familiarity with local labor standards .
. STRENGTHEN INTERNAL MONITORING PROCEDURES: An October 1996 Department of
Labor survey showed that monitoring contractors doubles their likelihood
of compliance with wage and hour regulations. Regular monitoring of
contractors is a major criteria for inclusion on the Department of
Labor's "Trendsetter List" of firms taking effective steps to ensure
their goods are not made in sweatshops. The May Company has been
noticeably absent from this list since its inception in 1995.
. TRANSLATE "VENDOR STANDARDS OF CONDUCT" INTO THE LANGUAGE OF EMPLOYEES
OF COMPANY SUPPLIERS AND REQUIRE THAT VENDORS DISTRIBUTE THESE STANDARDS
TO EMPLOYEES: Clearly a key element in enforcing the Company's standards
is to ensure that the workers they are designed to protect understand
their own employer's responsibilities. Noting that a 1995 survey of
Central American and Asian apparel factories found that only 22 out of
70 plants visited had informed their workers of their customers' codes
of conduct, the Department of Labor has recommended direct contact with
employees to ensure that Codes are communicated and enforced.
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Over the years, the May Company has achieved its goals by maintaining the
integrity of its name-plates and staying abreast of a changing retail
environment. Unfortunately and uncharacteristically, it has failed to take the
lead in shielding its image from being tarnished by implication in sweatshop
abuses. Shareholders should support our resolution to encourage the Board of
Directors to take strong action to address this threat to shareholder value and
our Company's good name.
WE URGE YOU TO VOTE FOR THIS PROPOSAL
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OTHER MATTERS
In addition to soliciting proxies in connection with the proposals by
the Independent Shareholders' Committee, the Company's directors are soliciting
proxies in connection with the following proposals to be brought before the
Annual Meeting: election of __ directors (Proposal __); ratification of the
appointment of auditors (Proposal __); and a shareholder proposal to eliminate
the Company's classified board and require that directors stand for election
annually (Proposal __).
The accompanying BLUE Annual Meeting proxy card will be voted at the
Annual Meeting in accordance with your instructions on such card.
THE INDEPENDENT SHAREHOLDERS' COMMITTEE URGES A VOTE FOR PROPOSAL[S] __
AND A VOTE AGAINST PROPOSAL[S] __.
Election of Directors
---------------------
(Proposal # __ on the proxy card)
You may vote FOR the election of each of the Company's Nominees as
Directors or withhold authority to vote for the Company's Nominees by marking
the proper box on the BLUE Annual Meeting proxy card. You may also withhold
your vote from any one or more of the Nominees by writing the name of such
nominee(s) in the space provided on the BLUE Annual Meeting proxy card. IF NO
MARKING IS MADE, YOU WILL BE DEEMED TO HAVE GIVEN A DIRECTION TO VOTE THE SHARES
REPRESENTED BY THE BLUE PROXY CARD FOR THE ELECTION OF ALL OF THE COMPANY'S
NOMINEES PROVIDED THAT YOU HAVE SIGNED AND DATED THE PROXY CARD.
Ratification of Auditors
------------------------
(Proposal # __ on the proxy card)
This proposal seeks the ratification of __________________ as
independent accountants for fiscal 1997.
PLEASE CAST YOUR VOTE FOR THIS RESOLUTION.
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Classified Board Shareholder Proposal
-------------------------------------
(Proposal # __ on the proxy card)
The Independent Shareholders' Committee believes that May Company's
classified Board is an anti-takeover device which neither adds shareholder value
nor is needed to protect the interests of shareholders. We believe board
accountability to shareholders is strengthened when all directors must stand for
election annually. Studies indicate that classified boards and other anti-
takeover devices have an adverse impact on shareholder value. In 1991 a study by
Lilli Gordon of the Gordon Group and John Pound of Harvard University found that
companies with restrictive corporate governance structures, including those with
classified boards, are "significantly less likely to exhibit outstanding long-
term performance relative to their industry peers."
PLEASE CAST YOUR VOTE FOR THIS RESOLUTION.
