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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14A
(RULE 14A-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF
THE SECURITIES EXCHANGE ACT OF 1934
Filed by the registrant [ X ]
Filed by a party other than the registrant [ ]
Check the appropriate box:
[ ] Preliminary proxy statement
[ X ] Definitive proxy statement
[ X ] Definitive additional materials
[ ] Soliciting material pursuant to Rule 14a-11(c) or Rule 14a-12
AMERIWOOD INDUSTRIES INTERNATIONAL CORPORATION
--------------------------------------------------------
(Name of registrant as specified in its charter)
AMERIWOOD INDUSTRIES INTERNATIONAL CORPORATION
--------------------------------------------------------
(Name of person(s) filing Proxy Statement)
Payment of filing fee (Check the appropriate box):
[ X ] $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), or 14a-6(i)(2).
[ ] $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3)
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11
(1) Title of each class of securities to which transaction applies:
(2) Aggregate number of securities to which transaction applies:
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11:
(4) Proposed maximum aggregate value of transaction:
[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number, or
the form or schedule and the date of its filing.
(1) Amount previously paid:
(2) Form, schedule, or registration statement no.:
(3) Filing party:
(4) Date filed:
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[AMERIWOOD INDUSTRIES LOGO]
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
JULY 25, 1996
The 1996 annual meeting of shareholders of Ameriwood Industries
International Corporation will be held on July 25, 1996 at 9:00 AM, local time,
in the Continental Room at the Amway Grand Plaza Hotel, 187 Monroe Avenue, NW,
Grand Rapids, Michigan, for the purpose of considering and voting upon the
following matters:
1. Election of two directors.
2. Such other matters as may properly come before the meeting.
The close of business on June 17, 1996 has been fixed by the Board of
Directors as the record date for the determination of shareholders entitled to
notice of, and to vote at, the annual meeting and any adjournment thereof.
By order of the Board of Directors,
/s/ CRAIG G. WASSENAAR
----------------------
CRAIG G. WASSENAAR
Secretary
171 Monroe Avenue, NW, Suite 600
Grand Rapids, MI 49503
June 20, 1996
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IMPORTANT
Whether or not you plan to attend the annual meeting in person, to assure your
representation and a quorum for the transaction of business at the meeting,
PLEASE DATE, SIGN AND RETURN THE ENCLOSED PROXY in the envelope provided. If
you do attend the annual meeting, you may revoke your proxy and vote your
shares in person, if you so choose.
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PROXY STATEMENT
This Proxy Statement is furnished in connection with the solicitation
of proxies by the Board of Directors of Ameriwood Industries International
Corporation ("Ameriwood" or the "Company"), 171 Monroe Avenue, NW, Suite 600,
Grand Rapids, Michigan, 49503, to be voted at the annual meeting of
shareholders to be held Thursday, July 25, 1996, in the Continental Room at the
Amway Grand Plaza Hotel, 187 Monroe Avenue, NW, Grand Rapids, Michigan, at 9:00
AM, local time, and at any adjournment thereof. This Proxy Statement and the
accompanying form of proxy, together with the 1995 Annual Report to
Shareholders are being sent beginning on June 20, 1996.
Each proxy in the accompanying form which is properly executed and
returned, and not revoked, will be voted in accordance with the specifications
on that proxy. If no specification is made, the shares represented by the
proxy will be voted FOR the election of the directors listed as nominees in
this Proxy Statement. If any other business should properly come before the
annual meeting (which is not anticipated), the proxyholders will have
discretionary authority to vote thereon in accordance with their best judgment.
A shareholder who returns a proxy may revoke it at any time before it
is voted at the annual meeting by delivering written notice of revocation to
the Company's Secretary, or by submitting a proxy bearing a later date, or by
attending the annual meeting and voting in person.
Proxies will be solicited initially by mail. They may also be
solicited personally and/or by use of telecommunications equipment. Ameriwood
directors, executive officers, and employees may solicit proxies without
additional compensation. Ameriwood has retained D. F. King & Co., Inc., 77
Water Street, New York, New York, 10005, at an estimated cost of $4,000, plus
expenses, to advise the Company and to assist in distribution of proxy
materials to brokers and other nominee shareholders. Ameriwood will reimburse
banks, brokers or other similar agents or fiduciaries for forwarding proxy
material to the beneficial owners of the Company's stock. All other expenses
in connection with the solicitation of proxies, including clerical work and
printing, will be paid by Ameriwood.
VOTING SECURITIES AND PRINCIPAL OWNERS
At the close of business on June 17, 1996, the record date for the
annual meeting, Ameriwood had 4,243,406 shares of its common stock, $1.00 par
value, issued and outstanding. Shareholders are entitled to one vote for each
share of Ameriwood stock registered in their names at the close of business on
the record date.
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The following table shows, as of May 31, 1996, the beneficial
ownership of shares of Ameriwood's common stock by the only shareholders known
to the Company to be beneficial owners of more than 5% of its common stock.
<TABLE>
<CAPTION>
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Name and Address Number of Shares Percent of Class Issued and
of Beneficial Owner Beneficially Owned Outstanding
========================================================================================================
<S> <C> <C>
Ameriwood Industries Affiliated Employee 818,590 19.29%
Stock Ownership and Savings Plan (1)
c/o FMB Trust, Trustee
101 E. Main St.
Zeeland, MI 49464
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Neil L. Diver (2) 242,500 5.71%
1988 Jackson St.
San Francisco, CA 94109
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</TABLE>
(1) This plan (the "ESOP/401(k) Plan") is a combined ESOP and 401(k) plan. An
administrative committee of officers and employees has shared investment
power over Ameriwood stock held in trust under the ESOP portion of the
plan. Each participant for whom Ameriwood stock is held in the 401(k)
portion has sole investment power with respect to the shares allocated to
his or her account and, under both portions of the plan, voting power is
passed through to individual participants with respect to the number of
shares allocated to their respective plan accounts. The current members of
the administrative committee are Richard Compton, Leon Dodd, Charles Foley,
Gregory Horvath, Dawne Kennedy, Mary K. Miller, John Steeb, and Craig
Wassenaar, each of whom disclaims beneficial ownership of the shares shown
above, except for shares allocated to his or her plan account. Shares
allocated to the plan accounts of Company executive officers are reported
in the table "Security Ownership of Management" under the heading "General
Information".
