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
[ X ] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Paragraph 240.14a-11(c) or
Paragraph 240.14a-12
AMERICAN WOODMARK CORPORATION.
(Name of Registrant as Specified In Its Charter)
AMERICAN WOODMARK CORPORATION
(Name of Person(s) Filing Proxy Statement)
Payment of Filing Fee (Check the appropriate box):
[ X ] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1)
and 0-11.
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pursuant to Exchange Act Rule 0-11 ( set forth the amount on
which the filing fee is calculated and state how it was
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[ ] 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
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<PAGE>
[DESCRIPTION] American Woodmark Corporation logo is shown here.
American Woodmark Corporation
3102 Shawnee Drive
Winchester, Virginia 22601
Notice of Annual Meeting of Shareholders
TO THE SHAREHOLDERS OF
AMERICAN WOODMARK CORPORATION:
The Annual Meeting of Shareholders ("Annual Meeting") of American
Woodmark Corporation (the "Company") will be held at Piper's at
Creekside, Route 11 South, Winchester, Virginia, on Friday, August 21,
1998 at 9:00 a.m., Eastern Daylight Time, for the following purposes:
1. To elect seven directors to serve for the ensuing year;
2. To ratify the selection by the Board of Directors of Ernst & Young
LLP as independent certified public accountants of the Company for
the fiscal year ending April 30, 1999; and
3. To transact such other business as may properly come before the
Annual Meeting or any adjournments thereof.
Only shareholders of record of shares of the Company's Common
Stock at the close of business on June 30, 1998 will be entitled to
vote at the Annual Meeting or any adjournments thereof.
Regardless of whether or not you plan to attend the Annual
Meeting, please complete the enclosed proxy, including signature and
date, and promptly return in the enclosed envelope. If for any reason
you desire to revoke your proxy, you may do so at anytime before it is
voted.
All shareholders are cordially invited to attend the Annual
Meeting.
By Order of the Board of Directors
KENT B. GUICHARD
Secretary
July 20, 1998
<PAGE>
AMERICAN WOODMARK CORPORATION
3102 Shawnee Drive
Winchester, Virginia 22601
Proxy Statement
Voting Rights and Solicitation
This Proxy Statement, mailed to shareholders on or about July 20,
1998, is furnished in connection with the solicitation by American
Woodmark Corporation (the "Company") of proxies in the accompanying form
for use at the Annual Meeting of Shareholders to be held on August 21,
1998, and at any adjournments thereof. A copy of the annual report of
the Company for the fiscal year ended April 30, 1998 is being mailed to
you with this Proxy Statement.
In addition to the solicitation of proxies by mail, the Company's
officers and other employees, without compensation, may solicit proxies
by telephone, telegraph and personal interview. The Company will bear
the cost of all solicitation.
On June 30, 1998, the date for determining the shareholders
entitled to vote at the Annual Meeting, there were 7,811,080 shares of
Common Stock of the Company outstanding and entitled to vote. Each such
share of Common Stock entitles the holder thereof to one vote.
Any shareholder that provides a proxy may revoke such proxy at any
time before it is voted. Proxies may be revoked by filing with the
Secretary of the Company written notice of revocation which bears a
later date than the date of the proxy, by duly executing and filing with
the Secretary of the Company a later dated proxy relating to the same
shares or by attending the Annual Meeting and voting in person.
A proxy, if executed and not revoked, will be voted for the
election of the nominees for director named herein and for the
ratification of Ernst & Young LLP as independent certified public
accountants of the Company for fiscal year 1999 unless such proxy
contains specific instructions to the contrary, in which event it will
be voted in accordance with such instructions. Abstentions will be
considered as votes represented at the Annual Meeting for quorum
purposes, but a vote to abstain will not be counted as a vote for or
against any of the proposals. The directors shall be elected by a
plurality of the votes cast by the holders of Common Stock entitled to
vote at the Annual Meeting, if a quorum is present.
ITEM 1 - ELECTION OF DIRECTORS
A Board of seven directors of the Company is to be elected at the
Annual Meeting to serve as directors until the next Annual Meeting of
Shareholders and until their successors have been elected. Each of the
nominees listed below is presently a director of the Company and, other
than Mr. Guichard, was elected by shareholders at the last Annual
Meeting for a term expiring at the 1998 Annual Meeting. The Board of
Directors appointed Mr. Guichard to the Board on November 12, 1997.
Other nominations may be made from the floor at the Annual Meeting.
Although the Company anticipates that all of the nominees named
below will be able to serve, if at the time of the Annual Meeting any
nominees are unable or unwilling to serve, shares represented by
properly executed proxies will be voted at the discretion of the persons
named therein for such other person or persons as the Board of Directors
may designate.
<PAGE>
NOMINEES
Principal Occupation(s) Director
During of
Name Age the Last Five Years and Company
Directorship(s) in Public Since
Companies
- ------------------- -- ------------------------------ ----
William F. Brandt, 52 Company Chairman and 1980
Jr. Executive Officer from 1996
to present; Company Chairman
and Chief Executive Officer
from 1995 to 1996; Company
Chairman and President from
1980 to 1995
Daniel T. Carroll 72 Chairman from 1995 to present 1986
and Chairman and President
from 1982 to 1995 of the
Carroll Group (a management
consulting firm); Director,
Aon Corporation, A.M. Castle
& Co., Comshare, Inc.,
Diebold, Inc., Wolverine
World Wide, Inc., Woodhead
Industries, Inc., Holmes
Protection, Recombinant
Biocatalyst, Inc. and Oshkosh
Truck Corp.
C. Anthony 64 Vice Chairman from 1997 to 1987
Wainwright present of McKinney & Silver
(an advertising agency);
Chairman from 1995 to 1997 of
Harris, Drury, Cohen, Inc.
