<PAGE>
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934 (Amendment No. )
Filed by the Registrant /X/
Filed by a Party other than the Registrant / /
Check the appropriate box:
/ / Preliminary Proxy Statement
/ / Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
/X/ Definitive Proxy Statement
/ / Definitive Additional Materials
/ / Soliciting Material Pursuant to Section 240.14a-11(c) or Section
240.14a-12
SHELBY WILLIAMS INDUSTRIES, INC.
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
N/A
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
/X/ $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), 14a-6(i)(2) or
Item 22(a)(2) of Schedule 14A.
/ / $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3).
/ / 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:
------------------------------------------------------------------------
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):
------------------------------------------------------------------------
4) Proposed maximum aggregate value of transaction:
------------------------------------------------------------------------
5) Total fee paid:
------------------------------------------------------------------------
/ / Fee paid previously with preliminary materials.
/ / Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
1) Amount Previously Paid:
------------------------------------------------------------------------
2) Form, Schedule or Registration Statement No.:
------------------------------------------------------------------------
3) Filing Party:
------------------------------------------------------------------------
4) Date Filed:
------------------------------------------------------------------------
Notes:
<PAGE>
[LOGO] SHELBY WILLIAMS INDUSTRIES, INC.
11-111 MERCHANDISE MART
CHICAGO, ILLINOIS 60654
-------------
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD MAY 7, 1996
To the Stockholders of
SHELBY WILLIAMS INDUSTRIES, INC.
You are hereby notified that the Annual Meeting of Stockholders of SHELBY
WILLIAMS INDUSTRIES, INC. will be held at The Shareholders Room, 21st Floor, 231
South LaSalle Street, Chicago, Illinois, on Tuesday, May 7, 1996 at 9:30 A.M.
for the following purposes:
1. Electing a Board of Directors to serve until the next annual
meeting of stockholders or until their respective successors shall
have been elected and qualified;
2. Considering and acting upon a proposal to ratify the selection of
Ernst & Young LLP as independent auditors for the fiscal year
ending December 31, 1996; and
3. Transacting such other business as may properly come before the
meeting or any adjournment thereof.
The close of business on March 11, 1996 has been fixed as the record date for
determination of the stockholders entitled to notice of and to vote at said
meeting. A list of stockholders will be open for examination during ordinary
business hours by any stockholder, for any purpose germane to such meeting,
during the ten days prior to the meeting date at the Company's address set forth
above.
IF YOU DO NOT EXPECT TO BE PRESENT PERSONALLY AT THE MEETING, PLEASE DATE,
SIGN AND RETURN THE ENCLOSED PROXY IN THE ENVELOPE PROVIDED.
By Order of the Board of Directors
Walter Roth, Secretary
March 25, 1996
<PAGE>
PROXY STATEMENT
-------------
SHELBY WILLIAMS INDUSTRIES, INC.
11-111 MERCHANDISE MART
CHICAGO, ILLINOIS 60654
--------------
The enclosed proxy is solicited by the Board of Directors of Shelby Williams
Industries, Inc. (the "Company") for the Company's annual meeting of
stockholders to be held May 7, 1996. Each proxy received will be voted as
directed. If no direction is indicated, the proxy will be voted FOR the election
of the nominees named below as directors, and FOR the proposal to ratify the
selection of independent auditors, in each case as described below. Any proxy
may be revoked at any time prior to the voting thereof by notifying the
Secretary of the Company, either prior to the meeting (at the above address) or
at the meeting if you attend personally. A later dated proxy will revoke a prior
dated proxy.
Only holders of the Company's 8,890,000 outstanding shares of Common Stock of
record at the close of business on March 11,1996 will be entitled to vote at the
meeting. Each share is entitled to one vote on each matter to be voted upon.
Abstentions will be treated as shares present and entitled to vote but as not
voted for purposes of determining the approval of any matters submitted to the
stockholders for a vote. Abstentions will have the same effect as negative
votes. If a broker indicates on the proxy that it does not have discretionary
authority as to certain shares to vote on a particular matter, those shares will
not be considered as present and entitled to vote with respect to that matter.
The approximate date on which this Proxy Statement and the form of proxy
enclosed herewith are first to be sent or given to the Company's stockholders is
intended to be March 25, 1996.
ELECTION OF DIRECTORS
At the meeting, a Board of eight directors is to be elected by plurality vote.
All of the nominees named below except Douglas A. Parker are presently directors
of the Company. If any vacancy in the list of nominees should occur for any
reason (no reason being presently known), discretionary authority is solicited
to vote for the election of other persons. The term of office of the directors
to be elected will be until the next annual meeting of stockholders (presently
expected to be held May 6, 1997) and until their respective successors are
elected and qualified, and the Company has no reason to believe that the
nominees named will not be available for election as directors for their
prescribed terms.
