<PAGE> 1
SCHEDULE 14A
(RULE 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. )
Filed by the registrant [X]
Filed by a party other than the registrant [ ]
Check the appropriate box:
[ ] Preliminary proxy statement [ ] Confidential, for Use of the
Commission Only (as permitted by
Rule 14a-6(e)(2))
[X] Definitive proxy statement
[ ] Definitive additional materials
[ ] Soliciting material pursuant to Rule 14a-11(c) or Rule 14a-12
HERMAN MILLER, INC.
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(Name of Registrant as Specified in Its Charter)
HERMAN MILLER, INC.
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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:
- --------------------------------------------------------------------------------
(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.
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[ ] 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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<PAGE> 2
[HERMAN MILLER LOGO]
1997
NOTICE OF 1997 ANNUAL MEETING OF SHAREHOLDERS
AND PROXY STATEMENT
August 25, 1997
Dear Shareholder:
Herman Miller, Inc.'s fiscal year ended May 31, 1997. Enclosed you will find
this year's Annual Report and a proxy card to vote your shares. Also, let us
know if you expect to attend the annual Shareholders Meeting scheduled for
October 1, 1997, by mailing a reservation card or by contacting Robbie Kroll at
616-654-3305.
We will be meeting at a new location this year. The Shareholders Meeting will
take place at the Zeeland High School Performing Arts Center, 3333 - 96th
Avenue, Zeeland, Michigan. (A map is enclosed.) Chairman of the Board David
Nelson will convene the business meeting promptly at 4 p.m. EDT. Please allow
time for parking and registration. After the business meeting, we will serve
hors d'oeuvres and light refreshments to all who indicate on the reservation
card that they will be staying.
The Annual Report discusses our performance for fiscal 1997 and presents some
of the reasons behind a great year at Herman Miller. If you have any questions
for us or for other senior managers, please write them on the enclosed card and
return it to us. If there isn't time at the meeting to answer all the
questions we receive, a member of our team or one of us will mail you a
response. We will also take questions during the meeting.
During the business meeting, we will elect five directors to the Board of
Directors, vote to increase the authorized common stock, ratify Arthur Andersen
LLP as our independent public accountants, and transact any other business as
may come before the meeting.
We hope to see you there.
Sincerely,
/s/ Michael A. Volkema /s/ David L. Nelson
Michael A. Volkema David L. Nelson
President and Chief Executive Officer Chairman of the Board of Directors
YOUR VOTE IS IMPORTANT.
PLEASE COMPLETE, SIGN, DATE
AND PROMPTLY RETURN YOUR PROXY
CARD IN THE ENCLOSED ENVELOPE
<PAGE> 3
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
The annual meeting of the shareholders of Herman Miller, Inc. (the
"Company"), will be held at the Zeeland High School Performing Arts Center,
3333 - 96th Avenue, Zeeland, Michigan, on Wednesday, the 1st of October, 1997,
at 4 p.m. (E.D.T.) for the following purposes:
1. To elect four directors, each for a term of three years, and
one director for a term of one year.
2. To consider and vote upon a proposal to amend the Company's
Articles of Incorporation to increase the authorized common
stock from 60,000,000 shares to 120,000,000 shares of common
stock, $.20 par value.
3. To consider and act upon a proposal to ratify the appointment
of Arthur Andersen LLP as independent public accountants for
the Company for the fiscal year ending May 30, 1998.
4. To transact such other business as may properly come before
the meeting or any adjournment thereof.
Shareholders of record at the close of business on August 4, 1997,
will be entitled to vote at the meeting.
Whether or not you expect to be present at this meeting, you are urged
to sign the enclosed proxy and return it promptly in the enclosed envelope. If
you do attend the meeting and wish to vote in person, you may do so even though
you have submitted a proxy.
By order of the Board of Directors
James N. DeBoer, Jr., Secretary of the Board
August 25, 1997
<PAGE> 4
HERMAN MILLER, INC.
855 East Main Avenue
P.O. Box 302
Zeeland, Michigan 49464-0302
PROXY STATEMENT DATED AUGUST 25, 1997
This Proxy Statement is furnished to the shareholders of Herman
Miller, Inc. (the "Company"), in connection with the solicitation by the Board
of Directors of proxies to be used at the Annual Meeting of Shareholders. This
meeting will be held on Wednesday, October 1, 1997, at 4 p.m. (E.D.T.) at the
Zeeland High School Performing Arts Center, 3333 - 96th Avenue, Zeeland,
Michigan.
SOLICITATION OF PROXIES
Each shareholder, as an owner of the Company, is entitled to vote on
matters scheduled to come before the Annual Meeting. The use of proxies allows
a shareholder of the Company to be represented at the Annual Meeting if he or
she is unable to attend the meeting in person. The proxy card accompanying this
Proxy Statement is to be used for such purpose.
If the proxy card is properly executed and returned to the Company,
the shares represented by the proxy will be voted at the Annual Meeting of
Shareholders and at any adjournment of that meeting. Where shareholders specify
a choice, the proxy will be voted as specified. If no choice is specified, the
shares represented by the proxy will be voted for the election of all nominees
named in the proxy and for the proposals described in this Proxy Statement.
A proxy may be revoked prior to its exercise by (1) delivering a
written notice of revocation to the Secretary of the Company, (2) executing a
proxy at a later date, or (3) attending the meeting and voting in person.
However, attendance at the meeting does not automatically serve to revoke a
proxy.
ELECTION OF DIRECTORS
The Board of Directors has nominated James R. Carreker, C. William
Pollard, Ruth A. Reister, and Richard H. Ruch, for election to serve as members
whose terms expire at the 2000 annual meeting. Each of the nominees previously
has been elected as a director by the Company's shareholders, except for Mr.
Carreker who was elected by the Board in January 1997. Dr. Charles Ray will
retire at the annual meeting in accordance with the Company's bylaws requiring
a director to retire at the annual meeting following his seventieth birthday.
The Board of Directors has nominated Dorothy A. Terrell for election as a
director for a one-year term to expire at the 1998 annual meeting, to fill the
vacancy created by Dr. Ray's retirement.
