<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:
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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):
-------------------------------------------------------------------------
(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.:
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(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 11, 2000
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 principal office
of the Company, One Mason Drive, Jamestown, New York 14702, on Thursday, May
11, 2000 at 10:00 a.m., New York time, for the following purposes:
1. To elect twelve Directors, five 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 an amendment to the Company's 1995 Stock Plan to increase the
number of shares of Class A Common Stock subject to such Plan by an
aggregate 250,000 shares of Class A Common Stock;
3. To ratify the appointment of Deloitte & Touche LLP, as the Company's
independent public accountants for the fiscal year ending December 30,
2000; and
4. 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 16, 2000, 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 29, 2000
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 principal office of the Company, One Mason Drive,
Jamestown, New York 14702, on Thursday, May 11, 2000 at 10:00 a.m., New York
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, for
the amendment to the 1995 Stock Plan (the "Plan") to increase the number of
shares of Class A Common Stock underlying the Plan 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 29, 2000.
Only holders of shares of Class A Common Stock or Class B Common Stock of
record at the close of business on March 16, 2000 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 16, 2000, the Company had outstanding
10,330,945 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 five 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. The vote of a majority of the shares
of outstanding capital stock, 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 to approve
the ratification of the amendment to the Plan.
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. Since Item 2 on the proxy card requires for approval
the affirmative vote of a majority of the voting power of the outstanding
shares of capital stock entitled to vote, an abstention with respect to such
proposal will have the same legal effect as a vote against such proposal.
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.
1
<PAGE>
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 18% 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.
2
<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, 2000, 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 ........... 1,227,228 11.3%(1) 3,325,685 97.9%(2)
One Mason Drive
Jamestown, NY 14702
Robert L. Ayres......... 168,619 1.6%(3) --
Lewis H. Aronson........ 86,453 (4)(5) --
Paul A. Benke........... 2,377 (5) --
Jerald D. Bidlack....... 11,316 (5) --
Douglas S. Bush......... 149,680 1.4%(6) 19,604 (5)
Gregory P. Bush......... 113,095 1.1%(7) 30,936 (5)(8)
David G. Dawson......... 45,522 (5)(9) --
Robert E. Hallagan...... 4,052 (5) --
Donald F. Hauck......... 92,134 (5)(10) --
Erland E. Kailbourne.... 4,052 (5) --
David G. Messinger...... 125,566 1.2%(11) --
Bush Industries, Inc.
Savings and Retirement
Plan .................. 728,078 7.1% --
One Mason Drive
Jamestown, NY 14702
Dimensional Fund
Advisors .............. 635,793 6.2% --
1299 Ocean Avenue
11th Floor
Santa Monica, CA 90401
FMR Corp. .............. 876,800 8.5% --
82 Devonshire St.
Boston, MA 02109
Reich & Tang Asset
Management L.P. ....... 1,680,150 16.3% --
600 Fifth Ave.
New York, NY 10020
All Officers and
Directors as a group
(14 persons)........... 2,068,918 18.1%(12)(13) 3,376,225 99.4%
</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 10,891 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. Certain of the foregoing
shares are owned of record by the Paul S. Bush Declaration of Trust, a
living trust, maintained for the benefit of Mr. Paul S. Bush.
3
<PAGE>
(2) Includes 1,861,916 shares of Class B Common stock held by The Bush Family
Limited Partnership. In addition, includes 40,557 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. Certain of the foregoing shares are owned of record by the
Paul S. Bush Declaration of Trust, a living trust, maintained for the
benefit of Mr. Paul S. Bush.
(3) Includes 143,750 shares of Class A Common Stock issuable upon the
exercise of outstanding options. Excludes 7,807 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 5,134 and 1,025 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 1,890 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
3,284 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 2,130 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 9,202 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 22,188 shares of Class A Common Stock issuable upon exercise of
outstanding options. Includes 60 shares of Class A Common Stock held as
custodian by Mr. David G. Dawson for the benefit of a minor child of Mr.
Dawson, 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 6,344 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 96,875 shares of Class A Common Stock issuable upon exercise of
outstanding options. 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.
Excludes 8,132 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
4
<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.
5
<PAGE>
ELECTION OF DIRECTORS
Twelve (12) Directors are to be elected for the ensuing year and until their
successors are duly elected and qualified. Five 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, except for Mr.
Erland E. Kailbourne who was elected a member of the Board of Directors in
October 1999 by action of the Board of Directors.
