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SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. 2)
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, N.W.
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. We are the May Company Independent Shareholders' Committee, a
committee independent of May Company management formed by the Union of
Needletrades, Industrial and Textile Employees ("UNITE") and the Southern
Regional Joint Board of UNITE for the purpose of sponsoring these proposals.
The Southern Regional Joint Board is the beneficial owner of 50 shares of the
Company's common stock, and pension trusts organized for the retirement benefit
of members of UNITE, a labor organization headquartered in New York, New York,
hold approximately 53,418 shares of the Company's common stock.
The first proposal is an anti-poison pill proposal. It will be presented
in the form of an amendment to the By-Laws the terms of which provide for the
elimination 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 improve compliance with
its current vendor standards of conduct by implementing additional monitoring
and posting requirements in accordance with "best practices" adopted by certain
major retailers. We believe that the Company's existing Vendor Responsibility
Program, while in line with comparable policies at similarly situated companies,
has not been effective enough in preventing the Company from receiving
merchandise which has been produced by suppliers tied to worker abuse and
sweatshop scandals because it relies too heavily on written representations by
the Company's suppliers. Publicity surrounding these violations has had a
negative impact on our Company's image. Accordingly, we believe a system that
includes closer monitoring of May Company contractors is advisable.
To ensure success in the future, the May Company must receive a strong
message from its shareholders at this time. 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, N.W.
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
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 Cervantes Convention
Center, St. Louis, Missouri at 10:00 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 is a committee independent of
May Company management, formed by the Union of Needletrades, Industrial and
Textile Employees ("UNITE") and the Southern Regional Joint Board of UNITE for
the purpose of sponsoring two shareholder proposals that will be considered at
the Annual Meeting. The Southern Regional Joint Board of UNITE is the
beneficial owner of 50 shares of the Company's common stock, and pension trusts
organized for the retirement benefit of members of UNITE, a labor organization
headquartered in New York, New York, hold approximately 53,418 shares of the
Company's common stock. The Southern Regional Joint Board is comprised of
various UNITE local affiliates located in the Southeastern region of the United
States. See "Information Concerning the Independent Share holders' Committee--
UNITE and Southern Regional Joint Board" and "--Certain Relationships."
The Independent Shareholders' Committee will make the following two
proposals at the Annual Meeting:
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1. An amendment to the Company's By-Laws, the terms of which amendment provide
for the elimination of the Company's "poison pill" rights plan, and subject
future poison pills to shareholder approval; and
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, N.W.
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
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(Proposal (e) on the Proxy Card; not on Management 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 share owners 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 share owners 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 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 share owners, 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."
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The intent of this proposal is to eliminate the poison pill currently in place
at May Company and to require shareholder approval for the adoption of any
future poison pill.
The Company's Board of Directors first adopted a rights agreement,
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."
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.
The Company's Rights Agreement is an anti-takeover device which
effectively prevents a change in control of the Company without the approval of
the board of directors. Triggering the poison pill affects the bidder by
causing substantial dilution to a person or group that attempts to acquire the
Company on terms not approved by the Board of Directors. We feel the poison
pill forces potential investors to negotiate acquisitions with management,
instead of making their offer directly to shareholders.
In 1996, according to the Investor Responsibility Research Center,
shareholder support for proposals opposing pills increased to 53.4%, the highest
support of any issue that proxy season. Such proposals received eight majority
votes in 1996: Weyerhauser, Rite Aid, Fleming, Supervalu, Rowan, Baker Hughes,
Wellman, and Consolidated Natural Gas.
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Our Company has historically been a stable and profitable corporation.
However, the Company has a number of corporate governance practices limiting
shareholder control. In addition to the poison pill, the May Company currently
has a classified board of directors and does not have a confidential voting
policy, and does not allow cumulative voting. We believe our Company's
performance not only makes defensive measures 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. We believe that shareholders should be able to
decide for themselves whether to accept an offer for their stock without
interference in the form of a poison pill.
We have not proposed a precatory shareholder resolution on the poison
pill because a number of companies have chosen to ignore the wishes of
shareholders to eliminate or prevent the creation of these devices despite
majority votes in favor of such voluntary resolutions. Proposals like ours,
which seek to eliminate and prevent poison pills by amending company by-laws,
have been proposed at other companies including Fleming Companies, Inc. and
Harrah's Entertainment Inc.
The Company has already stated in its proxy statement that it intends
to exercise its discretionary authority to vote against our proposal should it
be properly presented at the annual meeting. We do not believe that the Company
has the right to exercise such discretionary authority. We believe an
amendment to the By-Laws to immediately eliminate our Company's poison pill is
the best way to increase Board accountability and shareholder value.
