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[LOGO]
The May Department Stores Company
611 Olive Street
St. Louis, Missouri 63101-1799
It is our privilege to invite you to attend May's 2000 annual meeting of shareowners. The meeting will take place on May 19, 2000, at 11:00 a.m. at The Westin William Penn, 530 William Penn Place, Pittsburgh, Pennsylvania. This is the first time in 30 years that the annual meeting is being held outside of St. Louis. We decided to take the meeting "on the road" in order to give more shareowners an opportunity to attend.
We are pleased to add two new enhancements to our proxy solicitation process this year:
Very truly yours,
/s/ Eugene S. Kahn /s/ Jerome T. Loeb
Eugene S. Kahn
Jerome T. Loeb
President and
Chairman of the Board
Chief Executive Officer
TABLE OF CONTENTS
Notice of Annual Meeting of Shareowners 1
Proxy Statement 1
The Election of Directors 2
Beneficial Owners 5
Executive Compensation 5
The Board of Directors and Committees of the Board 10
The Ratification of the Appointment of Independent Auditors 11
Reapproval of the Executive Incentive Compensation Plan
for Corporate Executives
11
Proposal by a Shareowner Concerning a Classified Board 12
Proposal by a Shareowner Concerning May's Shareowner
Rights Plan 13
General 14
The proposals for the meeting are:
(a) the election of five directors;
(b) the ratification of the appointment of independent auditors;
(c) the reapproval of May's Executive Incentive Compensation Plan for Corporate Executives;
(d) a shareowner proposal concerning a classified board; and
(e) a shareowner proposal concerning May's shareowner rights plan.
The proxy statement discusses these proposals and contains other information about May. It also explains how you may vote at the annual meeting in person or by proxy. The shareowners may take action on additional business at the meeting if it is properly raised.
The record date for the meeting is March 31, 2000. This means that you must be a shareowner of record or the owner of May's Employee Stock Ownership Plan preference stock ("ESOP stock") at the close of business on that date to vote at the annual meeting.
Number of Shares Outstanding. You are entitled to one vote
for each share of common stock you own. On the record date, the company's
voting securities carried 341,059,653 votes and consisted of:
Proxies and Methods of Voting. If you own common stock in your own name, you are an "owner of record." This means that you may use the enclosed proxy card to tell the persons named as proxies how to vote your shares. If you fail to vote, the proxies cannot vote your shares at the meeting. If you participate in May's dividend reinvestment plan, the enclosed proxy card includes the shares in your dividend reinvestment plan account.
If you participate in May's profit sharing plan, you will receive a voting instruction card for the common stock and ESOP stock allocated to your account in that plan. The plan trustee will vote your shares in accordance with your instructions and the terms of the plan. If you fail to vote, the trustee will vote your shares in the same proportion as it votes the shares for which it receives instructions from other plan participants. Under the terms of the plan, the trustee must receive your voting instructions by May 12.
You have three voting options:
The named proxies will vote all shares
at the meeting that have been properly voted (whether by Internet, telephone,
or mail) and not revoked. If you sign and return your proxy card but do
not mark your proxy card to tell the proxies how to vote your shares on
each proposal, the proxies will vote the way the board of directors recommends
in this proxy statement. If action is taken at the meeting on matters that
are not described in this proxy statement, the proxies will use their own
judgment to determine how to vote your shares. The board of directors recommends
a vote
Electronic Access to Proxy Materials and Annual Reports. This proxy statement and the 1999 annual report are available on our Internet site at www.maycompany.com. You can elect to view future proxy statements and annual reports over the Internet instead of receiving paper copies in the mail.
If you are a shareowner of record, you can choose this option and save May the cost of producing and mailing these documents by following the instructions provided if you vote over the Internet. After you make this choice, you will receive an e-mail next year containing the Internet address of the proxy materials and annual report. Your choice will remain in effect until you tell us otherwise. You do not have to elect Internet access each year.
If you hold your May stock in street name through a broker, bank or other nominee, check the information provided by that entity for instructions on how to elect to view future proxy statements and annual reports over the Internet. After you make this choice, you will receive an e-mail next year containing the Internet address to use to access our proxy statement and annual report.
THE ELECTION OF DIRECTORS
Proposal (a) on the accompanying proxy card.
Nominees. The board of directors proposes the election of five directors. These five directors, together with the nine directors whose terms continue beyond the annual meeting, will make up the board of directors.
Unless you indicate otherwise on your proxy
card, the proxies will vote your shares FOR the following persons for terms
expiring at the annual meeting in the year indicated and until their successors
are elected and qualified:
2003
John L. Dunham
Michael R. Quinlan
Jerome T. Loeb
William P. Stiritz
Russell E. Palmer
Each nominee consents to being nominated and agrees to serve if elected. They will join the following directors whom you elected previously for terms ending at the annual meeting in the years indicated. These directors are not standing for election at this meeting:
2001
2002
Eugene S. Kahn
Marsha J. Evans
Helene L. Kaplan
Robert D. Storey
James M. Kilts
Anthony J. Torcasio
William D. Perez
Edward E. Whitacre, Jr.
R. Dean Wolfe
If a nominee becomes unavailable before the meeting, the proxies may vote your shares for any substitute nominee proposed by the board of directors, or the board may reduce the number of directors to be elected.
Information About Directors. Biographies of the directors
appear on the following pages, showing
May's 24 executive officers and directors as a group
2
The following shareowners reported to the Securities and Exchange Commission that they owned more than 5% of our common stock on December 31, 1999. With respect to May's profit sharing plan, ownership is as of the record date.
Number % of % of Name and address of shares outstanding voting of beneficial owner owned stock owned power
Capital Research and 26,638,450 8.3% 7.8% Management Company 333 South Hope Street Los Angeles, CA 90071 Oppenheimer Capital 20,373,546 6.4% 6.0% 1345 Ave. of the Americas New York, NY 10105 Sanford C. Bernstein & Co., Inc. 18,778,375 5.9% 5.5% 767 Fifth Avenue New York, NY 10153 May's Profit Sharing Plan Common Stock 15,357,110 4.8% 4.5% ESOP Stock 616,404 100% 6.1%
The plan for corporate executives applied to seven individuals in 1999 and applies to nine individuals in 2000, including the five executive officers named in the summary compensation table. The plan for company principals applies to the 19 presidents, chairmen, and vice chairmen of our operating divisions. Participants in each plan may receive annual cash awards for individual fiscal years and long-term cash awards for three-year long-term performance periods. These awards are based on
Participants in the three plans earned approximately $46.5 million for the performance periods ending in fiscal 1999. Amounts awarded under these plans to the named executive officers are reflected in the summary compensation table.
During fiscal 1999, each of the named executive
officers became eligible to receive a potential long-term cash award for
the three fiscal years ending in fiscal 2001. The following table
shows the maximum long-term cash awards payable for that period.