<TABLE>
<CAPTION>
Name and Age Director Since Position with the Company
- ----------------------------------- -------------- -------------------------
<S> <C> <C>
Nominees for Class A Directors
Paul A. Benke (78)................ 1985 Director
Jerald D. Bidlack (64)............ 1985 Director
David G. Dawson (52).............. 1998 Director
Robert E. Hallagan (56)........... 1993 Director
Erland E. Kailbourne (58)......... 1999 Director
Nominees for Class B Directors
Paul S. Bush (63)................. 1965 Chairman of the Board,
President, Chief Executive
Officer
Robert L. Ayres (56).............. 1988 Executive Vice President,
Chief Operating Officer,
Chief Financial Officer and
Director
Lewis H. Aronson (47)............. 1993 Senior Vice President of
Operations and Director
Douglas S. Bush (33).............. 1995 Vice President of
Merchandising and Director
Gregory P. Bush (34).............. 1993 Senior Vice President of
Product Development and
Research and Development and
Director
Donald F. Hauck (56).............. 1981 Senior Vice President and
Director
David G. Messinger (50)........... 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 DBA 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 Technologies, Inc. and Libera, Inc. In addition, Mr. Dawson serves
on a number of charitable boards and commissions.
6
<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. Erland E. Kailbourne has been the Chairman of The John R. Oishei
Foundation since October 1998, and he is the retired Chairman and CEO of Fleet
National Bank, New York Region, where he spent 37 years in various executive
capacities prior to his retirement in December 1998. He currently serves on a
number of corporate and community boards including Adelphia Communications
Corp., Albany International Corp., Rand Capital Corp., which are public
companies, and the New York ISO Utilities Board.
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 Senior Vice President of Product Development
and Research and Development. 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 (48) 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 (47) 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.
7
<PAGE>
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, Robert E. Hallagan and Erland E. Kailbourne. The duties of the
Audit Committee include recommending the engagement of independent auditors,
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. Recently both the United States Securities and Exchange
Commission and the New York Stock Exchange have issued new rules to amend
audit committee requirements. The Audit Committee is in the process of
implementing these new rules, consistent with transition measures provided for
under such rules. The Audit Committee held two meetings in 1999.
The Compensation Committee is comprised of Messrs. Jerald D. Bidlack
(Chairman), Paul A. Benke, Robert E. Hallagan and Erland E. Kailbourne. 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 two meetings in 1999.
The Board of Directors held eleven meetings in 1999. All Directors attended
at least 75% of the meetings of the Board of Directors and Committees on which
they then 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.
8
<PAGE>
The competitiveness of the Company's total compensation program--
incorporating base salaries, short term incentives, and long term incentives--
is assessed regularly. 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
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.
1999 Executive Compensation
In the first quarter of 2000, consistent with the Company's executive
compensation program designed to help attract, retain, and motivate the highly
qualified personnel needed to ensure maximum stockholder returns, the base
salaries of certain Executive Officers were increased. Bonuses awarded to all
Executive Officers, including Mr. Paul S. Bush, are primarily a function of
payouts under the formula-based Company Performance Bonus Plan, as described
above.
Jerald D. Bidlack, Chairman
Paul A. Benke
Robert E. Hallagan
Erland E. Kailbourne
9
<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 1999 600,002 651,300 6,576 -- -- -- 291,409(4)
Chairman, President, 1998 588,462 682,500 4,836 -- -- -- 299,448(4)
Chief Executive 1997 545,184 928,988 4,344 -- -- -- 300,732(4)
Officer
Robert L. Ayres 1999 404,998 344,468 1,567 -- -- -- 79,149(4)
Exec. Vice President, 1998 395,004 360,937 -- -- -- -- 77,862(4)
Chief Operating 1997 351,923 464,153 -- -- -- -- 79,540(4)
Officer,
Chief Financial
Officer
David G. Messinger 1999 299,988 225,450 1,254 -- -- -- 5,700
Senior Vice President 1998 292,298 236,250 -- -- -- -- 5,700
of Sales & Marketing 1997 259,615 272,231 -- -- -- -- 5,375
Lewis H. Aronson 1999 250,000 167,000 585 -- -- -- 5,075
Senior Vice President 1998 242,308 175,000 -- -- -- -- 5,017
of Operations 1997 207,692 190,562 -- -- -- -- 4,558
Gregory P. Bush 1999 161,538 86,850 731 -- -- -- 4,450
Senior Vice President 1998 150,000 65,625 -- -- -- -- 4,250
of Product Development 1997 145,385 95,281 -- -- -- -- 4,098
and Research and
Development
</TABLE>
- --------
(1) 1999 and 1998 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 1999, such contributions were $5,700 for Mr. Paul S. Bush, $5,700 for
Mr. Ayres, $5,700 for Mr. Messinger, $5,075 for Mr. Aronson, and $4,450
for Mr. Gregory P. Bush. 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.
(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 rollout of
the policies, the timing of which is contingent upon the amount of
premiums paid and policy performance. Premiums in 1999 were $285,709 for
Mr. Paul S. Bush and $73,449 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.