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LEGAL ISSUES RELATING TO THE ANTI-POISON PILL PROPOSAL
While we believe that the anti-poison pill by-law is valid, we
recognize that the Delaware courts have not considered the validity of it or any
similar by-law and, therefore, have not resolved the extent to which
stockholder-adopted by-laws may limit the authority of a board of directors to
oppose, or to adopt or employ defensive measures against, takeover bids.
Accordingly, it is uncertain whether the anti-poison pill by-law would survive a
Delaware court challenge. However, there is some support for the validity of
the anti-poison pill by-law in a recent Oklahoma Federal Court decision
involving an Oklahoma corporation. The court required a corporation to include
in its proxy statement for its 1997 annual shareholders 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. IBTGF v.
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Fleming Companies, Inc., No.Civ-96-1650 - A (1997). This decision is not
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binding on Delaware courts.
We believe that Section 109 of the Delaware General Corporation Law
authorizes the enactment of the anti-poison pill by-law. Section 109(a) gives
stockholders the power to "adopt, amend or repeal By-laws." Section 109(b)
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). [In a review of the Delaware General Corporation Law, and the
certificate of incorporation and by-laws of the Company, we have not discovered
any provisions that bar stockholders from adopting the anti-poison pill by-law.
We believe that Section 141(a) of the Delaware General Corporation Law does not
bar the adoption of the anti-poison pill by-law. That section 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).
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We believe that the adoption of the anti-poison pill by-law is not
inconsistent with Section 141(a) for two reasons. First, if Section 141(a) is
read as granting the board of directors exclusive authority over the business
and affairs of the corporation, that grant is qualified by the phrase "except as
may be otherwise provided in this chapter or in its certificate of
incorporation." The savings clause leaves room for the grant of authority in
Section 109 for stockholders to adopt by-laws, such as the anti-poison pill by-
law, which relate to the rights and powers of stockholders and directors.
Second, we believe that any reading of Section 141(a) that invalidated the anti-
poison pill by-law would make meaningless Section 109's broad grant of authority
for stock holders to adopt by-laws relating to the rights or powers of
stockholders and directors.
We also believe that the anti-poison pill by-law does not conflict
with Delaware case law dealing with the fiduciary duties of boards of directors.
In certain cases, courts interpreting Delaware law have, on the basis of
particular facts presented, upheld reasonable defensive measures adopted by
directors who, in good faith and upon reasonable investigation, believed that a
hostile offer posed a danger to corporate policy and effectiveness, even though
a majority of the stockholders may have tendered their shares. We believe that
these cases do not support invalidating the anti-poison pill by-law because in
none of those cases was the board's discretion limited by a by-law previously
adopted by stockholders pursuant to their powers under Section 109, nor did the
court consider the stockholders' authority to adopt such a by-law. We believe
it is inherent in the Delaware scheme of corporate law that while the board is
entitled to exercise its judgment in responding to a tender offer or other
takeover bid, its judgment must be exercised within the framework of statutes,
charter provisions and by-laws which in certain instances limit the actions that
directors may take even when the directors believe that their chosen course of
action is in the best interests of stockholders.
WE URGE YOU TO VOTE FOR THIS PROPOSAL.
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INDEPENDENT SHAREHOLDERS' COMMITTEE PROPOSAL:
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STRENGTHENING MAY COMPANY'S VENDOR RESPONSIBILITY PROGRAM
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(Proposal (d) 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:
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1. Establish independent monitoring mechanisms in conjunction with
non-governmental organizations, including allowing direct access
to employees who make Company products;
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."
This proposal was submitted to the Company by the Southern Regional
Joint Board of UNITE pursuant to Rule 14a-8 under the proxy rules, and has been
included in Management's proxy statement as Proposal (d). We are hereby
soliciting proxies in support of this proposal.
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.
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
empathetic 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 MAY COMPANY'S PRIVATE LABEL MERCHANDISE PROGRAM
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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 VENDOR RESPONSIBILITY PROGRAM
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." Our directors state that a
purpose of our Company's sourcing policy is to ensure that "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."
The Vendor Responsibility Program maintained by the Company is
comparable to other vendor policies adopted by similarly situated companies. It
includes the following features, as more fully described in Management's proxy
statement: notification of all overseas suppliers of its private label
merchandise of the Company's policies and standards with respect to labor laws,
child labor and prison labor; written notification by suppliers of compliance
with those policies at the time the business relationship is established and
annually thereafter; annual notification of each current domestic brand name and
private label supplier of the Company's labor policies and standards, and
notification that failure to operate in compliance with the policies and
standards would prevent the Company from continuing to do business with the
supplier; certification and
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warranty by manufacturers set forth on each purchase order that the
manufacturer, and all third party contractors, comply with all labor laws,
regulations and codes, including laws relating to the employment of children and
prison labor; inspection of each factory and subcontractor factory of suppliers
of the Company's private label merchandise before an initial order is placed
with a supplier and annually thereafter; and notification of any violations
noted during inspection and, if the violations are not corrected, termination of
purchases from that supplier.