The latter portion of this Proxy Statement contains more information
about the nominees. Unless otherwise directed by a shareholder's proxy, the
persons named as proxy voters in the accompanying proxy will vote for the
nominees named above. If any of the nominees become unavailable, which is not
anticipated, the Board of Directors, at its discretion, may designate
substitute nominees, in which event the enclosed proxy will be voted for such
substituted nominees. Proxies cannot be voted for a greater number of persons
than the number of nominees named.
A plurality of the votes cast at the meeting is required to elect the
nominees as directors of the Company. Accordingly, the four individuals who
receive the largest number of votes cast at the meeting will be elected as
directors. Shares not voted at the meeting, whether by abstention, broker
nonvote, or otherwise, will not be treated as votes cast at the meeting. The
Board of Directors recommends a vote FOR the election of all persons nominated
by the Board.
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<PAGE> 5
PROPOSED INCREASE IN AUTHORIZED COMMON STOCK
The Company's Board of Directors has proposed that the first paragraph
of Article III of the Company's Articles of Incorporation (the "Articles") be
amended to read as follows:
The total number of shares of all classes of stock which the
Corporation shall have the authority to issue is one hundred
thirty million (130,000,000) shares, of which one hundred
twenty million (120,000,000) shares shall be common stock of
the par value of $.20 per share and ten million shares
(10,000,000) shares shall be series preferred stock, without
par value.
This amendment would increase the Company's authorized common stock
from 60,000,000 shares to 120,000,000 shares of common stock, $.20 par value.
The purpose of the amendment is to provide additional shares of common stock
for future issuance. As of August 4, 1997, there were 46,114,043 shares of
common stock issued and outstanding and 3,279,068 shares of common stock
reserved for issuance under the Company's Stock Compensation Plans and Employee
Stock Purchase Plan. As a result, as of August 4, 1997, only 10,606,889 shares
of common stock remain available for future issuance. The Company has no
series preferred stock issued or outstanding and the proposed amendment to the
Articles would not effect the 10,000,000 shares of presently authorized series
preferred stock.
The Board of Directors believes it desirable to increase the
authorized number of shares of common stock in order to provide the Company
with adequate flexibility in corporate planning and strategies. The
availability of additional common stock for issuance could be used in
connection with a number of purposes, including corporate financing, future
acquisitions, and other corporate purposes such as the issuance of stock
dividends and stock options. There are currently no agreements or
understandings regarding the issuance of any of the additional shares of common
stock that would be available if this proposal is approved. Such additional
authorized shares may be issued for such purposes and for such consideration as
the Board of Directors may determine without further shareholder approval,
unless such action is required by applicable law or the rules of any stock
exchange on which the Company's securities may be listed.
The additional shares of Common Stock for which authorization is
sought would be part of the existing class of common stock, and, to the extent
issued, would have the same rights and privileges as the shares of common stock
presently outstanding. Ownership of shares of the Company's common stock
confers no preemptive rights.
The increase in the authorized but unissued shares of common stock
which would result from adoption of the proposed amendment could have a
potential anti-takeover effect with respect to the Company, although management
is not presenting the proposal for that reason and does not presently
anticipate using the increased authorized shares for such a purpose. The
potential anti-takeover effect of the proposed amendment arises because it
would enable the Company to issue additional shares of common stock up to the
total authorized number with the effect that the shareholdings and related
voting rights of then existing shareholders would be diluted to an extent
proportionate to the number of additional shares issued.
The affirmative vote of the holders of a majority of the outstanding
shares of common stock of the Company is required for approval of the proposed
amendment. Unless otherwise directed by a shareholder's proxy, the persons
named as proxy voters in the accompanying proxy will vote FOR the amendment.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE APPROVAL OF THE
PROPOSED AMENDMENT TO THE COMPANY'S ARTICLES OF INCORPORATION TO INCREASE THE
NUMBER OF SHARES OF AUTHORIZED COMMON STOCK.
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<PAGE> 6
RATIFICATION OF APPOINTMENT OF INDEPENDENT PUBLIC ACCOUNTANTS
The Board of Directors has appointed Arthur Andersen LLP as
independent public accountants for the Company for the fiscal year ending May
30, 1998. Representatives of Arthur Andersen LLP will be present at the annual
meeting of shareholders and available to respond to appropriate questions. The
Arthur Andersen LLP representatives will have the opportunity to make a
statement if they so desire.
Although the submission of this matter for approval by shareholders is
not legally required, the Board of Directors believes that such submission
follows sound corporate business practice and is in the best interests of the
shareholders. If the shareholders do not approve the selection of Arthur
Andersen LLP, the selection of such firm as independent public accountants for
the Company will be reconsidered by the Board of Directors.
The Board of Directors recommends a vote FOR the ratification of the
appointment of Arthur Andersen LLP as the Company's independent public
accountants.
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<PAGE> 7
VOTING SECURITIES AND PRINCIPAL SHAREHOLDERS
On August 4, 1997, the Company had 46,114,043 shares of common stock
issued and outstanding, par value $.20 per share. Shareholders are entitled to
one vote for each share of common stock registered in their names at the close
of business on August 4, 1997, the record date fixed by the Board of Directors.
Votes cast at the meeting and submitted by proxy will be tabulated by the
Company's transfer agent. As of August 4, 1997, no person was known by
management to be the beneficial owner of more than 5 percent of the Company's
common stock.
DIRECTOR AND EXECUTIVE OFFICER INFORMATION
SECURITY OWNERSHIP OF MANAGEMENT. The following table shows, as of
August 4, 1997, the number of shares beneficially owned by each of the Named
Executives identified in the executive compensation tables of this Proxy
Statement and by all directors and executive officers as a group. Except as
described in the notes following the table, the following persons have sole
voting and dispositive power as to all of their respective shares.
<TABLE>
<CAPTION>
AMOUNT AND NATURE
NAMED EXECUTIVE OF BENEFICIAL OWNERSHIP(1) PERCENT OF CLASS(3)
<S> <C> <C>
Michael A. Volkema 338,607 .72%
Andrew C. McGregor 124,264 .27%
Christopher A. Norman 90,751 .19%
Brian C. Walker 68,408 .15%
Gary S. Miller 122,868 .26%
All executive officers and directors 1,571,029(2) 3.35%
as a group (22 persons)
</TABLE>
(1) Includes the following numbers of shares with respect to which the
Named Executives have the right to acquire beneficial ownership under
stock options exercisable in 60 days: Mr. Volkema - 80,000; Mr.
