<PAGE>
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
(Amendment No. )
Filed by the Registrant [X]
Filed by Party other than the Registrant [_]
Check the appropriate box:
[_] Preliminary Proxy Statement
[_] Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
[X] Definitive Proxy Statement
[_] Definitive Additional Materials
[_] Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
Fastenal Company
- --------------------------------------------------------------------------------
(Name of Registrant as Specified in its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement,
if Other Than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[_] Fee computed on table below per Exchange Act Rules 14a-6(i)(l) and 0-11
1) Title of each class of securities to which transaction applies:
---------------------------------------------------------------------
2) Aggregate number of securities to which transaction applies:
---------------------------------------------------------------------
3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which the
filing fee is calculated and state how it was determined):
---------------------------------------------------------------------
4) Proposed maximum aggregate value of transaction:
---------------------------------------------------------------------
5) Total fee paid:
---------------------------------------------------------------------
[_] Fee paid previously with preliminary materials.
[_] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was
paid previously. Identify the previous filing by registration statement
number, or the form or schedule and the date of its filing.
1) Amount Previously Paid:
---------------------------------------------------------------------
2) Form, Schedule or Registration Statement No.:
---------------------------------------------------------------------
3) Filing Party:
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4) Date Filed:
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<PAGE>
FASTENAL COMPANY
2001 Theurer Boulevard
Winona, Minnesota 55987-1500
(507) 454-5374
March 16, 1999
Dear Shareholder:
You are cordially invited to attend the Annual Meeting of Shareholders to be
held at the Company's offices at 2001 Theurer Boulevard, Winona, Minnesota,
commencing at 10 o'clock a.m., Central Daylight Savings Time, on Tuesday,
April 20, 1999.
The Secretary's Notice of Annual Meeting and the Proxy Statement which
follow describe the matters to come before the meeting. During the meeting, we
will also review the activities of the past year and items of general interest
about the Company.
We hope that you will be able to attend the meeting in person and we look
forward to seeing you. Please mark, date and sign the enclosed Proxy and
return it in the accompanying envelope as quickly as possible, even if you
plan to attend the Annual Meeting. You may revoke the Proxy and vote in person
at that time if you so desire.
Sincerely,
/s/ Robert A. Kierlin
Robert A. Kierlin
Chairman of the Board, President
and Chief Executive Officer
<PAGE>
FASTENAL COMPANY
-----------------------------------
Notice of Annual Meeting of Shareholders
to be held on April 20, 1999
-----------------------------------
The Annual Meeting of Shareholders of Fastenal Company will be held at the
Company's offices at 2001 Theurer Boulevard, Winona, Minnesota, commencing at
10 o'clock a.m., Central Daylight Savings Time, on Tuesday, April 20, 1999 for
the following purposes:
1. To elect a Board of Directors of five directors, to serve until
the next regular meeting of shareholders or until their successors
have been duly elected and qualified.
2. To ratify the appointment of KPMG Peat Marwick LLP as independent
auditors for the fiscal year ending December 31, 1999.
3. To transact such other business as may properly be brought before
the meeting.
The Board of Directors has fixed March 9, 1999 as the record date for the
meeting, and only shareholders of record at the close of business on that date
are entitled to receive notice of and vote at the meeting.
Your Proxy is important to ensure a quorum at the meeting. Even if you own
only a few shares, and whether or not you expect to be present, you are
urgently requested to mark, date, sign and mail the enclosed Proxy in the
postage-paid envelope that is provided. The Proxy may be revoked by you at any
time prior to being exercised, and returning your Proxy will not affect your
right to vote in person if you attend the meeting and revoke the Proxy.
By Order of the Board of Directors,
/s/ Stephen M. Slaggie
Stephen M. Slaggie
Secretary
Winona, Minnesota
March 16, 1999
<PAGE>
------------------
PROXY STATEMENT
------------------
GENERAL INFORMATION
The enclosed Proxy is being solicited by the Board of Directors of Fastenal
Company (the "Company") for use in connection with the Annual Meeting of
Shareholders to be held on Tuesday, April 20, 1999 at the Company's offices at
2001 Theurer Boulevard, Winona, Minnesota, commencing at 10 o'clock a.m.,
Central Daylight Savings Time, and at any adjournments thereof. Only
shareholders of record at the close of business on March 9, 1999 will be
entitled to vote at such meeting or adjournment. Proxies in the accompanying
form which are properly signed, duly returned to an officer of the Company and
not revoked will be voted in the manner specified. A shareholder executing a
Proxy retains the right to revoke it at any time before it is exercised by
delivering to an officer of the Company written notice of termination of the
Proxy's authority or a properly signed Proxy bearing a later date.