(2) Neil L. Diver is Ameriwood's Chairman of the Board. The number of shares
Mr. Diver beneficially owns includes options exercisable within 60 days to
purchase 40,000 shares. For more detail regarding Mr. Diver's Ameriwood
stock ownership, see the heading "General Information" later in this proxy
statement.
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ELECTION OF DIRECTORS
Ameriwood's Board of Directors currently consists of four persons and is
divided into three classes. One class of directors is elected each year for a
term of three years and until their successors have been elected. Two
directors are to be elected at the 1996 annual meeting for terms expiring in
1999.
Assuming the presence of a quorum, directors will be elected at the annual
meeting from among those nominated, by a plurality of the votes cast by holders
of common stock present in person or by proxy and entitled to vote at the
meeting. Thus, the two nominees receiving the largest number of votes cast
will be elected. Abstentions, broker non-votes or withholding of authority
will contribute toward establishment of a quorum, but will have no effect on
the outcome of the election of such nominees.
The Board of Directors has nominated Kevin K. Coyne and Neil L. Diver, the
two incumbent directors whose terms are scheduled to expire at the 1996 annual
meeting , for reelection to another three year term. Messrs. Coyne and Diver
are willing to serve if elected. If any of the nominees should become unable
or unwilling to serve, which is not anticipated, the proxies hereby solicited
will be voted for the election of such other person(s) as may be nominated by
the Board of Directors.
Information concerning the business experience and Ameriwood stock
ownership of the nominees, and all other directors and executive officers of
the Company, as well as other information relevant to the election of directors
is included below under the heading "General Information."
The Board of Directors recommends a vote FOR the election of all persons
nominated by the Board.
GENERAL INFORMATION
DIRECTORS AND EXECUTIVE OFFICERS
BACKGROUND INFORMATION
Background information concerning each nominee for election as a director
at the annual meeting and each other director and executive officer of
Ameriwood is presented below, based on the most recent information provided to
the Company by such person. Unless otherwise indicated, the principal
occupation reported for each person has been the same for at least the past
five years.
NOMINEES FOR TERMS EXPIRING IN 1999
Kevin K. Coyne (age 46) has been an Ameriwood director since September
1990. Mr. Coyne is a private investor. He was President of CMB Industries
Corp., a manufacturer of water valves, from February 1992 until December 1995.
Neil L. Diver (age 58) has been an Ameriwood director and its Chairman of
the Board since September 1990. He is an administrator of private investments
and a director of several privately held companies.
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DIRECTOR WITH TERM EXPIRING IN 1998
Edwin Wachtel (age 64) has been an Ameriwood director since May 1990. Mr.
Wachtel, who is retired, was Chairman and Chief Executive Officer of Europe
Craft Imports, Inc., an apparel marketer from February 1992 until September
1995. From October 1987 to January 1992, he was Chairman of GW Investors
Corporation, a private investment firm.
DIRECTOR WITH TERM EXPIRING IN 1997
Richard Pigott (age 56) has been an Ameriwood director since February 1995.
He is a consultant, private investor and attorney. Prior to 1988, he was an
executive of Beatrice Companies, Inc. where he held the position of Executive
Vice President and Chief Administrative Officer, with responsibility for
Beatrice's financial, legal, and acquisition and divestiture functions. He
currently serves as a director of Rodman & Renshaw Capital Group, Inc.
NON-DIRECTOR EXECUTIVE OFFICERS
Charles R. Foley (age 49) was named Interim President and Chief Executive
Officer of Ameriwood on January 29, 1996. Mr. Foley was Vice President of
Finance and Chief Financial Officer from August 1995 until appointment to his
current role, and prior to that was Corporate Vice President of Planning and
Control from June 1993 until August 1995. Before joining Ameriwood, he was a
consultant with Arthur Andersen & Co. L.L.P., a public accounting firm, from
June 1990 to June 1993.
Craig G. Wassenaar (age 40) was named Vice President, Chief Financial
Officer and Secretary on May 8, 1996. He joined Ameriwood in January 1996 as
Corporate Controller / Treasurer and Assistant Secretary. Mr. Wassenaar was
formerly Vice President of Finance for the Baby Care Division of Gerber
Products Company from January 1995 to October 1995 and Corporate Controller and
Chief Accounting Officer of Gerber Products Company from May 1992 until January
1995. Prior to that, he was a Senior Manager in the accounting firm of Ernst &
Young L.L.P.
BOARD COMMITTEES AND MEETING ATTENDANCE
Ameriwood's Board of Directors has three standing committees: the Audit
Committee, the Human Resources Committee (formerly the Compensation and
Benefits Committee), and the Finance and Strategy Committee (formerly the
Strategic Planning Committee). The full Board is responsible for the
nomination of individuals for election or reelection to the Board of Directors;
there is not a nominating committee as such.
The Audit Committee reviews audit plans and activities, reviews the
Company's financial controls, and makes the annual selection of auditors. It
reviews with representatives of the Company's independent public accounting
firm the audit fees and other auditing arrangements, the scope of the
accountants' examination of accounting records, results of those audits, and
any problems the auditors may have identified regarding internal accounting
controls together with their recommendations. Mr. Coyne (chairman), Mr. Diver,
and Mr. Pigott currently serve on this committee. The Audit Committee met four
times during 1995.
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<PAGE> 7
The Human Resources Committee met two times during 1995. Information
concerning the functions of this committee is included in the "Report on
Executive Compensation" provided later in this Proxy Statement. Mr. Pigott
(chairman), Mr. Diver, and Mr. Wachtel are currently serving on this committee.
