<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:
<PAGE>
----------------------------
NOTICE
of
ANNUAL MEETING
of
STOCKHOLDERS
and
PROXY STATEMENT
----------------------
TIME:
Tuesday, April 1, 1997
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 3, 1997
Notice is hereby given that the annual meeting of stockholders of Rowe
Furniture Corporation (the "Company") will be held at the Roanoke Airport
Marriott, 2801 Hershberger Road, Roanoke, Virginia, on Tuesday, April 1, 1997,
at 10:00 a.m. The annual meeting is for the purpose of considering and acting
upon:
1. The election of three directors of the Company, each for a term of
three years.
2. The amendment of the Company's 1993 Stock Option and Incentive Plan
(the "1993 Stock Option Plan") in order to increase the number of
shares reserved for issuance thereunder; and
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 14, 1997, 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 1, 1997
----------------------------------
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 1, 1997, at
10:00 a.m., and all adjournments and postponements of the Meeting. The
accompanying Notice of Meeting, form of proxy and this proxy statement are
first being mailed to stockholders on or about March 3, 1997.
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 and for approval of the amendment to the 1993 Stock
Option Plan. 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 administrative 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 and broker non-votes will have no effect
upon the election of Directors. Approval of the amendment to the 1993 Stock
Option Plan requires the affirmative vote of holders of a majority of the
shares represented and entitled to vote on the matter at the meeting.
Abstentions will have the effect of a vote against the amendment to the 1993
Stock Option Plan. Broker non-votes will have no effect on such proposal.
VOTING SECURITIES AND PRINCIPAL HOLDERS THEREOF
Stockholders of record as of the close of business on February 14, 1997
will be entitled to one vote for each share then held. As of February 14,
1997, the Company had 13,166,189 shares of common stock issued and
outstanding.
The following table sets forth certain information regarding beneficial
ownership of the Common Stock as of February 14, 1997, 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 8.9%
Gerald M. Birnbach (3)(4)(5) 1,621,421 12.2
Sidney J. Silver (6) 1,500,723 11.4
Arthur H. Dunkin (7) 143,217 1.1
Keith J. Rowe (3)(8)(9) 1,357,385 10.3
Harvey I. Ptashek (10) 69,561 *
Gerald O. Woodlief (11) 95,552 *
Richard E. Cheney 87,662 *
W. Patrick Dolan (12) 77,788 *
Charles T. Rosen 43,030 *
All directors, nominees and executive officers
as a group (11 persons) 4,222,268 30.9
</TABLE>
* Less than one percent.
3
<PAGE>
(1) Includes shares subject to options exercisable within 60 days of
February 14, 1997 granted to the directors and executive officers as
follows: Mr. Birnbach - 133,400, Mr. Silver - 20,250, Mr. Dunkin -
61,750, Mr. Rowe - 35,437, Mr. Ptashek - 64,750, Mr. Woodlief -
35,437, Mr. Cheney - 35,437, Mr. Dolan - 35,437, Mr. Rosen - 35,437,
Marlene M. Johnson - 2,500 and Charlene A. Pedrolie - 18,000 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 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-trustee 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 21,271 shares as co-trustee with Miriam Birnbach for the
Irrevocable Trust for the Benefit of Nina Patton and the Descendants
of Nina Patton, 26,121 shares as co-trustee with Miriam Birnbach for
the Irrevocable Trust for the Benefit of Jami Taff and the Descendants
of Jami Taff, 16,421 shares as co-trustee with Miriam Birnbach for the
Irrevocable Trust for the Benefit of Tom Birnbach and the Descendants
of Tom Birnbach and 26,121 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 of which Mr. Birnbach disclaims beneficial ownership.
(6) Excludes the following shares of which Mr. Silver disclaims beneficial
ownership: 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, 12,500 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, 25,000 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, 38,500 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,
12,500 shares held by Mr. Silver's wife and son as trustees under the
Irrevocable Trust for the Benefit of David C. Silver and the
Descendants of David C. Silver and 12,500 shares held by Mr. Silver's
wife and son as trustees under the Irrevocable Trust for the Benefit
of Daniel B. Silver and the Descendants 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 Revocable 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) Excludes 100 shares owned by each of Mr. Dunkin's three children of
which Mr. Dunkin disclaims beneficial ownership.