10
<PAGE>
Aggregated Options/SAR Exercises in the Last Fiscal Year and Fiscal Year-End
Options/SAR Value
<TABLE>
<CAPTION>
Number of Securities
Underlying Unexercised Value of Unexercised
Shares Options/SARs at Fiscal In-the-Money Options/SARs
Acquired Value Year-End (#) at Fiscal Year-End $(000)
On Realized ------------------------- -------------------------
Name Exercise $(000) Exercisable Unexercisable Exercisable Unexercisable
- ------------------------ -------- -------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Paul S. Bush............ -- -- 560,000 -- 4,635 --
Robert L. Ayres......... -- -- 101,565 42,185 841 349
David G. Messinger...... -- -- 67,343 29,532 557 244
Lewis H. Aronson........ -- -- 62,577 18,986 518 157
Gregory P. Bush......... -- -- 44,298 14,765 367 122
</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 2000, the
base salaries payable on an annualized basis under the agreements are as
follows: Mr. Paul S. Bush $630,000; Mr. Robert L. Ayres $435,000; Mr. David G.
Messinger $330,000; and Mr. Lewis H. Aronson $280,000. 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 the
earlier of their death or rollout of the policies.
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.
11
<PAGE>
Certain Indebtedness
The Company has loaned money to certain of its Executive Officers from time
to time for various reasons, including to facilitate the purchase of the
Company's stock, at fair market value, under the Company's 1995 Stock Plan.
While all loans are currently non-interest bearing, loans made to facilitate
the purchase of the Company's stock are non-interest bearing only until
November 2001. The largest amount of indebtedness during 1999 for Mr. Paul S.
Bush was $363,861, and as of February 26, 2000, Mr. Paul S. Bush owed the
Company $360,373. For the other Executive Officers named in the Company's
Summary Compensation Table, the largest aggregate amount of indebtedness
outstanding at any time during 1999 was as follows: Mr. Robert L. Ayres,
$187,494, Mr. David G. Messinger, $149,995, Mr. Gregory P. Bush, $87,492 and
Mr. Lewis H. Aronson, $69,988, with said amounts remaining outstanding as of
February 26, 2000. 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, 1995 and ending January 1, 2000. Total
stockholder returns for the graph assumes that $100 was invested at the
beginning of the period, and that all dividends were reinvested.
Comparison of Five Year Cumulative Return
[GRAPH]
1/1/95 1/1/96 1/1/97 1/1/98 1/1/99 1/1/00
Bush Industries, Inc. $100.00 $120.56 $178.40 $242.40 $117.01 $164.15
New York Stock Exchange $100.00 $131.31 $156.33 $203.71 $237.43 $259.15
S&P Household Furnishings $100.00 $121.83 $112.68 $165.80 $221.27 $201.35
12
<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.
RATIFICATION OF AMENDMENT TO THE COMPANY'S 1995 STOCK
PLAN TO INCREASE THE NUMBER OF SHARES OF CLASS A
COMMON STOCK SUBJECT TO SUCH PLAN
The Board of Directors has amended, subject to stockholder ratification, the
Company's 1995 Stock Plan (the "Plan"), to increase the number of shares of
Class A Common Stock subject to such Plan by 250,000 shares. The Plan provides
for the award of Incentive Stock Options ("ISO's") (as defined under Section
422 of the Internal Revenue Code of 1986, as amended (the "Code")), Non-
Qualified Stock Options (NQSO's), not intended to qualify under Section 422 of
the Code, and shares of its Class A Common Stock subject to certain
restrictions (the "Restricted Stock") to employees, directors, independent
contractors and consultants of the Company (the "Plan Participants"). The
maximum number of shares of Class A Common Stock available for issuance under
the Plan, as initially adopted and approved by the Company's stockholders, was
375,000 shares of Class A Common Stock, as adjusted for stock dividends and/or
stock splits effectuated in the form of stock dividends. The number of options
and/or shares of Restricted Stock which can be awarded to any one person in a
given year is 200,000. As of February 29, 2000, there remained 161,465 shares
of Class A Common Stock reserved for issuance under the terms of the Plan. The
Company's Board of Directors has deemed it in the best interest of the Company
to increase the number of shares of Class A Common Stock subject to the Plan
by 250,000 shares of Class A Common Stock to provide the Company with the
flexibility to issue additional shares and/or options under the Plan. The
Company believes that the Plan provides employees, directors, independent
contractors and consultants of the Company with an additional incentive to
stimulate their efforts on the Company's behalf and to attract other qualified
personnel to the Company's employ.
The affirmative vote of a majority of the outstanding shares of Class A and
Class B Common Stock, 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 amendment to the Plan to increase the number of shares of
Class A Common Stock subject to the Plan by 250,000 shares of Class A Common
Stock. The Board of Directors recommends a vote in favor of such ratification.
