<PAGE>
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act of 1934
Filed by 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 (s)240.14a-11(c) or (s)240.14a-12
ROWE FURNITURE CORPORATION
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
ROWE FURNITURE CORPORATION
- -------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement
Payment of Filing Fee (check the appropriate box):
[X] $125 per Exchange Act Rules (6-11(c)(1)(ii), 14a-6(i)(1), or 14a-6(j)(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 be registration statement number,
of 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:
Notes:
<PAGE>
____________________________
NOTICE
OF
ANNUAL MEETING
OF
STOCKHOLDERS
AND
PROXY STATEMENT
____________________
TIME:
Tuesday, April 2, 1996
at 10:00 a.m.
PLACE:
Roanoke Airport Marriott
Roanoke, Virginia
____________________
ROWE FURNITURE CORPORATION
SALEM, VIRGINIA
____________________________
<PAGE>
ROWE FURNITURE CORPORATION
239 Rowan Street
Salem, Virginia 24153
To The Stockholders of
Rowe Furniture Corporation March 1, 1996
Notice is hereby given that the annual meeting of stockholders of Rowe
Furniture Corporation (the "Company") will be held at the Roanoke Airport
Marriott, Roanoke, Virginia, on Tuesday, April 2, 1996, at 10:00 a.m. The annual
meeting is for the purpose of considering and acting upon the election of three
directors of the Company, each for a term of three years, and to transact such
other business as may properly come before the meeting or any adjournment or
postponement thereof. The Board of Directors is not aware of any other business
to come before the meeting.
Any action may be taken on the foregoing proposal at the meeting on the
date specified above, or on any date or dates to which the meeting may be
adjourned or postponed. Stockholders of record at the close of business on
February 9, 1996, are the stockholders entitled to vote at the meeting, and at
any adjournments or postponements thereof.
You are requested to complete and sign the enclosed form of proxy which is
solicited by the Board of Directors, and to mail it promptly in the enclosed
envelope. The proxy will not be used if you attend the meeting and vote in
person.
By Order of the Board of Directors,
ARTHUR H. DUNKIN, Secretary-Treasurer
- ------------------------------------------------------------------------------
IMPORTANT: THE PROMPT RETURN OF PROXIES WILL SAVE THE COMPANY THE
EXPENSE OF FURTHER REQUESTS FOR PROXIES IN ORDER TO ENSURE THE PRESENCE
OF A QUORUM AT THE MEETING. A SELF-ADDRESSED ENVELOPE IS ENCLOSED FOR
YOUR CONVENIENCE. NO POSTAGE IS REQUIRED IF MAILED WITHIN THE UNITED
STATES.
- ------------------------------------------------------------------------------
<PAGE>
ROWE FURNITURE CORPORATION
239 Rowan Street
Salem, Virginia 24153
________________________________
PROXY STATEMENT
_________________________________
ANNUAL MEETING OF STOCKHOLDERS
TUESDAY, APRIL 2, 1996
__________________________________
This proxy statement is furnished in connection with the solicitation of
proxies on behalf of the Board of Directors of Rowe Furniture Corporation
(hereinafter called the "Company") to be used at the Annual Meeting of
Stockholders of the Company (hereinafter called the "Meeting"), which will be
held at the Roanoke Airport Marriott, Roanoke, Virginia, on April 2, 1996, at
10:00 a.m., and all adjournments and postponements of the Meeting. The
accompanying notice of Meeting and this proxy statement are first being mailed
to stockholders on or about March 1, 1996.
All shares of the Company's common stock, par value $1.00 per share (the
"Common Stock"), represented at the Meeting by properly executed proxies
received prior to or at the Meeting, and not revoked, will be voted at the
Meeting in accordance with the instructions thereon. If no instructions are
indicated, properly executed proxies will be voted for the nominees set forth in
this Proxy Statement. Proxies marked as abstaining will be treated as present
for purposes of determining a quorum at the Meeting, but will not be counted as
voting on any matter for which an abstention is indicated. Proxies returned by
brokers as "non-votes" on behalf of shares held in street name will not be
treated as present for purposes of determining a quorum for the Meeting unless
they are voted by the broker on at least one matter on the agenda. Such non-
voted shares will not be counted as voting on any matter as to which a non-vote
is indicated on the broker's proxy.
The Company does not know of any matters, other than as described in the
Notice of Meeting, that are to come before the Meeting. If any other matters are
properly presented at the Meeting for action, the persons named in the enclosed
form of proxy and acting thereunder will have the discretion to vote on such
matters in accordance with their best judgment.