(an advertising agency);
Chairman in 1994 and Vice
Chairman and CEO from 1990 to
1994 of Compton/Saatchi &
Saatchi, Inc. (an advertising
agency); Director, Gibson
Greeting Inc., Del Webb
Corp., All-Comm Media,
Advanced Polymer Systems, and
Caribiner International
James J. Gosa 51 Company President and Chief 1995
Executive Officer from 1996
to present; Company President
and Chief Operating Officer
from 1995 to 1996; Company
Executive Vice President from
1993 to 1995; Company Vice
President, Sales and
Marketing from 1991 to 1993
Martha M. Dally 47 Executive Vice President, 1995
Personal Products from 1994
to present of Sara Lee
Corporation (a manufacturer
and marketer of consumer
products); Vice President,
Personal Products from 1989
to 1993 of Sara Lee
Corporation
<PAGE>
Fred S. Grunewald 47 President and Chief Operating 1997
Officer from 1996 to 1998 of
Overhead Door Corporation (a
manufacturing company);
President and General
Manager, Home Products from
1994 to 1995 of Rubbermaid,
Inc.; Vice President,
Marketing and Engineering,
Household Products Division
from 1992 to 1994 of Black &
Decker (a manufacturing
company)
Kent B. Guichard 42 Company Vice President and 1997
Chief Financial Officer from
1993 to present; Corporate
Secretary from 1997 to
present
PRINCIPAL SHAREHOLDERS OF THE COMPANY
The following table sets forth information regarding shares of
Common Stock beneficially owned as of July 1, 1998 by (i) each person
who is known by the Company to beneficially own more than five percent
of the outstanding shares of Common Stock, (ii) each director of the
Company, (iii) each named executive officer, and (iv) the directors
and executive officers as a group. Unless otherwise noted, and to the
best knowledge of the Company, each individual has sole voting power
and sole investment power with respect to the number of shares set
forth opposite his or her name. The addresses of each person listed
below who owns more than five percent of the outstanding shares of
Common Stock are: Mr. William F. Brandt, Jr., 3102 Shawnee Drive,
Winchester, Virginia 22601, Ms. Mary Jo Stout, PO Box 206, Cross
Junction, Virginia 22625 and Fidelity Management & Research, One
Federal Street, Boston, Massachusetts 02109.
Number of Aggregate
Shares Percent
Beneficially of
Name Owned Class
---------- --------
William F. Brandt, Jr. (1)...... 2,231,910 27.9%
Mary Jo Stout (2)............... 869,036 10.8%
Fidelity Management & Research 523,500 6.5%
David L. Blount (3)............. 160,224 2.0%
James J. Gosa (4)............... 70,479 *
Kent B. Guichard (5)............ 27,465 *
Daniel T. Carroll (6)........... 10,700 *
Philip S. Walter (7)............ 6,667 *
C. Anthony Wainwright (8)....... 3,484 *
Martha M. Dally (9)............. 2,000 *
Fred S. Grunewald (10).......... 633 *
All directors and named executive
officers as a group (9 persons) 2,519,262 31.4%
*Indicates less than 1%.
(1) Includes 193,600 shares held by Mr. Brandt as trustee for the
benefit of his children, 24,794 shares by the Brandt Family
Foundation, and stock options exercisable on June 30, 1998 or within
60 days thereafter by Mr. Brandt for 26,666 shares. Excludes 61,952
shares held by Mr. Brandt's wife as trustee for the benefit of their
children.
(2) Includes 33,400 shares held by Ms. Stout as trustee for the
benefit of her children, 120,032 shares held by her brother as trustee
for the benefit of Ms. Stout, and 9,725 shares by the Holcomb Family
Foundation.
(3) Includes 8,923 shares held by the Windcrest Foundation, Inc.
and stock options exercisable on June 30, 1998 or within 60 days
thereafter by Mr. Blount for 27,000 shares.
<PAGE>
(4) Includes stock options exercisable on June 30, 1998 or within
60 days thereafter by Mr. Gosa for 47,333 shares.
(5) Includes stock options exercisable on June 30, 1998 or within
60 days thereafter by Mr. Guichard for 13,334 shares.
(6) Includes stock options exercisable on June 30, 1998 or within
60 days thereafter by Mr. Carroll for 3,000 shares.
(7) Includes stock options exercisable on June 30, 1998 or within
60 days thereafter by Mr. Walter for 6,667 shares.
(8) Includes stock options exercisable on June 30, 1998 or within
60 days thereafter by Mr. Wainwright for 3,000 shares.
(9) Includes stock options exercisable on June 30, 1998 or within
60 days thereafter by Ms. Dally for 2,000 shares.
(10)Includes stock options exercisable on June 30, 1998 or within
60 days thereafter by Mr. Grunewald for 333 shares.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934 requires the
Company's directors and officers, and persons who beneficially own
more than ten percent of a registered class of the Company's equity
securities (including Common Stock), to file with the Securities and
Exchange Commission ("SEC") initial reports of ownership and reports
of changes in ownership of Common Stock and other equity securities of
the Company. Officers, directors, and greater than ten percent
beneficial owners are required by SEC rules to furnish the Company
with copies of all Section 16(a) reports they file with the SEC.
To the Company's knowledge, based solely on review of the copies
of such reports furnished to the Company and written representations
that no other reports were required to be filed during the fiscal year
ended April 30, 1998, all Section 16(a) filing requirements applicable
to the Company's officers, directors, and greater than ten percent
beneficial owners were complied with; except that one Form 3 (report
of initial ownership) was filed late by Mr. William Armstrong,
Corporate Controller, who became an officer of the Company in
September 1997, one Form 4 (report of sale transaction) was filed late
by Mr. Brandt involving one transaction of gifted shares and one Form
4 (report of sale transaction) was filed late by Mr. Glenn Eanes,
Treasurer.