The address of the principal executive office of the Company is 2001 Theurer
Boulevard, Winona, Minnesota 55987-1500 and the telephone number is (507) 454-
5374. The mailing of this Proxy Statement and the Board of Directors' form of
Proxy to shareholders will commence on or about March 16, 1999.
The affirmative vote of the holders of a majority of the outstanding shares
of Common Stock of the Company present and entitled to vote is required for
approval of each proposal included in this Proxy Statement. For this purpose,
a shareholder who abstains with respect to a proposal is considered to be
present and entitled to vote on such proposal at the meeting and is in effect
casting a negative vote, but a shareholder (including a broker) who does not
give authority to a Proxy to vote, or withholds authority to vote, on a
proposal shall not be considered present and entitled to vote on such
proposal.
DEADLINES FOR RECEIPT OF SHAREHOLDER PROPOSALS FOR 2000 ANNUAL MEETING
Any shareholder proposal intended to be presented at the 2000 Annual Meeting
of Shareholders and desired to be included in the Company's Proxy Statement
for that meeting must be received by the Company at its principal executive
office no later than November 17, 1999 in order to be included in such Proxy
Statement. If notice of any other shareholder proposal intended to be
presented at the 2000 Annual Meeting of Shareholders is not received by the
Company on or before January 31, 2000, the Proxy solicited by the Board of
Directors of the Company for use in connection with that meeting may confer
authority on the Proxies named therein to vote in their discretion on such
proposal without any discussion in the Company's Proxy Statement for that
meeting of either the proposal or how such Proxies intend to exercise their
voting discretion.
1
<PAGE>
SECURITY OWNERSHIP OF PRINCIPAL
SHAREHOLDERS AND MANAGEMENT
The following table sets forth, as of March 1, 1999, the ownership of Common
Stock of the Company by each shareholder who is known by the Company to own
beneficially more than 5% of the outstanding Common Stock of the Company, by
each director and nominee for the office of director, by each executive
officer named in the Summary Compensation Table set forth under "Executive
Compensation" below, and by all directors and executive officers as a group.
At March 1, 1999 there were 37,938,688 shares of Common Stock, par value $.01
per share, issued and outstanding, each of which is entitled to one vote.
<TABLE>
<CAPTION>
Amount and Nature Percentage of
Name and, if Required, Address of Beneficial Outstanding
of Beneficial Owner Ownership(1) Shares
------------------------------ ------------------- -------------
<S> <C> <C>
Robert A. Kierlin................. 4,382,736(2)(3) 11.55%
Route 1, Box 65D
Winona, Minnesota 55987
Stephen M. Slaggie................ 2,288,972(2)(4) 6.03
1870 Ralph Scharmer Drive
Winona, Minnesota 55987
Michael M. Gostomski.............. 1,086,472(2)(5) 2.86
John D. Remick.................... 1,507,947(2)(6) 3.97
Henry K. McConnon................. 1,086,912(2)(3)(7) 2.86
Willard D. Oberton................ 107,560(8) *
Daniel L. Florness................ 1,056(9) *
Albert O. Nicholas................ 2,215,500(10) 5.84
Nicholas Company, Inc.
700 North Water Street
Milwaukee, Wisconsin 53202
Directors and executive officers
as a group (7 persons)........... 10,007,655 26.38
</TABLE>
- --------
* Less than 1%.
(1) Except as otherwise indicated in the Notes below, the listed beneficial
owner has sole voting power and investment power with respect to such
shares.
(2) Each director of the Company is a director and member of Hiawatha
Education Foundation ("Hiawatha Foundation") and a director of Hiawatha
Foundation's wholly-owned subsidiary (the "HEF Subsidiary"). As such,
each director shares voting and investment power with respect to the
shares of Common Stock of the Company owned by Hiawatha Foundation and
the HEF Subsidiary. As a result, the amount shown for each director
includes not only the shares he owns of record, but also an aggregate
of 113,000 shares owned of record by Hiawatha Foundation and the HEF
Subsidiary. Each director disclaims beneficial ownership of the shares
owned of record by Hiawatha Foundation and the HEF Subsidiary.