Performance Estimated or Other Maximum Period Until Future Payouts Maturation Under Non-Stock- Name or Payout Price-Based Plan(1)
Eugene S. Kahn Earned over $927,360 Jerome T. Loeb three fiscal years $630,045 Anthony J. Torcasio (1999-2001) $369,725 R. Dean Wolfe ending 2/2/02 $333,000 John L. Dunham $330,300
(1) Payouts may range from $0 to the "maximum" award value. The estimate above assumes that the individual remains eligible to participate throughout the three-year period, the maximum performance goals have been met, and that the stock price has increased sufficiently to result in the maximum stock price adjustment.Profit Sharing Plan. Associates over age 21, with one year of service and at least 1,000 hours of paid employment, may participate in our profit sharing plan. During 1999, 58,752 associates invested $88.9 million in the plan. Of this amount, $48.5 million was invested in May common stock. In addition, we added $53.9 million of May common stock and ESOP stock to associates' accounts as a result of the plan's matching formula.
The plan links its benefits to our performance each year and to the value of the common stock. Generally, we match up to the first 5% of pay each pay period that an associate invests in the plan. In 1999, our associates made $53.9 million of "matchable" contributions to the plan. The effective matching rate for 1999 was 100%. The effective matching rate has averaged 99% over the last five years.
Retirement Plans. We have two noncontributory retirement plans that cover associates over age 21 who are paid for 1,000 or more hours per year.
In addition, we have a supplementary retirement plan that covers associates who, at one time, had compensation in a calendar year equal to twice the amount of "wages" then subject to the payment of old age, survivor, and disability insurance Social Security taxes. Participants become entitled to a single life annuity retirement benefit equal to
The expense for our retirement plans for fiscal 1999 for all associates aggregated $53 million.
5
The following table shows the estimated aggregate annual benefits payable under these retirement plans to eligible associates in specified compensation and years of service classifications, assuming normal retirement at age 65 in 1999. The named executive officers had, as of December 31, 1999, the following years of service: Eugene S. Kahn, 9 years; Jerome T. Loeb, 35 years; Anthony J. Torcasio, 28 years; R. Dean Wolfe, 27 years; and John L. Dunham, 23 years.
Following the 180-day period, the executive is entitled to benefits only if his employment is actually or constructively terminated other than for cause or disability during the remaining term of the agreement.
Benefits under the severance agreements include (1) a lump sum payment equal to three times the sum of base salary at termination or, if greater, base salary immediately prior to the change in control, plus target bonus with maximum share price adjustment for the year in which the change in control occurs; (2) continued medical and life insurance benefits for 36 months; and (3) eligibility for post-retirement life and medical insurance benefits if the executive is within five years of his eligibility date for those benefits.
Executives who are subject to the insider trading rules of Section 16(b) of the Securities Exchange Act of 1934 also receive a cash payment in cancellation of their stock options. Mr. Kahn's agreement provides for a tax gross-up payment to ensure that his severance benefits are not subject to net reduction because of excise taxes which are payable under Section 4999 of the Internal Revenue Code. Mr. Loeb's agreement provides for a 50% tax gross-up payment.
If a change in control is imminent, we have a trust that we will fund to provide these severance benefits. The trust becomes irrevocable when the change in control occurs.
Each of the named executive officers has a written employment contract. These contracts expire at various dates on or before April 30, 2003.
Executive Stock Ownership. We encourage all associates to align their interests with shareowners by making a personal investment in May stock. We adopted minimum stock ownership guidelines in 1994 for our top management group. Associates can satisfy these minimum guidelines through direct stock ownership, profit sharing plan share equivalents and deferred compensation plan stock units. We expect associates to meet these minimum guidelines within five years of when the guidelines first apply to them.
Ownership Guideline Executive Level (Multiple of Base Salary)Stock Price Performance. The graph below compares our cumulative total shareowner return on a $100 investment in May common stock at the close of the market on January 28, 1995 (the end of fiscal 1994) against the returns of the S&P 500 stock index and the S&P Retail Department Stores Index.
Chief Executive Officer 5.0 times Corporate Senior Management Committee(a) 3.5 times Presidents, Chairmen and Vice Chairmen of Operating Divisions 2.5 times Corporate Executive Vice Presidents and Senior Vice Presidents and the Senior Management Committees of Operating Divisions 1.5 times
(a) Currently includes Mr. Kahn (whose guideline is the CEO guideline above) and six other executive officers.
1994 1995 1996
1997 1998 1999
Named Executive Officer Compensation. Current proxy rules
require us to disclose the compensation of certain executive officers in
each of the last three fiscal years. The summary compensation table on
the following page shows the compensation of those executive officers.
6
Annual Compensation(2) Long-Term Compensation
Awards Payouts Restricted Long-Term All Other Name and Stock Stock Incentive Compen- Principal Position Year Salary(1)(3) Bonus(1)(4) Awards(5) Options (6) Payouts(1)(7) sation(8)
Eugene S. Kahn 1999 $1,237,500 $787,500 $0 85,000 $446,353 $8,000 President and Chief 1998 $1,200,000 $675,000 $5,343,750 225,000 $584,408 $9,024 Executive Officer 1997 $756,250 $301,037 $0 33,750 $206,022 $8,348 Jerome T. Loeb 1999 $1,037,500 $590,626 $0 50,000 $326,821 $8,000 Chairman of the Board 1998 $1,000,000 $562,500 $0 75,000 $470,975 $9,024 1997 $976,250 $370,652 $0 45,000 $284,304 $8,348 Anthony J. Torcasio 1999 $887,500 $405,000 $0 40,000 $210,380 $8,000 Vice Chairman 1998 $825,000 $382,500 $1,858,125 41,250 $282,463 $9,024 1997 $712,500 $282,222 $540,000 33,750 $201,965 $8,348 R. Dean Wolfe 1999 $706,250 $321,750 $1,209,375 22,500 $300,461 $8,000 Executive Vice President- 1998 $672,500 $306,000 $0 22,500 $376,295 $9,024 Acquisitions and Real Estate 1997 $643,750 $244,593 $1,083,750 55,500 $230,758 $8,348 John L. Dunham 1999 $661,250 $321,750 $1,844,297 22,500 $153,411 $8,000 Vice Chairman and 1998 $597,500 $274,500 $0 22,500 $204,651 $9,024 Chief Financial Officer 1997 $509,583 $210,726 $1,014,375 55,500 $141,851 $8,348
1. Total Cash Compensation. As supplemental information, the following table shows the total cash compensation (Salary, Bonus and Long-Term Incentive Payouts) paid to the named executive officers for the fiscal year.
Year Mr. Kahn Mr. Loeb Mr. Torcasio Mr. Wolfe Mr. Dunham 1999 $2,471,353 $1,954,947 $1,502,880 $1,328,461 $1,136,411 1998 $2,459,408 $2,033,475 $1,489,963 $1,354,795 $1,076,651 1997 $1,263,309 $1,631,206 $1,196,687 $1,119,101 $862,1602. The table does not reflect certain non-cash compensation made available to the named executive officers for the last three fiscal years because the aggregate amounts of such compensation are below the required disclosure thresholds.