McGregor - 86,000; Mr. Norman - 65,200; Mr. Walker - 44,000; and Mr.
Miller - 98,478. Includes the following number of shares which are
restricted and subject to certain conditions: Mr. Volkema - 157,188;
Mr. McGregor - 31,650; Mr. Norman - 21,650; Mr. Walker - 22,850; and
Mr. Miller - 30,000.
(2) Included in this number are 731,578 shares with respect to which
executive officers and directors have the right to acquire beneficial
ownership under options exercisable within 60 days.
(3) Calculated based on the number of shares outstanding plus the option
shares referred to in notes (1) and (2) above.
-4-
<PAGE> 8
THE BOARD OF DIRECTORS. The information in the following table
relating to each nominee's and director's age, principal occupation or
employment for the past five years, and beneficial ownership of shares of
common stock as of August 4, 1997, has been furnished to the Company by the
respective nominees and directors. Except as described in the notes following
the table, the following nominees and directors have sole voting and
dispositive power as to all of the shares set forth in the following table.
<TABLE>
<CAPTION>
YEAR FIRST
BECAME A SHARES PERCENT OF
NAME AND PRINCIPAL OCCUPATION AGE DIRECTOR OWNED(1) CLASS(2)
<S> <C> <C> <C> <C>
NOMINEES FOR ELECTION AS DIRECTORS FOR TERMS TO EXPIRE IN 2000
C. William Pollard 59 1985 49,723(3) .11
Chairman of the Board,The ServiceMaster Company
(Management and Consumer Services for Health
Care, Industrial,and Educational Facilities)
Ruth Alkema Reister 61 1985 37,910(4) .08
Private Investments and Civic and Charitable Activities
Richard H. Ruch 67 1986 205,616(5) .44
From July 1995 to October 1995--Chairman of the Board,
Herman Miller, Inc.
From April 1992 to July 1995--Vice Chairman of the
Board, Herman Miller, Inc.
James R. Carreker 50 1997 466 .001
Since October 1995-Chairman of the Board and CEO
of Aspect Telecommunications Corp.
From August 1985-October 1995-President and CEO
of Aspect Telecommunications Corp.
NOMINEE FOR ELECTION AS DIRECTOR FOR TERM TO EXPIRE IN 1998:
Dorothy A. Terrell 52 --- -0- -0-
President, Sun Express, Inc.-Corporate Officer,
Sun Microsystems, Inc.
DIRECTORS WHOSE TERMS EXPIRE IN 1998:
Dr. E. David Crockett 61 1982 37,438 .08
Since November 1992--Chairman of the Board,
Cornerstone Imaging, Inc. (Document Image
Processing)
Since May 1991--General Partner, Aspen Ventures
(Venture Capitalists)
David L. Nelson 67 1972 97,438(6) .21
Since October 1995--Chairman of the Board,
Herman Miller, Inc.
From January 1994--Vice President, Customer Support,
America's Region , Asea, Brown, Boveri, Inc.
Prior to January 1994--Vice President, Customer
Satisfaction, Industry Segment, Asea, Brown,
Boveri, Inc. (Electronics Manufacturer)
</TABLE>
-5-
<PAGE> 9
<TABLE>
<CAPTION>
YEAR FIRST
BECAME A SHARES PERCENT OF
NAME AND PRINCIPAL OCCUPATION AGE DIRECTOR OWNED(1) CLASS(2)
<S> <C> <C> <C> <C>
Michael A. Volkema 41 1995 338,607(7) .72
Since July 1995- Chief Executive Officer, Herman
Miller, Inc.
Since May 1995- President, Herman Miller, Inc.
From February 1995 to May 1995- President and Chief
Executive Officer, Coro, Inc. (a subsidiary of
Herman Miller, Inc.)
From May 1993 to September 1994- Chairman of the
Board, Meridian, Inc. (a subsidiary of Herman
Miller, Inc.)
Prior to May 1993- President, Meridian, Inc. (a
subsidiary of Herman Miller, Inc.)
DIRECTORS WHOSE TERMS EXPIRE IN 1999:
J. Harold Chandler 48 1995 8,838 .02
Since November 1993--Chairman, President and Chief
Executive Officer, Provident Companies, Inc.
From June 1993 to November 1993--President,
MidAtlantic NationsBank and Maryland National
Corporation
From January 1992 to June 1993--President,
NationsBank/Washington, D.C., Maryland, and N.
Virginia
William K. Brehm 68 1991 21,388 .05
Chairman of the Board, SRA International, Inc.
(Systems Integrator and Information Technology
Consulting)
Brian Griffiths, Lord Griffiths of Fforestfach 55 1991 23,709 .05
Since 1990--International Advisor, Goldman Sachs
International Limited (International Investment
Banking
</TABLE>
(1) Shares shown for each director who is not an officer of the Company
include 67,000 shares for Mr. Nelson; 27,000 shares for Messrs.
Crockett, Pollard, and Ms. Reister; 18,000 shares for Mr. Griffiths;
6,000 shares for Mr. Brehm; and 3,000 shares for Mr. Chandler with
respect to which the director has the right to acquire beneficial
ownership under options exercisable within 60 days.
(2) Percentages are calculated based upon shares outstanding, plus shares
which the director has the right to acquire under stock options
exercisable within 60 days.
(3) Includes 806 shares owned of record and beneficially by Mr. Pollard's
wife. Mr. Pollard disclaims beneficial ownership of these shares.
(4) Includes 1,200 shares owned by Mrs. Resister's husband. Mrs. Reister
disclaims beneficial ownership of these shares.
(5) Includes 12,000 shares with respect to which Mr. Ruch has a right to
acquire beneficial ownership under options exercisable within 60 days.
In addition, Mr. Ruch's wife owns 9,800 shares to which Mr. Ruch
disclaims beneficial ownership and a Ruch Family Foundation Charitable
Trust owns 21,838 shares to which Mr. Ruch disclaims beneficial
ownership.
(6) Shares are owned jointly by Mr. Nelson and his wife. Includes 2,400
shares owned of record and beneficially by Mr. Nelson's wife, with
respect to which Mr. Nelson disclaims beneficial ownership.
(7) Includes 80,000 shares with respect to which Mr. Volkema has a right
to acquire beneficial ownership under options exercisable within 60
days and 157,188 shares of restricted stock which are subject to
forfeiture under certain conditions.