Stockholders who execute proxies solicited by the Company's Board of
Directors retain the right to revoke them at any time. Unless so revoked, the
shares represented by such proxies will be voted at the Meeting and all
adjournments and postponements thereof. The presence of a stockholder at the
Meeting will not automatically revoke such stockholder's proxy. Any proxy may be
revoked, however, at any time prior to its exercise by written notice to the
Secretary of the Company or the filing of a later dated proxy prior to a vote
being taken on a particular proposal at the Meeting or by attending the Meeting
and voting in person. Any written notice revoking a proxy should be delivered to
Arthur H. Dunkin, Secretary-Treasurer of the Company, at 239 Rowan Street,
Salem, Virginia 24153.
2
<PAGE>
STOCKHOLDER APPROVAL
Although the Company's principal executive offices are located in Salem,
Virginia, the Company is incorporated under the laws of the State of Nevada.
Under Nevada law, the affirmative vote of a plurality of the shares represented
at the Meeting is required for the election of Directors. Accordingly,
withholding of authority will have no effect upon the election of Directors.
VOTING SECURITIES AND PRINCIPAL HOLDERS THEREOF
Stockholders of record as of the close of business on February 9, 1996
will be entitled to one vote for each share then held. As of February 9, 1996,
the Company had 13,421,079 shares of common stock issued and outstanding.
The following table sets forth certain information regarding beneficial
ownership of the Common Stock as of February 9, 1996, by (i) each person who is
known by the Company to be the beneficial owner of more than five percent of the
outstanding Common Stock, (ii) each director and nominee, and (iii) all
directors, nominees and executive officers as a group. The Company believes that
the individuals listed each have sole voting and investment power with respect
to such shares, except as otherwise indicated in the footnotes to the table.
Unless otherwise indicated below, the business address of each person listed
below is: c/o Rowe Furniture Corporation, 239 Rowan Street, Salem, Virginia
24153.
<TABLE>
<CAPTION>
Shares Beneficially
Owned
-------------------------
Amount of
Beneficial Percent
Ownership(1) of Class
------------ --------
Name and Address,
of Beneficial Owner
- --------------------
<S> <C> <C>
Caryl S. Bentz (2) 1,172,433 8.7%
Gerald M. Birnbach (3)(4)(5) 1,564,421 11.5
Sidney J. Silver (6) 1,527,223 11.4
Arthur H. Dunkin 145,217 1.1
Keith J. Rowe (3) (7) (8) 1,406,885 10.5
Harvey I. Ptashek (9) 53,561 *
Gerald O. Woodlief (10) 91,052 *
Richard E. Cheney 83,162 *
W. Patrick Dolan 75,756 *
Charles T. Rosen 38,530 *
All directors, nominees and executive officers
as a group (10 persons) 4,195,236 30.2
</TABLE>
* Less than one percent.
3
<PAGE>
(1) Includes shares subject to options exercisable within 60 days of
February 9, 1996 granted to the directors and executive officers as
follows: Mr. Birnbach - 140,868, Mr. Silver - 15,750, Mr. Dunkin -
92,437, Mr. Rowe -30,937, Mr. Ptashek - 48,750, Mr. Woodlief - 30,937,
Mr. Cheney - 30,937, Mr. Dolan - 30,937, Mr. Rosen - 30,937 and Ms.
Pedrolie - 4,000. Also includes shares held in retirement accounts.
(2) Ms. Bentz's business address is- 4749 Barclay Square, Roanoke, Virginia
24018.
(3) Includes 280,098 shares held by Mr. Birnbach and Mr. Keith Rowe, as co-
trustees under the trust of FBO Michael Rowe, over which shares these
individuals exercise shared voting and investment power. Mr. Birnbach
does not have any income or residuary interest in these shares.
(4) Includes 115,803 and 398,670 shares held as co-trustees under
irrevocable trust agreements for the descendants of D. E. Rowe, Jr. and
for the descendants of Gladys B. Rowe, respectively, over which shares
Mr. Birnbach exercises shared voting and investment power.
(5) Includes 2,430 shares held jointly by Mr. Birnbach with his wife.
Includes 9,071 shares as co-trustee with Miriam Birnbach for the
Irrevocable Trust for the Benefit of Nina Patton and the Descendants of
Nina Patton, 9,071 shares as co-trustee with Miriam Birnbach for the
Irrevocable Trust for the Benefit of Jami Taff and the Descendants of
Jami Taff, 9,071 shares as co-trustee with Miriam Birnbach for the
Irrevocable Trust for the Benefit of Tom Birnbach and the Descendants
of Tom Birnbach and 9,071 shares as co-trustee with Miriam Birnbach for
the Irrevocable Trust for the Benefit of Bruce Birnbach and the
Descendants of Bruce Birnbach. Excludes 3,795 shares held by Mr.
Birnbach's wife.