The following table sets forth information with respect to each nominee for
director according to information furnished the Company by such nominee.
<TABLE>
<CAPTION>
NAME, AGE AND DIRECTOR OF
POSITIONS PRESENTLY PRINCIPAL OCCUPATIONS COMPANY
HELD WITH COMPANY DURING PAST FIVE YEARS SINCE
- --------------------------------- ----------------------------------------------------------------- -----------
<S> <C> <C>
Robert P. Coulter, 53 ........... President of the Company
President; Chief Operating
Officer; member of executive
committee 1978
Robert L. Haag, 69 .............. Private Investor
Member of executive
compensation and stock option
committees 1976
</TABLE>
1
<PAGE>
<TABLE>
<CAPTION>
NAME, AGE AND DIRECTOR OF
POSITIONS PRESENTLY PRINCIPAL OCCUPATIONS COMPANY
HELD WITH COMPANY DURING PAST FIVE YEARS SINCE
- --------------------------------- ----------------------------------------------------------------- -----------
<S> <C> <C>
William B. Kaplan, 55 ........... Chairman and CEO of Senior Lifestyle Corporation (development and
Member of audit committee; management of housing for the elderly)
chairman of stock option
committee 1992
Douglas A. Parker, 38 ........... President and CEO of Leonard Parker Company, Inc. (contract Not
purchasing agents for the hospitality industry) presently a
director
Herbert L. Roth, 72 ............. Self-employed as a financial consultant and general manager of
Chairman of audit committee and several real estate partnerships
member of stock option
committee 1976
Manfred Steinfeld, 71 ........... Chairman of Executive Committee since January, 1996; Chairman of
Chairman of the Executive the Board prior to January, 1996; Chief Executive Officer of
Committee; chairman of the Company prior to May, 1991
executive committee and
executive compensation
committee 1976
Paul N. Steinfeld, 41 ........... Chief Executive Officer of the Company since May, 1991; Chairman
Chairman of the Board; Chief of the Board since January, 1996; prior thereto Vice Chairman
Executive Officer; member of of the Board; Chief Administrative Officer of the Company prior
executive committee to May, 1991 1980
Trisha Wilson, 48 ............... President of Wilson & Associates, Inc. (interior architectural
Member of executive hospitality design)
compensation committee 1993
</TABLE>
Manfred Steinfeld is also a director of Amalgamated Trust & Savings Bank.
Herbert L. Roth is also a director of Corcom, Inc. Manfred Steinfeld is the
father of Paul N. Steinfeld; there is no other family relationship between any
director or executive officer of the Company. Herbert L. Roth is the brother of
Walter Roth, who is Secretary of the Company and a partner of the law firm of
D'Ancona & Pflaum. The Company retained said firm as legal counsel during the
last fiscal year and such retainer is continuing during the current fiscal year.
In 1995, non-employee directors were paid an annual retainer at the rate of
$16,000, together with a fee of $500 for each committee meeting attended.
The Company has in effect a 1995 Directors' Stock Option Plan (the "1995
Directors' Plan") which provides that on January 18 of each of the years 1995,
1996 and 1997, each director of the
Company who is not a full-time employee of the Company receives an option for
4,000 shares of the Company's Common Stock with an exercise price of 100% of
fair market value on the applicable date of grant. Options become fully
exercisable six months after date of grant and expire five years from date of
grant subject to earlier termination in certain circumstances in the event of
termination as a director. There have been no option exercises. Option grants of
4,000 shares each under the 1995 Directors' Plan were made to each of Robert L.
Haag, William B. Kaplan, Herbert L. Roth and Trisha Wilson on January 18, 1995
at an option exercise price of $7.938 per share, and on January 18, 1996 at an
option exercise price of $12.25 per share.
2
<PAGE>
BENEFICIAL OWNERSHIP OF SHARES
The following information is furnished as of March 1, 1996 (unless otherwise
indicated) to indicate beneficial ownership of the Company's Common Stock by
each director and nominee, by certain executive officers of the Company, and by
all directors and executive officers as a group. Such information has been
furnished to the Company by the indicated owners. Unless otherwise indicated,
beneficial ownership is direct.
