<PAGE>
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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
Bush Industries Inc.
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
- --------------------------------------------------------------------------------
(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:
-------------------------------------------------------------------------
(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:
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(4) Date Filed:
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Notes:
<PAGE>
BUSH INDUSTRIES, INC.
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
to be held on May 13, 1999
TO ALL STOCKHOLDERS OF BUSH INDUSTRIES, INC.:
NOTICE IS HEREBY GIVEN that the Annual Meeting of Stockholders of Bush
Industries, Inc., a Delaware corporation, will be held at the Sanibel Harbour
Resort & Spa, 17960 Harbour Pointe Drive, Ft. Myers, FL 33908, on Thursday,
May 13, 1999 at 10:00 a.m., Florida time, for the following purposes:
1. To elect eleven Directors, four of whom will be Class A Directors
elected by the holders of Class A Common Stock and seven of whom will be
Class B Directors elected by the holders of Class B Common Stock, for
the term of one year and until their successors are duly elected and
qualified;
2. To ratify the appointment of Deloitte & Touche LLP, as the Company's
independent public accountants for the fiscal year ending January 1,
2000; and
3. To transact such other business as may properly come before the Annual
Meeting or any adjournment or adjournments thereof.
Only stockholders of record at the close of business on March 18, 1999, are
entitled to notice of and to vote at the Annual Meeting or any adjournments
thereof.
By Order of the Board of Directors,
Ernest C. Artista,
Secretary
Jamestown, New York
March 26, 1999
WHETHER OR NOT YOU PLAN TO ATTEND THE ANNUAL MEETING, PLEASE PROMPTLY
COMPLETE, SIGN AND DATE THE ENCLOSED PROXY, WHICH IS SOLICITED BY THE BOARD OF
DIRECTORS OF THE COMPANY, AND RETURN IT TO THE COMPANY. THE PROXY MAY BE
REVOKED AT ANY TIME BEFORE IT IS VOTED, AND STOCKHOLDERS EXECUTING PROXIES MAY
ATTEND THE MEETING AND VOTE IN PERSON, SHOULD THEY SO DESIRE.
<PAGE>
BUSH INDUSTRIES, INC.
One Mason Drive
Jamestown, New York 14702
----------------
PROXY STATEMENT
The accompanying proxy is solicited by the Board of Directors of Bush
Industries, Inc. (the "Company") for the Annual Meeting of Stockholders of the
Company to be held at the Sanibel Harbour Resort & Spa, 17960 Harbour Pointe
Drive, Ft. Myers, FL 33908, on Thursday, May 13, 1999 at 10:00 a.m., Florida
time. All proxies duly executed and received will be voted on all matters
presented at the Annual Meeting in accordance with the instructions given by
such proxies. In the absence of specific instructions, proxies so received
will be voted for the named nominees relating to the class of Common Stock for
which the proxy relates for election to the Company's Board of Directors and
for the ratification of Deloitte & Touche LLP, as the Company's independent
public accountants. The Board of Directors does not anticipate that any of its
nominees will be unavailable for election and does not know of any other
matters that may be brought before the Annual Meeting. In the event that any
other matter should come before the Annual Meeting or that any nominee is not
available for election, the persons named in the enclosed proxy will have
discretionary authority to vote all proxies not marked to the contrary with
respect to such matter in accordance with their best judgment. The proxy may
be revoked at any time before being voted. The Company will pay the entire
expense of soliciting the proxies, which solicitation will be by use of the
mails. This Proxy Statement is being mailed to stockholders on or about March
26, 1999.
Only holders of shares of Class A Common Stock or Class B Common Stock of
record at the close of business on March 18, 1999 will be entitled to notice
of and to vote at the Annual Meeting and at all adjournments thereof. As of
the close of business on March 18, 1999, the Company had outstanding
10,481,359 shares of Class A Common Stock and 3,395,365 shares of Class B
Common Stock.
At the Annual Meeting, the holders of Class A Common Stock will be entitled,
as a class, to elect four Directors ("Class A Directors"), and the holders of
Class B Common Stock will be entitled, as a class, to elect seven Directors
("Class B Directors"). The vote of a majority of the Class A shares of Common
Stock represented at the Annual Meeting is required for the election of the
Class A Directors, and the vote of a majority of the Class B shares of Common
Stock represented at the Annual Meeting is required for the election of the
Class B Directors. The vote of a majority of the shares of capital stock
represented at the Annual Meeting, voting as a single class and after taking
into account that each holder of Class A Common Stock is entitled to one-tenth
vote per share of Class A Common Stock, and each holder of Class B Common
Stock is entitled to one vote per share of Class B Common Stock, is required
for the ratification of the appointment of Deloitte & Touche LLP, as the
Company's independent public accountants.
Shares represented by proxies which are marked "abstained" or which are
marked to deny discretionary authority will only be counted for determining
the presence of a quorum. Votes withheld in connection with the election of
one or more of the nominees for Director will not be counted as votes cast for
such individuals. In addition, where brokers are prohibited from exercising
discretionary authority for beneficial owners who have not provided voting
instructions (commonly referred to as "broker non-votes"), those shares will
not be included in the vote totals.