The Finance and Strategy Committee considers and makes recommendations to
the Board of Directors concerning issues such as long-term strategic growth
(including mergers and acquisitions, capital requirements, and enhancement of
shareholder value), international expansion, and new products. Members of this
committee are Mr. Wachtel (chairman),Mr. Coyne, and Mr. Diver. This committee
met five times in 1995.
The Board of Directors of the Company met nine times during 1995. All
incumbent directors, with the exception of Mr. Coyne, attended 100% of the
aggregate number of meetings of the Board of Directors and committees of the
Board on which they served during the year. Mr. Coyne missed one board
meeting, and attended 95% of the aggregate Board and applicable Committee
meetings held.
COMPENSATION OF DIRECTORS
Ameriwood pays its Chairman of the Board an annual retainer of $14,000, and
each of its other non-employee directors an annual retainer of $10,000. Each
committee chairman receives an annual retainer of $5,000. In addition, the
Company pays each director a fee of $500 for each Board or Committee meeting in
which the director participates.
Ameriwood also compensates non-employee directors for consulting services
they may provide to the Company from time to time, as well as for reimbursement
of documented expenses incurred in rendering such services. Payment consists
of consulting fees at the rate of $125 per hour, subject to a maximum of $1,000
per day, with all payments subject to approval by the chairman of the Human
Resources Committee. With respect to this agreement, Mr. Diver received
approximately $120,000 for actual time and expenses incurred during 1995 in
connection with litigation support, environmental matters, investor relations,
and strategic planning issues. No consulting fees were paid to any other
director during 1995.
At the May 18, 1995 annual meeting, the shareholders approved a stock
option plan for non-employee directors. Under the 1995 Plan, each incumbent
non-employee director was granted an initial option to acquire 5,000 shares of
Ameriwood common stock at a per share exercise price equal to the "fair market
value" (as defined by the Plan) as of the date of the grant, May 18, 1995. For
a newly elected non-employee director, an initial option to purchase 5,000
shares of stock would be granted at the time of election. Additional annual
options to acquire 5,000 shares will be granted to all non-employee directors
on each anniversary date of shareholder approval, except for a newly elected
director who was granted an initial option earlier in the same calendar year.
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<PAGE> 8
SECURITY OWNERSHIP OF MANAGEMENT
The following table provides information as of May 31, 1996 (except as
indicated in note (1) below) concerning direct or indirect beneficial ownership
of Ameriwood common stock by each director and each executive officer of the
Company, and by all directors and executive officers as a group, based on
information provided to Ameriwood by or on behalf of such persons.
<TABLE>
<CAPTION>
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Amount and Nature of Beneficial Ownership
-----------------------------------------
Sole Shared Percent of
Voting and Voting or Stock Class Issued
Investment Investment Options and
Name Power Power (1) (2) Total Outstanding(3)
===========================================================================================================
<S> <C> <C> <C> <C> <C>
Kevin K. Coyne (4) 71,281 31,038 20,000 122,319 2.88%
Neil L. Diver 165,500 37,000 40,000 242,500 5.71%
Richard Pigott 6,600 1,600 0 8,200 0.19%
Edwin Wachtel 65,436 0 20,000 85,436 2.01%
Charles R. Foley 4,160 3,986 14,000 22,146 0.52%
Craig G. Wassenaar 12,000 0 10,000 22,000 0.52%
----------------------------------------------------------------------------------------------------------
All Directors and
Executive Officers as a
group 391,977 92,306 153,000 637,283 15.02%
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</TABLE>
(1) Shares in this column include shares with respect to which the indicated
person has shared voting or investment power by reason of joint ownership,
trust or other contract or property right, and shares held by spouses and
children as to which the indicated person may have substantial influence by
reason of relationship. This total also includes, with respect to
executive officers of the Company, shares held by the ESOP/401(k) Plan
allocated to the accounts of such officers as of March 31, 1996.
(2) Shares may be acquired via options exercisable within 60 days.
(3) For purposes of computing the percentage of beneficial ownership by an
individual (or by the group), any shares shown under "Stock Options" for
that individual (or for the group) are treated as issued and outstanding.
(4) Of the shares listed for Mr. Coyne under "Shared Voting or Investment
Power," 16,702 are owned of record by his minor children and 14,336 are
held in a trust for his brother's children to which Mr. Coyne is the
trustee, but as to which he has no monetary interest. Mr. Coyne disclaims
beneficial ownership of all of these shares.
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EXECUTIVE COMPENSATION
SUMMARY COMPENSATION INFORMATION
The following table provides, for each of the last three completed fiscal
years, information concerning the compensation of the Chief Executive Officer
and each of the other individuals who were serving as executive officers at the
end of fiscal 1995 whose total salary and incentive bonus for that year
exceeded $100,000 (the "named executives").
<TABLE>
<CAPTION>
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SUMMARY COMPENSATION TABLE
==========================================================================================================
Long-Term
Annual Compensation (1) Compensation
----------------------------------------------
Options All
Other /SARs Other
Name and Principal Annual (# shares) Compensation
Position Year Salary Bonus Compensation(2) (3) (4)
------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Joseph J. Miglore 1995 $227,000 $0 $24,737 20,000 $31,783
President, Chief 1994 227,000 0 26,030 20,000 36,384
Executive Officer and 1993 215,000 102,601 * 0 18,487
Secretary
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James R. Meier 1995 129,000 0 15,639 7,000 13,635
Corporate Vice 1994 129,000 0 19,288 7,000 20,449
President of Marketing 1993 122,400 45,452 * 0 14,693
and Sales
------------------------------------------------------------------------------------------------------
Gerald A. Hickman 1995 124,000 0 * 7,000 14,674
Corporate Vice 1994 124,000 0 * 7,000 21,611
President of 1993 117,500 44,561 * 0 10,331
Manufacturing
------------------------------------------------------------------------------------------------------
Charles R. Foley 1995 122,800 0 16,414 7,000 11,785
Corporate Vice 1994 122,800 0 14,848 7,000 18,096
President of Finance, 1993 65,540(5) 26,696 * 0 2,057
Chief Financial Officer
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</TABLE>
(1) Includes amounts deferred under the 401(k) portion of the ESOP/401(k) Plan.