<TABLE>
<CAPTION>
AMOUNT
BENEFICIALLY
NAME OF BENEFICIAL OWNER OWNED PERCENT
- ---------------------------------------------------------------------- ------------ -------
<S> <C> <C>
Directors and Nominees:
Robert P. Coulter................................................... 88,494(B) 1.0%
Robert L. Haag...................................................... 144,688(C) 1.6%
William B. Kaplan................................................... 6,000(C) (A)
Douglas A. Parker................................................... 1,000 (A)
Herbert L. Roth..................................................... 23,999(C) (A)
Manfred Steinfeld................................................... 2,467,608(D) 27.7%
Paul N. Steinfeld................................................... 601,333(E) 6.7%
Trisha Wilson....................................................... 5,500(C) (A)
Certain executive officers:
Peter W. Barile..................................................... 77,027(F) (A)
Sam Ferrell......................................................... 19,555(G) (A)
All directors and executive officers as a group....................... 3,434,204(H) 38.4%
</TABLE>
- ---------
(A) Less than 1%.
(B) Includes 45,503 shares owned by Mr. Coulter's wife, as to which he disclaims
beneficial ownership. Also includes 4,667 stock options deemed exercised
solely for the purpose of showing total shares owned by Mr. Coulter.
(C) Includes 4,000 stock options deemed exercised solely for the purpose of
showing total shares owned by such person.
(D) Includes 25,054 shares owned by Mr. Steinfeld's wife and 488 shares owned by
The Steinfeld Foundation, an Illinois not-for-profit corporation of which
Mr. Steinfeld is an officer and Mr. Steinfeld and his wife are two of three
directors; Mr. Steinfeld disclaims beneficial ownership of such shares. Also
includes 40,420 shares held by Manfred Steinfeld, Paul N. Steinfeld, Robert
P. Coulter and Sam Ferrell as trustees of the Company's Employee Stock
Ownership Plan; Mr. Steinfeld disclaims beneficial ownership of such shares.
(The shares held by the trustees of said plan are not included in share
figures for Paul N. Steinfeld, Robert P. Coulter or Sam Ferrell in order to
avoid duplication.) Also includes 331,000 shares owned by The Fern and
Manfred Steinfeld Charitable Remainder Trust UTA 10/17/95 (the "CRT"), of
which Mr. Steinfeld is settlor and a trustee with sole power as trustee to
vote and dispose of said shares; Mr. Steinfeld's wife is the other trustee
of the CRT.
(E) Includes 11,333 stock options deemed exercised solely for the purpose of
showing total shares owned by Paul N. Steinfeld. Excludes shares held by The
Steinfeld Foundation, of which Paul N. Steinfeld is one of three directors
and disclaims beneficial ownership. See Note (D).
(F) Includes 8,744 shares held by Mr. Barile as custodian for his children, as
to which he disclaims beneficial ownership. Also includes 2,334 stock
options deemed exercised solely for the purpose of showing total shares
owned by Mr. Barile.
(G) Includes 2,667 stock options deemed exercised solely for the purpose of
showing total shares owned by Mr. Ferrell.
(H) See matters covered by the foregoing notes.
3
<PAGE>
The following information is furnished as of March 1, 1996 (unless otherwise
indicated) with respect to the only persons known to the Company to be the
beneficial owners of more than 5% of the Company's outstanding Common Stock.
Such information has been furnished to the Company by the indicated owners.
Unless otherwise indicated, beneficial ownership is direct.
<TABLE>
<CAPTION>
AMOUNT
BENEFICIALLY
NAME AND ADDRESS OF BENEFICIAL OWNER OWNED PERCENT
- ---------------------------------------------------------------------- ------------ -------
<S> <C> <C>
Manfred Steinfeld .................................................... 2,467,608(1) 27.7%
11-111 Merchandise Mart
Chicago, IL 60654
Paul N. Steinfeld .................................................... 601,333(1) 6.7%
150 Shelby Williams Drive
Morristown, TN 37813
Pioneering Management Corporation .................................... 499,200(2) 5.6%
60 State Street
Boston, MA 02109
David L. Babson & Co., Inc. .......................................... 720,200(3) 8.1%
One Memorial Drive
Cambridge, MA 02142
Brinson Partners, Inc.,
Brinson Trust Company and Brinson Holdings, Inc. .................... 531,900(4) 6.0%
209 South LaSalle Street
Chicago, IL 60604
</TABLE>
- ---------
(1) See notes to preceding table.
(2) Schedule 13G dated January 26, 1996, states that Pioneering has sole voting
power as to 499,200 shares, sole dispositive power as to 33,400 shares and
shared dispositive power as to 465,800 shares.
(3) Schedule 13G dated February 12, 1996, states that Babson has sole voting
power as to 485,500 shares, shared voting power as to 234,700 shares, and
sole dispositive power as to 720,200 shares.
(4) Schedule 13G dated February 9, 1996 states that Brinson Partners, Inc.