3. The table reflects salary paid or deferred during the respective fiscal years shown. Annual salary changes normally occur on May 1 of each year.
4. "Bonus" reflects the annual portion of the bonus payable under our executive incentive compensation plan for corporate executives described on page 9. The bonuses were paid or were deferred under our deferred compensation plan. All deferrals would be distributed to participants in lump sum cash payments immediately following a change in control, as defined in the plan.
5. "Restricted Stock" is valued at the average price of the May common stock on the grant date. The aggregate value of the restricted stock owned by each of the named executive officers as of the end of the last fiscal year (at $32.00 per share) was $4,800,000 for Mr. Kahn (150,000 shares), $2,400,000 for Mr. Loeb (75,000 shares), $2,640,000 for Mr. Torcasio (82,500 shares), $1,920,000 for Mr. Wolfe (60,000 shares) and $2,400,000 for Mr. Dunham (75,000 shares). We pay dividends on these shares quarterly. The common stock ownership numbers on pages 2 through 4 include shares of restricted stock. Under some circumstances, restricted shares continue to be forfeitable for up to 10 years from the grant date. Our restricted stock plan and our 1994 Stock Incentive Plan provide that restricted stock grants become fully vested and all restrictions are waived when a change in control, as defined in the plans, occurs.
6. "Stock Options" represent non-qualified 10-year options under our 1976 and 1987 stock option plans and the 1994 Stock Incentive Plan. The plans provide that all outstanding options become fully exercisable upon the occurrence of a change in control, as defined in the plans.
7. "Long-Term Incentive Payouts" represents the long-term portion of the bonus payable under the executive incentive compensation plan for corporate executives. Such amounts were paid or deferred under our deferred compensation plan. For Mr. Wolfe, the amounts also include installments of a long-term bonus arrangement entered into in 1995.
8. "All Other Compensation" represents our effective matching allocation to the named individual's accounts in the profit sharing plan.
7
STOCK OPTION GRANTS IN FISCAL 1999
Percent of Options Total Options Exercise or Expiration Grant Date Name Granted(1) Granted Base Price(2) Date Present Value(3)1. Generally, one-fourth of the options become exercisable on each of the first through fourth anniversaries of the grant date.
Eugene S. Kahn 85,000 2.0% $44.9688 5/12/09 $1,306,450 Jerome T. Loeb 50,000 1.2% $44.9688 5/12/09 $768,500 Anthony J. Torcasio 40,000 0.9% $44.9688 5/12/09 $614,800 R. Dean Wolfe 22,500 0.5% $44.9688 5/12/09 $345,825 John L. Dunham 22,500 0.5% $44.9688 5/12/09 $345,825
2. The exercise price is the market price on the option grant date.
3. We determined the Grant Date Present Values using the Black-Scholes
option pricing model. The estimated values under the model are based on
assumptions as to variables such as option term, interest rates, stock
price volatility and dividend yield. The actual value, if any, the option
holder may realize will depend on the excess of the actual market price
of the stock over the exercise price on the date the option is exercised.
The Grant Date Present Value calculation is presented in accordance with
SEC proxy disclosure requirements, and we have no way to determine whether
the Black-Scholes model can properly determine the value of an option.
We cannot assure that the value that may be realized by the option holder
will be at or near the value estimated by the Black-Scholes model. The
model assumes: (a) a seven year expected life for the options; (b) an interest
rate that represents the interest rate on a U.S. Treasury Bond with a maturity
date corresponding to that of the option's term; (c) stock price
volatility calculated based on daily stock price changes during the year
prior to the grant date; and (d) dividends at the rate of $.89 per share,
the annual dividend rate with respect to a share of stock on the grant
date.
Total Number of Value of Unexercised Shares Total Unexercised Options Held In-the-Money Options(2) Acquired Gain Name on Exercise Realized(1) Exercisable Unexercisable Exercisable Unexercisable2. "In-the Money Options" are options outstanding at the end of the last fiscal year for which the fair market value of May common stock at the end of the last fiscal year ($32.00 per share) exceeded the exercise price of the options.
Eugene S. Kahn 0 $0 237,048 300,668 $1,103,357 $135,394 Jerome T. Loeb 14,910 $325,619 154,206 151,540 $548,172 $68,265 Anthony J. Torcasio 13,260 $212,952 202,257 107,496 $1,326,914 $44,522 R. Dean Wolfe 0 $0 167,632 72,098 $1,182,167 $13,617 John L. Dunham 0 $0 96,575 82,457 $250,140 $32,608
1. The amounts "realized" reflect the appreciation on the date of exercise (based on the excess of the fair market value of the shares on the date of exercise over the exercise price). However, because the executive officers may keep the shares they acquired upon the exercise of the option (or sell them at different prices), these amounts do not reflect cash realized upon the sale of those shares.
Executive Compensation and Development Committee Report. Each member of the executive compensation and development committee is an independent, nonmanagement director. The committee reviews and approves, among other things, the compensation payable to each of the executive officers named in the summary compensation table.
Compensation Philosophy. Our
basic compensation philosophy is that May's compensation program should
Base Salary. We review base salaries
annually. They may be increased after our review based on
As a result of this overall review, including a review of changes in their responsibilities, we recommended increases in 1999 in the
8
annual base salary rates for the named executive officers other than Mr. Dunham of an average of 5%. In connection with Mr. Dunham's promotion to the vice chairman position, we recommended that his base salary increase by 17%.
Bonus Opportunities. May has three performance-based bonus plans covering approximately 3,320 associates. Each plan links a major portion of the associates' potential pay to the associates' performance and to May's performance. The bonus opportunities for the most senior executives and executive officers include both annual and long-term opportunities. Each named executive officer participates in the bonus plan for corporate executives.
Annual Bonus. For 1999, the named executive officers became eligible for annual bonuses of up to 45% (63% for Mr. Kahn and 56.3% for Mr. Loeb ) of base salary. We determined their bonuses based on whether May achieved certain predetermined performance levels (threshold, target or maximum) for (i) earnings per share (EPS) and (ii) return on net assets (RONA) over the year.
The annual bonus may be adjusted in two ways:
While return on equity is the company's principal measure in evaluating its performance for shareowners and its ability to invest shareowners' funds profitably, the bonus plans use RONA in evaluating this element of bonus opportunity to facilitate industry comparisons without having to make adjustments for financial leverage among the competitor group.
In 1999,
Long-Term Bonus. For the three-fiscal-year period that ended in 1999, the named executive officers became eligible for long-term bonuses of up to 45% (63% for Mr. Kahn and 56.3% for Mr. Loeb) of average base salary. We determined their bonuses based on (a) whether May achieved certain predetermined performance levels (threshold, target or maximum) for (i) compound growth rate for EPS and (ii) average RONA over the three-fiscal-year period, and (b) the change in stock price over the three-fiscal-year period.
The long-term bonus may be adjusted in two ways:
- May's performance compared to the EPS and RONA performances of the competitor group. May's rank relative to the competitor group is based on data provided to us by May's independent public accountants.