(3) Mr. Kierlin is a director and member of the investment committee of a
local secondary school (the "School") and Mr. McConnon is a director of
the School. As such, each of Mr. Kierlin and Mr. McConnon shares voting
and investment power with respect to the shares of Common
2
<PAGE>
Stock of the Company owned by the School. As a result, the amount shown
for each of Mr. Kierlin and Mr. McConnon includes not only the shares he
owns of record, but also 2,000 shares owned of record by the School.
Each of Mr. Kierlin and Mr. McConnon disclaims beneficial ownership of
the shares owned of record by the School.
(4) Includes 120,000 shares held of record by Mr. Slaggie's wife, and an
aggregate of 68,000 shares held of record by certain of Mr. Slaggie's
children and by Mr. Slaggie as custodian for those children. Also
includes 20,000 shares held of record by the Slaggie Family Foundation
(the "Slaggie Foundation"). Mr. Slaggie and members of his family
(including his wife and certain of his children) are directors and
members of the Slaggie Foundation and, as such, share voting and
investment power with respect to the shares of Common Stock of the
Company held by the Slaggie Foundation. Mr. Slaggie disclaims beneficial
ownership of the shares held of record by the Slaggie Foundation.
(5) Includes 813,472 shares held of record by Mr. Gostomski's revocable
living trust, over which Mr. Gostomski has voting and investment power,
and 160,000 shares held of record by the revocable living trust of Mr.
Gostomski's wife, over which Mr. Gostomski's wife has voting and
investment power.
(6) Includes 170,000 shares held of record by Mr. Remick's wife, and an
aggregate of 20,000 shares held of record by certain of Mr. Remick's
children and by Mr. Remick as custodian for those children. Also
includes 82,075 shares held in an estate of which Mr. Remick is one of
several personal representatives. As a personal representative, Mr.
Remick shares voting and investment power with respect to the shares of
Common Stock of the Company held in the estate.
(7) Includes 160,000 shares held of record by Mr. McConnon's wife, an
aggregate of 33,050 shares held of record by Mr. McConnon's son and by
Mr. McConnon as custodian for his son, and 12,000 shares held of record
by Mr. McConnon's father with respect to which Mr. McConnon has
investment power pursuant to a power of attorney granted to Mr. McConnon
by his father.
(8) Includes 18,800 shares held of record by Mr. Oberton's wife, and an
aggregate of 3,000 shares held of record by Mr. Oberton and his wife as
custodian for Mr. Oberton's children.
(9) Includes 56 shares attributable to the account of Mr. Florness in the
Company's 401(k) plan. Each participant in the 401(k) plan has the right
to direct the investment of, and the voting of all shares attributable
to, such participant's plan account.
(10) According to a Schedule 13G statement filed with the Securities and
Exchange Commission reflecting ownership as of December 31, 1998,
Nicholas Company, Inc., which is a registered investment company, has
sole investment power with respect to 2,215,500 shares. Mr. Nicholas,
who is the chief executive officer, chairman, a director and majority
shareholder of Nicholas Company, Inc., may be deemed to have indirect
beneficial ownership of such shares by virtue of his affiliation with
Nicholas Company, Inc. Mr. Nicholas disclaims such beneficial
ownership.
3
<PAGE>
ELECTION OF DIRECTORS
Nominees and Required Vote
The Restated Bylaws of the Company provide that the business of the Company
shall be managed by or under the direction of a Board of Directors of not less
than five nor more than nine directors, which number shall be fixed from time
to time by the Board of Directors. Each director shall be elected at the
Annual Meeting of Shareholders for a term that expires at the next regular
shareholders' meeting and shall hold office for the term for which he was
elected and until a successor is elected and has qualified. The Board of
Directors has fixed the number of directors to be elected for the ensuing year
at five and has nominated the five persons named below for election as
directors. Proxies solicited by the Board of Directors will, unless otherwise
directed, be voted to elect the five nominees named below to constitute the
entire Board of Directors.
All of the nominees named below are current directors of the Company. Each
nominee has indicated a willingness to serve as a director for the ensuing
year, but, in case any nominee is not a candidate at the meeting for any
reason, the Proxies named in the enclosed form of Proxy may vote for a
substitute nominee in their discretion.