("BPI") is a wholly-owned subsidiary of Brinson Holdings, Inc. ("BHI"); that
Brinson Trust Company ("BTC") is a wholly-owned subsidiary of BPI; that BHI
is a wholly-owned subsidiary of SBC Holding (USA), Inc. ("SBCUSA"); and that
SBUSA is a wholly-owned subsidiary of Swiss Bank Corporation ("SBC"). BPI
has shared voting and shared dispositive power as to 531,900 shares; and BTC
has shared voting and shared dispositive power as to 140,508 shares. The
address of SBCUSA is 222 Broadway, New York, NY; and the address of SBC is
Aeschenplatz 6 CH-4002, Basel, Switzerland.
4
<PAGE>
EXECUTIVE COMPENSATION
There is shown below certain information concerning the compensation of those
persons who at December 31, 1995 were the Chief Executive Officer of the Company
and the other four most highly compensated executive officers of the Company:
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG TERM
COMPENSATION
-------------
AWARDS
-------------
ANNUAL COMPENSATION(1) SECURITIES
---------------------- UNDERLYING ALL OTHER
NAME AND PRINCIPAL POSITION YEAR SALARY($) BONUS($)(2) OPTIONS(#) COMPENSATION($)(3)
- -------------------------------------------- --------- --------- ----------- ------------- -------------------
<S> <C> <C> <C> <C> <C>
Manfred Steinfeld........................... 1995 320,000 48,000 -0- -0-
Chairman of the Board 1994 300,000 -0- -0- 420
1993 300,000 -0- -0- 1,650
Paul N. Steinfeld........................... 1995 225,000 33,750 4,000 740
Vice Chairman of the Board; 1994 210,000 -0- -0- 910
Chief Executive Officer 1993 195,000 -0- -0- 1,110
Robert P. Coulter........................... 1995 225,000 33,750 4,000 740
President; Chief Operating Officer 1994 210,000 -0- -0- 920
1993 195,000 -0- -0- 1,110
Peter W. Barile............................. 1995 123,000 18,450 3,000 620
Executive Vice President 1994 118,000 -0- -0- 730
1993 114,000 -0- -0- 600
Sam Ferrell................................. 1995 120,000 18,000 3,000 740
Vice President of Finance; 1994 115,000 -0- -0- 660
Chief Financial Officer 1993 110,000 -0- -0- 500
</TABLE>
- ---------
(1) The aggregate amount of any perquisites or other personal benefits was less
than 10% of the total of annual salary and bonus and is not included in the
above table. The amount of pension payments to Manfred Steinfeld (see below)
is also not included in the above table.
(2) The above table includes one-half of the bonuses for 1995. The remaining
one-half will be paid in January, 1997, subject to forfeiture (and
reallocation to other participants) in the event of certain terminations of
employment. At December 31, 1995, an aggregate of $151,950 was accrued for
such payments to the persons in the above table.
(3) Dollar amounts shown are allocations under the Company's ESOP described
below. The ESOP purchases were allocated to Company stock as follows for the
years 1995, 1994 and 1993: Manfred Steinfeld, no shares, 35 shares and 149
shares; Paul N. Steinfeld, 85 shares, 76 shares and 100 shares; Mr. Coulter,
85 shares, 76 shares and 100 shares; Mr. Barile, 70 shares, 61 shares and 54
shares; and Mr. Ferrell, 85 shares, 55 shares and 45 shares. Under mandatory
requirements based on age, Manfred Steinfeld's entire interest in the ESOP
was distributed to him in 1995.
5
<PAGE>
All of the Company's executive officers are eligible to participate in a
Senior Management Incentive Plan. The plan each year is based on achieving
certain earnings per share objectives for the year, subject to adjustments for
certain factors. Certain percentage bonuses are paid depending on the extent to
which plan objectives are achieved. If such objectives are fully achieved for
1996, bonuses of 40% of base salary would be paid to participants, of which
one-half would be deferred for one year subject to forfeiture (and reallocation
to other participants) in the event of certain terminations of employment. No
bonuses were earned for 1994 or 1993.
The Company maintains a pension plan covering all salaried and commissioned
employees of the Company and those subsidiaries expressly included under the
terms of the plan. The Company intends to accrue and fund amounts sufficient to
cover normal costs. Each employee who is at least age 21 becomes a participant
in the plan after completing 1,000 hours of service during a relevant 12 month
period. A participant's benefits are fully vested after five years of service.
Benefits are equal to the sum of (i) 2.0% for each pension service year prior to
January 1, 1996, times final average annual compensation; plus (ii) 1.5% for
each pension service year after December 31, 1995, times final average annual
compensation; plus (iii) 1.25% for each pension service year, times final excess
compensation (based on social security taxable wage base). Plan benefits are not
subject to off-set for social security or other non-plan benefits. No benefits
are payable until after five years of participation in the plan. At January 1,
1996 each of the persons named in the summary compensation table above except
Manfred Steinfeld, had been credited with nine and one-half years of pension
service. Under mandatory requirements based on age, Manfred Steinfeld began, in
1995, receiving his annual pension of $88,560.