---
[Add other items referred to in Management's 1997 proxy statement]
VOTING RIGHTS
The Company's Board of Directors has fixed the close of business on March
XX as the record date for determining the shareholders of the Company entitled
to notice of and to vote at the Annual Meeting and any adjournment thereof. As
of the record date (based on the Management's 1997 proxy statement), May Company
had outstanding _________ shares of Common Stock. Each holder of record of
outstanding shares of Common Stock on the record date is entitled to one vote
for each share held on every matter submitted to the Annual Meeting. The
presence of the holders of a majority of the outstanding shares of Common Stock,
represented in person or by proxy and entitled to vote at the Annual Meeting,
will constitute a quorum at the Annual Meeting. Directors are elected by a
plurality of votes cast by holders of Common
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Stock, who are present in person or represented by proxy and entitled to vote at
the Annual Meeting. Adoption of the other matters proposed by the Company's
Board, shareholders of the Company and the Independent Shareholders' Committee,
respectively (together with the director elections, collectively, the "Annual
Meeting Proposals"), will require the affirmative vote of a majority of the
votes cast by holders of Common Stock who are present in person or represented
by proxy and entitled to vote at the Annual Meeting[, except as otherwise
provided in Management's 1997 proxy statement (incorporated herein by reference)
in connection with...]. Shares for which proxies are marked "abstain" will be
treated as shares present for purposes of determining the presence of a quorum
on all matters. Proxies relating to "street name" shares that are voted by
brokers on only some of the Annual Meeting Proposals will nevertheless be
treated as present for purposes of determining the presence of a quorum on all
matters, but will not be entitled to vote on any Annual Meeting Proposal as to
which the broker does not have discretionary voting power and has not received
instructions from the beneficial owner ("broker non-votes"). In tabulating the
vote on the election of directors and the other matters being considered at the
Annual Meeting, abstentions and broker non-votes will be disregarded, which will
have the effect of reducing the total number of shares from which any required
majority is calculated.
REVOCATION RIGHTS
A shareholder who executes the enclosed proxy may revoke it at any time
before it is exercised. An executed proxy may be revoked either by a later
dated proxy with respect to the same matters, by giving notice of revocation to
the Secretary of the Company, or by voting in person at the Meeting. Proper
execution of the Independent Shareholders' Committee's enclosed proxy will
revoke a previously executed proxy delivered to the Company. If the proxy is not
revoked, it will be voted by those herein named as you direct on the proxy.
UNMARKED PROXIES AND OTHER BUSINESS
If you sign and return to us your BLUE proxy, your shares will be voted in
accordance with your instructions. If no instructions are given for any matter,
your shares will be voted as follows: for each of Management's director nominees
(Proposal # __); [against ______(Proposal # __);] and for each of the other
Annual Meeting Proposals (Proposal # __ through XX), including the two
resolutions proposed by the Independent Shareholders' Committee.
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Except as set forth above, the Independent Shareholders' Committee is not
aware of any proposals to be brought before the Annual Meeting. Should any other
proposal be brought before the Annual Meeting, the vote required for approval of
such proposal would be as prescribed by the Company's charter or by-laws or by
applicable law. Should other proposals be brought before the Annual Meeting, the
persons named on the BLUE proxy will abstain from voting on such proposals
unless such proposals adversely affect the interests of the Independent
Shareholders' Committee as determined by the Independent Shareholders' Committee
in its sole discretion, in which event such persons will vote on such proposals
at their discretion.
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SOLICITATION OF PROXIES
The Independent Shareholders' Committee expects to solicit proxies
through the mail, as well as by telephone and through personal interviews. The
Independent Shareholders' Committee will also request brokers, custodians and
other nominees to forward solicitation materials to the beneficial owners of
Common Stock, and such persons will be reimbursed for their reasonable out-of-
pocket expenses. Proxies may be solicited personally and by telephone by
employees of the Union of Needletrades, Industrial and Textile Employees
("UNITE"), none of whom will receive additional compensation for such
solicitation.
The cost of the solicitation will be borne solely by the Independent
Shareholders' Committee. While the exact cost of the solicitation is not at this
time known, the Independent Shareholders' Committee do not expect it to exceed
$25,000. Total expenditures to date, including printing and postage expenses,
have been $5,000. Reimbursement for the cost of this solicitation will not be
sought from the May Company.
INFORMATION CONCERNING THE INDEPENDENT SHAREHOLDERS' COMMITTEE
The May Company Independent Shareholders' Committee has been formed by
UNITE for the purpose of this solicitation.
The Southern Regional Joint Board of UNITE, as successor in interest
to the Amalgamated Clothing and Textile Workers Union, is the beneficial owner
of 37 shares of May Company Common Stock. Pension trusts (the "UNITE Pension
Trusts") organized for the retirement benefit of members of UNITE, a labor
organization headquartered in New York, New York, are the holders of
approximately 38,320 shares of May Company Common Stock. UNITE represents
approximately seventy-five May Company employees at three store locations.
17
<PAGE>
The following employees of UNITE may be deemed to be" participants" in
this solicitation under Item 4 of Reg. 240.14a-101 of the Proxy Rules: Michael
R. Zucker, Director of Corporate and Financial Affairs at UNITE, at 2100 L
Street, N.W., Washington, D.C. 20037; Marka Peterson, Associate Director of
Corporate and Financial Affairs at UNITE, at 2100 L Street, N.W., Washington,
D.C. 20037; and Benjamin Hensler, Field Director of Corporate and Financial
Affairs at UNITE, at 2100 L Street, N.W., Washington, D.C. 20037.