-6-
<PAGE> 10
Mr. Carreker also is a director of Aspect Telecommunication
Corporation. Mr. Chandler is also a director of Provident Companies, Inc.,
AmSouth Bancorporation and Storage Technology Corp. Mr. Crockett also is a
director of Cornerstone Imaging, Inc., and Metatec Corporation. Brian
Griffiths, Lord Griffiths of Fforestfach, also is a director of The
ServiceMaster Company. Mr. Nelson also is a director and trustee of Cardinal
Fund, Inc. Mr. Pollard also is a director of The ServiceMaster Company and
Provident Companies, Inc. Ms. Terrell also is a director of General Mills,
Inc. and Sears, Roebuck & Co.
The Board of Directors held five meetings during the last fiscal year.
All of the directors attended at least 75 percent of the aggregate number of
meetings of the Board and the Board committees on which they served.
FINANCIAL AUDIT COMMITTEE. The Company has a Financial Audit
Committee comprised of Ms. Ruth A. Reister (chair); Dr. E. David Crockett (vice
chair); Messrs. William K. Brehm, Brian Griffiths, Lord Griffiths of
Fforestfach, C. William Pollard, and Richard H. Ruch. The Financial Audit
Committee recommends to the Board of Directors the selection of independent
auditors and reviews the scope of their audit, their audit reports, and any
recommendations made by them. The committee approves fees paid for audit and
nonaudit services by the independent public accountants. The committee also
reviews the activities of the Company's internal auditors, and reviews and
recommends to the Board issues concerning the Company's dividend policies,
capital expenditures, welfare benefits plans, and other related financial
matters. The committee met two times during the last fiscal year.
EXECUTIVE COMPENSATION COMMITTEE. The Company has an Executive
Compensation Committee, comprised of Messrs. William K. Brehm (chair), J.
Harold Chandler, and E. David Crockett. The Executive Compensation Committee
recommends to the Board the annual executive incentive plan, the grant of
employee stock options, and the annual remuneration of the Company's Chairman,
Vice Chairman, and Chief Executive Officer, and acts as the administrative
committee for the Company's Employee Stock Option and Long Term Incentive
Plans. The committee met five times during the last fiscal year.
NOMINATING COMMITTEE. The Company has a Nominating Committee
comprised of Messrs. C. William Pollard (chair), J. Harold Chandler, David L.
Nelson, Richard H. Ruch, and Michael A. Volkema. The Nominating Committee
selects and presents to the Board candidates for election to fill vacancies on
the Board. The committee will consider nominees recommended by shareholders,
provided recommendations are submitted in writing, on or before the 60th day
preceding the date of the annual meeting, including a description of the
proposed nominee's qualifications, his or her consent to serve as a director,
as well as other required data on the nominee and the shareholder submitting
the proposal and other relevant biographical data, to C. William Pollard, at
Herman Miller, Inc., 855 East Main Avenue, P.O. Box 302, Zeeland, Michigan
49464-0302. The committee met four times during the last fiscal year.
EXECUTIVE COMMITTEE. The Company has an Executive Committee comprised
of Messrs. David L. Nelson (chair), William K. Brehm, C. William Pollard,
Richard H. Ruch, and Michael A. Volkema. The Executive Committee acts from
time to time on behalf of the Board in managing the business and affairs of the
Company (except as limited by law or the Company's Bylaws), and is delegated
certain assignments and functions by the Board of Directors. The Committee met
two times during the last fiscal year.
COMPENSATION OF BOARD MEMBERS AND NON-EMPLOYEE OFFICERS
The Company pays directors' fees to nonemployee directors at the rate
of $32,500 per year, plus $1,000 per regular meeting and $1,500 per special
meeting. Directors may elect to receive a share grant, having a market value
equal to the cash retainer, up to 100% of the retainer. If a share grant is
selected, the director will receive a cash stipend of 20% of the value of the
shares granted. No other amounts are payable for service on committees of the
Board or for any other assignments that may be undertaken by a director as a
director.
In 1997, the Board established Director Stock Ownership Guidelines.
These guidelines, like those of the management team, are intended to reinforce
the importance of linking shareholder and director interests. Under these
guidelines, each director is expected to reach a minimum level of share
ownership which as a value equivalent to six (6) times the annual retainer fee
of $32,500 or a minimum total ownership valued at $195,000.
-7-
<PAGE> 11
Mr. Nelson became the Chairman of the Board on October 30, 1995. For
the 12 month period ending October 1997, Mr. Nelson agreed to devote at least
80 percent of his business time to the Board of Directors for the payment of
$250,000 plus director fees, and an annual library allowance of $1,500. In
addition, he will receive an annual benefit package of $10,000. Share grants
of 10,000 shares at $15.94 per share, and 5,000 shares at $36.125 per share,
were awarded to Mr. Nelson on July 9, 1996, and May 13, 1997, respectively, in
recognition of his outstanding service to the Company.
The Company has in effect a stock option plan, approved and adopted by
its shareholders, under which officers and directors who are not employees of
the Company or its subsidiaries are granted options to purchase shares of the
Company's common stock. Subject to certain exceptions, the options are not
exercisable until 12 months after the date of grant and expire 10 years after
the date of the grant. The option price is payable upon exercise in cash or,
subject to certain limitations, in shares of the Company's common stock already
owned by the optionee, or a combination of shares and cash.
During fiscal 1997, each director and officer of the Company who is
not an employee was granted an option to purchase 3,000 shares of the Company's
common stock at $32.875, its fair market value on the date of grant. Under this
plan, a total of 33,000 options were granted to all nonemployee directors and
officers as a group, and 52,600 options were exercised at an average exercise
price of $11.06 per share during the past year.
EXECUTIVE COMPENSATION COMMITTEE REPORT
GENERAL
The Company has long recognized the importance of a well-founded
executive compensation program and the role it plays in achieving the Company's
short- and long-term objectives of promoting superior corporate performance,
creating shareholder value, and maintaining fairness and relative equity in the
compensation of and between its executives and all other employee-owners. The
Executive Compensation Committee of the Board of Directors, which comprises
three nonemployee directors, was established over 20 years ago to provide an
ongoing review of the executive compensation program to ensure that it is
structured and administered to support the Company's mission and strategy. The
committee is responsible for recommendations to the full Board for several
aspects of executive compensation, including the annual remuneration of the
Company's Chief Executive Officer, which includes base salary, incentive pay,
and equity-based compensation. In addition, the committee also establishes the
performance objectives for the annual executive incentive plan which covers the
Chief Executive Officer, corporate officers, vice presidents, and directors at
each of the Company's business units. The Company's Chief Executive Officer
establishes the base salary of the Company's other executive officers.