For the three-year period that ended with fiscal 1999,
Long-Term Stock-Related Incentives. May provides long-term stock-related incentives through stock options and restricted stock. These incentives are designed to attract, retain and motivate management associates, and relate their compensation directly to May's stock performance. We grant stock options at fair market value on the grant date. They have value to the executive only if May's stock price increases. We establish guidelines for the grant of options for all executives, and we specifically approve any grants to the executive officers. We base the guidelines for annual grants on competitive practices and position levels. We approve restricted stock grants in special circumstances.
The named executive officers received annual stock option grants in 1999 consistent with the normal annual grant levels previously established for them. In addition, we awarded special restricted stock grants to Mr. Wolfe and Mr. Dunham. We made these grants based on our assessment that these two individuals had made material contributions to May and that the grants would enhance our ability to retain their services. We made no other special grants to the named executive officers in 1999.
Additional Information. During 1999, we selected and retained an independent compensation consulting firm to study the compensation of the executive group in May's operating divisions and of the senior management committee in the corporate office. The consultants reviewed May's base salary levels, annual and long-term bonus levels, and long-term incentives compared with the compensation packages of a broad group of companies, including the competitor group, other retail companies, and companies in other industries similar in size and complexity to May. Based on the consultants' review, we have determined that May's current compensation program, taking into account base compensation, bonus opportunities, and long-term incentive opportunities, is consistent with and furthers our compensation philosophy.
9
Tax laws and IRS regulations limit the
tax deductibility of executive compensation in excess of $1 million. Certain
exceptions permit tax deductions on this compensation, including exceptions
for performance-based compensation. Our policy continues to be that May
should attempt, wherever reasonably possible, to qualify future compensation
to be tax deductible.
Executive Compensation and Development Committee:
Edward E. Whitacre, Jr., Chairman
Russell E. Palmer
Michael R. Quinlan
Director Compensation. Management directors receive no compensation or fees for serving as a director or for attending board or committee meetings. Nonmanagement directors receive both cash compensation and stock compensation.
Cash compensation includes
Stock compensation includes
Name Audit Executive ECDC Finance Nominating
Mr. Dunham x Mrs. Evans x x Mr. Kahn x* Mrs. Kaplan x x* x Mr. Kilts x x Mr. Loeb x x Mr. Palmer x* x x Mr. Perez x x Mr. Quinlan x x Mr. Stiritz x x x* Mr. Storey x x Mr. Torcasio Mr. Whitacre x x* x Mr. Wolfe 1999 meetings 3 0 4 2 1
We have discussed with the independent public accountants the matters required to be discussed by Statement on Auditing Standards No. 61, Communication with Audit Committees, as amended.
We have received and reviewed the written disclosures and the letter from the independent public accountants required by Independence Standard No. 1, Independence Discussions with Audit Committees, as amended, and have discussed with the independent public accountants their independence.
Based on the reviews and discussions referred to above, we recommend to the board of directors that the financial statements referred to above be included in the Company's Annual Report on Form 10-K.
Audit Committee Members - Fiscal 1999:
Russell E. Palmer, Chairman
Michael R. Quinlan
Marsha J. Evans
William P. Stiritz
Helene L. Kaplan
Robert D. Storey
James M. Kilts
- reviews the compensation payable to store company principals;
- reviews and approves new compensation programs that involve May stock or affect compensation to senior management personnel and store company principals;
- advises management on all other executive compensation matters;
- reviews and monitors management development efforts to ensure development of a group of executives that would provide for adequate and orderly management succession; and
- administers, directly, by delegation or by establishing operating
guidelines, the 1994 Stock Incentive Plan, the Executive Incentive Compensation
Plan for Corporate Executives, the Executive Incentive Compensation Plan
for Company Principals, and the Deferred Compensation Plan.
- reviews and recommends to the board our long-range financial plans,
our capital expenditure program, specific debt and equity placement activities,
financial public relations and communications programs, financial aspects
of proposed acquisitions or divestitures, and the administration and evaluation
of the retirement and profit sharing plans' investments.
- advises the board with respect to criteria relating to director tenure and nonmanagement director compensation; and
- considers suggestions as to nominees for directors from any source, including shareowners.
Upon the recommendation of the audit committee, the board of directors
appointed Arthur Andersen LLP, independent public accountants, as auditors
of the company and its subsidiaries for the fiscal year ending February
3, 2001. This appointment is subject to ratification by you at the annual
meeting. A representative of Arthur Andersen LLP will attend the meeting
to respond to appropriate questions and to make a statement if he so desires.
In fiscal 1999, we paid fees to Arthur Andersen LLP in the aggregate amount
of $2.7 million. The board of directors unanimously recommends
a vote FOR Proposal (b), and your proxy will be so voted unless
you specify otherwise.
REAPPROVAL OF THE EXECUTIVE INCENTIVE COMPENSATION PLAN FOR CORPORATE EXECUTIVES
Proposal (c) on the accompanying proxy card.
Shareowners approved the Executive Incentive Compensation Plan for
Corporate Executives at May's 1995 annual meeting. We are submitting the
plan for reapproval at this meeting to have shareowners reapprove the performance
goals under the plan to meet the requirements for tax deductibility under
Section 162(m)
of the Internal Revenue Code.
This Code section requires that shareowners reapprove the performance goals under the plan every five years.
Overview. The plan provides for annual performance and long-term (three-year) awards. The executive compensation and development committee of the board of directors administers the plan. Members of this committee are "outside directors" under Section 162(m) of the Code.
At this time we cannot determine the benefits under the plan that any person will receive for performance periods that include 2000. However, the summary compensation table on page 7 shows the compensation paid in 1999 under the plan for each of the named executive officers under the columns labeled "Bonus" and "Long-Term Incentive Payouts." In 1999, the seven participants in the plan (including the five named executive officers) received $2,946,376 in annual bonuses and $1,562,370 in long-term bonuses.
Eligibility. Management employees are eligible to participate in the plan. For 2000 and for the long-term performance periods which include 2000, the only participants in the plan are the executive officers named in the summary compensation table and four other executives. The committee designates participants for a particular annual and/or long-term performance period. Performance periods are measured on a fiscal year basis.
Annual Awards. We calculate annual awards as a percentage of the participant's base salary on November 1 of the fiscal year. The committee establishes a maximum percentage that a participant may earn under the plan as an annual award for any annual performance period. This maximum percentage may not be greater than 45% (90% for the chairman of the board or the chief executive officer). For 1999, the maximum dollar amount of any annual award was $1,500,000. For 2000 and later years, the maximum dollar amount of any annual award is $2,000,000.
Performance Measures. The financial performance measures for annual awards are annual earnings per share growth ("EPS Growth") and return on net assets ("RONA") as disclosed in our annual report and as RONA may be adjusted by our independent certified public accountants to exclude non-recurring or extraordinary items that the committee determines are not representative of our ongoing operations.