The following table sets forth certain information as to each nominee for
the office of director:
<TABLE>
<CAPTION>
Name Age Position
---- --- --------
<S> <C> <C>
Robert A. Kierlin................... 59 Chairman of the Board, President,
Chief Executive Officer and Director
Stephen M. Slaggie.................. 59 Secretary and Director
Michael M. Gostomski................ 58 Director
John D. Remick...................... 62 Director
Henry K. McConnon................... 59 Director
</TABLE>
Mr. Kierlin has been the Chairman of the Board, President and Chief
Executive Officer of the Company and has served as a director since the
Company's incorporation in 1968.
Mr. Slaggie has been the Secretary of the Company and has served as a
director since 1970. He became a full-time employee of the Company in December
1987, at which time he assumed the additional duties of Shareholder Relations
Director and Insurance Risk Manager. From 1970 through June 1996, Mr. Slaggie
also served as Treasurer of the Company.
Mr. Gostomski has served as a director since 1973. For more than the past
five years, Mr. Gostomski has been the President and Chief Executive Officer
of Winona Heating & Ventilating Co., a sheet metal and roofing contractor
located in Winona, Minnesota.
Mr. Remick has served as a director since the Company's incorporation in
1968. For more than the past five years, Mr. Remick has been the President and
Chief Executive Officer of Rochester Athletic Club, Inc., an athletic club
located in Rochester, Minnesota.
Mr. McConnon has served as a director since the Company's incorporation in
1968. For more than the past five years, Mr. McConnon has been the President
of Wise Eyes, Inc., an eyeglass retailer and wholesaler located in State
College, Pennsylvania.
None of the above nominees is related to any other nominee or to any
executive officer of the Company.
4
<PAGE>
Board and Committee Meetings
The Company has an Audit Committee consisting of Robert A. Kierlin, John D.
Remick and Michael M. Gostomski. The Audit Committee held two meetings during
1998. The Audit Committee has the authority to (a) make recommendations to the
Board of Directors as to the engagement of independent auditors, (b) review
with the independent auditors the scope and results of audit engagements, (c)
review the scope, frequency and results of internal audits and examinations,
(d) review the adequacy of the Company's accounting policies and system of
internal accounting controls, and (e) review all related party transactions
for potential conflict-of-interest situations. The Company does not have a
Nominating Committee or a Compensation Committee.
The Board of Directors held two meetings during 1998.
Each director of the Company receives an annual retainer of $1,000 for his
services as a director, and $500 (plus reimbursement of reasonable expenses)
for attendance at each meeting of the Board. Each member of the Audit
Committee receives $250 (plus reimbursement of reasonable expenses) for
attendance at each Audit Committee meeting that is not held on the date of a
meeting of the Board of Directors. All directors attended more than 75% of the
aggregate number of meetings of the Board and Audit Committee on which they
served during 1998.
5
<PAGE>
EXECUTIVE COMPENSATION
Summary of Compensation
Set forth in the following table is information with respect to the
compensation of the President and Treasurer of the Company for each fiscal
year of the Company in the three fiscal year period ended December 31, 1998,
and of the Vice President of the Company for each fiscal year of the Company
in the two fiscal year period ended December 31, 1998:
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
Annual
Compensation
Name and ---------------------
Principal Position Year Salary($) Bonus($)
- ------------------ ---- --------- --------
<S> <C> <C> <C>
Robert A. Kierlin.................................... 1998 $102,500(1) --
Chairman of the Board, President 1997 $122,500(1) --
and Chief Executive Officer 1996 $122,000(1) --
Willard D. Oberton(2)................................ 1998 $110,000 $82,120
Vice President and 1997 $ 99,479 $40,155
Chief Operating Officer
Daniel L. Florness(3)................................ 1998 $ 84,375 $18,641
Treasurer, Chief Financial Officer 1997 $ 73,542 $13,456
and Chief Accounting Officer 1996 $ 35,000 $ 4,582
</TABLE>
- --------
(1) Includes $2,500, $2,500 and $2,000 paid to Mr. Kierlin during 1998, 1997
and 1996, respectively, in his capacity as a director and member of the
Audit Committee of the Company. See "Board and Committee Meetings" above.
(2) Mr. Oberton became an executive officer of the Company in March 1997. Mr.
Oberton's 1997 compensation includes compensation for the full fiscal
year.
(3) Mr. Florness became an executive officer and employee of the Company in
June 1996.