CERTAIN INFORMATION CONCERNING THE
BOARD OF DIRECTORS AND ITS COMMITTEES
The Board of Directors held five regular meetings during the
fiscal year ended April 30, 1998. All of the Board members that were
directors during fiscal year 1998 attended at least 75% of the
aggregate of the total number of Board meetings plus meetings of the
committees of which they were members.
Board and Committee Meetings
The Board of Directors has a Compensation Committee, an Audit
Committee and a Governance Committee. The Compensation Committee is
composed of Ms. Dally, Mr. Wainwright and Mr. Grunewald. Ms. Dally
serves as Chairperson of the Compensation Committee. The Compensation
Committee determines awards under and administers the Company's 1996
Stock Option Plan for Employees and the Company's Shareholder Value
Plan for Employees. The Committee also reviews the compensation of
executive officers of the Company. The Compensation Committee met four
times during fiscal year 1998.
The Audit Committee is composed of Mr. Carroll, Mr. Wainwright and
Mr. Grunewald. Mr. Carroll serves as the Chairperson of the Audit
Committee. The Audit Committee reviews and reports to the Board with
respect to various auditing and accounting matters, including the
selection and fees of the Company's independent auditors, the scope of
both internal and independent audit procedures, the nature of services
to be performed by the independent auditors and the Company's
accounting practices. The Audit Committee met three times in fiscal
year 1998.
The Governance Committee is composed of Mr. Brandt, Mr. Gosa and
Ms. Dally. Mr. Brandt serves as Chairperson of the Governance
Committee. The Governance Committee is responsible for the recruitment
and nomination of new directors, appoints committees and chairs,
<PAGE>
reviews the performance of each director a minimum of once every three
years, reviews the performance of the Board and explores ways to
improve the effectiveness of the Board. The Governance Committee met
five times during fiscal year 1998. The Governance Committee accepts
nominations for new directors from shareholders. Shareholders may
recommend nominations from the floor at the Annual Shareholders
meeting.
Compensation of the Board
Non-management directors receive an annual retainer of $15,000, a
$1,000 fee for attendance at each Board meeting and $500 fee for
attendance at each Committee meeting. The Company bears the cost of
all travel associated with director's performance of their
responsibilities. Directors who are also employees of the Company do
not receive any compensation for their membership on the Board.
In May of 1997, the 1995 Non-Management Director Retirement Plan,
"The Retirement Plan", was terminated by a vote of the Board of
Directors. The 1995 Non-Management Director Retirement Plan provided
each non-employee director with a credit equal to fifty percent of the
current annual retainer on the first day of each fiscal year. Each non-
employee director could receive a maximum of ten annual credits. Each
non-employee director would become vested in his or her total credits
at a rate of ten percent per year, and was fully vested in all credits
after completing ten years of service on the Board. Total vested
credits were to be paid to directors on the first day of each fiscal
year commencing with the year immediately following the director's
retirement from the Board. Payments were to be made in equal amounts
over the same number of years that the director served on the Board,
but in no event over more than ten years. For directors elected before
1985, a provision was made for credits earned as if The Retirement Plan
had been adopted in 1984, vesting as if The Retirement Plan had been
adopted in 1989 and an increase in all limitations from ten to fifteen
years. According to provisions of the plan, the Board approved one-
time lump sum payments of $78,000, $48,000, $48,000, $33,075, $6,750
and $3,000 to Mr. Gerlach (Board Member until August 1997), Mr.
Carroll, Mr. Wainwright, Mr. Graber (retired from Board January 1997),
Ms. Dally and Mr. Mathias (retired from Board March 1977), respectively
in satisfaction of their vested credits in The Retirement Plan.
At the 1995 Annual Meeting, the Company's shareholders approved a
Stock Option Plan for Non-Employee Directors (the "1995 Directors
Plan"). The 1995 Directors Plan provides for an automatic award to
each non-employee director upon his or her initial election to the
Board of an option to acquire 1,000 shares of Common Stock. Each year
thereafter, eligible Directors are automatically granted an option to
acquire an additional 1,000 shares of Common Stock. The exercise price
for each option granted under the 1995 Directors Plan is 100% of the
fair market value of Common Stock on the date of the grant. Options
granted under the 1995 Directors Plan have a term of four years and are
exercisable as to one-third of the shares on the first anniversary of
the date of grant and as to an additional one-third on each succeeding
anniversary of the date of grant. During the last fiscal year, Messrs.
Carroll, Wainwright, Grunewald and Ms. Dally were each granted options
to purchase 1,000 shares at an exercise price of $15.563 per share. No
options may be granted under the 1995 Directors Plan after August 31,
1999.
In fiscal year 1998 the Board of Directors considered and approved
the 1997 Stock Value Unit Plan for Non-Employee Directors by which each
non-employee director is granted three Stock Value Units at the
beginning of each fiscal year.
The 1997 Stock Value Unit Plan for Non-Employee Directors is
administered by the Compensation Committee of the Board of Directors.
Each non-employee director is eligible to participate in the plan for
the three-year performance period. For fiscal year 1998, the
performance period began on September 1, 1997 and ends on August 31,
2000. Generally, a new three-year performance period begins each
September 1st.