(2) A "*" in this column indicates that the dollar value of perquisites and
other personal benefits provided to the named executive did not exceed 10%
of such executive's aggregate salary and bonus. In each case where the
amount did exceed 10%, the cost to lease a company automobile for the named
executive represented more than 25% of his total perquisites and other
personal benefits. Also, for Mr. Miglore, a monthly auto allowance
represented more than 25% of his other annual compensation for 1995.
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(3) In accordance with special provisions in the Ameriwood Industries 1993 Stock
Incentive Plan, as approved by the shareholders at the 1993 annual meeting,
a portion of Mr. Miglore's options granted in 1992 were automatically
canceled and replaced by options granted on June 16, 1993, the date of
shareholder approval. The purpose of this special provision was to allow
the portion of Mr. Miglore's 1992-granted incentive stock options not then
exercisable to become fully exercisable as non-qualified stock options.
The replacement options cover the same number of shares as were covered by
the canceled options, and the per share exercise price and expiration date
also remained unchanged, as did any effect of employment termination while
the replacement options are outstanding. In all other respects, the
replacement options are governed by the terms of the 1993 Stock Incentive
Plan.
(4) Includes Company matching contributions under the 401(k) portion of the
ESOP/401(k) Plan, Company contributions under the ESOP portion of the
ESOP/401(k) Plan, and, beginning in January 1994, annual premiums under the
Supplemental Executive Retirement Program (SERP) as described later in this
Proxy Statement.
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------
Year Description Miglore Meier Hickman Foley
=================================================================================================
<S> <C> <C> <C> <C> <C>
1995 401(k) match $ 6,468 $4,519 $4,339 $4,298
ESOP contribution 4,500 3,874 3,719 3,684
SERP premium 20,815 5,242 6,616 3,803
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1994 401(k) match 6,468 6,106 5,894 5,229
ESOP contribution 9,101 9,101 9,101 9,064
SERP premium 20,815 5,242 6,616 3,803
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1993 401(k) match 6,855 6,099 4,288 2,057
ESOP contribution 11,632 8,594 6,043 0
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</TABLE>
(5) Represents salary for partial year, as Mr. Foley was hired as Corporate
Vice President of Planning and Control in June 1993.
CERTAIN AGREEMENTS WITH NAMED EXECUTIVES
MIGLORE EMPLOYMENT AGREEMENT
Joseph J. Miglore had an employment agreement with Ameriwood from the time
he joined the Company in April 1990, as amended by an addendum in November
1992, until he left the Company in January 1996. The agreement provided for
salary at a rate subject to annual review by the Ameriwood Board (which had
been delegated to the Human Resources Committee), a potential annual cash
incentive bonus, the amount of which was tied to achievement of objectives
established by the Human Resources Committee under Ameriwood's Annual Incentive
Plan, and for certain fringe benefits. The agreement provided for termination
by either party at any time.
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Under this agreement, if Ameriwood terminated Mr. Miglore for any reason
other than cause, he was entitled to receive severance of one year's salary,
the full amount of his target cash incentive bonus for the calendar year of
termination, and continuation of fringe benefits for twelve months. In
addition, for a 30-day period following such termination, Mr. Miglore would
have had the right to require the Company to purchase all shares of Ameriwood
stock then owned by him and all of his then-outstanding options on Ameriwood
stock to the extent they were exercisable on the termination date. The
purchase price for such shares and options would have been based on the average
high bid and low asked prices for the common stock on or nearest the date he
demanded such purchase, reduced, in the case of options, by the option exercise
prices. Ameriwood was not obligated to provide any post-employment payments or
benefits to Mr. Miglore if he voluntarily terminated employment or if his
employment was terminated by death.
On January 29, 1996, Mr. Miglore's employment arrangement with the Company
was terminated and the parties entered into a "Mutual Termination and Benefits
Agreement." Under the terms of this agreement, Mr. Miglore received a lump sum
settlement of $402,000 and certain health and life insurance benefits for one
year. In addition, he received stock appreciation rights on 20,000 shares of
the Company's common stock, which were exercised on April 3, 1996. The amount
was determined by the spread between $5.625 (the closing price on April 3,
1996) and $4.50. Also, should a "change of control" (defined below) occur
during the nine months following termination of employment, Mr. Miglore, under
the terms of his Management Retention Agreement, is entitled to the benefits
described in the section below, except that the lump sum severance payment
would be multiplied by three, and the fringe benefits would continue for three
years. Mr. Miglore also resigned from the Company's Board of Directors on
March 8, 1996.
MANAGEMENT RETENTION AGREEMENTS
Ameriwood has entered into Management Retention Agreements with all of its
executive officers, as well as with certain other key employees. These
agreements were authorized by the Board of Directors, and were initially
generated in connection with a proposal to acquire the Company made in late
1992. The purpose of the agreements is to reinforce and encourage such
employees' continued attention and dedication to their duties when faced with
potentially disturbing circumstances which might arise from the possibility of
a change in control of the Company. Each agreement remains in force for the
entire term of the pertinent person's employment. However, no benefits could
become payable under any agreement unless a "change in control" should occur
(as therein defined).