Mr. Kierlin, Mr. Oberton and Mr. Florness are the only persons who were
executive officers of the Company during the fiscal year ended December 31,
1998 and whose total salary and bonus for such fiscal year was $100,000 or
more.
Compensation Committee Interlocks and Insider Participation
As indicated under "Board and Committee Meetings" above, the Company does
not have a Compensation Committee or any other committee of the Board of
Directors performing equivalent functions. Decisions regarding compensation of
executive officers of the Company are made by the Board of Directors. Two of
the Company's executive officers, Robert A. Kierlin and Stephen M. Slaggie,
are directors of the Company, and each participated in all deliberations of
the Board during the fiscal year ended December 31, 1998 concerning executive
officer compensation.
Board Report on Executive Compensation
As required by the rules established by the Securities and Exchange
Commission, the Board of Directors has prepared, for inclusion in this Proxy
Statement, the following report on the
6
<PAGE>
compensation policies of the Board applicable to the Company's executive
officers. The Company's executive officers during 1998 were its President (who
is the Chief Executive Officer and a director of the Company), its Secretary
(who is a director of the Company), its Vice President and its Treasurer.
At the first meeting of the Board of Directors in 1998, the Board
established the maximum total compensation (base salary and, if applicable,
bonus) to be paid to the Company's President and Secretary for the year. As
shown in the table set forth under "Security Ownership of Principal
Shareholders and Management" above, each of the Company's President and
Secretary holds a significant portion of the Company's Common Stock, which was
acquired by such officer at the time of the Company's incorporation. It is the
philosophy of the Board of Directors that the President and Secretary should
be modestly compensated by the Company, and that financial rewards for those
officers should come in large part from increases in the value of the
Company's stock held by them. Consistent with that philosophy, the Board set
the maximum compensation of the Company's President and Secretary for 1998 at
the same level as 1997.
The President's compensation in 1998 consisted solely of base salary. The
compensation of the Company's other executive officers in 1998 consisted of
base salary and the potential for a bonus. The actual base salary paid to each
of the President and Secretary was, within the limits established by the Board
of Directors, determined by such officer based on such factors as such officer
deemed appropriate, provided that the base salary paid to the Company's
Secretary was subject to the review and approval of the President. The base
salary paid to the Company's other executive officers was determined by the
Board of Directors. The bonus paid to the Company's Secretary was paid under
the Company's general employee bonus program for non-sales personnel. Under
the bonus program, an aggregate bonus is calculated for each of the Company's
departments based on the department achieving certain pre-determined cost
containment goals. The aggregate bonus, if any, for each department is then
allocated among the department's employees in a manner determined by the
department's supervisor based on the level of responsibility of each employee,
provided that such allocation is subject to the review and approval of the
Company's President. The Company's Secretary was the supervisor of his
department in 1998. The bonuses paid to the Company's Vice President and
Treasurer were paid under individual bonus arrangements. The Vice President's
bonus was calculated based on the amount by which the Company's pre-tax income
in 1998 exceeded its pre-tax income in 1997. The bonus paid to the Company's
Treasurer was calculated based on the amount by which net income in 1998
exceeded a percentage of net sales in 1998.
There has been no increase in the annual base salary paid to the Company's
President in the last twelve completed fiscal years, or in the annual base
salary paid to the Company's Secretary since he became a full-time employee of
the Company in 1987. The salary paid to the Company's President in 1998,
determined by him within the limits established by the Board of Directors, was
50% of the maximum compensation authorized for payment to him by the Board and
was less than his 1997 salary reflecting diminished time spent by the
President on the Company's business during 1998.
With the exception of the bonus arrangements described above, the
compensation policies and practices of the Board of Directors applicable to
the Company's executive officers are not subject to specific criteria, and the
factors considered by the Board in setting the maximum compensation of the
President and Secretary and the base salary of the Company's other executive
officers, and by the President and Secretary in determining their actual base
salary within the limits established by the Board, were subjective, such as
the level of compensation paid by the Company to its other employees.
7
<PAGE>
The Board is aware of the executive compensation historically paid by members
of the peer group selected in connection with the preparation of the stock
performance graph set forth below. However, the Board did not consider the
compensation paid by the companies in the peer group to their chief executive
officers in setting the maximum compensation of the Company's President for
1998, since the higher average level of compensation present at those
companies does not reflect the philosophy of the Board that the President
should be modestly compensated. The Company's performance was not a factor
considered by the Board of Directors in setting the maximum compensation of
the President and Secretary or the base salary of the Company's other
executive officers, nor did the Board require the President and Secretary to
consider the Company's performance in determining their actual base salary.