The committee establishes threshold, target and maximum performance objectives with respect to EPS Growth and RONA for each annual performance period. The percentage of base salary earned will be prorated for actual performance that falls between the threshold and maximum annual objectives.
Adjustment for Relative Rank. Annual
awards are subject to an automatic upward or downward adjustment to reflect
our perfor-
11
mance as compared to a group of competitors designated in advance
by the committee. We determine our relative rank based on data provided
by our independent public accountants. The relative rank adjustment varies
depending on the number of competitors designated by the committee. For
example, if the committee designated six other competitors, then, if we
were to rank first or second, the award for that measure would not be less
than target level; if we were to rank third or fourth, the award for that
measure would not be less than threshold level; and if we were to rank
sixth or seventh, the award for that measure would not be more than threshold
level.
Long-Term Awards. Each long-term performance period consists of three consecutive fiscal years. Long-term performance periods operate concurrently, that is, a new performance period commences annually. For example, fiscal years 1999, 2000, and 2001 constitute one performance period; 2000, 2001, and 2002 a second per-formance period; and 2001, 2002, and 2003 a third performance period.
We calculate long-term awards as a percentage of the participant's average base salary over the three-year period. The maximum percentage that a participant may earn under the plan as a long-term award for any long-term performance period (before any share price adjustment) is 45% (90% for the chairman of the board and the chief executive officer); the maximum is then subject to the share price adjustment described below. For the long-term performance period that ends in 1999, the maximum dollar amount of any long-term award was $1,500,000. For long-term performance periods that end in 2000 and later years, the maximum dollar amount of any long-term award is $2,000,000.
Performance Measures. The financial performance measures for long-term awards are EPS Growth and RONA. We measure EPS Growth by the compound annual growth rate over the three-year performance period. We measure RONA by averaging the returns for each of the three fiscal years of the performance period. The adjustments for relative rank as compared to competitors with respect to annual awards also apply to each long-term award.
As with the annual award portion of the plan, the committee establishes threshold, target and maximum performance objectives with respect to EPS Growth and RONA for each long-term performance period. For actual performance that falls between the threshold and maximum performance objectives, the percentage of average base salary over the three-year period earned will be prorated.
Adjustments for Relative Rank and Change in Market Price. As with the annual award portion of the plan, long-term awards are subject to adjustment based on our relative ranking compared to a group of competitors designated by the committee.
We also adjust long-term awards to reflect changes in the market value of May common stock over the three-year performance period. The award earned is increased or decreased in direct proportion to the percentage increase or decrease in the market price, subject to a maximum increase of 50% of such award and a maximum decrease of 25% of such award.
Discretionary Adjustments of Awards and Percentages. The committee may adjust the annual and long-term awards of any participant upward or downward in its sole and absolute discretion. The committee may not, however, make upward adjustments in awards of a participant whose compensation for the particular year is subject to the limits on tax deductibility in Section 162(m) of the Code.
The affirmative vote of the owners of a majority of the votes cast on the proposal is required to re-approve the plan. The board of directors unanimously recommends a vote FOR Proposal (c), and your proxy will be so voted unless you specify otherwise.
PROPOSAL BY A SHAREOWNER CONCERNING A CLASSIFIED BOARD
Proposal (d) on the accompanying proxy card.
Evelyn Y. Davis, Watergate Office Building, Suite 215, 2600 Virginia
Ave., N.W., Washington, D.C. 20037, who owns 300 shares of May common stock,
has advised us that she plans to introduce the following resolution at
the annual meeting:
We believe that a classified board reduces our vulnerability to certain potentially abusive takeover tactics. It encourages potential acquirers to initiate takeover actions through arm's length negotiations with management and the board of directors. The classified board does not preclude unsolicited acquisition proposals, but by eliminating the threat of imminent removal, positions the incumbent board to act to maximize the value you receive from a potential acquisition.
We also believe that the classified board structure facilitates continuity and stability of leadership and policy, since a majority of the directors at any given time will have prior experience as directors and will be familiar with our business strategies and operations. We firmly believe that directors elected for staggered terms are just as accountable to you as they would be if elected annually.
For all of the reasons described above, the board of directors continues to believe that the classified system is advantageous to May and to you. The board of directors unanimously recommends a vote AGAINST Proposal (d), and your proxy will be so voted unless you specify otherwise.
12
The Union of Needletrades, Industrial and Textile Employees (UNITE),
2100 L Street, N.W., Suite 210, Washington, D.C. 20037, which owns 20,350
shares of May common stock, has advised us that it plans to introduce the
following resolution at the annual meeting:
Given May's failure to keep pace with its competitors in developing a presence on the internet, a critical strategic weakness in our opinion, and sluggish sales in the end of 1999, we do not think our Company should maintain its poison pill, a device that we believe entrenches management and the Board, without shareholder approval.
Under the Rights Plan, 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 May's Junior Participating Preference Shares at a $150 purchase price. The rights will be exercisable if a person or group acquires beneficial ownership of 20% or more of May's outstanding Common Stock or has announced a tender offer upon consummation of which said entity would own 20% or more of May's outstanding Common Stock.
We believe the terms of the rights are designed to discourage or thwart an unwanted takeover of our Company. While May should have appropriate tools to ensure that all shareholders benefit from any proposal to buy the Company, we do not believe the future possibility of a takeover justifies the unilateral implementation of a poison pill. We believe shareholders should have the right to vote on the necessity of such a power-ful tool that could be used to entrench existing management.
Rights plans like ours have become increasingly unpopular in recent years. In 1999, a majority of shareholders at Bergen Brunswig, Georgia Pacific, Lubrizol, and Owens-Corning voted in favor of proposals to redeem or repeal poison pills.
The effects of poison pill rights plans on the trading value of companies' stock have been researched extensively. A 1986 study by the U.S. Securities and Exchange Commission's Office of the Chief Economist stated, "stock-returns evidence suggest 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." A 1992 study by John Pound of Harvard University and Lilli A. Gordon of the Gordon Group found a correlation between high corporate performance and the absence of poison pills.
In light of the debatable economic benefit of our poison pill and the undeniably undemocratic way in which they were assigned to shareholders, we believe these rights should lapse and not be extended, renewed or issued again without a shareholder vote.
The board of directors opposes the foregoing resolution. Your board of directors disagrees with many of the supporting statements in this proposal. Our rights plan does not block the acquisition of May. Rather, it is designed to deter coercive takeover tactics and to otherwise encourage potential acquirors to negotiate directly with the board of directors. The board of directors is in the best position to negotiate on behalf of all shareowners, to evaluate the adequacy of any potential offer, and to protect shareowners against potential abuses during the takeover process, such as partial and two-tiered tender offers and creeping stock accumulation programs, which do not treat all shareowners fairly and equally.
Our rights plan provides the board with the requisite time and flexibility to negotiate on behalf of all of the shareowners, thereby enhancing the board's ability to negotiate the highest possible bid from a potential acquiror, to develop alternatives which may better maximize shareowner value, to preserve the long-term value of the company for the shareowners, and to ensure that all shareowners are treated fairly and equally.