COMPENSATION PHILOSOPHY
The Company's compensation philosophy, as formulated by the Executive
Compensation Committee and endorsed by the Board of Directors, is designed to
engender and preserve a sense of fairness and equity among employees,
shareholders, and customers. Consistent with this philosophy, an "Economic
Value Added" (EVA(R)), (1) performance measurement and incentive compensation
system has been created and implemented. This system, which is an internal
measurement of operating and financial performance that has been shown by
extensive independent market research to more closely correlate with
shareholder value than any other performance measure.
Beginning in fiscal 1997, the incentive compensation plans of
corporate officers, vice presidents, and directors at each of the Company's
business units were linked to the EVA concept. Under the terms of the EVA
plan, focus is shifted from budget performance to long-term continuous
improvements in shareholder value. Each year, the EVA target is raised over
the actual EVA earned the prior year by an improvement factor so that higher
EVA targets must be attained in order to earn the same level of incentive pay.
This improvement factor is established by the Board of Directors for a period
of three years.
____________________
(1) EVA is a registered trademark of Stern Stewart & Co.
-8-
<PAGE> 12
The Committee believes that the utilization of the EVA measurement
system, with its focus on maximizing the Company's return on capital
investments relative to its cost of capital, will be a more effective means of
evaluating and rewarding management performance. The Committee believes the
adoption of the EVA measurement system is consistent with its objective of
endorsing an executive compensation program designed to:
- Link a material portion of annual compensation directly to
operating performance.
- Promote achievement of long-term strategic goals and objectives.
- Align the interests of executives with the long-term interests of
the shareholders.
- Attract, motivate, and retain executives of outstanding ability.
EXECUTIVE STOCK OWNERSHIP GUIDELINES. To further emphasize and
reinforce the importance of linking shareholder and management interests, the
Board has adopted stock ownership requirements for approximately 150
executives, including all officers. Under these guidelines, the CEO is
expected to own shares of Herman Miller stock which have an aggregate value of
at least twelve (12) times his base salary. The other executives are expected
to own shares with an aggregate value of between one (1) and six (6) times
their base salaries to be achieved over a five to ten year period. The level
of ownership and attainment period is determined by the executive's
responsibility level and corresponding management position within the Company.
Ownership for the purposes of the guidelines is defined to include shares owned
by the executives, as well as shares held in profit sharing, 401-k and deferred
compensation accounts for his/her benefit. Stock options are not included in
the calculation of an executive's total ownership.
To assist executives in attaining the required ownership levels, the
Board and shareholders adopted the 1994 Key Executive Stock Purchase Assistance
Plan. The plan authorizes the Board's Executive Compensation Committee to
extend loans to selected executives to acquire shares of the Company's stock.
The executives can earn repayment of a portion of the principal and interest
due on these loans provided that certain corporate performance goals are
attained.
During fiscal 1997, three individuals were selected to participate in
the plan. Loans totaling $1 million resulting in the acquisition of 45,000
shares were made. Currently, loans under this plan totaling $2 million have
been extended to 13 individuals. Based on the Company's performance as
measured against its fiscal 1997 goals, 193 percent of the annual repayment of
principal and 100 percent of interest due was earned.
In fiscal 1997 the Company also adopted a Key Executive Deferred
Compensation Program whereby executives can elect to defer a portion of the EVA
cash bonus and have it denominated in Company stock. For 1997 the Company also
provided an incentive in the form of a premium denominated in Herman Miller
common shares equal to 30 percent of the amount deferred up to a maximum of 50
percent of the cash bonus. Each year, the Committee may adjust the premium
percentage and the maximum amount of the deferral that is subject to the
premium. The Committee believes that this program provides an additional
opportunity and incentive for the key executives to increase their ownership
level in the Company. Fifteen (15) executives were elected to participate in
this program for fiscal 1997 and deferred $1,481,833, which was invested in
Company stock and received a premium totaling $395,333, which was also invested
in Company stock.
In addition, stock options which may be granted under the 1994
Long-Term Incentive Plan may be utilized to assist executives in achieving
their ownership requirements. Stock ownership is also made available to all
the Company's employees through the Employee Stock Purchase Plan and various
Employee Ownership and Profit Sharing Plans.
COMPANY PERFORMANCE AND EXECUTIVE COMPENSATION
The salaries of the Company's Chief Executive Officer and other
executives are established on a performance-based evaluation system. Each
executive officer's performance, except that of the Chief Executive Officer, is
evaluated by his or her superior and reviewed by the Executive Compensation
Committee. This review considers the employee's overall performance relative to
the achievement of corporate objectives as well as individual contributions and
achievements. This same evaluation system is applied to the Company's Chief
Executive Officer by this committee.
-9-
<PAGE> 13
In 1997, the Company's new EVA measurement system replaced the method
for awarding both annual stock options and the formula for awarding cash
incentive bonuses as defined by the fiscal 1996 Executive Compensation Plan.
As discussed earlier, the Herman Miller EVA Incentive Compensation
Plan is intended to more closely link incentive awards to the creation of
shareholder wealth and to promote a culture of performance and ownership. The
Executive Compensation Committee approves an expected annual improvement in EVA
for which a target bonus is paid for attaining performance which matches the
annual planned improvement factor that has been established for a 3 year period
by the Board of Directors. For the Company's Chief Executive Officer and other
executives, the EVA plan is intended to motivate growth above the expected
annual improvement in EVA with a straight line payoff profile offering a cash
bonus award that has a unlimited upside potential, as well as unlimited
downside potential. The potential for suffering a negative bonus is made
possible because annual bonus awards are not fully paid out but instead are
banked forward and put at risk with their full payout contingent upon continued
successful performance.
In consideration of this risk profile the Executive Compensation
Committee believes it inappropriate to cap the CEO's cash compensation as has
been its past policy. Therefore, beginning in fiscal 1997 there will no longer
be a cap imposed on the cash compensation of the company's Chief Executive
Officer.