(8) 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.
(9) Excludes 792 shares owned by Mr. Rowe's wife of which Mr. Rowe
disclaims beneficial ownership.
(10) Excludes 54,278 shares owned by Mr. Ptashek's wife of which Mr.
Ptashek disclaims beneficial ownership.
(11) Excludes 72,595 shares owned by Mr. Woodlief's wife of which Mr.
Woodlief disclaims beneficial ownership.
(12) Includes 27,164 shares held as trustee under the W. P. Dolan Profit
Sharing Plan over which Mr. Dolan exercises sole voting and investment
power.
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.
4
<PAGE>
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.
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>
Gerald O. Woodlief........................................66 1982 2000
Harvey I. Ptashek.........................................58 1984 2000
W. Patrick Dolan..........................................57 1988 2000
</TABLE>
DIRECTORS CONTINUING TO SERVE
<TABLE>
<CAPTION>
Director Term To
Age Since Expire
--- -------- -------
<S> <C> <C> <C>
Charles T. Rosen..........................................63 1977 1999
Sidney J. Silver..........................................62 1982 1999
Arthur H. Dunkin..........................................51 1986 1999
Gerald M. Birnbach........................................66 1966 1998
Keith J. Rowe.............................................53 1977 1998
Richard E. Cheney.........................................75 1988 1998
</TABLE>
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.
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.
W. Patrick Dolan has served as President of W. P. Dolan & Associates, a
labor/management consulting firm, since 1978.
Charles T. Rosen has served as President of CTR Funding, Inc., a private
investment company, since 1975.
5
<PAGE>
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. and Alpine Lace Brands and serves as a financial
relations consultant to such companies.
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 1, 1996, 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 1,
1996.
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. Two meetings were held by the
Executive Committee during the year ended December 1, 1996.
The Stock Option Committee of the Board of Directors consists of Messrs.
Cheney, Dolan, Rosen, Rowe and Woodlief. 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 1, 1996.
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 1, 1996 (the "Named Executives").
Summary Compensation Table
<TABLE>
<CAPTION>
Long-Term Compensation
Awards
Annual ------
Name and Compensation Securities Underlying All Other
Principal Position Year Salary Bonus Options Compensation(1)
- ------------------ ---------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Gerald M. Birnbach
Chairman and President 1996 $754,512 $250,000(2) 50,000 245,271
1995 745,404 0 40,000 244,675
1994 725,000 0 56,400 1,406,930
Harvey I. Ptashek
Senior Vice President 1996 230,000 15,000 16,000 14,700
1995 230,000 15,000 15,000 14,700
1994 228,333 0 33,750 5,082
Arthur H. Dunkin
Secretary Treasurer 1996 195,000 0 16,000 11,700
1995 195,000 15,000 12,000 12,600
1994 193,333 0 33,750 5,082
Marlene M. Johnson
Vice President - People
and Strategy(3) 1996 125,000 0 0 7,500
1995 9,135 0 12,500 274
1994 0 0 0 0
Charlene A. Pedrolie
Vice President - Manufacturing
Systems(4) 1996 165,833 0 10,000 9,950
1995 106,067 0 20,000 5,600
1994 0 0 0 0
</TABLE>
(1) Except as noted in the paragraph below with respect to Mr. Birnbach,
for years 1996 and 1995, represents (i) matching contributions by the
Company pursuant to its Cash-or-Deferred Non-Qualified Executive
Retirement Plan (the "Executive Retirement Plan") and (ii)
supplemental contributions under the Executive Retirement plan as
follows: Mr. Birnbach - 1996 $22,636 and $22,635, 1995 - $22,338 and
$22,337; Mr. Ptashek - 1996 $7,350 and $7,350, 1995 - $7,350 and
$7,350; Mr. Dunkin - 1996 $5,850 and $5,850 - 1995 $6,300 and $6,300;
Mrs. Johnson - 1996 $3,750 and
7
<PAGE>
$3,750, 1995 - $274 and $274; and Mrs. Pedrolie - 1996 $4,975 and
$4,975, 1995 $2,800 and $2,800. Except as noted below with respect to
Mr. Birnbach, for 1994, represents matching contributions by the
Company pursuant to its Qualified 401(k) Savings Plan.