The following is a brief summary of the provisions of the 1995 Stock Plan as
previously adopted by the Company's stockholders and does not include all of
the detailed provision of the Plan.
In accordance with the terms of the Plan, ISO's may be issued with an
exercise price equal to the fair market value of a share of Class A Common
Stock on the date that the option is granted. In the case of a stockholder who
owns 10% or more of the voting stock of the Company, the exercise price cannot
be less than 110% of the fair market value of a share of Common Stock as of
the date of grant. The Company can also issue NQSO's under the terms of the
Plan, at an exercise price as determined by the Compensation Committee.
The Plan is administered by the Company's Compensation Committee. The
interpretation and construction by the Compensation Committee of any provision
of the Plan is final and binding.
No option may be exercised more than ten years from the date of its grant,
unless otherwise required or provided at the time of grant. All options will
be non-assignable and non-transferable by the holder, except as otherwise
provided by will or by the laws of descent and distribution. The Plan provides
for an adjustment in the number of shares of Class A Common Stock subject to
each outstanding option and/or in the exercise price thereof, in the event of
stock dividends, recaptializations, mergers, consolidations, or
reorganizations.
13
<PAGE>
No option granted under the Plan may be exercised during the first year
after the date of grant. Options granted under the Plan may be subject to a
vesting schedule, as determined as of the date of grant. The Plan provides for
an accelerated vesting in the event of a change in control and under certain
other circumstances. Options which have not been exercised must, unless
otherwise provided at the time of grant, be exercised within three months of
termination of employment or six months of death.
Shares of Restricted Stock may be awarded for such consideration and on such
terms as the Compensation Committee may determine. As long as the restrictions
remain in effect, the grantee cannot sell or transfer the shares, but the
grantee has all the other rights of a stockholder, including the right to vote
and to received dividends. The grantee will forfeit the grantee's Restricted
Stock to the Company if the grantee's employment with the Company terminates
for any reason prior to the expiration of the restrictions. Restrictions on
the disposition of Restricted Stock will expire after two years of continued
employment or after such shorter or longer time period as determined by the
Compensation Committee. The Compensation Committee in its discretion, however,
may relax or remove restrictions.
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
December 30, 2000. Deloitte & Touche LLP has been the independent accountants
for the Company for the past sixteen 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 Messrs. 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 1999, the Company paid Bush Entertainment, Inc., a
company of which Mr. Paul S. Bush is a principal, an aggregate of
approximately $77,000 for services rendered. Mr. David G. Dawson, a Class A
14
<PAGE>
Director of the Company, served as a consultant to the Company during the
Company's 1999 fiscal year. For the fiscal year ended January 1, 2000, the
Company paid Mr. Dawson in the aggregate approximately $88,000 for such
services.
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 1999 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 24, 2000 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 29, 2000
15
<PAGE>
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 16, 2000, at the Annual Meeting of Stockholders to be held on May 11,
2000 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, FOR THE AMENDMENT TO THE
COMPANY'S 1995 STOCK PLAN, 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)
<PAGE>
This proxy, when properly executed, will be voted in the manner directed herein
by the undersigned Class A Common Stockholder. If no direction is made, this
proxy will be voted FOR the following Proposals:
1. ELECTION OF DIRECTORS PAUL A. BENKE, JERALD D. BIDLACK, DAVID G.
DAWSON, ROBERT E. HALLAGAN, ERLAND E. KAILBOURNE
FOR all WITHHOLD
nominees listed AUTHORITY
(except as to vote for
marked to the all nominees (INSTRUCTION: To withhold authority to vote for
contrary) listed any individual nominee, write that nominee's
name in the space provided below.)
/ / / / ________________________________________________
2. PROPOSAL TO RATIFY AN AMENDMENT TO THE COMPANY'S 1995 STOCK PLAN TO INCREASE
THE NUMBER OF SHARES OF CLASS A COMMON STOCK SUBJECT TO SUCH PLAN BY AN
AGGREGATE 250,000 SHARES OF CLASS A COMMON STOCK.
FOR AGAINST ABSTAIN
/ / / / / /
3. PROPOSAL TO RATIFY THE APPOINTMENT OF DELOITTE & TOUCHE LLP, TO ACT AS THE
COMPANY'S INDEPENDENT PUBLIC ACCOUNTANTS FOR THE FISCAL YEAR ENDED DECEMBER 30,
2000.
FOR AGAINST ABSTAIN
/ / / / / /
TO ACT UPON SUCH OTHER MATTER OR MATTERS WHICH MAY PROPERLY COME BEFORE THE
MEETING OR ANY ADJOURNMENT OR ADJOURNMENTS THEREOF.
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:__________________________, 2000
______________________________________
Signature
______________________________________
Signature