INFORMATION AND DOCUMENTS INCORPORATED BY REFERENCE
We incorporate herein by reference the information relating to
security ownership of management and certain beneficial owners contained in
Management's May Company's 1997 proxy statement. Copies of such proxy statement
and the 8-K incorporated herein by reference are available upon request by
contacting the Independent Shareholders' Committee at the telephone number and
address above. The May Company Independent Shareholders' Committee and UNITE
assume no responsibility for the accuracy or completeness of any information
contained herein which is based on, or incorporated by reference to,
Management's Proxy Statement or May Company public filings.
DEADLINE FOR SUBMISSION OF SHAREHOLDER PROPOSALS
Proposals of shareholders intended to be presented at the next Annual
Meeting must be received by The May Department Store Company, 611 Olive Street,
St. Louis, Missouri 63101-1799 on or before December xx, 1997. The Independent
Shareholders' Committee urges all qualified shareholders to submit their
resolutions to management.
MAY COMPANY INDEPENDENT
SHAREHOLDERS' COMMITTEE
18
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PLEASE COMPLETE, DATE AND SIGN THE ENCLOSED BLUE PROXY CARD PROMPTLY
AND MAIL IT IN THE POSTAGE PRE-PAID ENVELOPE PROVIDED HEREWITH.
If your shares are held in the name of a broker, bank or nominee, only
it can sign a proxy card and only upon receipt of your specific instructions to
do so. Accordingly, please contact the person responsible for your account and
give him or her appropriate instructions to execute the blue proxy card.
IF YOU HAVE ANY QUESTIONS OR NEED ASSISTANCE IN VOTING YOUR SHARES,
PLEASE CALL (202) 785-5690.
19
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THE MAY COMPANY DEPARTMENT STORES
1997 ANNUAL MEETING OF SHAREHOLDERS
THIS PROXY IS SOLICITED BY
MAY COMPANY INDEPENDENT SHAREHOLDERS' COMMITTEE
The undersigned shareholder of The May Department Stores Company hereby
appoints each of Michael R. Zucker, Marka Peterson, and Benjamin Hensler, and
each of them with full power of substitution, for and in the name of the
undersigned, to represent and to vote, as designated below, all shares of Common
Stock and ________________________ of The May Department Stores Company that the
undersigned is entitled to vote if personally present at the 1997 Annual Meeting
of Shareholders of The May Department Stores Company, to be held on May 23, 1997
at __________, and at any adjournment, postponement or rescheduling thereof. The
undersigned hereby revokes any previous proxies with respect to the matters
covered by this Proxy.
MAY COMPANY INDEPENDENT SHAREHOLDERS' COMMITTEE RECOMMENDS A VOTE FOR
EACH OF ITEMS ____ SET FORTH BELOW.
(Please mark with an "X" in the appropriate boxes)
[ORDER TO BE ADJUSTED AND NUMBERING TO BE ADDED CONSISTENT WITH
MANAGEMENT'S PROXY CARD.]
__. ELECTION OF DIRECTORS: Election of _____________________________________
<PAGE>
[ ] FOR all nominees ex- [ ] WITHHOLD AUTHORITY
cept as marked below for all nominees
(INSTRUCTION: To withhold authority to vote for one or more nominees, mark FOR
above and print the name(s) of the person(s) with respect to whom you wish to
withhold authority in the space provided below.)
___. Approval of proposal to approve ________ as Independent Auditors.
For Against Abstain
[ ] [ ] [ ]
___. Approval of proposal to declassify the Board of Directors.
For Against Abstain
[ ] [ ] [ ]
___. Approval of proposal to require elimination of the poison pill through
an amendment to the Company's By-Laws.
For Against Abstain
<PAGE>
[] [] []
Approval of the proposal to urge the Board of Directors to strengthen the
Company's Vendor Standards of Conduct.
For Against Abstain
[] [] []
IN THEIR DISCRETION, THE PROXIES ARE AUTHORIZED TO VOTE UPON SUCH OTHER BUSINESS
AS MAY PROPERLY COME BEFORE THE MEETING OR ANY ADJOURMENT THEREOF.
(continued on the reverse side)
<PAGE>
If no marking is made, this PROXY will be voted FOR all of the nominees
listed above, FOR the proposal to approve ________ as Independent Auditors, FOR
the proposal to declassify the Board of Directors, FOR the anti-poison pill
by-law proposal, and FOR the proposal to urge the Board of Directors to
strengthen the Company's Vendor Responsibility Program.
Please date and sign this proxy exactly as your name appears hereon:
Dated: __________________________, 1997
(Signature)
(Signature, if held jointly)
(Title)
When shares are held by joint tenants, both should sign. When signing
as attorney-in-fact, executor, administrator, trustee, guardian,
corporate officer or partner, please give full title as such. If a