A list of the stockholders entitled to vote at the Annual Meeting will be
available at the Company's office, One Mason Drive, Jamestown, New York 14702,
for a period of ten (10) days prior to the Annual Meeting for examination by
any stockholder.
Officers and Directors of the Company beneficially own approximately 17% of
the outstanding shares of Class A Common Stock and approximately 99% of the
outstanding shares of Class B Common Stock. See "Security Ownership of
Management and Principal Stockholders." Accordingly, approval of the aforesaid
matters is virtually assured.
1
<PAGE>
SECURITY OWNERSHIP OF MANAGEMENT
AND PRINCIPAL STOCKHOLDERS
The following table sets forth the amount of shares of Class A Common Stock
and Class B Common Stock owned as of March 1, 1999 by each person standing for
election as a Director of the Company, by those persons known to the Company
to own beneficially 5% or more of the outstanding shares of Class A and/or
Class B Common Stock of the Company, and by all Directors and Officers of the
Company as a group. With respect to any person who beneficially owns 5% or
more of the outstanding shares of Class A and/or Class B Common Stock, the
address of such person is also set forth.
<TABLE>
<CAPTION>
Number and Number and
Percentage of Percentage of
Name and Address Shares of Class A Shares of Class B
of Beneficial Owner Common Stock Owned Common Stock Owned
- ------------------------ ------------------ ------------------
<S> <C> <C> <C> <C>
Paul S. Bush............ 1,220,068 11.0%(1) 3,329,885 98.1%(2)
One Mason Drive
Jamestown, NY 14702
Robert L. Ayres......... 155,519 1.5%(3) --
Lewis H. Aronson........ 81,563 (4)(5) --
Paul A. Benke........... 631 (5) --
Jerald D. Bidlack....... 7,264 (5) --
Douglas S. Bush......... 145,628 1.4%(6) 19,004 (5)
Gregory P. Bush......... 106,982 1.0%(7) 27,936 (5)(8)
David G. Dawson......... 51,651 (5)(9) --
Robert E. Hallagan...... -- --
Donald F. Hauck......... 88,641 (5)(10) --
David G. Messinger...... 115,086 1.1%(11) --
Bush Industries, Inc.
Savings and Retirement
Plan................... 672,029 6.4% --
One Mason Drive
Jamestown, NY 14702
FMR Corp. .............. 1,040,500 9.9% --
82 Devonshire St.
Boston, MA 02109
Reich & Tang Asset Man-
agement L.P............ 1,382,750 13.2% --
600 Fifth Ave.
New York, NY 10020
All Officers and Direc-
tors as a group (13
persons)............... 2,007,364 17.3%(12)(13) 3,376,825 99.5%
</TABLE>
- --------
(1) Includes 560,000 shares of Class A Common Stock issuable upon exercise of
outstanding options. In addition, includes 228,153 shares of Class A
Common Stock held in trust for the benefit of Mr. Paul S. Bush's
children, and with respect to which Mr. Paul S. Bush disclaims beneficial
ownership. Also includes 400,000 shares held by the Paul S. Bush
Charitable Remainder Unitrust, and with respect to which Mr. Paul S. Bush
disclaims beneficial ownership. Excludes 10,550 shares of Class A Common
Stock held of record by the Company's Savings and Retirement Plan (the
"401(k) Plan") for the benefit of Mr. Paul S. Bush, and with respect to
such shares, the trustees of such Plan have sole voting power. In
addition, excludes shares of Class A Common Stock issuable upon
conversion of shares of Class B Common Stock.
2
<PAGE>
(2) Includes 38,757 shares of Class B Common Stock held in trust for the
benefit of Mr. Paul S. Bush's children, and with respect to which Mr.
Paul S. Bush disclaims beneficial ownership.
(3) Includes 143,750 shares of Class A Common Stock issuable upon the
exercise of outstanding options. Excludes 7,498 shares of Class A Common
Stock held of record by the Company's 401(k) Plan for the benefit of Mr.
Robert L. Ayres, and with respect to such shares, the trustees of such
Plan have sole voting power.
(4) Includes 81,563 shares of Class A Common Stock issuable upon exercise of
outstanding options. Excludes 4,941 and 1,014 shares of Class A Common
Stock, held of record by the Company's 401(k) Plan for the benefit of Mr.
Lewis H. Aronson and his spouse, respectively, and with respect to such
shares, the trustees of such Plan have sole voting power. Also excludes
900 shares of Class A Common Stock issuable to Mr. Aronson's spouse upon
the exercise of outstanding options owned of record by Mr. Aronson's
spouse, and with respect to which Mr. Aronson disclaims beneficial
ownership.
(5) Less than 1%.
(6) Includes 87,499 shares of Class A Common Stock issuable upon exercise of
outstanding options. Excludes 1,756 shares of Class A Common Stock held
of record by the Company's 401(k) Plan for the benefit of Mr. Douglas S.