The following table indicates examples of annual pension benefits to be paid
in an annuity of equal monthly installments upon normal retirement at age 65
(after five years of pension service). Actuarially equivalent benefits are paid
at early retirement after age 55.
<TABLE>
<CAPTION>
YEARS OF PENSION SERVICE*
-----------------------------------------------------
RENUMERATION 5 10 15 20 25**
- ------------------------------------------------------- --------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C>
$100,000............................................... $ 9,925 $ 19,850 $ 29,775 $ 39,700 $ 49,625
110,000............................................... 11,300 22,600 33,900 45,200 56,500
120,000............................................... 12,675 25,350 38,025 50,700 63,375
130,000............................................... 14,050 28,100 42,150 56,200 70,250
140,000............................................... 15,425 30,850 46,275 61,700 77,125
150,000**............................................. 16,800 33,600 50,400 67,200 84,000
</TABLE>
- ---------
* In 1995, the benefits based on final average compensation were changed from
2% to 1.5% for each pension service year on or after January 1, 1996. This
change cannot deprive a participant of benefits that were accrued prior to
1995; therefore, the prospective effect of the change will vary from
participant to participant. The preceding table sets out the constant values
that would be applicable to a participant who has always been subject to the
new, lower formula. As of December 31, 1995, the annual accrued benefit
under the plan for each of the executive officers named in the summary
compensation table was as follows: Manfred Steinfeld, $88,560; Paul N.
Steinfeld, $38,550; Robert P. Coulter, $42,510; Peter W. Barile, $23,980;
and Sam Ferrell, $21,300.
** Maximum under the plan.
The Company maintains an Employee Stock Ownership Plan ("ESOP"). Salaried and
commissioned employees who are at least 21 years old and who completed at least
1,000 hours of service during a relevant 12 month period are eligible to
participate in the ESOP. The Company is entitled to make contributions to the
ESOP either in Company stock or in cash, for the purpose of purchasing Company
stock. The amount of the Company's annual contribution is discretionary. For
calendar year 1995, the Company contributed $70,000 to the ESOP.
6
<PAGE>
The amount that the Company contributes to the ESOP is allocated among the
accounts of participants who are employed by the Company on the last day of the
year in proportion to their relative compensation. A separate account is
maintained on behalf of each participant to reflect the shares of Company stock
that have been allocated to him or her. Upon termination of employment,
participants are eligible to receive a distribution of the Company stock held in
their accounts, if termination of employment occurs after the particular
participant has been credited with five years of service or on account of death,
disability, or attainment of age 65.
STOCK OPTIONS
The Company has a stock option plan under which stock options are granted to
key employees. All options are incentive stock options and are granted at 100%
of the fair market value at the time of grant, except that options to Paul N.
Steinfeld are granted at 110% of the fair market value at the time of grant. A
person is not eligible to be granted an option at any time when he owns directly
(and not by attribution) stock possessing more than 10% of the total combined
voting power of the Common Stock of the Company. Thus Manfred Steinfeld is not
eligible to receive options under the stock option plan.
Shown below is information with respect to individual grants of stock options
made during the last completed fiscal year to each of the executive officers
named in the summary compensation table.
OPTION GRANTS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
INDIVIDUAL GRANTS POTENTIAL REALIZABLE
---------------------------------------------------------- VALUE AT ASSUMED ANNUAL
NUMBER OF RATES OF STOCK PRICE
SECURITIES % OF TOTAL OPTIONS EXERCISE APPRECIATION FOR OPTION
UNDERLYING GRANTED TO PRICE PER TERM
OPTIONS EMPLOYEES IN FISCAL SHARE EXPIRATION ------------------------
NAME GRANTED(#) YEAR ($/SH.) DATE(1) 5%($) 10%($)
- ------------------------------------ ----------- ------------------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C>
Manfred Steinfeld................... -0- N/A N/A N/A N/A N/A
Paul N. Steinfeld................... 4,000 25.0 8.73 1/18/00 5,624 16,228
Robert P. Coulter................... 4,000 25.0 7.94 1/18/00 8,784 19,388
Peter W. Barile..................... 3,000 18.8 7.94 1/18/00 6,588 14,541
Sam Ferrell......................... 3,000 18.8 7.94 1/18/00 6,588 14,541
</TABLE>
- ---------
(1) All options become exercisable in one-third increments 15 months, 30 months
and 45 months after date of grant.