(6) Excludes 1,593 shares owned by Mr. Silver's wife, 189,843 shares held
by Mr. Silver's wife and son as trustees under the Irrevocable Trust
for the Wife and Descendants of Sidney J. Silver, 10,000 shares held by
Mr. Silver's wife and son as trustees under the Irrevocable Trust for
the Benefit of Beth D. Silver and the Descendants of Beth D. Silver,
20,000 shares held by Mr. Silver's wife and son as trustees under the
Irrevocable Trust for the Benefit of Patricia A. Silver and the
Descendants of Patricia A. Silver, 20,000 shares held by Mr. Silver's
wife and son as trustees under the Irrevocable Trust for the Benefit of
Lisa E. Cannon and the Descendants of Lisa E. Cannon, 10,000 shares
held by Mr. Silver's wife and son as trustees under the Irrevocable
Trust for the Benefit of David C. Silver and 10,000 shares held by Mr.
Silver's wife and son as trustees under the Irrevocable Trust for the
Benefit of Daniel B. Silver. Includes 115,803 and 398,670 shares held
as co-trustee under Irrevocable Trust agreements for the descendants of
D.E. Rowe, Jr. and for the descendants of Gladys B. Rowe, respectively,
792 shares held as co-trustee under the Irrevocable Trust Agreement FBO
Jonathan Simon Elsberg and 15,187 shares in the Silver, Freedman & Taff
Profit Sharing Plan and Trust over which shares Mr. Silver exercises
shared voting and investment power. Mr. Silver's business address is:
c/o Silver, Freedman & Taff, L.L.P, 1100 New York Ave., N.W.,
Washington, D.C. 20005.
(7) Messrs. Michael and Keith Rowe are coexecutors of the estate of
Elizabeth J. Rowe and have shared voting and investment power with
respect to 10,084 shares.
(8) Excludes 792 shares owned by Mr. Rowe's wife.
(9) Excludes 109,278 shares owned by Mr. Ptashek's wife.
(10) Excludes 72,595 shares owned by Mr. Woodlief's wife.
PROPOSAL I - ELECTION OF DIRECTORS
The Company's Board of Directors is composed of nine directors. One-third
of the Directors are elected annually. Three Directors are to be elected at the
Meeting for terms of three years or until their successors are elected and
qualified.
Unless contrary specification is indicated, it is intended that the
accompanying form of proxy will be voted for the election of the three nominees
named below. If any of such persons is unable, or declines to serve, the persons
named in the accompanying proxy may vote for another person, or persons, in
their discretion. There are no arrangements or understandings between any
nominee and any other person pursuant to which such nominee was selected.
4
<PAGE>
The following table sets forth certain information with respect to each
nominee for election to the Board and each Director continuing to serve.
INFORMATION CONCERNING NOMINEES
<TABLE>
<CAPTION>
DIRECTOR TERM TO
AGE SINCE EXPIRE
--- ----- ------
<S> <C> <C> <C>
Charles T. Rosen ....................................62 1977 1999
Sidney J. Silver ....................................61 1982 1999
Arthur H. Dunkin ....................................50 1986 1999
</TABLE>
DIRECTORS CONTINUING TO SERVE
<TABLE>
<CAPTION>
DIRECTOR TERM TO
AGE SINCE EXPIRE
--- ----- ------
<S> <C> <C> <C>
Gerald M. Birnbach ..................................65 1966 1998
Keith J. Rowe .......................................52 1977 1998
Richard E. Cheney ...................................74 1988 1998
Gerald O. Woodlief ..................................65 1982 1997
Harvey I. Ptashek ...................................57 1984 1997
W. Patrick Dolan ....................................56 1988 1997
</TABLE>
Charles T. Rosen has served as President of CTR Funding, Inc., a private
investment company, since 1975.
Sidney J. Silver has been a member of the Washington, D.C. law firm Silver,
Freedman & Taff, L.L.P since 1972.
Arthur H. Dunkin has been the Company's Secretary-Treasurer since 1986.
Mr. Dunkin has been in the service of the Company since 1984.
Gerald M. Birnbach has been in the service of the Company since 1956. He
has served as the Company's President since 1972, and Chairman of the Board
since 1976. Prior to becoming President, he was Vice President of
Merchandising and Sales.
Keith J. Rowe served as a Vice President of the Company from 1977 to
January 1993. He is presently a private investor and currently serves on the
board of directors of Enabling Technologies, Inc.
Richard E. Cheney was the Chairman of the Board of Hill & Knowlton, an
international public relations company, from 1987 to 1991 and served as the
Chairman Emeritus from 1991 to 1993. He currently serves on the boards of
directors of Chattem, Inc., C.R. Gibson Company, Holopak Technologies, Inc. and
Alpine Lace Brands and serves as a financial relations consultant to such
companies.
5
<PAGE>
Harvey I. Ptashek, who has been employed by the Company since 1964, has
served as its Senior Vice President since 1984. He was the Vice President of
Sales from 1980 to 1984. Prior to that time, he held positions with the Company
as National Sales Manager and Director of Sales Administration.