The board of directors is elected by the shareowners and is charged with the responsibility of protecting shareowners' interests. Moreover, a majority of May's fourteen directors are independent - they are neither employees nor officers of May. They add a broad range of experience in business, finance, and the law. All of May's directors are especially sensitive to their fiduciary duty under Delaware law which requires that they act in the best interest of the company and all of the shareowners.
The board of directors may, pursuant to
the terms of the rights plan, redeem the rights to permit an acquisition
that it determines, in the exercise of its fiduciary duties, to be in the
best interest of all shareowners. Moreover, a number of other companies
with existing rights plans have received unsolicited offers and have redeemed
their rights after their directors were satisfied that the transaction,
as negotiated, was fair to and in the best interests of all shareowners.
Thus, experience indicates that rights plans neither prevent unsolicited
offers from occurring, nor prevent companies from being acquired at prices
that are fair and equitable to shareowners. In fact,
GENERAL
Vote Required. The presence, in person or by proxy, of the owners of a majority of the votes entitled to be cast by the shareowners entitled to vote generally at the annual meeting constitutes a quorum. Abstentions and broker nonvotes are counted as present and entitled to vote for quorum purposes. Generally, a nominee may only vote the common stock that it holds for you in accordance with your instructions. However, if it has not received your instructions within 10 days of the meeting, the nominee may vote on matters which the New York Stock Exchange determines are routine. If a nominee cannot vote on a particular matter because it has not received your instructions and because the matter is not routine, this is a "broker nonvote" on that matter.
The vote required to approve each proposal at the meeting is:
Solicitation of Proxies. The accompanying proxy is solicited by the board of directors for use at the May 19, 2000, annual meeting and for use when the meeting reconvenes if it is adjourned or postponed. We will bear the expenses of soliciting proxies. Directors, officers, and regular employees of May may solicit proxies personally, from and through registered owners, nominees, and others acting as principals and as intermediaries. They may solicit proxies by any means, including by mail, telephone, facsimile, or electronic means.
We have retained D.F. King & Co., Inc. to assist in soliciting proxies for a fee of $18,500, plus out-of-pocket expenses. We will, upon request, reimburse brokerage firms and others for their reasonable expenses in forwarding solicitation materials to the beneficial owners of our common stock.
Section 16(a) Beneficial Ownership Reporting Compliance. Section 16(a) of the Securities Exchange Act requires executive officers and directors to file reports of holdings and transactions in May common stock with the SEC. Based on a review of copies of reports provided to us, we believe that our executive officers and directors satisfied all reporting requirements for fiscal 1999.
2001 Shareowner Proposals. If you wish to submit a proposal to include in the proxy statement for the annual shareowners' meeting in 2001, we must receive it on or before December 18, 2000. You should follow the procedures described in Rule 14a-8 of the Securities Exchange Act and send the proposal to our principal executive offices, 611 Olive Street, St. Louis, Missouri 63101-1799, Attention: Secretary.
If you wish to bring matters before shareowners at the 2001 annual meeting other than pursuant to the procedures in Rule 14a-8, you must satisfy the following requirements under our by-laws,
For a copy of our by-laws, please write our secretary at the address given above.
Whether or not you plan to attend the annual meeting, it is important that your shares are represented and voted at the meeting. Please fill out, sign, date, and return your proxy card, or vote by phone or by the Internet as soon as possible. We appreciate your cooperation in giving this matter your immediate attention.
By order of the board of directors.
14
Function. The audit committee shall aid the board in undertaking and fulfilling its responsibilities for conservative, credible and accurate financial reporting to the public, shall provide support for management's efforts to enhance the quality of the Corporation's controls and shall work to provide appropriate avenues of communication between the board of directors and the Corporation's independent public accountants and internal auditors.
Composition and Term. The committee shall be a committee of the board and shall consist exclusively of independent directors (not less than three). The definition of independent directors will be based on New York Stock Exchange rules for audit committees, as amended.
The committee members shall be appointed for one year terms at the annual meeting of the board, upon the recommendation of the nominating committee. The chairman shall be designated by the board.
Administrative Matters. The committee shall meet at such times and from time-to-time as it deems to be appropriate, but not less than three times each year. The committee shall report to the board of directors at the first board meeting following each such committee meeting. Annually the committee shall review and assess the adequacy of its charter. If the audit committee recommends any changes, the board must review those changes. This charter will be filed as an exhibit to the proxy statement in accordance with SEC requirements.
The Corporation's independent public accountants and internal auditors shall attend at least two of the committee's meetings each year. The committee may request members of management or others to attend meetings and provide pertinent information as necessary. The committee shall provide management, the independent public accountants and internal auditors with appropriate opportunities to meet privately with the committee.
Duties and Responsibilities. The duties of the committee shall include the following:
1. Make recommendations to the board of directors as to:
4. Meet annually with general counsel, and outside counsel when appropriate, to review legal and regulatory matters, if any, that may have a material impact on the financial statements;
5. Recommend annually to the board of directors that based upon reviews and discussions described in items 1-4 above that the financial statements for the fiscal year then ended should be included in the company's annual report on Form 10-K;
6. Review the coordination between the independent public accountants and internal auditors and review the risk assessment process, scopes and procedures of the Corporation's internal audit work and whether such risk assessment process, scopes and procedures are adequate to attain the internal audit objectives, as determined by the Corporation's management and approved by the committee; review the significant findings of the internal auditors for each fiscal year; review the quality and composition of the Corporation's internal audit staff; and review and approve the internal audit charter on a periodic basis;
7. Review annually the distribution and acknowledgment process related to the Policy on Business Conduct and review the results of the Corporation's internal audit work of this process, including the types of exceptions reported by associates;
8. Review annually the Corporation's policies and procedures with respect to officers' travel and entertainment expenses and corporate jet usage and consider the results and recommendations of any audit work in these areas performed by the independent public accountants and internal auditors; and
9. Make a periodic self assessment of the committee, including a review of the charter, using assessment tools available through third parties or developed internally.
The committee shall also undertake such additional
activities within the scope of its primary function as the committee may
from time to time determine. The committee may retain independent counsel,
accountants, or others to assist it in the conduct of any investigation.
Proxy Cards:The May Department Stores Company encourages you to take
advantage of two new and convenient ways to vote your shares. You may now
vote your shares 24 hours a day, 7 days a week, either over the Internet
or using a touch-tone telephone. Your Internet or telephone vote authorizes
the named proxies to vote your shares in the same manner as if you marked,
signed and returned your proxy card. If you vote by Internet or telephone
you do not need to mail back your proxy card.
If you vote over the Internet, you may also elect to receive future
annual reports and proxy statements via the Internet.
Telephone
- Using a touch-tone telephone, dial 1/800-690-6903.
- Have this proxy card in hand.
- Enter the Control Number located below.
- Follow the simple instructions.
Mail
- Mark and sign the proxy card below.
- Detach the proxy card.
- Return the proxy card in the postage-paid envelope provided.