Bush, and with respect to such shares, the trustees of such Plan have
sole voting power. Excludes shares of Class A Common Stock issuable upon
conversion of shares of Class B Common Stock beneficially owned by Mr.
Douglas S. Bush.
(7) Includes 59,063 shares of Class A Common Stock issuable upon exercise of
outstanding options. Includes 8,000 shares of Class A Common Stock held
of record by Mr. Gregory P. Bush's spouse, and with respect to such
shares, Mr. Gregory P. Bush disclaims beneficial ownership. Excludes
3,076 shares of Class A Common Stock held of record by the Company's
401(k) Plan for the benefit of Mr. Gregory P. Bush, and with respect to
such shares, the trustees of such Plan have sole voting power. Excludes
shares of Class A Common Stock issuable upon conversion of shares of
Class B Common Stock beneficially owned by Mr. Gregory P. Bush.
(8) Includes 1,530 shares of Class B Common Stock held of record by Mr.
Gregory P. Bush's spouse, and with respect to such shares, Mr. Gregory P.
Bush disclaims beneficial ownership. Includes 7,402 shares of Class B
Common Stock held as custodian by Mr. Gregory P. Bush's spouse for the
benefit of Mr. Gregory P. Bush's children, and with respect to such
shares, Mr. Gregory P. Bush disclaims beneficial ownership.
(9) Includes 32,188 shares of Class A Common Stock issuable upon exercise of
outstanding options. Includes 211 shares of Class A Common Stock held as
custodian by Mr. David G. Dawson for the benefit of minor children of Mr.
Dawson, and with respect to such shares, Mr. Dawson disclaims beneficial
ownership. Includes 30 shares of Class A Common Stock held as custodian
by Mr. Dawson's spouse for the benefit of Mr. Dawson's children, and with
respect to such shares, Mr. Dawson disclaims beneficial ownership.
(10) Includes 23,907 shares of Class A Common Stock issuable upon the exercise
of outstanding options. Excludes 6,164 shares of Class A Common Stock
held of record by the Company's 401(k) Plan for the benefit of Mr. Donald
F. Hauck, and with respect to such shares, the trustees of such Plan have
sole voting power.
(11) Includes 630 shares of Class A Common Stock held as custodian by Mr.
David G. Messinger for his minor children, and with respect to such
shares, Mr. Messinger disclaims beneficial ownership. Includes 96,875
shares of Class A Common Stock issuable upon exercise of outstanding
options. Excludes 7,921 shares of Class A Common Stock held of record by
the Company's 401(k) Plan for the benefit of Mr. Messinger, and with
respect to such shares, the trustees of such Plan have sole voting power.
(12) Includes shares of Class A Common Stock issuable upon exercise of
outstanding options, as described in the Notes above. In addition, includes
shares of Class A Common Stock beneficially owned by Mr. Ernest C. Artista
and Mr. Neil A. Frederick, the Company's Secretary and Treasurer
respectively. Excludes shares
3
<PAGE>
of Class A Common Stock issuable upon conversion of outstanding shares of
Class B Common Stock. Excludes shares held of record by the Company's
401(k) Plan, as described in the Notes above. In addition, excludes shares
of Class A Common Stock issuable to the spouses of certain Officers upon
exercise of outstanding options.
(13) In calculating the percentage of shares of Class A Common Stock owned,
included in the total number of shares of Class A Common Stock
outstanding are the shares of Class A Common Stock issuable upon exercise
of outstanding options, as described in the foregoing Notes.
4
<PAGE>
ELECTION OF DIRECTORS
Eleven (11) Directors are to be elected for the ensuing year and until their
successors are duly elected and qualified. Four of such Directors will be
Class A Directors, elected by the holders of the Class A Common Stock, and
seven of such Directors will be Class B Directors, elected by the holders of
the Class B Common Stock. If, at the time of election, any of the nominees
should be unavailable for election, a circumstance which is not expected by
the Company, it is intended that the proxies will be voted for such substitute
nominee as may be selected by the Company. Proxies not marked to the contrary
will be voted for the election of the following persons with respect to that
class of Common Stock represented thereby. All of the nominees are standing
for re-election by the stockholders from the current term.
<TABLE>
<CAPTION>
Name and Age Director Since Position with the Company
- ---------------------------- -------------- -------------------------
<S> <C> <C>
Nominees for Class A Direc-
tors
Paul A. Benke (77)......... 1985 Director
Jerald D. Bidlack (63)..... 1985 Director
David G. Dawson (51)....... 1998 Director
Robert E. Hallagan (55).... 1993 Director
Nominees for Class B Direc-
tors
Paul S. Bush (62).......... 1965 Chairman of the Board, President,
Chief Executive Officer
Robert L. Ayres (55)....... 1988 Executive Vice President, Chief
Operating Officer, Chief Financial
Officer and Director
Lewis H. Aronson (46)...... 1993 Senior Vice President of
Operations and Director
Douglas S. Bush (32)....... 1995 Vice President of
Merchandising and Director
Gregory P. Bush (33)....... 1993 Vice President of Furniture
Research and Development
and Advanced Systems
Technology and Director
Donald F. Hauck (55)....... 1981 Senior Vice President and Director
David G. Messinger (49).... 1988 Senior Vice President of Sales
and Marketing and Director
</TABLE>
Mr. Paul A. Benke has served as a Director of the Company since 1985. In
1982, Mr. Benke founded the Roger Tory Peterson Institute, a not-for-profit
environmental education institute, and is titled "Founder". He served as its
President from 1995 to 1996 and as its Executive Vice President/Executive
Director from 1991 through 1995.