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<PAGE> 12
Under each executive's agreement, if such a change in control occurred, and
within 24 months thereafter the executive terminates his employment for "good
reason," or his employment is otherwise terminated for reasons other than
death, "disability," voluntary "retirement" or "cause" (terms defined in the
agreements), he would become entitled to (1) continuation of fringe benefits
for one year and (2) lump-sum cash severance payments in the following amounts:
(a) the total of annual salary, target annual incentive bonus, and 9.5% of
salary and target incentive; (b) the full amount of any unvested employer
contributions allocated to his account under the ESOP/401(k) Plan; (c) for each
share covered by an outstanding option on Ameriwood stock then owned, the
excess of market price (or if higher, the highest price paid in connection with
any change in control) over the pertinent option exercise price, whereupon such
options would be canceled; and (d) reasonable legal fees and expenses incurred
by him as a result of the termination. These fringe benefits and severance
payment entitlements are subject to the signing and delivery of a release, and
to certain potential payment reductions related to provisions of the Internal
Revenue Code. Each agreement further provides that if the Company terminates
the executive other than for cause or he terminates employment for good reason
prior to a change in control, should a change in control occur within nine
months thereafter, he would be entitled to the benefits and payments described
above as if his termination had occurred on the first business day following
the change in control.
SUPPLEMENTAL EXECUTIVE RETIREMENT PROGRAM
The Company believes that competitive retirement benefits are an integral
part of attracting and retaining key executives. Based on an independent
benefits consulting firm study, Ameriwood executive officers were up to 22%
below the average retirement "target replacement rate" of ending salary of the
300+ companies in its study. A target replacement rate is the desired
percentage of salary that would be available at retirement, through retirement
savings plans or other retirement vehicles. Ameriwood executive officers were
below the average rate primarily because of government regulations that
currently limit Company and executive contributions to Ameriwood's ESOP/401(k)
Plan. Therefore, on January 21, 1994, Ameriwood instituted a Supplemental
Executive Retirement Program (SERP) for all of its executive officers.
Under the SERP, Ameriwood has purchased variable life insurance policies
for each executive officer. Each policy is subject to a Split-Dollar Life
Insurance Agreement ("Split-Dollar Agreement") and a Severance Compensation
Agreement, under which ownership of the insurance policy lies with each
respective executive officer. Since Ameriwood is obligated to pay the policy
premiums, in consideration of such payments each executive officer has assigned
to Ameriwood a collateral security interest in his policy, which is evidenced
by a Collateral Assignment Agreement. Under the Split-Dollar Agreement,
executive officers may also make, at their option, after-tax deposits to
investment accounts established under the policies.
If an executive officer remains continuously employed full-time with
Ameriwood until he attains age 55, and employment is subsequently terminated
for any reason other than "cause" (as defined in the executive officer's
management retention agreement described in the preceding section), the Company
will release to the executive officer its collateral security interest in the
policy, which is equal to the total amount of premiums paid to-date on that
policy. The executive officer would receive the cash surrender value of
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<PAGE> 13
the policy, which would be taxable to the executive officer and tax deductible
to the Company. Should the executive officer's employment with Ameriwood be
terminated for any reason prior to attaining age 55, the Company would receive
the lesser of the cash surrender value of the policy or the amount of its
collateral security interest on that executive officer's policy; the executive
officer would not be eligible for any benefit in these circumstances. If the
Company terminates the executive officer for cause, no benefit will be payable
under this program.
In the event of disability, an executive officer will be deemed to have met
the age requirement and will be entitled to the benefits described above.
Should an executive officer die while employed by Ameriwood, the Company would
be reimbursed for its security interest from the death benefit paid out on the
policy. The remainder of the death benefit would be issued to the executive
officer's named beneficiary; no other benefit would be payable under the
program.
Ameriwood agrees that it will not merge or consolidate with any other
corporation or organization, or permit its business activities to be taken over
by any other organization, unless the other organization agrees to assume the
obligations under this program. Total premiums paid in connection with the
life insurance policies under this program were approximately $34,000 in 1995,
which will continue to be the approximate amount of premiums for existing
policies each succeeding year for as long as the policies remain in effect.
STOCK OPTIONS
The following tables provide information concerning options to purchase
Ameriwood common stock granted to the named executives during 1995 and
unexercised options held by the named executives at year-end. There were no
options exercised during 1995.
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------------
OPTION/SAR GRANTS IN LAST FISCAL YEAR
===============================================================================================================
Individual Grants
-----------------------------------------------------
% of Total
# of Options/ Potential Realizable Value at
Options SARs Granted to Assumed Annual Rates of Stock
/SARs Employees in Exercise Appreciation for Option Term (2)
Granted Fiscal Price Expiration --------------------------------
Name (1) Year ($/Share) Date 0% 5% 10%
- ---------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Miglore 20,000 42.6% $8.875 02/07/05 $0 $111,629 $282,889
Meier 7,000 14.9% $8.875 02/07/05 0 39,070 99,011
Hickman 7,000 14.9% $8.875 02/07/05 0 39,070 99,011
Foley 7,000 14.9% $8.875 02/07/05 0 39,070 99,011
- ---------------------------------------------------------------------------------------------------------------
</TABLE>
(1) Options were granted under Ameriwood's 1993 Stock Incentive Plan, and allow
the exercise price to be paid in cash, shares of common stock, or any
combination thereof. All options were granted for maximum ten-year terms
and were immediately exercisable. In the case of voluntary separation,
stock options expire 90 days after termination.
11
<PAGE> 14
(2) Potential realizable values are based on arbitrarily assumed rates of
appreciation in the market value of Ameriwood common stock above the
exercise price and over the entire option term without any discount to
present value. As illustrated by the first column, without an increase in
the stock price above the market price at grant, there would be no value
realized. Ameriwood's closing stock price as of March 15, 1996 would have
to increase by over 60% to equal the market price at grant for these
options.
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------
FISCAL YEAR-END OPTION / SAR VALUES
=======================================================================================
Number of Unexercised Value of Unexercised In-the-Money
Options/SARs at Year-End Options/SARs at Year-End(1)
------------------------- -------------------------
Name Exercisable/Unexercisable Exercisable/Unexercisable
- ---------------------------------------------------------------------------------------
<S> <C> <C>
Miglore 124,000 / 0 $0 / 0
Meier 28,000 / 0 0 / 0
Hickman 21,000 / 0 0 / 0
Foley 14,000 / 0 0 / 0
- ---------------------------------------------------------------------------------------
</TABLE>
(1) In-the-Money options are those for which, at year-end, the fair market
value of the underlying security exceeded the exercise price.