<PAGE>
The performance goal for the plan is based on "total shareholder
return," defined in the plan as the increase in the average trading
price of a share of Common Stock during the month in which the
performance period ends (the "ending price") plus the value of
distributions and dividends during the performance period, over the
average trading price of a share of Common Stock during the month
preceding the first day of the three-year performance period (the
"beginning price"), expressed as an annualized rate of return for the
performance period. The total shareholder return for the Company
Common Stock for the performance period is compared to the total
shareholder return of the Common Stock for the publicly traded
corporations that are included in the S&P Home Furnishings and
Appliance Index of Companies (the "Index") for the same period.
With respect to each three-year performance period, the Committee
will award participants three units. The Committee will also fix at
that time a range of dollar values for the award unit related to the
performance goal percentile rank achieved for the three-year
performance period. For the three-year performance period beginning
September 1, 1997, the range of values for an award unit is between
$500 at the 50th percentile (that is the threshold) and $3,000 at the
90+ percentile (which is the maximum value). For rankings between the
50th and 90th percentile, the award unit value is determined from a
table adopted by the Committee. For example, if a participant has 3
award units and the Company's total shareholder return equals the 50th
percentile total shareholder return for the Index, the participant will
receive incentive compensation of $1,500 (3 X $500) for the three-year
performance period. If the Company's percentile ranking is 91, the
participant will receive incentive compensation of $9,000 (3 X $3,000).
If the Company's percentile ranking is less than 50, no incentive
compensation will be paid.
Before any award may be paid, the Committee must certify that the
performance goal has been achieved and any other requirements of the
plan have been satisfied. No payment will be made until the Committee
makes that certification.
All awards will be paid as soon as administratively practicable
following the last day of the performance period to which the award
relates (except in the case of sale or disposition of the Company). A
participant shall receive no award if he or she ceases to be a director
before the last day of the performance period for any reason other than
death, disability or retirement. If the participant ceases to be a
director because of the occurrence of one of the preceding events, a
prorated award will be paid.
Under the terms of the plan Mr. Carroll, Mr. Wainwright, Mr.
Grunewald and Ms. Dally were each issued 3 Stock Value Units during
fiscal year 1998.
<PAGE>
COMPENSATION OF EXECUTIVE OFFICERS
<TABLE>
Summary Compensation Table
The following table sets forth the compensation for fiscal years
1998, 1997 and 1996 for the Company's named executive officers for
fiscal year 1998. The named executive officers consist of the Chief
Executive Officer, the Chairman (who was CEO prior to fiscal year 1998
and who continues to serve as an Executive Officer of the Company), and
the three other most highly compensated executive officers of the
Company as of April 30, 1998.
<CAPTION>
Long-Term
Compensation
Annual Compensation Awards
----------------------------------- -------- ------------
Other Securties
Name & Fiscal Annual Underlying All Other
Principal Position Year Salary Bonus Compensation Options (#) Compensation
- ------------------------- ---- -------- -------- ---------- ------ ----------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
James J. Gosa 1998 $288,269 $299,189 $ 0 42,000 $ 5,161 (2)
President & Chief 1997 238,504 280,540 3,465 (1) 35,000 3,951 (2)
Executive Officer 1996 189,170 77,737 1,584 (1) 15,000 4,402 (2)
William F. Brandt, Jr. 1998 208,654 202,840 3,812 (1) 25,000 4,104 (3)
Chairman and 1997 238,154 242,775 0 45,000 4,513 (3)
Executive Officer 1996 260,540 107,041 2,142 (1) 0 4,917 (3)
David L. Blount 1998 180,319 167,789 516 (1) 21,000 3,161 (4)
Vice President, 1997 169,821 169,764 0 21,000 2,947 (4)
Manufacturing 1996 163,343 68,808 0 9,000 2,867 (4)
Kent B. Guichard 1998 175,000 170,274 6,100 (1) 20,000 2,834 (5)
Vice President, Finance & 1997 155,205 157,920 0 20,000 2,513 (5)
Chief Financial Officer 1996 143,144 63,147 0 5,000 2,313 (5)
Philip S. Walter 1998 121,212 171,866 (6) 0 20,000 42,371 (7)
Vice President & General 1997 0 0 0 0 0
Manager, New Business 1996 0 0 0 0 0
Development
</TABLE>
<PAGE>
(1) Company-paid spousal travel expenses.
(2) Contributions made on Mr. Gosa's behalf by the Company under the
Investment Savings Stock Ownership Plan were $3,841, $2,654, and
$2,237, for fiscal 1998, 1997 and 1996, respectively. Company-paid
premiums for group life insurance made on Mr. Gosa's behalf were
$1,320, $559, and $491, for fiscal 1998, 1997, and 1996, respectively.
Also, as part of Mr. Gosa's relocation, he was extended an interest-
free loan. Relocation loans are available to all Company management.
Using a 10% interest rate, the imputed interest savings to Mr. Gosa
were $738 and $1,674 in fiscal years 1997 and 1996, respectively. The
final payment, completing Mr. Gosa's repayment to the Company, was
received in fiscal year 1997.
(3) Contributions made on Mr. Brandt's behalf by the Company under the
Investment Savings Stock Ownership Plan were $3,158, $3,409, and
$3,690, for fiscal 1998, 1997, and 1996, respectively. Company-paid
premiums for group life insurance made on Mr. Brandt's behalf were
$946, $1,104, and $1,227, for fiscal 1998, 1997 and 1996, respectively.
(4) Contributions made on Mr. Blount's behalf by the Company under the
Investment Savings Stock Ownership Plan were $2,700, $2,539, and
$2,484, for fiscal 1998, 1997 and 1996, respectively. Company-paid
premiums for group life insurance made on Mr. Blount's behalf were
$461, $408, and $383, for fiscal 1998, 1997, and 1996, respectively.