Mr. Jerald D. Bidlack has served as a Director of the Company since 1985.
Mr. Bidlack has been President of Griffin Automation, Inc., West Seneca, New
York since 1992, a designer and manufacturer of automation equipment. He also
serves as a Director of Graham Corporation of Batavia, New York.
Mr. David G. Dawson has served as a Director of the Company since 1998. Mr.
Dawson has been Chairman of the Board and President of Dawson Metal Company
and Dawson Doors since 1983 and has been President of Spray Tech, Inc. since
1994. Mr. Dawson also serves on the Board of Directors of CLI Oncology,
Integument, Inc. and Libera, Inc. In addition, Mr. Dawson serves on a number
of charitable boards and commissions.
5
<PAGE>
Mr. Robert E. Hallagan has served as a Director of the Company since 1993.
Mr. Hallagan has been the Vice Chairman of Heidrick & Struggles since January
1997, and prior to that he was its President and Chief Executive Officer since
1991. In addition, Mr. Hallagan serves as Chief Executive Officer of the
Heidrick & Struggles/National Association of Corporate Directors (NACD) joint
venture, The Center for Board Leadership. Mr. Hallagan also serves on the
Board of Directors of Berkshire Life Insurance Company and the National
Association of Corporate Directors.
Mr. Paul S. Bush has been with the Company since it was founded in 1959. He
has been President and Chief Executive Officer since 1971. Mr. Paul S. Bush
serves on the Board of Directors of the American Furniture Manufacturers
Association of High Point, North Carolina. He is the father of Messrs. Gregory
P. and Douglas S. Bush.
Mr. Robert L. Ayres joined the Company as Executive Vice President in 1988.
He has been Chief Operating and Chief Financial Officer since 1991.
Mr. Lewis H. Aronson has been employed by the Company since 1988 and has
held a variety of management positions within the Company since that time.
Currently Mr. Aronson is Senior Vice President of Operations.
Mr. Douglas S. Bush has been employed by the Company since 1990 and has held
a variety of management positions within the Company since that time.
Currently Mr. Douglas S. Bush is Vice President of Merchandising. He is the
son of Mr. Paul S. Bush and the brother of Mr. Gregory P. Bush.
Mr. Gregory P. Bush has been employed by the Company since 1988 and has held
a variety of management positions within the Company since that time.
Currently Mr. Gregory P. Bush is Vice President of Furniture Research and
Development and Advanced Systems Technology. He is the son of Mr. Paul S. Bush
and the brother of Mr. Douglas S. Bush.
Mr. Donald F. Hauck has been employed by the Company since 1971 and has held
a variety of management positions with the Company since that time. Currently
Mr. Hauck is Senior Vice President.
Mr. David G. Messinger has been employed by the Company since 1975 and has
held a variety of management positions with the Company since that time.
Currently Mr. Messinger is Senior Vice President of Sales and Marketing.
The business background of the following Executive Officers of the Company,
to the extent not otherwise set forth herein, are described below:
Mr. Ernest C. Artista (47) joined the Company in 1988 and has held a variety
of management positions with the Company since that time. Currently Mr.
Artista is Secretary of the Corporation and Vice President of Organizational
Development and Human Resources.
Mr. Neil A. Frederick (46) joined the Company in 1988 and has held a variety
of management positions with the Company since that time. Currently, Mr.
Frederick is Treasurer of the Corporation and Vice President of Finance.
MEETINGS OF THE BOARD OF DIRECTORS
AND INFORMATION REGARDING COMMITTEES
The Board of Directors has two standing committees, an Audit Committee and a
Compensation Committee. The Company does not have a Nominating Committee.
The Audit Committee is composed of Messrs. Paul A. Benke (Chairman), Jerald
D. Bidlack and Robert E. Hallagan. The duties of the Audit Committee include
recommending the engagement of independent auditors,
6
<PAGE>
reviewing and considering actions of Management in matters relating to audit
functions, reviewing with independent auditors the scope and results of its
audit engagement, reviewing reports from various regulatory authorities,
reviewing the system of internal controls and procedures of the Company, and
reviewing the effectiveness of procedures intended to prevent violations of
law and regulations. The Audit Committee held two meetings in 1998.