REPORT ON EXECUTIVE COMPENSATION
The following report is presented to shareholders by the members of the
Human Resource Committee (formerly the Compensation and Benefits Committee) of
the Board of Directors. Mr. Pigott is the chairman of this committee.
GENERAL ORGANIZATION AND FUNCTIONS
The Human Resources Committee has been a standing committee of Ameriwood's
Board of Directors for many years. Pursuant to long-standing Board policy,
only non-employee directors serve on this committee.
In general, the Human Resources Committee is charged with overseeing the
operation of the Company's compensation and incentive programs for executive
officers and other key personnel. The members of this committee also review
existing programs, and implement or recommend to the Board such new programs
they may consider advisable in light of Ameriwood's overall compensation
objectives and strategies. As part of its general functions, the Committee
annually reviews the salaries of all executive officers and recommends to the
Board such salary adjustments as it considers appropriate. In addition, it
administers Ameriwood's incentive plans, under which executive officers and
other key employees may earn cash and/or equity-based incentives.
12
<PAGE> 15
OVERVIEW OF EXECUTIVE OFFICER COMPENSATION PROGRAMS
Ameriwood's compensation programs for executive officers attempt to relate
the overall pay levels of these officers to the attainment of company-wide and
individual performance objectives, as well as to improvements in shareholder
returns. These programs attempt at the same time to further the Company's
ability to attract and retain the best possible executive talent by providing
compensation opportunities competitive with those of executives possessing
similar experience and responsibilities at similar manufacturing companies. In
order to motivate executives to achieve the goals inherent in Ameriwood's
business strategy, as well as to attain individual performance objectives, a
potentially substantial portion of executive annual compensation is possible,
dependent upon achievement of such goals and objectives, through the Annual
Incentive Plan. In addition, a significant portion of executive compensation
over the longer-term is linked to increases in market value of Ameriwood stock,
through equity-based plans.
SALARIES
Initial salaries for new executive officers are negotiated between the
prospective executive and management, subject to Human Resources Committee and
full Board approval. In reviewing such salaries and making recommendations to
the Board, the Committee evaluates the responsibilities of the position and the
experience of the individual by reference to the competitive marketplace for
executive talent. This is accomplished through a comparison of salaries for
comparable positions at other companies. The Committee also considers the
potential availability of additional compensation for the prospective executive
through the Annual Incentive Plan and through equity-based awards.
Likewise, in reviewing and formulating recommendations concerning annual
salary adjustments for executive officers, the Human Resources Committee
considers comparative executive salary survey data, along with the potential
availability of compensation other than salary. Other factors are also
considered, including Ameriwood's financial performance during the prior year
in relation to its business plans and objectives; Company performance measures
such as increases in market share, manufacturing efficiency gains, or
improvements in product quality and relations with customers, suppliers or
employees; any new responsibilities assigned or to be assigned to an executive;
and Committee members' assessments (supplemented by those of the CEO, with
respect to other executive officers) of each executive's past individual
performance and consequent anticipated future contributions. Extraordinary
developments bearing on Company and individual executive performance are also
taken into account during the salary review process.
Based on the factors described above, Ameriwood's executive officers did
not receive any salary increases for 1996.
ANNUAL INCENTIVE PLAN
At the beginning of each year under the Annual Incentive Plan maintained
for executives and other key employees, the Human Resources Committee
establishes a specified annual target for net earnings and/or "Return on Net
Assets Employed" ("RONAE"). Defined in more detail in the plan, RONAE in
general is determined by dividing annual pretax income by the difference
between average monthly total assets and average monthly current liabilities
for the year. The Committee also approves individual performance objectives
for each plan participant. The amount of the cash incentive bonus that any
13
<PAGE> 16
plan participant can earn for the year is then entirely dependent upon actual
results and the extent to which the participant's individual performance
objectives are achieved. If less than 80% of target is achieved, no incentives
may be paid under the plan, regardless of the extent to which individual goals
have been achieved. If the 80% minimum threshold is met or exceeded, each plan
participant will earn a percentage of his or her salary. The percentage ranges
from a minimum of 6.75% to a maximum of 47.5%. In addition, all participants
may earn a percentage of salary for attainment of individual goals-from 2.5%
for attainment of at least 70% of individual goals to 17.5% for attainment of
all such goals.
As the Company did not attain 80% of target for 1995, no cash incentives
were paid to any executive officers or other management personnel for 1995.
STOCK OPTIONS
Stock options entitle management to buy shares of Ameriwood common stock at
a specified price for a specified period of time. Committee members believe
that by encouraging equity ownership in the Company, the interests of
shareholders and management become more closely aligned. Stock options provide
management an incentive to increase the stock value over the long-term by
rewarding them for any appreciation in the stock price.
Stock options are awarded to executives and other key employees who, in the
judgment of the Human Resources Committee, are expected to contribute
materially to the Company's future success. More specifically, the employees'
respective contributions toward Ameriwood's business plans and strategic goals
and the improvement in Ameriwood's stock price during the year are considered
in the award of stock options. The Committee is also influenced by whether
options were granted in the prior year, and if so, the size of the grant.
Options are typically granted annually. The size of stock option grants are
initially recommended to the Committee by the CEO (with the exception of his
own grant), and are generally consistent in size from year to year. In
February 1996, the Committee approved the grant of 20,000 Stock Appreciation
Rights to Mr. Foley and stock options to certain key employees under the 1993
Stock Incentive Plan. These options were provided as an incentive for
execution of a management reorganization further described in the Company's
1995 annual report on Form 10-K. All stock options are initially granted at
exercise prices equal to the fair market value of the common stock on the date
of grant.
Respectfully submitted,
Richard Pigott, Chairman
Neil L. Diver
Edwin Wachtel
14
<PAGE> 17
STOCK PERFORMANCE
The following graph compares the cumulative total shareholder return on an
investment in Ameriwood common stock with The Nasdaq Stock Market for U.S.
companies index, and with the Wood Household Furniture Index--SIC Code 2511.