Shown below is information with respect to exercises of stock options during
the last completed fiscal year by each of the executive officers named in the
summary compensation table and the fiscal year-end value of unexercised options.
7
<PAGE>
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR AND FISCAL YEAR-END OPTION
VALUES
<TABLE>
<CAPTION>
NUMBER OF
SHARES VALUE OF
UNDERLYING UNEXERCISED
UNEXERCISED IN-THE-MONEY
OPTIONS AT OPTIONS AT
SHARES FY-END(#) FY-END($)
ACQUIRED ON VALUE EXERCISABLE/ EXERCISABLE/
NAME EXERCISE(#) REALIZED($) UNEXERCISABLE UNEXERCISABLE
- ----------------------------------- ------------- ------------- -------------- --------------
<S> <C> <C> <C> <C>
Manfred Steinfeld.................. -0- -0- -0- -0-
Paul N. Steinfeld.................. -0- -0- 10,000/4,000 25,375/12,076
Robert P. Coulter.................. 6,666 33,330 3,334/4,000 11,252/15,248
Peter W. Barile.................... 2,666 13,330 1,334/3,000 4,502/11,436
Sam Ferrell........................ 3,333 16,665 1,667/3,000 5,626/11,436
</TABLE>
COMPENSATION COMMITTEE INTERLOCKS
AND INSIDER PARTICIPATION
Manfred Steinfeld, who served as chairman of the executive compensation
committee during the last
completed fiscal year, was, during the fiscal year, an executive officer of the
Company.
REPORT OF THE EXECUTIVE COMPENSATION
AND STOCK OPTION COMMITTEES
This report of the Executive Compensation and Stock Option Committees shall
not be deemed incorporated by reference by any general statement incorporating
this Proxy Statement by reference into any filing under the Securities Act of
1933 or the Securities Exchange Act of 1934 (the "Acts"), except to the extent
that the Company specifically incorporates this information by reference, and
shall not otherwise be deemed filed under such Acts.
The Company applies a consistent philosophy to compensation for all employees,
including senior management. This philosophy incorporates the following themes:
1. Compensation should relate to the value
created for stockholders.
2. Compensation programs should support the
short and long-term strategic goals and objectives of the Company.
3. Compensation programs should reflect and
promote the Company's values, and reward individuals for outstanding
contributions to the Company's success.
4. Short and long-term compensation is critical in
attracting and retaining well qualified executives and other employees.
5. Compensation should be based on individual
contribution; however, amounts earned by executives in variable compensation
programs should be dictated by how the Company performs.
6. Compensation should be competitive without
being at either the low or high ends of the ranges enumerated for similar
positions elsewhere.
The Company has a simple compensation program that consists of cash and equity
based compensation. This program allows the Company to successfully attract and
retain key employees, permits it to provide useful products and services to
customers, enhance stockholder value, motivate innovation, foster teamwork, and
adequately reward employees.
CASH-BASED COMPENSATION
SALARY
The Company sets base salary for employees based upon the philosophy
indicated above. Using these elements, the Executive Compensation Committee
compares corresponding amounts paid by other companies selected because of the
similarity of their businesses to that of the Company
8
<PAGE>
and/or to provide local market comparisons. These companies are not necessarily
within the S&P Hotel-Motels Index which has been used for purposes of comparison
in the "Performance Graph." However, the committee believes these companies more
accurately reflect the market in which the Company competes for executive
talent.
SENIOR MANAGEMENT INCENTIVE PLAN
The Company sets certain earnings per share objectives, subject to
adjustments for certain factors. Bonuses are paid depending on the extent to
which plan objectives are achieved. If such objectives are fully achieved for
1996, bonuses of 40% of base salary would be paid to participants, of which one-
half would be deferred for one year subject to forfeiture (and reallocation to
other participants) in the event of certain terminations of employment.
EQUITY-BASED COMPENSATION
STOCK OPTION PLAN
This plan provides additional incentives to maximize stockholder value. The
plan also utilizes vesting periods to encourage key employees to continue in the
employ of the Company. All options become exercisable in one-third increments 15
months, 30 months and 45 months after the date of grant. The Company grants
stock options to a broad-based population of senior and middle management
employees. In determining the size of incentive awards to individual key
employees, the Stock Option Committee considers a number of factors, including:
1. Level of job responsibilities;
2. Past performance;
3. Size and frequency of grants by comparable
companies;
4. Salary level;
5. Corporate performance, as measured by
various tests of profitability such as operating income, net income and
earnings per share; and
6. Size of any prior grants.
9
<PAGE>
<TABLE>
<S> <C>
EXECUTIVE COMPENSATION COMMITTEE STOCK OPTION COMMITTEE
Manfred Steinfeld, Chairman William B. Kaplan, Chairman
Robert L. Haag Robert L. Haag
Trisha Wilson Herbert L. Roth
</TABLE>
PERFORMANCE GRAPH
The performance graph below shall not be deemed incorporated by reference by
any general statement incorporating this Proxy Statement by reference into any
filing under the Acts, except to the extent that the Company specifically
incorporates this information by reference, and shall not otherwise be deemed
filed under such Acts.