Gerald O. Woodlief served as a Senior Vice President of the Company from
1982 until his retirement in December 1992. Since January 1993, Mr. Woodlief has
been a consultant to the Company. From 1949 until 1982, Mr. Woodlief served in
various manufacturing positions with the Company.
W. Patrick Dolan has served as President of W. P. Dolan & Associates, a
labor/management consulting firm since 1978.
BOARD OF DIRECTORS MEETINGS AND COMMITTEES. The Board conducts its business
through meetings of the Board and through the activities of its committees.
During the fiscal year ended December 3, 1995, the Board of Directors held eight
regular Board meetings. No incumbent director of the Company attended fewer than
75 percent of the total meetings of the Board of Directors and committee
meetings on which such Board member served during this period.
The Audit Committee of the Board of Directors consists of Messrs. Cheney,
Dolan, Rosen, Rowe and Silver. The primary functions of this committee are to
evaluate audit performance, oversee relations with the Company's independent
auditors, and evaluate internal accounting policies and procedures. Three
meetings were held by the Audit Committee during the year ended December 3,
1995.
The Executive Committee of the Board of Directors consists of Messrs.
Birnbach, Rowe, Silver and Woodlief. This committee determines the compensation
of the executive officers of the Company. Three meetings were held by the
Executive Committee during the year ended December 3, 1995.
The Stock Option Committee of the Board of Directors consists of Messrs.
Cheney, Dolan, Rosen, Rowe and Silver. The Stock Option Committee determines the
number of stock options to be granted to all officers and employees of the
Company. Two meetings were held by the Stock Option Committee during the year
ended December 3, 1995.
The Company's full Board of Directors act as a nominating committee for the
annual selection of nominees for election as Directors. While the Board of
Directors will consider nominees recommended by stockholders, it has not
established any procedures for this purpose.
6
<PAGE>
EXECUTIVE COMPENSATION
The following table sets forth the compensation for each of the last three
fiscal years earned by the President and each of the most highly compensated
executive officers whose individual remuneration exceeded $100,000 for the
fiscal year ended December 3, 1995 (the "Named Executives").
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
Long-Term
Compensation
Annual Awards
------
Name and Compensation Number of All Other
Principal Position Year Salary Options Compensation(1)
- ------------------- ---------------------------------------------------------------
<S> <C> <C> <C> <C>
Gerald M. Birnbach
Chairman and President 1995 $745,404 40,000(2) $ 244,675
1994 725,000 56,400 1,406,930
1993 642,153 0 6,745
Harvey I. Ptashek
Senior Vice President 1995 245,000 15,000(2) 14,700
1994 228,333 33,750 5,082
1993 210,000 0 4,947
Arthur H. Dunkin
Secretary-Treasurer 1995 210,000 12,000(2) 12,600
1994 193,333 33,750 5,082
1993 173,333 0 5,305
Charlene A. Pedrolie
Vice President - Manufacturing
Systems (3) 1995 106,667 20,000(4) 5,600
1994 0 0 0
1993 0 0 0
</TABLE>
(1) Amounts under All Other Compensation were contributed by the Company
pursuant to its Non-Qualified 401(k) Savings Plan and includes for Mr.
Birnbach $200,000 in 1995 and $1.4 million in 1994 pursuant to the
settlement of his SERP agreement. See "--Employment Agreements."
(2) Stock options awarded on December 7, 1995.
(3) Ms. Pedrolie's employment with the Company began on April 1, 1995.
(4) Stock options awarded on initial date of employment.
7
<PAGE>
The following table sets forth certain information concerning stock
options granted pursuant to the Company's 1983 and 1993 Stock Option and
Incentive Plans to the Named Executives in fiscal 1995. No stock appreciation
rights have been awarded under such plans.
OPTION GRANTS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
POTENTIAL
REALIZABLE VALUE AT
ASSUMED ANNUAL
RATES OF STOCK PRICE
APPRECIATION
INDIVIDUAL GRANTS FOR OPTION TERM
- ----------------------------------------------------------------------------------------------------------------------------------
NUMBER OF
SECURITIES UNDERLYING % OF TOTAL EXERCISE
OPTIONS OPTIONS GRANTED OR BASE
GRANTED TO EMPLOYEES PRICE EXPIRATION
NAME #(1) IN FISCAL YEAR ($/SH) DATE 5%($) 10%($)
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
G. M. Birnbach 40,000 17.8% $ 5.00 12-07-05 $ 125,800 $318,800
H. I. Ptashek 15,000 6.7% 5.00 12-07-05 47,175 111,550
A. H. Dunkin 12,000 5.3% 5.00 12-07-05 37,740 95,640
C. A. Pedrolie 20,000 8.9% 4.125 04-03-05 51,893 131,505
</TABLE>
(1) Mr. Birnbach's 40,000 shares consist of 20,000 shares underlying non-
qualified stock options, which are exercisable immediately and 20,000
shares underlying incentive options, which are exercisable January 2,
1997. Mr. Dunkin's and Mr. Ptashek's options were exercisable as of
January 2, 1996. Mr. Pedrolie's options are exercisable as follows: 20% as
of April 3, 1996 40% as of April 3, 1997, 60% as of April 3, 1998, 80% as
of April 3, 1999 and 100% as of April 3, 2000.