The Executive Compensation Committee also authorizes the grant of
stock options to employees of the Company, including executive officers. Under
the EVA plan, the committee initially approves a target option grant which is
then multiplied by the same bonus multiple that is applied to the target cash
bonus. However, executives are limited by an upside potential of two times the
target option grant and on the downside by a zero grant.
During fiscal 1997 Mr. Michael A. Volkema, the Company's Chief
Executive Officer, earned a base salary and cash bonus of $352,900 and $316,783
respectively, representing total cash compensation of $669,683. This total
excludes amounts deferred under the Key Executive Deferred Compensation Plan,
under which Mr. Volkema elected to defer 50% of his EVA cash bonus denominated
in Herman Miller common stock. Mr. Volkema received a premium also denominated
in Herman Miller common stock equal to 1,856 shares which vests over a three
year period.
In July 1997 Mr. Volkema was also awarded a stock option grant of
40,000 shares representing a multiple of two times his target options of
20,000. The committee believes that the significant ownership position created
by these actions will more closely align Mr. Volkema's interests with those of
the shareholders. The size of the equity based compensation awards and the
cash compensation reflect the committee's evaluation and recognition of Mr.
Volkema's contribution to the significant accomplishments and successes
achieved by the Company in fiscal 1997.
William K. Brehm (Chair)
E. David Crockett
J. Harold Chandler
-10-
<PAGE> 14
SUMMARY COMPENSATION TABLE
The following table sets forth the compensation received by the Named
Executives for each of the three fiscal years ended May 31, 1997, June 1, 1996,
and June 3, 1995.
<TABLE>
<CAPTION>
ANNUAL COMPENSATION LONG TERM COMPENSATION
-------------------------------------------------------------------------------
AWARDS PAYOUTS
------------------------------------------
SECURITIES
RESTRICTED STOCK UNDERLYING LTIP ALL OTHER
NAME AND PRINCIPAL YEAR SALARY(1) BONUS(2) OTHER AWARDS OPTIONS/SARS PAYOUTS(4) COMPENSATION(5)
POSITION ($) ($) ($) ($) (#)(8) ($) ($)
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Michael A. Volkema, 1997 352,900 316,783 -0- -0- 40,000 631,765 4,199
President & Chief Executive 1996 357,771 274,269 -0- 1,435,000(6) 40,000 592,745 2,718
Officer 1995 159,000 -0- -0- 200,000(7) 40,000 -0- -0-
Andrew C.McGregor, 1997 205,000 129,261 84,145 108,375(9) 20,000 125,652 7,433
Executive Vice President 1996 194,923 185,317 -0- -0- 24,000 125,329 3,151
President, Herman Miller 1995 162,058 29,876 44,402(3) -0- 40,000 46,167 6,099
Choices
Christopher A, Norman, 1997 205,000 109,793 -0- 108,375(9) 20,000 91,732 5,774
President, Miller SQA, Inc. 1996 207,692 180,930 -0- -0- 24,000 91,966 4,551
1995 130,461 191,532 -0- -0- 20,000 34,317 1,753
Brian C. Walker, 1997 195,000 122,860 -0- 108,375(9) 20,000 126,092 4,724
Executive Vice President, Chief 1996 137,307 128,024 -0- -0- 24,000 122,035 2,837
Financial Officer and Treasurer 1995 74,108 1,698 -0- 13,013(10) 20,000 -0- 692
Gary S. Miller, 1997 187,200 89,141 -0- -0- 20,000 122,285 8,387
Executive Vice President, 1996 180,000 162,837 -0- -0- 14,000 122,600 7,053
Product Services 1995 162,058 35,241 -0- -0- 46,000 44,852 4,061
</TABLE>
(1) Includes amounts deferred by employees pursuant to Section 401(k) of
the Internal Revenue Code. Includes 52 weeks of compensation for 1997
and 1996, and 53 weeks for 1995, consistent with the Company's fiscal
year.
(2) Represents amounts earned under the Company's Earned Share Bonus Plan
and Executive Incentive Plan, but excludes amounts foregone at the
election of the Named Executives and payable in shares of the
Company's common stock under the Key Executive Deferred Compensation
Plan, as reported in the Long-Term Incentive Plan table.
(3) The amount includes cost of living, foreign assignment, foreign
exchange, spouse travel, and moving expenses.
(4) Represents amounts earned under the Company's 1994 Key Executive Stock
Purchase Assistance Plan and applied to the repayment of loans made
thereunder.
(5) Includes amounts attributable during fiscal 1997 to benefit plans of
the Company as follows: (a) amounts contributed by the Company
pursuant to the Company's profit sharing plan for the account of
Messrs. Volkema, McGregor, Norman, Walker, and Miller were $4,199;
$6,299; $5,774; $4,724; and $6,299, respectively; and (b) payments by
the Company in fiscal 1997 of premiums for life insurance for the
benefit of Messrs. McGregor, and Miller were $1,134 and $2,088,
respectively.
(6) This amount represents the value of 60,000 and 40,000 shares of the
Company's common stock (based on the closing price on the date of
grant of $13.25 and $16.00 per share, respectively) granted to Mr.
Volkema under the terms of two Incentive Share Grant Agreements. Mr.
Volkema elected to use 28 percent of his grants to pay his federal
taxes on these grants which resulted in his receipt (net of taxes) of
43,200 and 28,800 shares, respectively. The shares are subject to
forfeiture provisions which lapse as the number of sharesbecome vested
each year over a five- or six-year period. The minimum annual rate of
vesting is 10% of the total shares granted during the first five years
following the date of grant, with the balance vesting at the end of
the sixth year (fiscal 2001 and 2002, respectively). The rate of
vesting may be accelerated if certain corporate performance goals are
achieved, which would permit full vesting not earlier than fiscal 2000
and 2001, respectively. Dividends are payable on the restricted
shares at the same rate as dividends on the Company's common stock.
At May 31, 1997, the value of the 72,000 restricted shares held by Mr.
Volkema based on the closing price of the Company's common stock on
that date ($35.75 per share) equaled $2,574,000.