However, the Board of Directors believes that the compensation of the
Company's executive officers in 1998 was low by national and regional
standards (based on a comparison of executive compensation paid by the Company
and certain other comparably sized companies published in a national business
periodical), particularly in light of the Company's historical financial
results; and that, as a result of their share ownership and the bonus
arrangements described above, the interests of the Company's executive
officers are closely aligned with the long-term interests of the Company and
its public shareholders.
Section 162(m) of the Internal Revenue Code of 1986 limits the deductibility
of compensation over $1,000,000 paid by a company to its executive officers.
Since the Company's executive compensation is paid in cash and is set at
levels such that each executive officer will receive compensation well below
the $1,000,000 limit, the Board of Directors has determined that it is not
necessary at this time to take any position with respect to the non-
deductibility of compensation in excess of $1,000,000.
The Board of Directors
Robert A. Kierlin
Stephen M. Slaggie
Michael M. Gostomski
John D. Remick
Henry K. McConnon
8
<PAGE>
Performance Graph
Set forth below is a graph comparing, for a period of five years ended
December 31, 1998, the yearly cumulative total shareholder return on the
Company's Common Stock with the yearly cumulative total shareholder return of
the NASDAQ Market Index, an index of a group of peer companies selected by the
Company, and, because of changes in the peer companies from those selected
last year, an index of last year's peer group.
The companies in this year's peer group are Lawson Products, Inc.
("Lawson"), Noland Company ("Noland"), MSC Industrial Direct Co., Inc. ("MSC")
and W.W. Grainger, Inc. ("Grainger"). Grainger, which was not in the peer
group last year, was added to the peer group this year because the Company
believes the shift in its product mix over the last several years from
fasteners to general industrial supplies warrants the addition of another peer
company in the industrial supply business, and because the Company feels that
a peer group of four companies is a better representative sample than a peer
group of three companies. The Company is not included in either last year's
peer group or this year's peer group.
In calculating the yearly cumulative total shareholder return of the peer
group indexes, the shareholder returns of the companies included in the peer
groups are weighted according to the stock market capitalizations of such
companies at the beginning of each period for which a return is indicated. Of
the companies included in the peer groups, the stock of Lawson, Noland and
Grainger has been publicly traded for the entire five-year period covered by
the performance graph, and the stock of MSC has been publicly traded since
December 1995. The shareholder returns of MSC are first included in the
calculation of cumulative total shareholder return of the peer group indexes
for the year 1996.
The comparison of total shareholder returns in the performance graph assumes
that $100 was invested on December 31, 1993 in each of the Company, the NASDAQ
Market Index, the index of this year's peer group and the index of last year's
peer group, and that dividends were reinvested when and as paid.
9
<PAGE>
Comparison of Five Year Cumulative Total Return
Among Fastenal Company, NASDAQ Market Index and Peer Group Indexes
Fastenal NASDAQ Old Peer New Peer
Company Market Index Group Group
1993 $100.00 $100.00 $100.00 $100.00
1994 132.01 104.99 94.99 100.82
1995 273.15 136.18 91.47 114.79
1996 295.94 169.23 109.97 140.29
1997 247.56 207.00 130.60 170.77
1998 284.89 291.96 130.59 153.21
10
<PAGE>
RELATIONSHIP WITH AND APPOINTMENT
OF INDEPENDENT AUDITORS
The Board of Directors has selected KPMG Peat Marwick LLP to serve as the
Company's independent auditors for the fiscal year ending December 31, 1999,
subject to ratification by the shareholders. While it is not required to do
so, the Board of Directors is submitting the selection of that firm for
ratification in order to ascertain the view of the shareholders. If the
selection is not ratified, the Board of Directors will reconsider its
selection. Proxies solicited by the Board of Directors will, unless otherwise
directed, be voted to ratify the appointment of KPMG Peat Marwick LLP as
independent auditors for the Company for the fiscal year ending December 31,
1999.