The following table sets forth information concerning the exercise of
options during the last fiscal year and unexercised options held as of the end
of the fiscal year with respect to each of the Named Executives:
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR
AND FISCAL YEAR-END OPTION VALUES
<TABLE>
<CAPTION>
Number of Shares Value of
Underlying Unexercised
Unexercised In-the-Money
Shares Options at 12-3-95 Options at 12-3-95
Acquired Value Exercisable/ Exercisable/
Name On Exercise Realized(1) Unexercisable Unexercisable(2)
- -----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Gerald M. Birnbach 74,000 $241,528 122,718/ $227,026/
38,150(3) 0
Harvey I. Ptashek 0 0 33,750/ 0/
15,000(3) 0
Arthur H. Dunkin 0 0 80,437/ 160,983/
12,000(3) 0
Charlene A. Pedrolie 0 0 0/ 0/
20,000 15,000
</TABLE>
_______________________
8
<PAGE>
(1) The difference between fair market value of the Company's Common Stock
price at exercise and exercise price.
(2) The difference between fair market value of the Company's Common price.
Stock price at fiscal year end and exercise price.
(3) Includes options to purchase 40,000, 15,000 and 12,000 shares awarded to
Messrs. Birnbach's Ptashek and Dunkin, respectively, on December 7, 1995.
Mr. Birnbach's 40,000 shares consist of 20,000 shares underlying non-
qualified stock options, which are exercisable immediately and 20,000
shares underlying incentive options, which are exercisable January 2, 1997.
Mr. Dunkin's and Mr. Ptashek's options were exercisable as of January 2,
1996.
SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN ("SERP"). The plan provides for
a fixed retirement benefit at age 65 of $100,000 per year for ten years for a
total sum of $1.0 million. A participant who retires between the ages of 55 and
65 will receive a reduced annual payment over a greater number of years for a
total sum of one million dollars. A participant who retires at age 53 or 54
will receive a reduced annual payment over a greater number of years for total
sums of $650,000 and $700,000, respectively. A participant who retires before
age 53 will receive a lump sum payment equal to the total amount previously
accrued by the Company for financial accounting purposes. In September 1995,
the Company revised the SERP to provide for the transfer into a separate
grantor trust of assets equal to the Company's obligations and to eliminate the
reduction in the full benefit provided by the Plan because of age in the event
of a change in control. The Named Executives who are participants in the plan
are Messrs. Ptashek and Dunkin.
EMPLOYMENT AGREEMENTS. In December 1993, the Company revised and extended
an existing employment agreement with Mr. Birnbach. At the time the agreement
was revised and extended, Mr. Birnbach's SERP was terminated and the Company
agreed to settle an approximately $2.7 million lump sum payment to which Mr.
Birnbach was entitled upon retirement pursuant to the SERP. Under the settlement
the Company agreed to pay Mr. Birnbach $1.4 million on or before December 15,
1993 and four equal annual installments of $200,000 on or before December 15
each year thereafter.
The agreement provides for an annual base salary of $725,000, exclusive of
bonuses and increases, and annual salary increases based upon increases in the
Consumer Price Index. Provision is also made for a bonus for unusual efforts
made by Mr. Birnbach on behalf of the Company to be awarded in the sole
discretion of the Company's Board of Directors. The agreement also provides for
termination benefits, disability benefits, vacation and other benefits,
including the furnishing of an automobile to Mr. Birnbach. The agreement has an
eight year term.
In the event that the Company terminates Mr. Birnbach's employment contract
without cause or due to the cessation of the Company's business, other than by
reason of sale of such business, or due to a change in control of the Company
which is followed by the voluntary or involuntary termination of Mr. Birnbach's
employment, Mr. Birnbach will be entitled to the full amount of all compensation
and benefits to which he would otherwise be entitled under the agreement for the
remaining term of the agreement. In addition, any benefits Mr. Birnbach may
have under any employee benefit plan shall immediately vest.
Under the agreement, for a period of two years after the voluntary or
involuntary termination of Mr. Birnbach's employment with the Company, Mr.
Birnbach may not compete or own an interest in any other business in competition
with that of the Company's business, except for the purchase and holding of
securities of any company listed upon a recognized securities exchange or traded
in a recognized security market.