-11-
<PAGE> 15
(7) The amount represents the value of 19,048 shares of the Company's
common stock (based on the closing price on the date of grant of
$10.50 per share) granted to Mr. Volkema under the terms of an
Incentive Share Grant Agreement. Mr. Volkema elected to use 28
percent of his grant to pay his federal taxes on this grant which
resulted in his receipt (net of taxes) of 13,714 shares. The shares
are subject to the same forfeiture and vesting provisions described in
footnote (6) above. Full vesting would occur not earlier than fiscal
2000 and not later than fiscal 2001. At May 31, 1997, the value of
the 13,714 restricted shares held by Mr. Volkema, based on the closing
price of the Company's common stock on that date ($35.75 per share)
equaled $490,275.50.
(8) The options reflected as being granted in fiscal 1997, were awarded in
fiscal 1998 on July 8, 1997, but relate to fiscal 1997 performance.
(9) The amount represents the value of 3,000 shares of the Company's
common stock (based on the closing price on the date of grant of
$36.125) granted to Mr. McGregor, Mr. Norman and Mr. Walker under the
terms of a Share Grant Agreement. All participants elected to use 45%
of the grant to pay federal and state taxes on this grant which
resulted in a net receipt of 1,650 shares to each participant. The
shares are subject to the same provisions described in footnote (6)
above. Full vesting would occur not earlier than fiscal 2002 and no
later than fiscal 2003. At May 31, 1997, the value of each
participant's 1,650 restricted shares based on the closing price of
the Company's common stock on that date ($35.75 per share) equaled
$58,987.50.
(10) The amount represents the value of 1,200 shares of the Company's
common stock (based on the closing price on the date of grant of
$10.84) granted to Mr. Walker under the terms of a Share Grant
Agreement. The shares are subject to forfeiture provisions which
lapse after a five year period, at which time the shares will vest
100%. Full vesting would occur at the end of fiscal 2000. At May 31,
1997, the value of the 1,200 restricted shares held by Mr. Walker
based on the closing price of the Company's common stock on that date
($35.75 per share) equaled $42,900.
-12-
<PAGE> 16
AGGREGATED STOCK OPTION EXERCISES IN FISCAL 1997 AND YEAR END OPTION VALUES
The following table provides information on the exercise of stock
options during fiscal 1997 by the Named Executives and the number and value of
unexercised options at May 31, 1997.
<TABLE>
<CAPTION>
Number of Securities Value of Unexercised
Underlying Unexercised In the Money Options
Options at May 31, 1997 at May 31, 1997(2)
--------------------------------------------------------------
Shares
Acquired
on Value
Name Exercise Realized(1) Exercisable Unexercisable Exercisable Unexercisable
- ----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Michael A. Volkema -0- -0- 80,000 -0- 1,800,000 -0-
Andrew C. McGregor -0- -0- 86,000 -0- 1,972,500 -0-
Christopher A. Norman -0- -0- 65,200 -0- 1,441,824 -0-
Brian C. Walker -0- -0- 44,000 -0- 941,500 -0-
Gary S. Miller 9,522 158,303 98,478 -0- 2,308,319 -0-
</TABLE>
(1) Represents the aggregate market value of shares acquired at time of
exercise, less the aggregate exercise price paid by the employee.
(2) Values are based on the difference between the closing price of the
Company's common stock on May 31, 1997 ($35.75) and the exercise
prices of the options.
LONG-TERM INCENTIVE PLANS-AWARDS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
NAME NUMBER OF PERFORMANCE
SHARES, UNITS OR OTHER
OR OTHER PERIOD UNTIL
RIGHTS (#) (1) MATURATION
OR PAYOUT(2)
-------------------------------------------------------------------------
<S> <C> <C>
Michael A. Volkema 8,043 3 years
Andrew C. McGregor 3,115 3 years
Christopher A. Norman 2,791 3 years
Brian C. Walker 2,963 3 years
Gary S. Miller 2,064 3 years
</TABLE>
(1) Represents the number of units credited to an employee's account under
the terms of the Company's Key Executive Deferred Compensation Plan
(the "Plan"). Under the terms of the Plan, participants may elect to
defer all or a portion of their EVA cash incentive. Deferred amounts
are credited in stock units, based on the value of the Company's stock
as of the end of the month in which the bonus would have been paid to
the employee. Stock units are payable only in shares of the Company's
common stock. Includes the following number of units credited to each
of the Named Executives premium account, as described in footnote (2):
Michael A. Volkema - 1,856; Andrew C. McGregor - 719; Christopher A.
Norman - 644; Brian C. Walker - 684; and Gary S. Miller - 476.
-13-
<PAGE> 17
(2) Each year the Company's Executive Compensation Committee establishes
the maximum percentage of EVA cash bonus that may be deferred, the
maximum amount of EVA cash incentive which may be subject to a premium
percentage, and the amount of the premium percentage. For fiscal
1997, the maximum percentage of EVA bonus that is subject to a premium
percentage was 50%, and the premium percentage was established at 30%.
Stock units credited to a participant's account due to the premium
percentage are credited to a separate premium account, which vests at
the rate of 33-1/3%, beginning on the first anniversary of the
deferral, and each anniversary thereafter, provided that the
participant is an employee of the Company. The plan allows for
accelerated vesting in the event of a participant's death, disability,
retirement or termination due to a change in control, as defined in
the Company's Plan for Severance Compensation After Hostile Takeover,
as amended and restated.
PENSION PLAN TABLE
The following table sets forth the estimated annual benefits payable
upon normal retirement at age 65, on May 31, 1997, to persons in specified
compensation and years of service classifications under the Company's
Retirement Income Plan. Projected benefits are computed on a straight line
annuity basis, and such benefits are in addition to any amounts which may be
received under the Social Security Act. Under current tax rates, annual
benefits payable at retirement may not exceed $125,000.
<TABLE>
<CAPTION>
YEARS OF BENEFIT SERVICE(2)
----------------------------------------------------------------------------
AVERAGE ANNUAL
COMPENSATION(1) 20 25 30 35 40
--------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C>
$150,000 52,277 65,346 78,415 91,484 104,553
$180,000 63,377 79,221 95,065 110,909 126,753
$210,000 74,477 93,096 111,715 130,334 148,953
$240,000 85,577 106,971 128,365 149,759 171,153
$270,000 96,677 120,846 145,015 169,184 193,353
$300,000 107,777 134,721 161,665 188,609 215,553
</TABLE>
(1) Average annual compensation is determined under the Retirement Income
Plan by the average of the five highest consecutive years of annual
compensation (the amounts included under the columns "Salary" and
"Bonus" in the Summary Compensation Table) during the last ten years
of employment, subject to a maximum of $160,000 for fiscal 1997.