Because we believe that these measures have not been effective in
preventing certain abuses in violation of the labor standards promulgated by the
Company, and although we acknowledge that the Company has no legal obligation to
do so, we believe that the Company should adopt even stricter vendor standards
of conduct in accordance with the "best practices" relating to sourcing policies
adopted by certain major retailers.
VIOLATIONS OF LABOR STANDARDS BY CERTAIN VENDORS
We believe that the May Company Vendor Responsibility Program could be
more effective in preventing certain violations of labor standards espoused by
the Company. Recent examples of vendors' non-compliance with applicable
standards of conduct include the following:
. In 1994, Y.P.S., a factory which produced women's jackets for the
Company's Amanda Smith and Lord and Taylor labels, was ordered by the
New York State Department of Labor to make payments to its workers of
over $50,000 in illegally-withheld back wages. Y.P.S. had been
previously cited by the DOL in 1994 for $129,544 in wage and hour
violations.
. The exclusive manufacturer of May's Pant-her line of women's
clothing, Norton McNaughton is a major New York apparel firm. May
Company is McNaughton's most important customer, accounting for 38% of
sales in 1994. Since 1992 state and federal investigators have linked
Norton McNaughton to contractors who fail to pay overtime and minimum
wage.
. An investigation conducted in November, 1996 by the Urban Community
Mission of Jakarta ("UCM - Jakarta"), an internationally-respected
non-governmental organization, revealed child labor, sub-minimum wages
and searches of workers at two Indonesian garment factories which have
exported garments to May Company. One of these factories, PT
Sandrafine Garment, 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.
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. In January, 1997 UCM - Jakarta conducted a follow-up investigation
of three additional factories, PT Hand Sum Tex, PT Kaho Indah Citra
Garment and PT Sutera Indah Utama, which have exported garments to May
Company, and found that all were in violation of Indonesian minimum
wage standards. The survey also revealed employment of child laborers
and widespread failure to provide workers with legally required leaves
and benefits.
STRONGER MEASURES ARE NEEDED TO IMPROVE ENFORCEMENT OF MAY'S VENDOR STANDARDS
Although the Company is not legally responsible for the abuses that
occur at the facilities of its vendors like those described above, we believe
that the May Company should take immediate and effective action to improve
enforcement of its vendor standards in order to protect both its private labels
and its stores from association with such abuses. The management proxy
statement agrees that it is in the best interest of shareholders for the Company
to "remain focused on monitoring [the Company's] existing policies and
practices to enhance compliance by its suppliers." However, we believe that the
procedures currently in place under its Vendor Responsibility Program are
insufficient since they rely heavily on contractors' and vendors' written
promises of ethical behavior.
We believe that the May Company should adopt effective structures to
monitor vendors' actual treatment of their workers in accordance with the "best
practices" that have been adopted by certain major retailers. Our resolution
proposes that three specific measures be taken:
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. 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 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.
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. Although many other major retailers have vendor standards that are
comparable to those of the Company, and although the Company is under no legal
obligation to adopt stricter standards, we believe that it should 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 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 four directors (Proposal (a)); ratification of the
appointment of auditors (Proposal (b)), and a
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shareholder proposal to eliminate the Company's classified board and require
that directors stand for election annually (Proposal (c)).
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 PROPOSALS
(A), (B), (C), (D) AND (E).
ELECTION OF DIRECTORS
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(Proposal (a) 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 (b) on the Proxy Card)
This proposal seeks the ratification of Arthur Andersen LLP as
independent accountants for fiscal 1997.
PLEASE CAST YOUR VOTE FOR THIS RESOLUTION.
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CLASSIFIED BOARD SHAREHOLDER PROPOSAL
-------------------------------------
(Proposal (c) on the Proxy Card)
We believe 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 further 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.
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VOTING RIGHTS
The Company's Board of Directors has fixed the close of business on
April 1, 1997 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. Owners of common stock are entitled to cast one vote for each share
owned. According to the Company's proxy statement, the outstanding voting
securities of May Company as of the record date, which carry 250,606,163 votes,
consisted of (i) 235,236,024 shares of common stock (excluding 78,400,972
shares of treasury stock), and (ii) 682,359 shares of ESOP stock which carry
15,370,139 votes. The owners of the outstanding common stock and of the ESOP
stock are entitled to vote together as a single class. The election of directors
requires a plurality of votes cast. The affirmative vote of the owners of a
majority of the shares represented in person or by proxy and entitled to vote on
the item is required to approve the ratification of auditors and the shareowner
proposals. The shares represented by abstentions and broker non-votes are
counted as present and entitled to vote for purposes of determining a quorum.