The Compensation Committee is comprised of Messrs. Jerald D. Bidlack
(Chairman), Paul A. Benke and Robert E. Hallagan. The duties of the
Compensation Committee include recommending to the Board of Directors
remuneration to be paid to Executive Officers of the Company, determining the
number of shares and options to be awarded pursuant to the Company's 1995
Stock Plan, administering and monitoring compensation, including administering
the Company's Performance Bonus Plan, and recommending the establishment of
incentive and bonus programs for executives of the Company. The Compensation
Committee held one meeting in 1998.
The Board of Directors held ten meetings in 1998. All Directors attended
100% of the meetings of the Board of Directors and Committees on which they
served.
EXECUTIVE COMPENSATION
REPORT OF THE COMPENSATION COMMITTEE ON EXECUTIVE COMPENSATION
All decisions on the compensation of the Company's Executive Officers are
made by the Compensation Committee of the Board of Directors (the
"Committee"). Grants or awards of stock options or shares of the Company's
Class A Common Stock to Executive Officers are made solely by the Committee in
compliance with the requirements of Rule 16b-3, promulgated under the
Securities Exchange Act of 1934.
The Company's executive compensation program is designed to help attract,
retain, and motivate the highly qualified personnel needed to ensure maximum
stockholder returns. To meet these goals, the Company has implemented a
compensation program with the following components:
. Base salaries that reflect the scope and responsibilities of the
position, as well as the skills, knowledge, experience, abilities, and
contributions of each individual executive.
. Short term incentives that are directly linked to the financial
performance of the Company.
. Long term incentives that balance the Executive Officer's short and long
term perspectives and provide rewards consistent with stockholder
returns.
All decisions regarding individual compensation for the Company's Executive
Officers and executive compensation programs are reviewed, discussed, and
approved by the Committee and/or are recommended to the Board of Directors or
stockholders for approval, as appropriate. All compensation decisions are
determined following a detailed review and assessment of external competitive
data, the individual's contributions to the Company's success, any significant
changes in role or responsibility, and internal equity of pay relationships.
The competitiveness of the Company's total compensation program--
incorporating base salaries, short term incentives, and long term incentives--
is assessed regularly, and where appropriate, with the assistance of outside
compensation consultants. In general, the Committee intends that the overall
compensation level for the executive group should reflect competitive levels
of compensation for comparable positions in similarly sized manufacturers of
consumer durables over the long term.
The Company believes that Executive Officers should be rewarded for their
contribution to the financial success and profitability of the business, and
as such, in 1994, the Company implemented, with stockholder approval, a
Performance Bonus Plan. Under the Performance Bonus Plan, actual bonus amounts
for each Executive Officer are based on a formula which multiplies the
Executive Officer's base salary by the Company's pretax, pre-bonus profits as
a percentage of sales and a factor reflecting the Executive Officer's relative
7
<PAGE>
responsibilities and ability to impact the Company's profits. All Executive
Officers, including the Chief Executive Officer, participate in the
Performance Bonus Plan. In addition, the Committee and the Board of Directors
occasionally approve special bonuses in recognition of extraordinary
achievements that have provided significant benefits to the stockholders of
the Company.
The Company believes that it is essential to link executive and stockholder
interests. To meet this objective, the Company administers a stock option
program which awards grants to provide participants with an opportunity to
share in the Company's success. In determining stock option grants, the
Committee considers the externally competitive market, the past contributions
of the individual, the individual's ability to affect Company profitability,
the scope of the individual's responsibilities, and the need to retain the
individual's service over time. All Executive Officers, including the Chief
Executive Officer, are eligible to participate in this program.
1998 EXECUTIVE COMPENSATION
Except for the change in compensation during the first quarter of 1998, as
previously disclosed in the Company's Proxy Statement for the Annual Meeting
held on May 14, 1998, the base salaries for the Executive Officers remained
the same.
Jerald D. Bidlack, Chairman
Paul A. Benke
Robert E. Hallagan
8
<PAGE>
Summary Compensation Table
<TABLE>
<CAPTION>
Long Term Compensation
-------------------------------
Annual Compensation Awards Payouts
---------------------------- --------------------- ---------
Securities Long
Other Restricted Underlying Term
Annual Stock Options/ Incentive All Other
Name and Salary Bonus Compensation Awards SARs Payouts Compensation
Principal Position Year ($) (1) ($) ($) (2) ($) (#) ($) ($) (3)
- ------------------------ ---- ------- ------- ------------ ---------- ---------- --------- ------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Paul S. Bush............ 1998 588,462 682,500 4,836 -- -- -- 299,448(4)
Chairman, President, 1997 545,184 928,988 4,344 -- -- -- 300,732(4)
Chief Executive Officer 1996 525,000 866,775 4,260 -- -- -- 303,523(4)
Robert L. Ayres......... 1998 395,004 360,937 -- -- -- -- 77,862(4)
Exec. Vice President, 1997 351,923 464,153 -- -- -- -- 79,540(4)
Chief Operating 1996 340,000 433,070 -- -- -- -- 78,726(4)
Officer,
Chief Financial Officer
David G. Messinger...... 1998 292,298 236,250 -- -- -- -- 5,700
Senior Vice President- 1997 259,615 272,231 -- -- -- -- 5,375
Sales & Marketing 1996 250,000 254,000 -- -- -- -- 4,712
Lewis H. Aronson........ 1998 242,308 175,000 -- -- -- -- 5,017
Senior Vice President- 1997 207,692 190,562 -- -- -- -- 4,558
Operations 1996 200,000 177,800 -- -- -- -- 4,494
Gregory P. Bush......... 1998 150,000 65,625 -- -- -- -- 4,250
Vice President of 1997 145,385 95,281 -- -- -- -- 4,098
Furniture 1996 140,000 119,544 -- -- -- -- 3,972
Research and
Development
and Advanced Systems
Technology
</TABLE>
- --------
(1) 1998 and 1996 salary represents 26 biweekly pay periods. 1997 salary
represents 27 biweekly pay periods.