(2) The Named Executives have credited years of service and "average
annual compensation" under the Retirement Income Plan as follows:
Michael A. Volkema, 2 years - $491,987, Andrew C. McGregor, 22 years -
$260,306, Christopher A. Norman, 18 years - $302,044, Brian C.
Walker, 8 years - $148,138, Gary S. Miller, 22 years - $249,398.
OTHER ARRANGEMENTS
The Company maintains a Salary Continuation Plan, which provides that an
officer's base salary (as shown in the "Salary" column of the Summary
Compensation Table) will be continued for twelve months after termination of
the officer's employment. Under this plan, benefits terminate if the officer
performs services for a competitor of the Company, and benefits are offset for
any noncompetitor payments for services. No benefits are payable under the plan
if an officer dies, retires, voluntarily terminates employment, or is
terminated for malfeasance.
-14-
<PAGE> 18
SHAREHOLDER RETURN PERFORMANCE GRAPH
Set forth below is a line graph comparing the yearly percentage change in
the cumulative total shareholder return on the Company's common stock with that
of the cumulative total return of the Standard & Poor's 500 Stock Index and the
NASD Non-Financial Index for the five year period ended May 31, 1997. The
following information is based on an annual investment of $100, on May 30,
1992, in the Company's common stock, the Standard & Poor's 500 Stock Index and
the NASD Non-Financial Index, with dividends reinvested.
TOTAL SHAREHOLDER RETURN HERMAN MILLER, INC.
TOTAL SHAREHOLDER RETURN
HERMAN MILLER, INC.
[CHART]
<TABLE>
<CAPTION>
1992 1993 1994 1995 1996 1997
<S> <C> <C> <C> <C> <C> <C>
NASD Non-Financial 100 118 121 145 213 231
S&P 500 Index 100 112 116 140 180 233
Herman Miller, Inc. 100 138 136 123 176 414
</TABLE>
-15-
<PAGE> 19
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Pursuant to Section 16 of the Securities Exchange Act of 1934, the
Company's directors and officers, as well as any person holding more than 10
percent of its common stock, are required to report initial statements of
ownership of the Company's securities and changes in such ownership to the
Securities and Exchange Commission. Based upon written representations by each
director and officer, all the reports were filed by such persons during the
last fiscal year, except for one late report filed by Brian Griffiths, Lord
Griffiths of Fforestfach covering one transaction.
SHAREHOLDER PROPOSALS--1998 ANNUAL MEETING
Any shareholder proposal intended to be presented at the next annual
meeting of the Company must be received by the Company at 855 East Main Avenue,
PO Box 302, Zeeland, MI 49464-0302 not later than April 27, 1998, if the
shareholder wishes the proposal to be included in the Company's proxy materials
relating to the meeting.
In addition, the Company's Bylaws contain certain notice and procedural
requirements applicable to director nominations and shareholder proposals,
irrespective of whether the proposal is to be included in the Company's proxy
materials. A copy of the Company's Bylaws has been filed with the Securities
and Exchange Commission and can be obtained from the Public Reference Section
of the Commission or the Company.
MISCELLANEOUS
If any matters, other than the matters set forth herein, properly come
before the meeting, it is the intention of the persons named in the enclosed
proxy to vote the shares thereby represented in accordance with their judgment.
The cost of the solicitation of proxies will be borne by the Company. In
addition to the use of the mails, proxies may be solicited personally or by
telephone or telegraph by a few regular employees of the Company without
additional compensation. The Company may reimburse brokers and other persons
holding stock in their names or in the names of nominees for their expenses in
sending proxy materials to the principals and obtaining their proxies.
The annual report of the Company for the fiscal year ended May 31, 1997,
including financial statements, is being mailed to shareholders with this proxy
statement.
Shareholders are urged to date and sign the enclosed proxy and return it
promptly to the Company in the enclosed envelope.
Questions related to your holdings can be directed as follows:
First Chicago Trust Company of New York
PO Box 2500
Jersey City, NJ 07303-2500
Phone: 1 800 446 2617
By Order of the Board of Directors
James N. De Boer, Jr., Secretary of the Board
August 25, 1997.
-16-
<PAGE> 20
HERMAN MILLER, INC.
By signing this card, the shareholders appoints Richard H. Ruch, Michael A.
Volkema, and David L. Nelson and each of them, as attorneys, with the power of
substitution, to vote the shares of Common Stock of Herman Miller, Inc. ("the
company") held of record by the undersigned on August 4, 1997, at the Annual
Meeting of Shareholders to be held at the Zeeland High School Performing Arts
Center, 3333 - 96th Avenue, Zeeland, Michigan on Wednesday, October 1, 1997, at
4:00 p.m. (E.D.T.) and at the adjournment thereof.
ELECTION OF FOUR DIRECTORS, each for a term of three years. Nominees: C.
William Pollard, Ruth Alkema Reister, Richard H. Ruch, and James R. Carreker.
ELECTION OF ONE DIRECTOR, for a term of one year. Nominee: Dorothy A. Terrell.
The Proxies will vote your shares in accordance with your direction on this
card. If you do not indicate your choice on this card, the Proxies will vote
your shares "FOR" the nominees and "FOR" the proposals.
All shares votable hereby and the undersigned includes shares, if any, held for
my account in the company's Employee Stock Ownership Plan and Employee Stock
Purchase Plan.
<TABLE>
<S> <C>
Please mark
your vote as
in this example
This proxy is solicited on behalf of the Board of Directors
For Withheld For Against Abstain
1. Election / / / / 2. Proposal to / / / / / / 3. Ratification of appointment
of Directors increase the of Arthur Anderson LLP as
as listed on authorized Independent auditors for the
reverse side common stock Year ending May 30, 1998.
For except vote withheld from the to 120,000,000 shares
following nominee(s);
_______________________________ 4. At their discretion, the Proxies are authorized
to vote upon such other business as may
properly come before the meeting or
adjournment thereof.
____________________________________________________
Signature Date
____________________________________________________
Signature Date
</TABLE>