In addition to contributions by the Company pursuant to the 401(k)
Plan and the Cash-or-Deferred Non-Qualified Executive Retirement Plan,
the amounts for Mr. Birnbach include payments to Mr. Birnbach of
$200,000 in 1996, $200,000 in 1995 and $1.4 million in 1994 pursuant
to the settlement of his SERP agreement. See"--Employment
Agreements."
(2) Payable in the year following Mr. Birnbach's retirement and will
accrue interest annually based on the average ten-year U. S. treasury
bond rate.
(3) Mrs. Johnson's employment with the Company began on November 6, 1995.
(4) Ms. Pedrolie's employment with the Company began on April 1, 1995.
The following table sets forth certain information concerning stock options
granted pursuant to the Company's 1993 Stock Option and Incentive Plan to the
Named Executives in fiscal 1996. No stock appreciation rights have been awarded
under such plans.
<TABLE>
<CAPTION>
Option Grants in Last Fiscal Year
Potential
Realizable Value At
Assumed Annual
Rates of Stock Price
Appreciation
Individual Grants For Option Term
- ------------------------------------------------------------------------------------------------------------------------------------
Number of
Securities Underlying % of Total Exercise
Options Options Granted or Base
Granted to Employees Price Expiration
Name #(1) In Fiscal Year ($/SH) Date 5%($) 10%($)
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
G. M. Birnbach 50,000 12.8% $7.625 11-26-06 $239,766 $607,614
H. I. Ptashek 16,000 4.1% 7.625 11-26-06 76,725 194,437
A. H. Dunkin 16,000 4.1% 7.625 11-26-06 76,725 194,437
M. M. Johnson 0 0% 0 0
C. A. Pedrolie 10,000 2.6% 7.625 11-26-06 47,953 121,522
</TABLE>
(1) Mr. Birnbach's 50,000 shares consist of 37,000 shares underlying non-
qualified stock options, which are exercisable immediately and 13,000
shares underlying incentive options, which are exercisable January 2, 1998.
Mr. Ptashek's options consist of 3,000 shares exercisable immediately and
13,000 shares which became exercisable January 2, 1997. Mr. Dunkin's
options consist of 5,000 shares which were exercisable immediately and
11,000 shares which became exercisable January 2, 1997.
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:
8
<PAGE>
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 12-1-96 Options at 12-1-96
Acquired Value Exercisable/ Exercisable/
Name On Exercise Realized(1) Unexercisable(2) Unexercisable(3)
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Gerald M. Birnbach 50,000 $191,319 127,868/ $309,195/
33,000 60,750
Harvey I. Ptashek 0 0 51,750/ 130,331/
13,000 3,250
Arthur H. Dunkin 46,687 189,916 50,750/ 122,206/
11,000 2,750
Marlene M. Johnson 0 0 2,500/ 9,375/
10,000 37,500
Charlene A. Pedrolie 0 0 14,000/ 17,500/
16,000 60,000
- -----------------------
</TABLE>
(1) The difference between fair market value of the Company's Common Stock
price at exercise and exercise price.
(2) Includes option grants under the 1983 Stock Option Plan and the 1993 Stock
Option Plan.
(3) The difference between fair market value of the Company's Common Stock
price at fiscal year end and exercise price.
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.
9
<PAGE>
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 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 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 enable the executive officers to defer current
income. 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
10
<PAGE>
bond rate. Participants are fully vested in the amounts credited to their plan
accounts at all times. Supplemental contributions were awarded for fiscal 1996
as follows: G. M. Birnbach - $22,635, A. H. Dunkin - $5,800, M. M. Johnson -
3,750, C. A. Pedrolie - $4,975 and H. I. Ptashek - $7,350.
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 1, 1996, 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.
For fiscal 1997, the fee for non-employee directors will be $1,750 per meeting.