_________________________________________________________
Control Number
_________________________________________________________
_________________________________________________________
Admission Ticket
This is your Admission Ticket to May's 2000
Annual Meeting of Shareowners.
_________________________________________________________
MAY The directors recommend
a vote FOR items (a), (b), and (c).
The directors
recommend a vote AGAINST items (d) and (e).
Please mark all choices like this
/x/
Election of Directors:
(a) (01) John L. Dunham, (02) Jerome T. Loeb, (03) Russell
E. Palmer, (04) Michael R. Quinlan, (05) William P. Stiritz
For Withhold For All
To withhold authority to vote, mark "For All
All All
Except: Except" and write the
nominees's number on the line below.
/ / / /
/ / ________________________________
Directors recommend a vote FOR items (b) and (c).
For Against Abstain
(b) Ratification of the appointment
/ / / /
/ /
of independent auditors
For Against Abstain
(c) Reapproval of May's Executive
/ / / /
/ /
Incentive Compensation Plan for
Corporate Executives
Directors recommend a vote AGAINST items (d) and (e).
For Against Abstain
(d) Proposal by a shareowner
/ / / /
/ /
concerning a classified board
For Against Abstain
(e) Proposal by a shareowner
/ / / /
/ /
concerning May's shareowner rights plan
__________________________________________________
__________________________________________________
Signature [PLEASE SIGN WITHIN BOX]
Date
__________________________________________________
__________________________________________________
Signature (Joint Owners)
Date
Fold and detach Proxy Card here
if you are not voting by Internet or Telephone
------------------------------------------------------------------------------
MAY PROXY
THE MAY DEPARTMENT STORES COMPANY
This proxy is solicited on behalf of the board of directors for the annual meeting on May 19, 2000.
By signing this card, the undersigned appoints each of Eugene S.
Kahn,
Alan E. Charlson, and Richard A. Brickson, as proxy, with full
power of
substitution, to vote all common shares of the undersigned in The
May
Department Stores Company at the May 19, 2000 annual meeting of
shareowners, or when the meeting reconvenes if it is adjourned or postponed,
on all subjects that may properly come before the meeting, subject to the
directions on the other side of this card. This card is also the undersigned's
voting instruction for any and all shares held of record by The Bank of
New York for the undersigned's account in our Dividend Reinvestment Plan.
The board of directors recommends a vote FOR election of all listed
director nominees, FOR proposals (b) and(c), and AGAINST proposals (d)
and (e). If no directions are given, and this signed card is returned,
the undersigned understands that the proxies will vote in accordance with
recommendations of the board of directors and in each proxy's discretion
on any other matters that are properly raised at the meeting or when the
meeting reconvenes if it is adjourned or postponed. See "Proxy Statement
- General - Other Matters" in May's proxy statement for the 2000 annual
meeting.
The nominees for the board of directors are John L. Dunham,
Jerome T. Loeb, Russell E. Palmer, Michael R. Quinlan, and William P. Stiritz.
Please vote by Internet or telephone, or sign the other side of
this card and return it promptly in the enclosed return envelope to: The
May Department Stores Company, c/o ADP, 51 Mercedes Way, Edgewood, NY 11717.
The May Department Stores Company encourages you to take advantage
of two new and convenient ways to vote your shares. You may now vote your
shares 24 hours a day, 7 days a week, either over the Internet or using
a touch-tone telephone. Your Internet or telephone vote authorizes the
named proxies to vote your shares in the same manner as if you marked,
signed and returned your proxy card. If you vote by Internet or telephone
you do not need to mail back your voting instruction card.
If you vote over the Internet, you may also elect to receive future annual reports and proxy statements via the Internet.
Telephone
- Using a touch-tone telephone, dial 1/800-690-6903.
- Have this voting instruction card in hand.
- Enter the Control Number located below.
- Follow the simple instructions.
Mail
- Mark and sign the voting instruction card below.
- Detach the voting instruction card.
- Return the voting instruction card in the postage-paid envelope
provided.
_________________________________________________________
Control Number
_________________________________________________________
Fold and detach Voting
Instruction Card here
if you are not voting
by Internet or Telephone
------------------------------------------------------------------------------
MAY The directors recommend a vote FOR items
(a), (b), and (c).
The directors recommend
a vote AGAINST items (d) and (e).
Please mark all choices like this /x/
Election of Directors:
(a) (01) John L. Dunham, (02) Jerome T. Loeb, (03) Russell E. Palmer,
(04) Michael R. Quinlan, (05) William P. Stiritz
For Withhold
For All To withhold authority
to vote, mark "For All
All All
Except: Except" and write the
nominees's number on the line below.
/ / / /
/ / ________________________________
Directors recommend a vote FOR items (b) and (c).
For Against
Abstain
(b) Ratification of the appointment
/ / / /
/ /
of independent auditors
For Against
Abstain
(c) Reapproval of May's Executive Incentive
/ / / /
/ /
Compensation Plan for Corporate Executives
Directors recommend a vote AGAINST items (d) and (e).
For Against
Abstain
(d) Proposal by a shareowner
/ / / /
/ /
concerning a classified board
For Against
Abstain
(e) Proposal by a shareowner
/ / / /
/ /
concerning May's shareowner rights plan
___________________________________________________
___________________________________________________
Signature [PLEASE SIGN WITHIN BOX]
Date
___________________________________________________
___________________________________________________
Signature (Joint Owners)
Date
MAY
The May Department Stores Company
611 Olive Street
St. Louis, Missouri 63101-1799
Dear Fellow Member of the Profit Sharing Plan:
Thanks to the hard work and continued dedication that each of you
bring to your job every day, we achieved our 25th consecutive year of record
sales and earnings per share. The 1999 effective matching rate for the
Profit Sharing Plan was 100%, the fourth consecutive year that the match
was 100% or more. This year's annual report salutes you. We feature on
pages 14 to 16 associates who represent the thousands of May associates
whose high level of performance and dedicated support of May's commitment
to treating the customer right has made our stores better places to shop.
We have enclosed the 1999 annual report, the proxy statement for
the 2000 annual meeting, a confidential voting instruction card, and a
return envelope. The proxy statement describes the proposals you may vote
on as well as the recommendations of the board and management. As a Profit
Sharing Plan participant, you may instruct the trustee, The Bank of New
York, how to vote the May shares attributable to your plan account. The
trustee may not disclose your instructions.
This year you have three ways you can vote. You may vote over the
Internet, by telephone or by signing, dating, and returning the confidential
voting instruction card in the enclosed postage-pad envelope. Your vote
is very important to our company.
Thank you for your continued support and commitment to May.