(5) Contributions made on Mr. Guichard's behalf by the Company under
the Investment Savings Stock Ownership Plan were $2,596, $2,310, and
$2,188, for fiscal 1998, 1997 and 1996, respectively. Company-paid
premiums for group life insurance made on Mr. Guichard's behalf were
$238, $203, and $125, for fiscal years 1998, 1997 and 1996,
respectively.
(6) Includes a $20,000 signing bonus received by Mr. Walter during
fiscal year 1998.
(7) During fiscal year 1998 Mr. Walter received $28,783 associated
with relocation expenses and cabinetry valued at $10,614. Company-paid
premiums for group life insurance made on Mr. Walter's behalf were $167
for fiscal year 1998. Also, as part of Mr. Walter's relocation, he was
extended an interest-free loan. Relocation loans are available to all
Company management. Using a 10% interest rate, the imputed interest
savings to Mr. Walter in fiscal year 1998 was $2,807.
<PAGE>
<TABLE>
Option Grants in Last Fiscal Year
The following table sets forth information concerning options
granted during fiscal 1998 to the Company's named executive officers
under the 1996 Stock Option Plan for Employees.
<CAPTION>
Potential Realizable
Value at Assumed
Annual Rates of Stock
Price Appreciation
Individual Grants (1) For Option Term
---------------------------------------- ----------------------
Number of Percent of Total
Securities Options Granted
Underlying to Employees Exercise
Options in Fiscal Year or Base Expiration
Name Granted (#) % Price ($/Share) Date 5% ($) 10% ($)
- -------------------- ----------- -------------- --------------- --------- -------- ----------
<S> <C> <C> <C> <C> <C> <C>
James J. Gosa 42,000 17.9% $16.44 5/29/2007 $434,280 $1,100,400
William F. Brandt, Jr. 25,000 10.7 16.44 5/29/2007 258,500 655,000
David L. Blount 21,000 8.9 16.44 5/29/2007 217,140 550,200
Kent B. Guichard 20,000 8.5 16.44 5/29/2007 206,800 524,000
Philip S. Walter 20,000 8.5 14.44 8/1/2007 181,600 460,200
</TABLE>
(1) The exercise price of the options is 100% of the fair market value
of the Common Stock on the date of the option grant. Options are
exercisable at a rate of 33% per year beginning on the first
anniversary of the date on which the options were granted. The options
must be exercised within ten years from the date of grant, at which
time the options expire. If the employee's employment is terminated,
the employee has ninety days to exercise that portion of the option
that was exercisable as of the date his or her termination of
employment.
<PAGE>
<TABLE>
Aggregated Option Exercises in Last Fiscal Year and
Fiscal Year-End Option Values
The following table summarizes options exercised during fiscal
1998 and presents the values of unexercised options held by the
Company's named executive officers at April 30, 1998.
<CAPTION>
Number of
Securities Value of
Underlying Unexercised
Unexercised In-the-Money
Options Options
Shares At FY-End (#) At FY-End ($)
Acquired Value Exercisable / Exercisable /
Name On Exercise(#) Realized($) Unexercisable Unexercisable
- --------------- -------------- ----------- ------------- -------------
<S> <C> <C> <C> <C> <C> <C>
James J. Gosa 0 $ 0 21,667 E $ 550,417 E
70,333 U 1,292,854 U
William F. 5,000 76,500 15,000 E 278,900 E
Brandt, Jr. 55,000 U 903,125 U
David L. 2,500 40,938 13,000 E 321,500 E
Blount 38,000 U 700,198 U
Kent B. 7,000 107,875 3,000 E 71,958 E
Guichard 35,000 U 636,052 U
Philip S. 0 0 0 E 0 E
Walter 20,000 U 316,260 U
</TABLE>
<PAGE>
<TABLE>
Long-Term Incentive Plan - Awards in Last Fiscal Year
The following table sets forth information concerning long-term
incentives granted during fiscal 1998 to the Company's named executive
officers under the Shareholder Value Plan for Employees.
<CAPTION>
Number of
Shareholder
Value plan Performance or Estimated Future Payouts Under
(SVP) Units Other Period Until Non-Stock Price-Based Plans
Awarded in Maturation -------------------------------
Name Fiscal Year or Payout Threshold Target Maximum
- -------------- ----------- ----------------- --------- -------- --------
<S> <C> <C> <C> <C> <C>
James J. Gosa 52 5/1/97 to 4/30/2000 $26,000 $101,400 $156,000
William F. Brandt, Jr. 32 5/1/97 to 4/30/2000 16,000 62,400 96,000
David L. Blount 26 5/1/97 to 4/30/2000 13,000 50,700 78,000
Kent B. Guichard 24 5/1/97 to 4/30/2000 12,000 46,800 72,000
Philip S. Walter 24 5/1/97 to 4/30/2000 12,000 46,800 72,000
</TABLE>
The Shareholder Value Plan is administered by the Compensation
Committee of the Board of Directors. Participants in the plan are
designated by the Committee. The Committee has designated the Chief
Executive Officer, and the next four most highly compensated employees,
as well as approximately twenty other management employees, to
participate in the plan for the three-year performance period beginning
May 1, 1997 and ending April 30, 2000. Generally, a new three-year
performance period begins each May 1st.
The performance goal for the plan is based on "total shareholder
return," defined in the plan as the increase in the average trading
price of a share of Common Stock during the month in which the
performance period ends (the "ending price") plus the value of
distributions and dividends during the performance period, over the
average trading price of a share of Common Stock during the month
preceding the first day of the three-year performance period (the
"beginning price"), expressed as an annualized rate of return for the
performance period. The total shareholder return for the Company
Common Stock for the performance period is compared to the total
shareholder return of the Common Stock for the publicly traded
corporations that are included in the S&P Home Furnishings and
Appliance Index of Companies (the "Index") for the same period.