In addition, Mr. Birnbach's employment agreement and Supplemental Executive
Retirement Plan Waiver agreement were amended in September 1995 to provide for
the transfer into a
9
<PAGE>
separate grantor trust of assets equal to the Company's obligations upon the
occurrence of certain events, including a change in control of the Company.
The Board of Directors approved employment contracts with Messrs. Ptashek
and Dunkin in 1984 and 1985, respectively. The contracts provide that if the
officers are terminated for the convenience of the Company, without cause or any
reason related to job performance, they may receive a sum equal to their annual
base compensation for a period of two years or until the attainment of the of
the normal retirement age under the Company's retirement plans, whichever is
earlier. Payments made under these employment contracts are credited toward age
requirements under the SERP.
In addition, these employment contracts were amended in September 1995 to
provide for the transfer into a separate grantor trust of assets equal to the
Company's obligations in the event of a change in control of the Company.
CASH-OR-DEFERRED NON-QUALIFIED EXECUTIVE RETIREMENT PLAN. Effective
December 1, 1994, the Company adopted an unfunded Cash-or-Deferred Non-Qualified
Executive Retirement Plan (the "Executive Retirement Plan"). The Executive
Retirement Plan is designed to supplement the amounts of current income
deferrable by certain executive officers under the Company's tax-qualified
401(k) Plan. Under the Executive Retirement Plan, a participant may elect to
defer an unlimited amount of his salary and bonus; however, the matching formula
for such amounts is the same as that of the 401(k) Plan. Each participant will
receive a matching Company contribution equal to (i) 75% of the first 1% to 3%
of compensation deferred and (ii) 25% of deferred amounts from 4% to 6% of
compensation. No matching contribution will be made for deferred amounts in
excess of 6% of salary and bonus. In its discretion, the Board of Directors may
award supplemental credits to the account of plan participants. Participant
deferral amounts, matching credits and any supplemental credits will earn
interest equal to the then current 10-year treasury bond rate. Participants are
fully vested in the amounts credited to their plan accounts at all times.
Supplemental contributions were awarded for fiscal 1995 as follows: G. M.
Birnbach - $22,337, A. H. Dunkin - $6,300, C. A. Pedrolie - $2,800 and H. I.
Ptashek - $7,300.
In addition, the Executive Retirement Plan provides for the transfer into a
separate grantor trust of assets equal to the Company's obligations to the plan
participants upon the occurrence of certain events, including a change in
control of the Company. As of December 3, 1995, five executive officers,
including the Named Executives, participate in the Executive Retirement Plan.
DIRECTOR COMPENSATION. Directors employed by the Company are paid fees of
$500 per meeting and non-employee directors receive a fee of $1,500 per meeting.
No fees are paid to members of committees appointed by the Board of Directors.
The directors who are not employees of the Company received the following
amounts in fiscal 1995 for serving on the Company's Board of Directors: Messrs.
Silver, Rosen, Rowe and Woodlief, $12,000 each; and Messrs. Cheney and Dolan
$10,000 each. Directors who are executive officers of the Company each received
$4,000 in 1995 in compensation for their service on the Company's Board of
Directors. In accordance with the 1993 Stock Option and Incentive Plan,
directors who are not employees of the Company each received on the first Monday
in February of each year an automatic grant of options to purchase 4,500 shares.
Accordingly, the following directors received such stock option awards on
February 6, 1995: Messrs. Cheney, Dolan, Rosen, Rowe, Silver and Woodlief. In
January 1995, effective for fiscal year 1996, the 1993 Stock Option Plan was
amended to change the date of the automatic grant to non-employee directors from
the first Monday of February to the first business day of the Company's fiscal
year. The purpose of this change was to make the date contemporaneous with the
start of the Company's fiscal year and the time period in which the Company
generally grants
10
<PAGE>
stock option awards. Accordingly, the following directors each received on
December 4, 1995 stock option awards to purchase 4,500 shares of common stock:
Cheney, Dolan, Rosen, Rowe, Silver and Woodlief. No stock options by non-
employee directors were exercised during fiscal 1995.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION. The members
of the Company's Compensation Committee are Messrs. Birnbach, Rowe, Silver and
Woodlief. Mr. Birnbach is currently the Company's President and Chairman, and
Messrs. Rowe and Woodlief are former officers of the Company. Since his
retirement in December 1992, Mr. Woodlief has been a consultant to the Company
at a monthly fee of $5,000 or $60,000 in fiscal year 1995. Beginning in January
1996, the monthly fee has been revised to $2,500. Mr. Silver is a member of the
law firm Silver, Freedman & Taff, L.L.P. which serves as general counsel to the
Company. Total fees incurred for legal services rendered by this firm to the
Company and its subsidiaries during the fiscal year ended December 3, 1995 did
not exceed 5% of such firm's gross revenues in its last fiscal year.