A representative of KPMG Peat Marwick LLP will be present at the Annual
Meeting of Shareholders and will be afforded an opportunity to make a
statement if such representative so desires and will be available to respond
to appropriate questions during the meeting.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934 requires the Company's
directors and officers to file initial reports of share ownership and reports
of changes in share ownership with the Securities and Exchange Commission.
Directors and officers are required by Commission regulations to furnish the
Company with copies of all Section 16(a) forms they file. Based solely on a
review of the copies of such forms furnished to the Company and written
representations from the Company's directors and officers, all Section 16(a)
filing requirements were met for the year ended December 31, 1998.
11
<PAGE>
ADDITIONAL MATTERS
The Annual Report of the Company for the fiscal year ended December 31,
1998, including financial statements, is being mailed with this Proxy
Statement.
As of the date of this Proxy Statement, management knows of no matters that
will be presented for determination at the meeting other than those referred
to herein. If any other matters properly come before the meeting calling for a
vote of shareholders, it is intended that the shares represented by the
Proxies solicited by the Board of Directors will be voted by the Proxies named
therein in accordance with their best judgment.
The Company will pay the cost of soliciting Proxies in the accompanying
form. In addition to solicitation by the use of mails, certain directors,
officers and regular employees of the Company may solicit Proxies by
telephone, telegram or personal interview, and may request brokerage firms and
custodians, nominees and other record holders to forward soliciting materials
to the beneficial owners of stock of the Company and will reimburse them for
their reasonable out-of-pocket expenses in so forwarding such materials.
Shareholders who wish to obtain a copy of the Company's 10-K Annual Report,
filed with the Securities and Exchange Commission for the fiscal year ended
December 31, 1998, may do so without charge by writing to Stephen M. Slaggie,
Secretary, at the Company's offices, 2001 Theurer Boulevard, Winona, Minnesota
55987-1500.
By Order of the Board of Directors,
/s/ Stephen M. Slaggie
Stephen M. Slaggie
Secretary
Dated: March 16, 1999
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PROXY FASTENAL COMPANY
Solicited on Behalf of the Board of Directors
Annual Meeting of Shareholders--April 20, 1999
The undersigned, revoking any proxy heretofore given, hereby appoints Robert
A. Kierlin, Stephen M. Slaggie and Michael M. Gostomski, and each of them, as
Proxies, each with full power of substitution, for and in the name of the
undersigned to vote, as designated below, and on the reverse side hereof, all
the shares of Common Stock of Fastenal Company registered in the name of the
undersigned at the close of business on March 9, 1999, at the Annual Meeting of
Shareholders to be held on April 20, 1999, and at any adjournment thereof.
1. Election of Directors. Nominees of the Board of Directors are Robert A.
Kierlin, Stephen M. Slaggie, Michael M. Gostomski, John D. Remick and
Henry K. McConnon.
[_] FOR ALL NOMINEES LISTED ABOVE except vote withheld from the following
nominee(s), if any:
[_] WITHHOLD AUTHORITY to vote for all nominees listed above
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2. Ratification of the appointment of KPMG Peat Marwick LLP as independent
auditors for the 1999 fiscal year.
[_] FOR[_] AGAINST[_] ABSTAIN
(continued, and to be dated and signed, on other side)
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3. Any other business which may properly be considered and acted upon at said
meeting.
THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED AS SPECIFIED ON THE REVERSE
SIDE, BUT IF NO DIRECTION IS GIVEN, THIS PROXY WILL BE VOTED FOR ALL NOMINEES
NAMED ON THE REVERSE SIDE AND FOR PROPOSAL 2. NOTWITHSTANDING THE FOREGOING,
IF THIS PROXY IS TO BE VOTED FOR ANY NOMINEE NAMED ON THE REVERSE SIDE AND
SUCH NOMINEE IS UNWILLING OR UNABLE TO SERVE, THIS PROXY WILL BE VOTED FOR A
SUBSTITUTE IN THE DISCRETION OF THE PROXIES. THE PROXIES ARE AUTHORIZED TO
VOTE IN THEIR DISCRETION UPON SUCH OTHER BUSINESS AS MAY PROPERLY COME BEFORE
THE MEETING.
Dated: ______________________ , 1999
Please sign exactly as this
Proxy is addressed.
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(Signature)
Jointly owned shares will be voted
as directed if one owner signs
unless another owner instructs to
the contrary, in which case the
shares will not be voted. When
signing as attorney, executor,
administrator, guardian, custodian,
or corporate official, sign name
and title.