The graph below compares cumulative total return (assuming reinvestment of
dividends) on the Company's Common Stock, for the five-year period shown,
compared with the Standard & Poor's 500 Index and the Standard & Poor's
Hotel-Motels Index (fiscal years ending December 31), assuming $100 invested on
January 1, 1991 in the Company's Common Stock and in each index.
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
SHELBY WILLIAMS
INDUSTRIES, INC. S&P 500 S&P HOTEL-MOTELS
<S> <C> <C> <C>
1990 100.0 100.0 100.0
1991 103.5 130.5 131.9
1992 179.7 140.4 185.6
1993 257.9 154.6 345.7
1994 156.6 156.6 307.5
1995 225.0 215.5 363.5
</TABLE>
<TABLE>
<CAPTION>
1990 1991 1992 1993 1994 1995
--------- --------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C> <C>
Shelby Williams Industries, Inc. 100.0 103.5 179.7 257.9 156.6 225.0
S&P 500 100.0 130.5 140.4 154.6 156.6 215.5
S&P Hotel-Motels 100.0 131.9 185.6 345.7 307.5 363.5
</TABLE>
10
<PAGE>
BOARD MEETINGS AND COMMITTEES
The Board of Directors has four standing committees: the executive committee,
the audit committee, the executive compensation committee and the stock option
committee. The function of the executive committee is to exercise the power and
authority of the Board of Directors as may be necessary during intervals between
meetings of the Board of Directors, subject to such limitations as are provided
by law, the Company's By-laws or resolutions of the Board of Directors. The
function of the audit committee is to review with the independent auditors of
the Company the scope and adequacy of the audit of the Company's accounts to be
made by such auditors and the accounting practices, procedures and policies of
the Company. The function of the executive compensation committee is to examine
and make recommendations to the Board as to the compensation to be paid to the
executives of the Company. The function of the stock option committee is to
grant options under and administer the Company's stock option plans and to have
responsibility with respect to the determination and amount of any contribution
to the Company's ESOP. The Company does not have a nominating committee.
The Board of Directors met four times and the audit committee and the
executive compensation committee each met once during 1995. The stock option
committee acted by unanimous written consents and did not meet during 1995. The
executive committee did not meet formally in 1995. All directors attended at
least 75% of the aggregate of such Board and committee meetings of which they
were members.
CERTAIN TRANSACTIONS
William B. Kaplan, a director of the Company, is president and 50% shareholder
of Senior Lifestyle Corporation ("SLC"). Affiliates of SLC have selected and
from time to time in the future may select the Company's products for purchase
by building projects managed, but not owned, by such affiliates. Neither Mr.
Kaplan, SLC nor such affiliates receive any compensation from the Company for
such selections.
Mr. Kaplan is the president and one of the principal owners of Senior Suites
Chicago Corporation, the general partner (with a 1% interest) of certain limited
partnerships which have developed and constructed residential projects for
seniors that opened for occupancy in mid-1995 and early 1996 or are scheduled to
open later in 1996. The limited partnerships have purchased or anticipate
purchasing products from the Company in the normal course of business. Because
these limited partnerships had little or no revenues in 1995, the amounts paid
or to be paid to the Company, while in each case less than $60,000 and less than
1% of total project development budgets, exceed 5% of each limited partnership's
unaudited revenues for 1995. The entities and amounts of purchases or orders for
purchase from the Company are as follows: Senior Suites Chicago Grand Limited
Partnership, $51,158 in 1995; Senior Suites Chicago Gage Limited Partnership,
$45,820 in 1995; and Senior Suites Chicago South Shore Limited Partnership,
$33,049 in 1995 and $20,743 through February 14, 1996. In addition, Senior
Suites Chicago Central Station Limited Partnership, which had no purchases in
1995, anticipates purchasing approximately $55,000 of products from the Company
in 1996.
Douglas A. Parker, a nominee for director of the Company, is president, CEO
and a more than 10% stockholder of Leonard Parker Company, Inc. ("LPC"). LPC
purchased products from the Company for resale in the normal course of business
in 1995 and such purchases are continuing in 1996. Net sales by the Company to
LPC in 1995 amounted to approximately $3,818,000.