COMPLIANCE WITH SECTION 16(A). Section 16(a) of the Securities Exchange Act
of 1934 requires the Company's directors and executive officers, and persons who
own more than 10% of a registered class of the Company's equity securities, to
file with the Securities and Exchange Commission (the "SEC") initial reports of
ownership and reports of changes in the ownership of Common Stock and other
equity securities of the Company. Officers, directors and greater than 10%
shareholders are required by SEC regulation to furnish the Company with copies
of all Section 16 (a) forms they file.
To the Company's knowledge, based solely upon information provided to the
Company by the officers and directors subject to Section 16 of the Securities
Exchange Act of 1934, each of the Company's executive officers and directors
timely filed all required reports.
REPORT OF THE EXECUTIVE AND STOCK OPTION COMMITTEES
The compensation policies of the Company seek to align the compensation of
its executive officers with the Company's financial and other performance
aspects, thereby improving performance and enhancing stockholder value.
COMPENSATION PHILOSOPHY. The Company's compensation programs are designed
to attract and retain qualified management personnel by providing competitive
compensation while, at the same time, providing incentive to enhance stockholder
value consistent with the business strategies and long-term objectives of the
Company. Accordingly, the Company's compensation programs include the following
aspects:
The compensation program includes a base salary providing competitive
compensation and reflecting the Company's financial and other performance as
well as the individual's performance.
Long-term incentive in the form of stock options are designed to reward and
retain executives over a period of years, and to align the interests of
executives with those of stockholders by relating compensation to the Company's
stock price.
BASE SALARIES. Base salaries are intended to compensate fairly all of the
executive officers of the Company for the effective exercise of their
responsibilities, their management of the business functions for which they are
responsible, and their extended period of service to the Company.
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Actual salaries paid to the Company's executive officers are based upon their
level of experience and performance and their years of service to the Company.
LONG-TERM INCENTIVES. The Company provides long-term stock-related
incentives to key executives and employees including the Named Executives under
the 1983 and 1993 Stock Option and Incentive Plans (the "Plans"). Awards under
the Plans may be either "incentive" stock options, qualifying for favorable
income tax treatment, or "non-qualified" stock options. Awards are designed to
align management's incentives with the interests of the Company's stockholders
and to reward executives for increases in stockholder value. In April 1995,
stock options were awarded to Ms. Pedrolie totaling 20,000 shares. In December
1995, stock options were awarded to the other Named Executives in the following
amounts: Mr. Birnbach - 40,000 shares; Mr. Ptashek - 15,000 shares; and Mr.
Dunkin 12,000 shares. Such awards were to link an adequate portion of executive
compensation to benefits produced for all other stockholders.
COMPENSATION OF THE CHIEF EXECUTIVE OFFICER. Effective December 1993,
Mr. Birnbach received an increase in his salary from $641,600 to $725,000 as an
inducement to extend his contract to serve as Chairman and President of the
Company and to reward him for improvement in the Company's financial and other
performance. In December 1994, Mr. Birnbach's compensation was adjusted for the
cost of living as per his employment agreement. See "Executive Compensation -
Employment Agreements."
In 1993, Section 162(m) was added to the Internal Revenue Code of 1986, the
effect of which is to eliminate the deductibility of compensation over $1
million, with certain exclusions, paid to each of certain highly compensated
executive officers of publicly held corporations, such as the Company. Section
162(m) applies to remuneration (both cash and non-cash) that would otherwise be
deductible for tax years beginning on or after January 1, 1994, unless expressly
excluded. The Company has included a provision in Mr. Birnbach's employment
agreement limiting his compensation to the $1 million threshold and deferring
any amount in excess of such limit. In addition, although the current
compensation of each of the Company's other executive officers is below the $1
million threshold, the Company intends to consider the new provision in
establishing future compensation policies for such officers.
COMPENSATION COMMITTEE
Gerald M. Birnbach
Keith J. Rowe
Sidney J. Silver
Gerald O. Woodlief
STOCK OPTION COMMITTEE
Richard E. Cheney
W. Patrick Dolan
Charles T. Rosen
Keith J. Rowe
Sidney J. Silver
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PERFORMANCE GRAPH
The following is a line graph comparing the yearly change in the
cumulative total return on the Company's Common Stock with the cumulative total
return on the NYSE Market Index and the Company's peer group index for the
Company's last five fiscal years.
COMPARISON OF FIVE YEAR CUMULATIVE TOTAL RETURN
Among Rowe Furniture Corporation, the NYSE Market
Index, and the Company's Peer Group
The peer group consists of household furniture manufacturing companies with
the same Standard Industrial Classification as the Company.