Abstentions and broker non-votes are not counted as either FOR or AGAINST for
purposes of the election of directors. An abstention is counted as a vote
AGAINST, and a broker non-vote is not counted as either FOR or AGAINST, for
purposes of approving the other matters to be acted upon at the annual meeting.
REVOCATION RIGHTS
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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 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 for each of Management's director nominees
(Proposal (a)) and for each of the other Annual Meeting proposals (Proposals
(b), (c), (d) and (e)), including the poison pill by-law amendment proposal and
the vendor standards of conduct proposal described above.
Except as set forth above, we are 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.
SOLICITATION OF PROXIES
We expect to solicit proxies through the mail, as well as by telephone
and facsimile and through personal interviews. We 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 and facsimile by regular employees of UNITE, none of whom will receive
additional compensation for such solicitation. Proxies will not be solicited by
specially engaged employees or paid solicitors.
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, it is not expected 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.
15
<PAGE>
INFORMATION CONCERNING THE
INDEPENDENT SHAREHOLDERS' COMMITTEE
The May Company Independent Shareholders' Committee has been formed by
UNITE and the Southern Regional Joint Board of UNITE for the purpose of this
solicitation.
UNITE AND SOUTHERN REGIONAL JOINT BOARD
The Southern Regional Joint Board of UNITE, as successor in interest
to the Amalgamated Clothing and Textile Workers Union, is the beneficial owner
of 50 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 53,418 shares of May Company Common Stock. UNITE represents
approximately seventy-five May Company employees at three store locations. The
Southern Regional Joint Board is comprised of various UNITE local affiliates
located in the Southeastern region of the United States.
The Independent Shareholders' Committee, UNITE and the Southern
Regional Joint Board of UNITE are "participants" in this solicitation under Item
4 of Reg. 240.14a-101 of the Proxy Rules. The following employees of UNITE may
also 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.
CERTAIN RELATIONSHIPS
UNITE and the Southern Regional Joint Board of UNITE are collective
bargaining representatives of employees at companies located throughout North
America. Although UNITE is not currently seeking to organize employees at May
Company, it may in the future engage in organizing activities at the Company or
at vendors or manufacturers or other entities with which the Company conducts
business. The Independent Shareholders' Committee was formed for the purpose of
conducting this solicitation and does not engage in organizing activities.
UNITE locals have three collective bargaining agreements in place with
the Company that cover a total of 75 employees, and there are no current labor
disputes. We note, however, that UNITE, as the preeminent labor union in the
clothing and textile industries, in the ordinary course engages in organizing
and collective bargaining activities at a variety of manufacturers and vendors
that may supply goods to the Company.
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<PAGE>
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 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 other 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 25, 1997. The Independent
Shareholders' Committee urges all qualified shareholders to submit their
resolutions to management.
MAY COMPANY INDEPENDENT
SHAREHOLDERS' COMMITTEE
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.
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<PAGE>
THE MAY DEPARTMENT STORES COMPANY
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 common shares 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 Cervantes Convention
Center, St. Louis, Missouri at 10:00 a.m. C.S.T., 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 THE ITEMS SET FORTH BELOW:
(Please mark with an "X" in the appropriate boxes)
(a) ELECTION OF DIRECTORS: Election of Jerome T. Loeb, Russell E. Palmer,
Michael R. Quinlan and William P. Stiritz.
[ ] 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.)
<PAGE>
(b) Approval of proposal to approve Arthur Andersen LLP as Independent
Auditors.
For Against Abstain
[ ] [ ] [ ]
(c) Approval of proposal to declassify the Board of Directors.
For Against Abstain
[ ] [ ] [ ]
(d) Approval of the proposal to urge the Board of Directors to strengthen the
Company's Vendor Standards of Conduct.
For Against Abstain
[ ] [ ] [ ]
(e) Approval of proposal to eliminate the poison pill through an amendment to
the Company's By-Laws.
For Against Abstain
[ ] [ ] [ ]
If no marking is made, this PROXY will be voted FOR all of the nominees
listed above, FOR the proposal to approve Arthur Andersen LLP as Independent
Auditors, FOR the proposal to declassify the Board of Directors, FOR the
proposal to urge the Board of Directors to strengthen the Company's Vendor
Responsibility Program and FOR the anti-poison pill by-law proposal. If no
directions are given, and this signed card is returned, the undersigned
understands that the proxies named on Management's proxy card will vote in
accordance with recommendations of the board of directors and in each proxy's
discretion on any other matter that may properly come before the meeting and at
any adjournment or postponement thereof.
Please date and sign this proxy exactly as your name appears hereon:
<PAGE>
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.