With respect to each three-year performance period, the Committee
will designate and award participants with a number of award units.
The Committee will also fix at that time a range of dollar values for
the award unit related to the performance goal percentile rank achieved
for the three-year performance period. For the three-year performance
period beginning May 1, 1997, the range of values for an award unit is
between $500 at the 50th percentile (which is the threshold) and $3,000
at the 90+ percentile (which is the maximum value). For rankings
between the 50th and 90th percentile, the award unit value is
determined from a table adopted by the Committee. For example, if a
participant has 50 award units and the Company's total shareholder
return equals the 50th percentile total shareholder return for the
<PAGE>
Index, the participant will receive incentive compensation of $25,000
(50 X $500) for the three-year performance period. If the Company's
percentile ranking is 91, the participant will receive incentive
compensation of $150,000 (50 X $3,000). If the Company's percentile
ranking is less than 50, no incentive compensation will be paid.
Before any award may be paid, the Committee must certify that the
performance goal has been achieved and any other requirements of the
plan have been satisfied. No payment will be made until the Committee
makes that certification. Even though the performance goals have been
met, the award payable to a participant in any performance period shall
not exceed $750,000.
All awards will be paid as soon as administratively practicable
following the last day of the performance period to which the award
relates (except in the case of a change of control). A participant
shall receive no award if the participant's employment terminates
before the last day of the performance period for any reason other than
death, disability, retirement or the sale or other disposition of the
business unit in which the participant is employed. If termination of
employment occurs because of the occurrence of one of the preceding
events, a prorated award will be paid.
Pension Plan
The Company maintains a non-contributory defined benefit pension
plan for salaried employees. The plan covers substantially all
employees who are compensated on the basis of a salary and/or a
commission, and who meet certain age and service requirements. Funding
is determined on an actuarial basis. Benefits are based on a
percentage of a participant's average compensation, including bonuses,
for the five calendar years in the ten calendar years prior to the
participant's retirement that produce the highest average compensation,
and the participant's years of credited service. The plan is a
continuation of a pension plan that was in effect for former employees
of Boise Cascade Corporation. If an employee was a participant in the
Boise Cascade plan, his or her benefit under the Company's plan cannot
be less than the benefit he or she would have received under the Boise
Cascade plan. The employee's benefit will be based upon his or her
credited service under both the Boise Cascade plan and the Company's
plan. If an employee has seven or more years of credited service under
the Boise Cascade plan, part of his or her benefit will be provided by
the Boise Cascade plan. The Company's plan will provide the rest of
the total benefit.
As of April 30, 1998, the credited years of service for Messrs.
Brandt, Gosa, Blount and Guichard were 27, 6, 21 and 4, respectively.
Mr. Walter will not be credited with a year of service until August 1,
1998.
<PAGE>
The following table illustrates the annual pension benefits for
retirement at age 65 under various levels of compensation and years of
credited service. The figures in the table assume that the plan
continues in its present form and that the participants elect a life
annuity form of benefit.
Final Average Years of Credited Service
Annual -------------------------------------
Compensation 10 20 30 40
- ----------------- ------- ------- -------- --------
$100,000......... $12,500 $25,000 $ 37,500 $ 50,000
$150,000......... 18,750 37,500 56,250 75,000
$200,000......... 25,000 50,000 75,000 100,000
$300,000......... 37,500 75,000 112,500 150,000
$325,000......... 40,625 81,250 121,875 162,500
The IRS places limits on the amount of compensation that can be
taken into account in computing benefits under the plan, as well as the
maximum amount of retirement benefits that may be paid under the plan.
These limits are indexed each year, so that the ultimate amount of
benefit actually paid will depend on the year of retirement. For
calendar year 1998, the maximum annual compensation that may be taken
into account is $160,000, and the maximum annual benefit that may be
paid in the form of a single life annuity is $130,000.
REPORT OF THE COMPENSATION COMMITTEE
The Compensation Committee of the Board of Directors is
responsible for the establishment of policies and procedures governing
executive compensation. The Committee is comprised entirely of non-
employee directors.
The Compensation Committee periodically performs a comprehensive
review of executive compensation with the assistance of a leading
independent compensation consultant. This report summarizes the
current philosophy of the Committee regarding executive compensation.
Compensation Philosophy
The Company's executive compensation program is designed to assist
in attracting, motivating, and retaining qualified senior management.
The fundamental objective of the compensation program is to support the
achievement of the Company's business objectives and, thereby, the
creation of long-term shareholder value. To this end, the Company's
philosophy is that executive compensation policy and practice should be
designed to achieve the following objectives:
* Align the interests of executive management with those of the
Company and its shareholders by providing a significant portion of
total compensation in Company Common Stock or other instruments which
derive value consistent with the return to shareholders;
* Provide an incentive to executive management by tying a meaningful
portion of compensation to the specific achievement of desired results;
and
* Enable the Company to attract and retain key executives whose
skills and capabilities are needed for the continued growth and success
of the Company by offering competitive total compensation and
attractive career opportunities.
The Compensation Committee believes that total return to the
shareholder should be a major determinant of long-term executive
compensation. While a significant portion of compensation may
fluctuate with annual results, the total program is structured to
emphasize long-term performance and sustained growth in shareholder
value.
The Compensation Committee believes that base salaries and target
incentive compensation for executive management should approximate the
averages found in publicly traded peer companies. The Committee
further believes that a substantial portion of target compensation
should be at risk based on performance. Actual incentive compensation,
therefore, should include elements which result in significant
variability based on performance. Executive management should have an
<PAGE>
opportunity for superior compensation with superior results. While
overall Company performance is emphasized in an effort to encourage and
reward teamwork, individual compensation should include some elements
which reflect individual responsibilities and contribution. At risk
performance-based compensation averaged approximately 48% of total
annual cash compensation for the executive group during the fiscal year
ended April 30, 1998.