<TABLE>
<CAPTION>
COMPARISON OF 5 YEAR CUMULATIVE TOTAL RETURN
OF COMPANY, INDUSTRY INDEX AND BROAD MARKET
- -------------------------------- FISCAL YEAR ENDING -----------------------------------
COMPANY 1990 1991 1992 1993 1994 1995
<S> <C> <C> <C> <C> <C> <C>
ROWE FURNITURE CP 100 107.20 237.19 633.22 760.65 646.61
INDUSTRY INDEX 100 135.03 186.77 252.73 201.38 246.41
NYSE MARKET INDEX 100 120.08 137.82 154.66 157.23 201.14
</TABLE>
13
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INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
The Board of Directors engaged the independent certified public accounting
firm of BDO Seidman, L.L.P. to audit the records of the Company for the 1993,
1994 and 1995 fiscal years. Representatives of BDO Seidman, L.L.P. are expected
to attend the Meeting to respond to appropriate questions and to make a
statement if they so desire.
STOCKHOLDER PROPOSALS
In order to be eligible for inclusion in the Company's proxy materials
for the next year's annual meeting of stockholders, any stockholder proposal to
take action at such meeting must be received at the Company's principal
administrative offices at 239 Rowan Street, Salem, Virginia, no later than
October 31, 1996. Any such proposal shall be subject to the requirements of the
proxy rules adopted under the Securities Exchange Act of 1934, as amended.
OTHER MATTERS
The Board of Directors is not aware of any business to come before the
Meeting other than those matters described above in this proxy statement.
However, if other matters should properly come before the Meeting, it is
intended that holders of the proxies will act in accordance with their best
judgment.
The cost of solicitation of proxies will be borne by the Company. The
Company will reimburse brokerage firms and other custodians, nominees and
fiduciaries for reasonable expenses incurred by them in sending proxy materials
to the beneficial owners of the Company's Common Stock. In addition to
solicitation by mail, directors, officers and regular employees of the Company
may solicit proxies personally or by telegraph or telephone, without additional
compensation. The Company may also retain the services of a proxy solicitation
firm, the fees and expenses of which firm will be paid for by the Company,
although there is no present intention to retain any such firm.
The Company's annual report to stockholders, including financial
statements, has been mailed to all stockholders of record as of the close of
business on February 9, 1996. Any stockholder who has not received a copy of
such annual report may obtain a copy by writing to the Company. Such annual
report is not to be treated as part of the proxy solicitation materials, nor as
having been incorporated herein by reference.
ARTHUR H. DUNKIN
Secretary-Treasurer
March 1, 1996
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<PAGE>
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
ROWE FURNITURE CORPORATION - COMMON STOCK PROXY
FOR THE ANNUAL MEETING OF STOCKHOLDERS AT 10:00 A.M. LOCAL TIME ON TUESDAY,
APRIL 2, 1996, AT THE ROANOKE AIRPORT MARRIOTT, ROANOKE, VIRGINIA
The undersigned hereby appoints G. M. Birnbach and B. A. Rotramel or either
one of them with full powers of substitution as Proxies to vote the Common Stock
of Rowe Furniture Corporation (the "Company") held by the undersigned at the
above stated Annual Meeting, any adjournments and or postponements thereof, upon
the matters set forth in the Notice of Annual Meeting of Stockholders and Proxy
Statement dated March 1, 1996, as follows:
1. ELECTION OF DIRECTORS. The nominees to serve until 1999 are Messrs.
Charles T. Rosen, Sidney J. Silver and Arthur H. Dunkin
[_] VOTE FOR all nominees [_] VOTE WITHHELD for all nominees
[_] VOTE FOR, except vote withheld from the following nominee(s):
________________________
In their discretion, the Proxies are authorized to vote upon such other matters
as may properly come before the Annual Meeting.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" EACH OF THE NOMINEES.
(CONTINUED AND TO BE SIGNED ON THE REVERSE SIDE)
<PAGE>
This proxy will be voted as specified. IF NO SPECIFICATION IS MADE, THIS PROXY
WILL BE VOTED FOR ALL NOMINEES WITH THE DISCRETION OF THE PROXY OR PROXIES ON
ANY OTHER BUSINESS.
Any proxy heretofore given by the undersigned with respect to such stock is
hereby revoked. Receipt of the Notice of the 1996 Annual Meeting, Proxy
Statement and Annual Report to Shareholders is hereby acknowledged. PLEASE
MARK, SIGN, DATE AND RETURN THIS PROXY CARD PROMPTLY USING THE ENCLOSED
ENVELOPE.
___________________________________
SIGNATURE DATE
___________________________________
SIGNATURE DATE
Joint owners must EACH sign. Please sign EXACTLY as your name(s) appear(s) on
this card. When signing as attorney, trustee, executor, administrator or
guardian, please give your full title. If a corporation, please sign in full
corporate name by president or other authorized officer. If a partnership,
please sign in partnership name by authorized person.