(2) Represents imputed income from non-interest bearing loans.
(3) Includes Company contribution to the Savings and Retirement Plan (401(k)).
In 1998, such contributions were $5,700 for Mr. Paul S. Bush, $5,700 for
Mr. Ayres, $5,700 for Mr. Messinger, $5,017 for Mr. Aronson, and $4,250
for Mr. Gregory P. Bush. In 1997, such contributions were $5,375 for Mr.
Paul S. Bush, $5,375 for Mr. Ayres, $5,375 for Mr. Messinger, $4,558 for
Mr. Aronson, and $4,098 for Mr. Gregory P. Bush. In 1996, such
contributions were $5,375 for Mr. Paul S. Bush, $5,375 for Mr. Ayres,
$4,712 for Mr. Messinger, $4,494 for Mr. Aronson, and $3,972 for Mr.
Gregory P. Bush.
(4) Includes premiums paid by the Company with respect to split-dollar life
insurance policies for Mr. Paul S. Bush and Mr. Ayres. The Company will be
reimbursed to the extent of the premiums paid, and expects to receive such
payments upon the earlier of the death of the participant, or November 1,
2002 for Mr. Paul S. Bush and December 19, 2009 for Mr. Ayres. Premiums in
1998 were $293,748 for Mr. Paul S. Bush and $72,162 for Mr. Ayres.
Premiums in 1997 were $295,357 for Mr. Paul S. Bush and $74,165 for Mr.
Ayres. Premiums in 1996 were $298,148 for Mr. Paul S. Bush and $73,351 for
Mr. Ayres.
9
<PAGE>
AGGREGATED OPTIONS/SAR EXERCISES IN THE LAST FISCAL YEAR AND FISCAL YEAR-END
OPTIONS/SAR VALUE
<TABLE>
<CAPTION>
Number of Securities Value of Unexercised
Underlying Unexercised In-the-Money Options/SARs
Options/SARs at Fiscal at Fiscal Year-End
Year-End (#) $(000)
------------------------- -------------------------
Shares Value
Acquired On Realized
Name Exercise $(000) Exercisable Unexercisable Exercisable Unexercisable
- ------------------------ ----------- -------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Paul S. Bush............ 115,000 2,080 560,000 -- 1,975 --
Robert L. Ayres......... -- -- 59,377 84,373 209 298
David G. Messinger...... -- -- 37,812 59,063 133 208
Lewis H. Aronson........ -- -- 43,593 37,970 154 134
Gregory P. Bush......... -- -- 29,532 29,531 104 104
</TABLE>
COMPENSATION OF DIRECTORS
Directors who are not employees of the Company were paid an annual fee of
$28,000.
EMPLOYMENT CONTRACTS AND TERMINATION OF EMPLOYMENT AND CHANGE-IN-CONTROL
ARRANGEMENTS
The Executive Officers named in the Summary Compensation Table, except for
Mr. Gregory P. Bush, have employment agreements with the Company which provide
for a rolling three-year term of employment. Effective as of March 1998, the
base salaries payable on an annualized basis under the agreements are as
follows: Mr. Paul S. Bush $600,000; Mr. Robert L. Ayres $405,000; Mr. David G.
Messinger $300,000; and Mr. Lewis H. Aronson $250,000. The agreements also
provide that upon termination of an executive's employment due to disability,
the executive will receive the severance payments he would have received upon
termination of his employment by the Company without good cause, reduced by
the benefits that he may receive under any short term disability and long term
disability plans provided by the Company. In addition, in the case of Mr. Paul
S. Bush and Mr. Robert L. Ayres, the agreements provide for the continuation
of certain split dollar life insurance arrangements with the Company, despite
termination of their employment by the Company without good cause, until they
reach age 65.
Pursuant to the agreements, if the executive's employment with the Company
is terminated without good cause during the term of his agreement, the
executive will be entitled to severance pay equal to the compensation and
benefits he would have been paid, absent such termination, for a number of
months specified as follows: Mr. Paul S. Bush (36 months); Mr. Robert L. Ayres
(36 months); Mr. David G. Messinger (12 months); and Mr. Lewis H. Aronson (12
months).