The Compensation Committee also believes executives should have a
substantial equity ownership position to provide long-term incentives
which closely link executive compensation to the Company's long-term
performance and return to shareholders. Ownership may be through both
direct ownership and through stock options and other stock-based
awards.
Competitive Positioning
The Compensation Committee regularly reviews executive
compensation levels to ensure that the Company will be able to attract
and retain the caliber of executives needed to effectively operate the
Company and that pay for executives is reasonable and appropriate
relative to current market practice. In making these evaluations, the
Compensation Committee annually reviews the results of surveys of
executive salary and incentive levels among peer companies and other
durable goods manufacturers of similar size. In addition, the
Compensation Committee periodically completes an in-depth analysis of
salaries, annual bonuses and long-term incentives assisted by an
independent outside compensation consulting firm.
Components of Executive Compensation
The principal components of the Company's executive compensation
program include base salary, annual cash bonus, long-term incentives
and benefits.
Base Salary. Base salaries for all executives have been
competitively established based on salaries paid for like positions in
comparable companies. The companies used for comparison of base
salaries are not the same companies used in the Performance Graph
section of this proxy. These salaries are reviewed annually to assure
continued competitiveness and are adjusted when necessary. Based on
national surveys available to the Compensation Committee and
information provided by an independent consultant, the Compensation
Committee believes that executive management, as a group, is paid at
the average market rate. As is the case with the salaried
administration policy for the entire Company, adjustments to executive
base salaries result from a demonstrated increase in skills or from
market-driven changes in comparable positions.
Annual Cash Bonus. The purpose of the Company's annual incentive
program is to provide a direct monetary incentive to executives in the
form of an annual cash bonus which is tied to the achievement of
measurable, predetermined performance objectives. The annual incentive
bonus reflects overall Company financial performance and, for certain
executives, an individual's contribution to that performance. All
executive officers are eligible for an annual bonus, with a maximum
potential of 100% or 110% of base pay. Vice Presidents of the Company
were eligible for 100% of base pay during fiscal 1998, with the
following components used in determining bonus payout: Net Income (70%
of base pay)and Individual Performance (30% of base pay). The Chief
Executive Officer and President, and the Chairman were eligible for
110% of base pay during fiscal 1998, with the following components used
in determining bonus payout: Net Income (110% of base pay). No annual
incentives are paid below certain predetermined levels of minimal
performance.
Long-term Incentives. Long-term incentive compensation involves
the use of two types of stock-based instruments: stock options and
shareholder value units. Both types of incentives are intended to
focus the attention of executives on the achievement of the Company's
long-term performance objectives, to align executive management's
interests with those of shareholders and to facilitate executives'
accumulations of sustained ownership of Company stock. The levels of
award opportunities, as combined under both instruments, are intended
to be consistent with typical levels of comparable companies and to
reflect an individual's level of responsibility and performance. The
companies used for comparison of long-term incentives are not the same
companies used in the Performance Graph section of this proxy.
<PAGE>
Stock options, as awarded under the 1996 Stock Option Plan for
Employees, give executives the opportunity to purchase American
Woodmark Corporation Common Stock for a term not to exceed ten years
and at a price of no less than the fair market value of the Company's
stock on the date of grant. Executives benefit from stock options only
to the extent the stock price appreciates after the grant of the
option. Details concerning option grants may be found in the Option
Grant Table.
Shareholder value units, as awarded under the Shareholder Value
Plan for Employees, give executives the opportunity to receive
incentive cash payments based on the comparative total return to the
shareholders of American Woodmark versus the total returns of those
companies included in the S&P Home Furnishings and Appliance Index.
This Index is the same measurement used in the Performance Graph in
this Proxy. Executives may be eligible for cash incentives if the
Company provides a total return to shareholders above the fiftieth
percentile of this group of companies over a three-year period. Details
concerning Shareholder Value Unit awards may be found in Long-Term
Incentive Plan Awards Table.
Benefits. Benefit programs for executives are designed to provide
protection against financial catastrophe that can result from illness,
disability or death. Benefits offered to senior executives are those
offered to all employees.
Compensation of the Chief Executive Officer
The total compensation for the Chief Executive Officer in fiscal
1998 was established in accordance with the policies discussed above in
this report. As reported in the Summary Compensation Table, Mr. Gosa's
base salary increased by 20.9% during the fiscal year based on the full
year impact of a change in Mr. Gosa's responsibilities from President
and Chief Operating Officer to President and Chief Executive Officer
during fiscal 1997 and on the Committee's assessment of comparable
positions in similar companies. Mr. Gosa received an annual cash bonus
according to the plan based on the achievement of certain net income
targets. Mr. Gosa's stock option award and stock value unit grants
were consistent with the Company's compensation philosophy, and the
target value for these incentives is comparable to like positions at
similar companies, as determined by an independent compensation
consultant. The companies used for comparison are not the same
companies used in the Performance Graph section of this proxy.
Compliance with Section 162(m)of the Internal Revenue Code
The company is subject to Section 162(m) of the Internal Revenue
Code, which imposes a $1 million limit on the amount of compensation
that may be deducted by the Company for a taxable year with respect to
each of the Chief Executive Officer and the four most highly
compensated executive officers of the Company. Performance-based
compensation that meets certain requirements is not subject to the
deduction limit. The Committee has reviewed the impact of Section
162(m) on the Company and believes that it is unlikely that the
compensation paid to Mr. Gosa or any of the other named executive
officers during the current fiscal year will exceed the limit.