Very truly yours,
/s/ Eugene S. Kahn
/s/ Jerome T. Loeb
Eugene S. Kahn
Jerome T. Loeb
President and
Chairman of the Board
Chief Executive Officer
Fold and detach
Voting Instruction Card here
if you are not
voting by Internet or Telephone
------------------------------------------------------------------------------
MAY CONFIDENTIAL VOTING
INSTRUCTIONS TO THE BANK OF NEW YORK AS TRUSTEE UNDER THE MAY
DEPARTMENT
STORES COMPANY PROFIT SHARING PLAN
By signing this card, I appoint the Trustee to vote all shares of
common stock of The May Department Stores Company represented by units
credited to my account in the May Common Stock Fund of the Profit Sharing
Plan and all shares of ESOP Preference Shares of the company credited to
my account in the ESOP Preference Fund of the Profit Sharing Plan, all
as of February 29, 2000 (the latest practicable Valuation Date), at the
May 19, 2000 annual meeting of shareowners, or when the meeting reconvenes
if it is adjourned or postponed, on all subjects that may properly come
before the meeting, subject to the directions on the other side of this
card.
The board of directors recommends a vote FOR election of all listed
director nominees, FOR proposals (b) and (c), and AGAINST proposals (d)
and (e). If no directions are given, and this signed card is returned,
I understand that the Trustee will vote in accordance with recommendations
of the board of directors and in its discretion on any other matters that
are properly raised at the meeting or when the meeting reconvenes if it
is adjourned or postponed. See "Proxy Statement - General - Other Matters"
in May's proxy statement for the 2000 annual meeting. If this card is not
received by the Trustee on or before May 12, 2000, the Trustee will vote
my shares in the same proportion as the other shares held by the Trustee
are voted pursuant to instructions received from other participants in
the Profit Sharing Plan.
The nominees for the board of directors are John L. Dunham, Jerome
T. Loeb, Russell E. Palmer, Michael R. Quinlan, and William P. Stiritz.
Please vote by Internet or telephone, or sign the other side of
this card and return it promptly in the enclosed return envelope to: The
May Department Stores Company, c/o ADP, 51 Mercedes Way, Edgewood, NY 11717.
The May Department Stores Company encourages you to take advantage
of two new and convenient ways to vote your shares. You may now vote your
shares 24 hours a day, 7 days a week, either over the Internet or using
a touch-tone telephone. Your Internet or telephone vote authorizes the
named proxies to vote your shares in the same manner as if you marked,
signed and returned your proxy card. If you vote by Internet or telephone
you do not need to mail back your voting instruction card.
If you vote over the Internet, you may also elect to receive future annual reports and proxy statements via the Internet.
Mail
- Mark and sign the voting instruction card below.
- Detach the voting instruction card.
- Return the voting instruction card in the postage-paid envelope
provided.
_________________________________________________________
Control Number
_________________________________________________________
Fold and detach Voting Instruction
Card here
if you are not voting by Internet
or Telephone
------------------------------------------------------------------------------
MAY The directors
recommend a vote FOR items (a), (b), and (c).
The directors recommend a vote AGAINST items (d) and (e).
Please mark all choices like this /x/
Election of Directors:
(a) (01) John L. Dunham, (02) Jerome T. Loeb, (03) Russell E. Palmer,
(04) Michael R. Quinlan, (05) William P. Stiritz
For Withhold For All
To withhold authority to vote, mark "For All
All All
Except: Except" and write the nominees's
number on the line below.
/ / / /
/ / ________________________________
Directors recommend a vote FOR items (b) and (c).
For Against Abstain
(b) Ratification of the appointment
/ / / /
/ /
of independent auditors
For Against Abstain
(c) Reapproval of May's Executive Incentive
/ / / /
/ /
Compensation Plan for Corporate Executives
Directors recommend a vote AGAINST items (d) and (e).
For Against Abstain
(d) Proposal by a shareowner
/ / / /
/ /
concerning a classified board
For Against Abstain
(e) Proposal by a shareowner
/ / / /
/ /
concerning May's shareowner rights plan
___________________________________________________
___________________________________________________
Signature [PLEASE SIGN WITHIN BOX]
Date
___________________________________________________
___________________________________________________
Signature (Joint Owners)
Date
MAY
The May Department Stores Company
611 Olive Street
St. Louis, Missouri 63101-1799
Dear Member of the ZCMI 401(k) Savings Plan:
Thanks to your hard work and dedication, during 1999 we successfully
completed the merger of ZCMI with May. With your help, we reopened 13 ZCMI
stores in Utah and Idaho in early 2000, giving May a first-time presence
in those states. We are pleased to have you as a shareowner of May.
We have enclosed May's 1999 annual report, the proxy statement for
our 2000 annual meeting, a confidential voting instruction card, and a
return envelope. The proxy statement describes the proposals you may vote
on as well as the recommendations of May's board and management. As a ZCMI
401(k) Savings Plan participant, you may instruct the trustee, Zions First
National Bank, how to vote the May shares in your plan account. The trustee
may not disclose your instructions.
This year you have three ways you can vote. You may vote over the
Internet, by telephone or by signing, dating, and returning the confidential
voting instruction card in the enclosed postage-pad envelope. Your vote
is very important to our company.
Thank you for your continued support and commitment to May.
Very truly yours,
/s/ Eugene S. Kahn
/s/ Jerome T. Loeb
Eugene S. Kahn
Jerome T. Loeb
President and
Chairman of the Board
Chief Executive Officer
Fold and detach
Voting Instruction Card here
if you are not
voting by Internet or Telephone
------------------------------------------------------------------------------
MAY CONFIDENTIAL VOTING INSTRUCTIONS
TO ZIONS FIRST NATIONAL BANK
AS TRUSTEE
UNDER THE ZCMI 401(k) SAVINGS PLAN
By signing this card, I appoint the Trustee to vote all shares of
common stock of The May Department Stores Company credited to my account
in the Employer Stock Fund of the ZCMI 401(k) Savings Plan as of February
29, 2000 (the latest practicable Valuation Date), at the May 19, 2000 annual
meeting of shareowners, or when the meeting reconvenes if it is adjourned
or postponed, on all subjects that may properly come before the meeting,
subject to the directions on the other side of this card.
The board of directors recommends a vote FOR election of all listed
director nominees, FOR proposals (b) and (c), and AGAINST proposals (d)
and (e). If no directions are given, and this signed card is returned,
I understand that the Trustee will vote in accordance with recommendations
of the board of directors and in its discretion on any other matters that
are properly raised at the meeting or when the meeting reconvenes if it
is adjourned or postponed. See "Proxy Statement - General - Other Matters"
in May's proxy statement for the 2000 annual meeting. If this card is not
received by the Trustee on or before May 12, 2000, the Trustee will vote
my shares in the same proportion as the other shares held by the Trustee
are voted pursuant to instructions received from other participants in
the ZCMI 401(k) Savings Plan.
The nominees for the board of directors are John L. Dunham, Jerome
T. Loeb, Russell E. Palmer, Michael R. Quinlan, and William P. Stiritz.
Please vote by Internet or telephone, or sign the other side of
this card and return it promptly in the enclosed return envelope to: The
May Department Stores Company, c/o ADP, 51 Mercedes Way, Edgewood, NY 11717.
Page 6 of the printed proxy statement contains a Stock Price Performance Graph. The information in the graph is presented in a tabular format immediately following the graph.
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