Under each of the agreements, if the executive terminates his employment
after a substantial adverse alteration in the nature and status of the
executive's responsibilities or duties following a change in control of the
Company (as defined in the agreements), or if the Company terminates the
executive's employment without good cause following a change in control of the
Company, the executive will be entitled to severance pay equal to the
compensation and benefits he would have been paid during the next 36 months,
or in the case of Mr. Paul S. Bush, the next 48 months. The compensation
payable to an executive upon a "change in control" will be reduced, if
necessary, to assure that the payments would not constitute "excess parachute
payments" under the Internal Revenue Code of 1986, as amended.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
No member of the Compensation Committee was an officer or employee of the
Company or of any of its subsidiaries during the prior year or was formerly an
officer of the Company or of any of its subsidiaries. None of the Executive
Officers of the Company have served on the Board of Directors or Compensation
Committee during the last fiscal year of any other entity, any of whose
officers served either on the Board of Directors of the Company or on the
Compensation Committee of the Company.
10
<PAGE>
CERTAIN INDEBTEDNESS
The Company has loaned money to certain of its Executive Officers from time
to time on a non-interest bearing basis. Mr. Paul S. Bush was the only
Executive Officer named in the Company's Summary Compensation Table, with
indebtedness in excess of $60,000 outstanding at any time during 1998. The
largest amount of said indebtedness during 1998 for Mr. Paul S. Bush was
$93,949, and as of February 28, 1999, Mr. Paul S. Bush owed the Company
$72,963. Imputed interest on loans to named Executive Officers is reflected in
the Summary Compensation Table under the column "Other Annual Compensation".
COMPARISON OF TOTAL STOCKHOLDER RETURN
The following graph sets forth total stockholder returns for the New York
Stock Exchange, the S&P Household Furnishings Index, and the Company for the
five-year period beginning January 1, 1994 and ending January 1, 1999. Total
stockholder returns for the graph assumes that $100 was invested at the
beginning of the period, and that all dividends were reinvested.
PERFORMANCE GRAPH APPEARS HERE
<TABLE>
<CAPTION>
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1/1/94 1/1/95 1/1/96 1/1/97 1/1/98 1/1/99
- ----------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Bush Industries, Inc. $100.00 $99.80 $120.40 $178.30 $242.30 $116.90
- ----------------------------------------------------------------------------------------
New York Stock Exchange $100.00 $96.80 $127.10 $151.40 $197.30 $229.90
- ----------------------------------------------------------------------------------------
S&P Household Furnishings $100.00 $81.80 $ 98.60 $ 88.80 $123.10 $167.20
- ----------------------------------------------------------------------------------------
</TABLE>
11
<PAGE>
The preceding sections entitled "Report of the Compensation Committee on
Executive Compensation" and "Comparison of Total Stockholder Return" do not
constitute soliciting material for purposes of Rule 14a-9 of the Securities
and Exchange Commission (the "Commission"), will not be deemed to have been
filed with the Commission for purposes of Section 18 of the Securities
Exchange Act of 1934, and are not to be incorporated by reference into any
other filing made by the Company with the Commission.
RELATIONSHIP WITH INDEPENDENT PUBLIC ACCOUNTANTS
The Company has retained, subject to stockholder ratification, Deloitte &
Touche LLP, as its independent public accountants for the fiscal year ending
January 1, 2000. Deloitte & Touche LLP has been the independent accountants
for the Company for the past fifteen years and has no financial interest,
either direct or indirect, in the Company. A representative of Deloitte &
Touche LLP is expected to attend the Annual Meeting and to have an opportunity
to make a statement and/or respond to appropriate questions from stockholders.
If the stockholders do not ratify the appointment of Deloitte & Touche LLP, as
the Company's independent public accountants, the Board of Directors will
consider the selection of another accounting firm.
The vote of a majority of the shares of Class A and Class B Common Stock
represented at the Annual Meeting, voting as a single class, after giving
effect that each holder of Class A Common Stock is entitled to one-tenth vote
per share of Class A Common Stock, and each holder of Class B Common Stock is
entitled to one vote per share of Class B Common Stock, is required for the
ratification of Deloitte & Touche LLP, as the Company's independent public
accountants. The Board of Directors recommends a vote "FOR" the ratification
of the appointment of Deloitte & Touche LLP, as the Company's independent
public accountants.
CERTAIN TRANSACTIONS
The Company has entered into employment agreements with Paul S. Bush, Robert
L. Ayres, Lewis H. Aronson, and David G. Messinger. See "Executive
Compensation--Employment Contracts and Termination of Employment and Change-
in-Control Arrangements."
The Company maintains "key man" life insurance in the amount of
approximately $21.4 million on the life of Mr. Paul S. Bush, the Chairman of
the Board, President and Chief Executive Officer of the Company. Effective
July 1997, the Company entered into a stock redemption agreement with Mr. Paul
S. Bush, which provides that upon Mr. Paul S. Bush's demise the Company may be
required to redeem a portion of the Company's capital stock then owned by Mr.