Furthermore, the 1996 Stock Option Plan for Employees and the
Shareholder Value Plan for Employees are generally designed to comply
with the requirements of the performance-based compensation exception
from the $1 million limit. The Committee will continue to monitor the
impact of the Section 162(m) limit on the Company and to assess
alternatives for avoiding any loss of tax deductions in future fiscal
years.
Martha M. Dally, Chairperson
Fred S. Grunewald
C. Anthony Wainwright
<PAGE>
PERFORMANCE GRAPH
Set forth below is a graph comparing the five-year cumulative
total shareholder return from investing $100 on May 1, 1993 in American
Woodmark Corporation Common Stock, the S&P 500 Index, and the S&P Home
Furnishings and Appliance Index:
Source 1993 1994 1995 1996 1997 1998
- ------------------- ------ ------ ------ ------ ------ ------
American Woodmark $100.0 $145.6 $145.6 $124.6 $328.5 $791.3
S&P 500 100.0 105.3 123.7 161.0 201.4 284.1
S&P Home Furnishings 100.0 124.2 114.6 136.1 130.6 221.0
and Appliance Index
CERTAIN TRANSACTIONS
The Company leases its headquarters from Amwood Associates,
a partnership including Mr. Brandt and Ms. Stout. The lease
commenced on March 18, 1986 and has a remaining term of three
years, at which time it may be canceled by either party. Current
rental payments are $32,145 per month and are subject to annual
increases, not to exceed 7%, based on changes in the Consumer
Price Index. During the fiscal year ended April 30, 1998, the
Company made payments under the lease in the amount of $383,000.
The rent under the lease was established by an independent
appraisal and is on terms that the Company believes are at least
as favorable to the Company as those that could be obtained from
unaffiliated third parties.
ITEM 2--RATIFICATION OF SELECTION OF
INDEPENDENT PUBLIC ACCOUNTANTS
Upon the recommendation of the Audit Committee, the Board of
Directors has selected Ernst & Young LLP as independent certified
public accountants to audit the Financial Statements of the
Company for fiscal year 1999, and has directed a vote of
shareholders to be taken to ascertain their approval or
disapproval of that selection. If the shareholders do not ratify
the selection of Ernst & Young LLP, other independent auditors
will be considered by the Board of Directors.
Representatives of Ernst & Young LLP will be present at the
Company's Annual Meeting. Such representatives will have the
opportunity to make a statement if they so desire, and will be
available to respond to appropriate questions.
The Board of Directors recommends a vote "FOR" ratification
of the selection of Ernst & Young LLP as independent auditors of
the Company for fiscal year 1999.
<PAGE>
OTHER BUSINESS
If any other business properly comes before the Annual
Meeting, your proxy may be voted by the persons named in it in
such manner, as they deem proper.
At this time management does not know of any other business
which will be presented at the Annual Meeting.
PROPOSALS BY SHAREHOLDERS FOR PRESENTATION AT 1999 ANNUAL MEETING
The Company must receive proposals that any shareholder
intends to present to the 1999 Annual Meeting of Shareholders no
later than March 16, 1999.
By Order of the Board of
Directors
Kent B. Guichard
Secretary
July 17, 1998
[DESCRIPTION] American Woodmark Corporation logo is shown here.
<PAGE>
[DESCRIPTION] Proxy Card
AMERICAN WOODMARK CORPORATION
PROXY SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS FOR
ANNUAL MEETING OF SHAREHOLDERS TO BE HELD AUGUST 21, 1998
The undersigned hereby appoints Martha M. Dally and Daniel
T. Carroll (each with power to act alone and with power of
substitution) as proxies, and hereby authorizes them to represent
and vote, as directed on the reverse side, all the shares of
Common Stock of American Woodmark Corporation held of record by
the undersigned on June 30, 1998, at the annual meeting of
shareholders to be held on August 21, 1998, and any adjournment
thereof.
This proxy when properly executed will be voted in the
manner directed herein by the undersigned shareholder. If no
direction is made, this proxy will be voted FOR proposals 1 and
2. ---
(Continued and to be signed on the other side)
<PAGE>
Please date, sign and mail your
proxy card back as soon as possible!
ANNUAL MEETING OF SHAREHOLDERS
AMERICAN WOODMARK CORPORATION
AUGUST 21, 1998
Please Detach and Mail in the Envelope Provided
A X Please mark your votes as indicated in this example
-----
1. ELECTION OF DIRECTORS NOMINEES: William F. Brandt, Jr.
FOR all nominees WITHHOLD C. Anthony Wainwright
listed to the AUTHORITY Martha M. Dally
right (except as to vote for James J. Gosa
indicated hereon) all nominees Daniel T. Carroll
listed to the Fred S. Grunewald
right Kent B. Guichard
---- -------
(INSTRUCTION: To withhold authority to vote for any individual
nominee write that nominee's name on the line provided below.)
- -----------------------------------------------------------------------
2. PROPOSAL TO RATIFY THE SELECTION OF ERNST & YOUNG LLP as
independent certified public accountants of the Company.
FOR AGAINST ABSTAIN
------ ------ -----
3. In their discretion the proxies are authorized to vote upon
such other business as may properly come before the meeting.
Please date, sign and return this Proxy in the enclosed envelope.
Date ------------------------------------------------, 1998
Signature -------------------------------------------------
Signature -------------------------------------------------
Note: Please sign exactly as name appears above. Executors,
trustees, etc., should so indicate when signing. If a
corporation, sign in full corporate name by authorized officer. If a
partnership, sign in partnership name by authorized person.