The Nasdaq Stock Market for U.S. companies is a performance indicator of the
overall stock market, while the Wood Household Furniture Index is more specific
to the nature of Ameriwood's business. The comparison assumes a $100
investment on December 31, 1990 and cumulation and reinvestment of dividends
paid thereafter.
FISCAL YEAR ENDING
<TABLE>
<CAPTION>
1990 1991 1992 1993 1994 1995
<S> <C> <C> <C> <C> <C> <C>
Ameriwood Industries 100 266.67 560.00 853.33 386.67 206.67
Wood Household Furniture Index 100 138.38 184.33 232.37 155.37 194.47
The Nasdaq Stock Market (US) 100 128.38 129.64 155.50 163.26 211.77
</TABLE>
*The Wood Household Furniture Index--SIC Code 2511, prepared by Media General
Financial Services, includes Bassett Furniture, Bush Industries, Chromcraft
Revington, DMI Furniture, Ethan Allen Interiors, Interco, LADD Furniture, Masco
Corp., O'Sullivan Industries, Pulaski Furniture, Stanley Furniture, Wellington
Hall, and Ameriwood.
15
<PAGE> 18
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
As previously noted, Edwin Wachtel, who is currently a member of the Human
Resources Committee and served on that committee throughout 1995, was President
and Chief Executive Officer of Europe Craft Imports, Inc. ("Europe Craft")
until September 1995. Ameriwood had an agreement with Europe Craft, which owns
the Members Only trademark, under which Ameriwood was granted an exclusive
license to use the trademark in the United States and its territories and
possessions, Canada, and Mexico. The agreement began on March 1, 1992 and was
terminated June 30, 1995. The trademark was used in connection with the
manufacture, distribution and sale of unassembled furniture produced from
designs approved by Europe Craft ("covered products").
Royalties payable under this agreement were based on a percentage of the
Company's Net Sales (as defined in the agreement) of covered products
manufactured and sold during a contract period, subject to minimum required
royalties of $100,000 for the 12-month period ended June 30, 1994, and $130,000
for each succeeding twelve month period while the agreement remained in effect.
The agreement also required Ameriwood to comply with specified standards and
practices relating to use of the trademark, and contained
cross-indemnifications between Ameriwood and Europe Craft. During 1995,
payments to Europe Craft pursuant to this agreement were $65,000, the minimum
amount due for the six month period of January 1,1995 through June 30, 1995.
OTHER MATTERS
As previously noted, Neil Diver, who served on the Human Resources
Committee throughout 1995, is the Chairman of the Board of Ameriwood. However,
neither Mr. Diver, nor any other director serving on the Human Resources
Committee during 1995, is, or has ever been, an employee or officer of
Ameriwood or any of its subsidiaries.
As discussed previously under "General Information", non-employee directors
of Ameriwood may be compensated for consulting services provided to the
Company, as well as for reimbursement of documented expenses incurred in
rendering such services. With respect to this arrangement, Mr. Diver received
approximately $120,000 for actual time and expenses incurred during 1995.
16
<PAGE> 19
MISCELLANEOUS
SECTION 16(A) COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934 requires all Ameriwood
directors and officers and persons owning more than 10% of its common stock to
file reports with the Securities and Exchange Commission, with a copy to be
furnished to the Company. Based on a review of such reports (Forms 3, 4 and 5,
and written representations from certain reporting persons) furnished to
Ameriwood during or with respect to the preceding fiscal year, the Company
believes that all Section 16(a) filing requirements were met.
INDEPENDENT AUDITORS
The Company's independent public accountants for the year ended December
31, 1995 were Coopers & Lybrand L.L.P. Representatives of Coopers & Lybrand
L.L.P. are expected to attend the annual meeting to respond to appropriate
questions and to make a statement if they so desire.
PROPOSALS OF SHAREHOLDERS AND SHAREHOLDER NOMINATIONS OF DIRECTORS
Any shareholder proposal intended for presentation at the 1997 annual
meeting of shareholders must be received at Ameriwood's corporate office, 171
Monroe Avenue, NW, Suite 600, Grand Rapids, Michigan, 49503, no later than
February 20, 1997, in order to be eligible for inclusion in the Company's proxy
materials relating to that meeting.
By order of the Board of Directors
/s/ CRAIG G. WASSENAAR
----------------------
CRAIG G. WASSENAAR
Secretary
Grand Rapids, Michigan
June 20, 1996
17
<PAGE> 20
PROXY PROXY
AMERIWOOD INDUSTRIES INTERNATIONAL CORPORATION
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
FOR THE ANNUAL MEETING OF SHAREHOLDERS TO BE HELD ON JULY 25, 1996
The undersigned appoints Neil L. Diver and Craig G. Wassenaar, or
either of them, proxies for the undersigned, each with full power of
substitution, to attend the Annual Meeting of Shareholders of Ameriwood
Industries International Corporation to be held on July 25, 1996 at 9:00 AM,
local time, and any adjournments or at postponements of the Annual Meeting, and
to vote as specified in this Proxy all the Common Shares of the Company which
the undersigned would be entitled to vote if personally present. This Proxy
when properly executed will be voted in accordance with the undersigned's
indicated directions. If no direction is made, this Proxy will be voted FOR
the election of Directors.
YOUR VOTE IS IMPORTANT! PLEASE MARK, SIGN AND DATE THIS PROXY ON THE REVERSE
SIDE AND RETURN IT PROMPTLY IN THE ACCOMPANYING ENVELOPE.
(Continued and to be signed on reverse side.)
AMERIWOOD INDUSTRIES INTERNATIONAL CORPORATION
PLEASE MARK VOTE IN OVAL IN THE FOLLOWING MANNER USING DARK INK ONLY.
<TABLE>
<S><C>
For All
1. Election of Directors- For Withheld Except
Nominees: Kevin K. Coyne, / / / / / /
Neil L. Diver
- ------------------------------------
(Except nominee written above.)