Paul S. Bush's estate, at the then market price based upon a thirty day
average prior to the closing of any stock redemption. The amount of the
redemption is limited to the approximately $21.4 million in life insurance
proceeds described above. The Company believes that the redemption agreement
would protect stockholder valuation, by providing a mechanism for the orderly
liquidation of a portion of the estate's equity holdings in the Company, if
the estate is then required to sell such stock, for among other reasons, to
satisfy, in whole or part, then current estate tax obligations.
During fiscal year 1998, the Company made charitable contributions of
approximately $82,000 to The Paul Bush Family Foundation, a foundation
controlled by Mr. Paul S. Bush. Mr. David G. Dawson, a Class A Director of the
Company, served as a consultant to the Company during the Company's 1998
fiscal year. For the fiscal year ended January 2, 1999, the Company paid Mr.
Dawson in the aggregate approximately $88,000 for such services.
12
<PAGE>
COMPLIANCE WITH SECTION 16(a) OF THE EXCHANGE ACT
Section 16(a) of the Securities Exchange Act of 1934 (the "Exchange Act")
requires that the Company's Officers and Directors, and persons who own more
than ten percent of a registered class of the Company's equity securities,
file reports of ownership and changes in ownership with the Securities and
Exchange Commission. Officers, Directors and greater than ten percent
stockholders are required by regulation to furnish to the Company copies of
all Section 16(a) forms they file.
Based solely on its review of the copies of such forms received by it, or
written representations from certain reporting persons, the Company believes
that during its 1998 fiscal year, all such filing requirements applicable to
its Officers, Directors, and greater than ten percent beneficial owners were
complied with.
DEADLINE FOR RECEIPT OF STOCKHOLDER PROPOSALS
Proposals of stockholders of the Company that are intended to be presented
at the Company's next Annual Meeting must be received by the Company no later
than November 26, 1999 in order for them to be included in the proxy statement
and form of proxy relating to that meeting.
By Order of the Board of Directors
Ernest C. Artista,
Secretary
Jamestown, New York
March 26, 1999
13
<PAGE>
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PROXY FOR ANNUAL MEETING OF STOCKHOLDERS
BUSH INDUSTRIES, INC.
P.O. Box 460
One Mason Drive, Jamestown, NY 14702-0460
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
OF BUSH INDUSTRIES, INC.
The undersigned hereby appoints Paul S. Bush and Robert L. Ayres as Proxies,
each with the power to appoint his substitute, and hereby authorizes either of
them to represent and to vote, as designated hereon, all the shares of Class A
Common Stock of Bush Industries, Inc. held of record by the undersigned on March
18, 1999, at the Annual Meeting of Stockholders to be held on May 13, 1999 at
10:00 a.m., or any adjournment(s) thereof.
THIS PROXY WILL BE VOTED AS DIRECTED, OR, IF NO CONTRARY DIRECTION IS
INDICATED, WILL BE VOTED FOR THE ELECTION OF DIRECTORS AND FOR THE RATIFICATION
OF DELOITTE & TOUCHE LLP, AS THE COMPANY'S INDEPENDENT PUBLIC ACCOUNTANTS, AND
AS SAID PROXIES DEEM ADVISABLE ON SUCH OTHER MATTERS AS MAY COME BEFORE THE
MEETING.
(Continued on reverse side)
- --------------------------------------------------------------------------------
FOLD AND DETACH HERE
<PAGE>
<TABLE>
<S> <C> <C>
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This proxy, when properly executed, will be voted in the manner directed herein Please mark [X]
by the undersigned Class A Common Stockholder. If no direction is made, this your votes as
proxy will be voted FOR the following proposals: indicated in
this example.
1. ELECTION OF DIRECTORS PAUL A. BENKE, JERALD D. BIDLACK, DAVID G. DAWSON, ROBERT E. HALLAGAN
FOR all nominees WITHHOLD (INSTRUCTION: To withhold authority to vote for any individual nominee, write that
listed (except as AUTHORITY nominee's name in the space provided below.)
marked to the to vote for all
contrary) nominees listed
[ ] [ ] _________________________________________________________________________________
2. PROPOSAL TO RATIFY THE APPOINTMENT OF DELOITTE & TOUCHE LLP, TO ACT AS THE TO ACT UPON SUCH OTHER MATTER OR MATTERS
COMPANY'S INDEPENDENT PUBLIC ACCOUNTANTS FOR THE FISCAL YEAR ENDED JANUARY 1, 2000. WHICH MAY PROPERLY COME BEFORE THE MEETING
OR ANY ADJOURNMENT OR ADJOURNMENTS THEREOF.
FOR AGAINST ABSTAIN
[ ] [ ] [ ] This proxy should be marked, dated
and signed by the stockholder(s)
exactly as his or her name appears
hereon, and returned promptly in the
enclosed envelope. Persons signing
in a fiduciary capacity should
so indicate. If shares are held
by joint tenants or as community
property, both must sign.
Dated:_______________________, 1999
___________________________________
Signature
___________________________________
Signature
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FOLD AND DETACH HERE
</TABLE>