Trisha Wilson, a director of the Company, has recommended or specified and
from time to time in the future may recommend or specify the Company's products
for projects in connection with which she or her company renders interior
architectural hospitality design services. Neither Ms. Wilson nor her company
receives any compensation from the Company for such recommendations or
specifications.
11
<PAGE>
PROPOSAL TO RATIFY SELECTION OF INDEPENDENT AUDITORS
The Board of Directors has selected the firm of Ernst & Young LLP as
independent auditors for the current fiscal year. Ernst & Young LLP served in
this capacity for 1995.
A representative of Ernst & Young LLP is expected to be present at the annual
meeting and to be available to respond to any appropriate questions raised at
the meeting and make a statement if he desires to do so.
PROPOSALS OF STOCKHOLDERS
Proposals of stockholders intended to be presented at the next annual meeting
must be received by the Company for inclusion in the Company's proxy statement
and form of proxy relating to that meeting not later than November 25, 1996.
GENERAL
The Company will bear the cost of solicitation of proxies. In addition to
being solicited by mail, proxies may be solicited personally or by telephone or
telegraph. The Company will reimburse brokerage houses and other custodians,
nominees and fiduciaries for forwarding proxy materials to principals in
obtaining their proxies.
The Board of Directors is not aware of any matter which is to be presented for
action at the meeting other than the matters set forth herein. Should any other
matter requiring a vote of the stockholders arise, the proxies in the enclosed
form confer upon the person or persons entitled to vote the shares represented
by such proxies discretionary authority to vote the same in respect of any such
other matter in accordance with their best judgment in the interest of the
Company.
Walter Roth
SECRETARY
Dated: March 25, 1996
12
<PAGE>
SHELBY WILLIAMS INDUSTRIES, INC.
PROXY SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
FOR ANNUAL MEETING OF STOCKHOLDERS-MAY 7, 1996
The undersigned stockholder of SHELBY WILLIAMS INDUSTRIES, INC. hereby
appoints PAUL N. STEINFELD, ROBERT P. COULTER and WALTER ROTH, each with full
power of substitution, as attorneys and proxies to vote all of the shares of
stock of said Company which the undersigned is entitled to vote at the Annual
Meeting of Stockholders of said Company to be held on Tuesday, May 7, 1996 at
9:30 A.M. at The Shareholders Room, 21st Floor, 231 South LaSalle Street,
Chicago, Illinois, or at any adjournments thereof, with all powers the
undersigned would possess if personally present, as indicated below, and for the
transaction of such other business as may properly come before said meeting or
any adjournment thereof, all as set forth in the March 25, 1996 Proxy Statement
for said meeting:
<TABLE>
<S> <C> <C> <C> <C> <C>
1. Election of / / FOR all nominees listed below / /
Directors. (except as marked to the contrary WITHHOLD AUTHORITY to vote
below) for all nominees listed below
</TABLE>
(INSTRUCTION: TO WITHHOLD AUTHORITY TO VOTE FOR ANY INDIVIDUAL NOMINEE, STRIKE A
LINE THROUGH THE NOMINEE'S NAME IN THE LIST BELOW.)
Robert P. Coulter, Robert L. Haag, William B. Kaplan, Douglas A. Parker, Herbert
L. Roth, Manfred Steinfeld,
Paul N. Steinfeld, Trisha Wilson
- --------------------------------------------------------------------------------
(CONTINUED AND TO BE SIGNED ON REVERSE SIDE)
<PAGE>
(CONTINUED FROM OTHER SIDE)
2. Ratifying selection of Ernst & Young LLP as independent
auditors. / / FOR / / AGAINST / / ABSTAIN
A majority of the members of said Proxy Committee who shall be present in
person or by substitute at said meeting, or in case but one shall be present
then that one, shall have and exercise all of the powers of said Proxy
Committee.
THIS PROXY WILL BE VOTED AS DIRECTED BUT IF NO DIRECTION IS INDICATED WILL
BE VOTED FOR PROPOSALS (1) AND (2) DESCRIBED HEREIN. ON OTHER MATTERS THAT MAY
COME BEFORE SAID MEETING, THIS PROXY WILL BE VOTED IN THE DISCRETION OF THE
ABOVE-NAMED PERSONS.
Dated: ____________________, 1996
_________________________________
(Signature of Stockholder)
Note: Please sign exactly as your name or names appear on this Proxy. If the
stock is registered in the name of more than one person, the Proxy should be
signed by all named holders. When signing as attorney, executor, administrator,
trustee or guardian, please give full title. If a corporation, please sign in
full corporate name by president or other authorized officer. If a partnership,
please sign in partnership name by authorized person.