Record Date Shares: The undersigned acknowledges receipt of
Ameriwood's proxy solicitation materials,
including notice of meeting, and of its
1995 Annual Report to Shareholders.
Dated: ,1996
---------------------
------------------------------
Signature(s)
------------------------------
Please sign exactly as your name appears.
Joint owners should each sign personally.
Where applicable, indicate your official
position or representation capacity.
</TABLE>
<PAGE> 21
[FIRST MICHIGAN
BANK LOGO]
June 20, 1996
NOTICE TO PARTICIPANTS IN THE
AMERIWOOD INDUSTRIES AFFILIATED EMPLOYEE
STOCK OWNERSHIP AND SAVINGS PLAN
IMPORTANT
Dear Plan Participant:
Enclosed is the notice of meeting and Proxy Statement that have been
prepared by Ameriwood Industries International Corporation ("Ameriwood").
These documents have been prepared in connection with the solicitation of
proxies by Ameriwood's Board of Directors for Ameriwood's annual meeting of
shareholders to be held July 25, 1996, and any adjournment thereof.
Because FMB Trust, as trustee of the Plan (the "Trustee"), is the holder
of record of all shares of Ameriwood stock held under the Plan -- including
shares allocated to your Plan account(s) -- the Trustee is the only person who
can directly vote or give a proxy for voting those shares. However, under the
terms of the Plan, only you have the right to direct the Trustee how to vote
your allocated shares, and those shares cannot be voted at all without
instructions from you. Therefore, enclosed is a blue voting instruction form
and a postage-paid return envelope for the purpose of instructing the Trustee
how to vote your allocated shares of Ameriwood common stock at the annual
meeting.
TO ASSURE THAT YOUR ALLOCATED SHARES WILL BE VOTED AT THE MEETING, IT
IS IMPORTANT THAT THE TRUSTEE RECEIVE YOUR VOTING INSTRUCTIONS NO LATER THAN
JULY 18, 1996.
The enclosed proxy materials describe all of the matters that Ameriwood
expects will be voted upon at the upcoming meeting. You should review those
materials carefully. In addition, the recommendations of Ameriwood's Board
concerning these matters have been indicated on the blue voting instruction
form for your information. If you want to support the recommendations of the
Board concerning the proposals to be considered at the meeting, you can do so
by signing, dating and returning the blue voting instruction form in the
postage-paid envelope provided. If you wish your allocated shares to be voted
in some other manner with respect to one or more of the proposals, you should
so indicate on the form before signing, dating and returning it to the
Trustee. The Trustee makes no recommendation with respect to your voting
decisions.
YOUR VOTE IS STRICTLY CONFIDENTIAL. Under no circumstances will the
Trustee, or any of its agents, disclose to Ameriwood or any other party how or
if you voted. You should feel free to vote in the manner you think is best.
If you have any questions about your voting rights under the Plan, the
voting instruction form, or the secrecy of your vote, please contact the
Trustee between the hours of 9:00 AM and 4:00 PM, eastern standard time, at
(616) 355-9694.
FMB Trust, Trustee
<PAGE> 22
AMERIWOOD INDUSTRIES AFFILIATED EMPLOYEE STOCK OWNERSHIP AND SAVINGS PLAN
VOTING INSTRUCTIONS TO TRUSTEE
FOR THE ANNUAL MEETING OF SHAREHOLDERS OF
AMERIWOOD INDUSTRIES INTERNATIONAL CORPORATION
JULY 25, 1996
I, as a participant in the Ameriwood Industries Affiliated Employee Stock
Ownership and Savings Plan (the "Plan") hereby instruct FMB Trust, as trustee
under the Plan (the "Trustee"), to vote, either in person or by proxy, all
shares of common stock of Ameriwood Industries International Corporation
("Ameriwood") allocated to any of my Plan accounts in accordance with the
instructions set forth below. Such shares are to be voted at the 1996 annual
meeting of shareholders and at any adjournment thereof. I also instruct the
Trustee to act in its discretion (or to authorize its proxy or proxies to act
in his or their discretion) upon any other matters which may come before the
meeting.
I UNDERSTAND THAT THE RECOMMENDATIONS OF AMERIWOOD'S BOARD OF DIRECTORS ARE
SET FORTH BELOW FOR MY INFORMATION ONLY AND THAT THE TRUSTEE MAKES NO
RECOMMENDATIONS WITH RESPECT TO MY VOTING DECISIONS.
NOTE: This instruction form must be signed, dated and received by the trustee
by the close of business on July 18, 1996 in order for the trustee to ensure
that your voting instructions will be followed. If your voting instructions
are not timely received, the trustee will not vote the shares allocated to your
account. Your voting instructions to the trustee are confidential, as
explained in the accompanying notice to participants.
*******************************************************
1. Election of Directors
/ / FOR both nominees / / FOR ALL EXCEPT / / WITHHOLD AUTHORITY
as to both nominees
KEVIN K. COYNE NEIL L. DIVER
NOTE: If you do not want your shares voted "FOR" a particular nominee, mark
the "FOR ALL EXCEPT" box and strike a line through the nominee's name you do
not wish to vote for. Your shares will be voted for the remaining nominee.
AMERIWOOD'S BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE FOR THE DIRECTOR OF
NOMINEES LISTED ABOVE.
*******************************************************
As a participant in the Plan, I hereby acknowledge receipt of Ameriwood's proxy
solicitation materials relating to the 1996 annual meeting of shareholders, and
I hereby instruct the Trustee to vote all shares allocated to any of my Plan
accounts as I have indicated above. If I sign this instruction form but do not
specifically instruct the Trustee how to vote, the Trustee is instructed to
vote all of my allocated shares in accordance with the recommendations of
Ameriwood's board of directors.
The submission of this instruction form, if properly signed and dated, revokes
any prior voting instructions I may have given to the Trustee.
Dated: Signature:
----------------------------- --------------------------------