No fees are paid to members of committees appointed by the Board of Directors
for their service on committees. The directors who are not employees of the
Company received the following amounts in fiscal 1996 for serving on the
Company's Board of Directors: Messrs. Cheney, Silver, Rosen, Rowe and Woodlief,
$12,000 each; and Mr. Dolan $10,500. Directors who are executive officers of the
Company each received $4,000 in 1996 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 receive 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 5, 1996: Messrs. Cheney, Dolan, Rosen, Rowe, Silver
and Woodlief. No stock options by non-employee directors were exercised during
fiscal 1996.
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 an annual fee of $32,500 in fiscal year 1996. Beginning in January 1996, the
monthly fee was revised to $1,250. 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 1, 1996 did not exceed 5%
of such firm's gross revenues in its last fiscal year.
Section 16(a) Beneficial Ownership Reporting Compliance. 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, directors and
greater than 10% shareholders timely filed all required reports.
11
<PAGE>
REPORT OF THE COMPENSATION 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. 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 1993 Stock Option and Incentive Plan (the "Plan"). Awards under the Plan 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. On November 26, 1996,
stock options were awarded to the Named Executives in the following amounts:
Mr. Birnbach - 50,000 shares, Mr. Dunkin and Mr. Ptashek - 16,000 shares each
and Ms. Pedrolie - 10,000 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. Pursuant to the employment agreement, Mr. Birnbach's compensation
is adjusted annually for cost of living increases. See "Executive Compensation -
Employment Agreements."
Pursuant to Mr. Birnbach's employment agreement, provision is made for a
bonus to be awarded in the sole discretion of the Company's Board of Directors.
On November 6, 1996, Mr. Birnbach was awarded a bonus of $250,000 payable in
the year following Mr. Birnbach's retirement in consideration of exceptional
performance by Mr. Birnbach in 1996.
12
<PAGE>
In 1993, Section 162(m) was added to the Internal Revenue Code of 1986, as
amended (the "Code"), 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
Gerald O. Woodlief
13
<PAGE>
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.
COMPARISON OF 5 YEAR CUMULATIVE TOTAL RETURN
OF COMPANY, INDUSTRY INDEX AND BROAD MARKET
- ------------------------------FISCAL YEAR ENDING--------------------------------
<TABLE>
<CAPTION>
COMPANY 1991 1992 1993 1994 1995 1996
<S> <C> <C> <C> <C> <C> <C>
ROWE FURNITURE CORP. 100 221.25 590.67 709.53 603.16 973.67
INDUSTRY INDEX 100 138.31 187.17 149.14 182.48 229.33
NYSE MARKET INDEX 100 114.78 128.80 130.94 167.51 208.35
</TABLE>
14
<PAGE>
PROPOSAL II - AMENDMENT TO THE 1993 STOCK OPTION PLAN
Under the 1993 Stock Option Plan, 1,468,125 shares (as adjusted for
the three-for-two stock splits paid January 15, 1993, October 5, 1993, January
15, 1994 and December 6, 1994) of the Common Stock, $1.00 par value, are
reserved for issuance by the Company. As of February 14, 1997, options were
outstanding covering 917,912 shares. The 1993 Stock Option Plan was ratified by
the stockholders of the Company in 1993.
The 1993 Stock Option Plan was adopted in order to permit the granting
of long-term incentive awards to directors, officers and key employees as a
means of enhancing and encouraging the recruitment and retention of these
individuals on whom the continued success of the Company most depends. Of the
remaining 405,525 shares currently authorized for issuance under the 1993 Stock
Option Plan, 135,000 shares are reserved for awards to the non-employee
directors of the Company. To ensure that a sufficient number of shares will be
available for future awards to officers and employees of the Company, the Board
of Directors approved an amendment to the 1993 Stock Option Plan to increase the
number of shares authorized for issuance thereunder from 1,468,125 to 1,968,125.
The increasing competition among business organizations for capable
management makes it essential to maintain a program which will encourage and
facilitate investment in the Common Stock of the Company by those individuals
whose efforts will determine the future growth and continued success of the
Company. In this regard, the amendment to the 1993 Stock Option Plan will
enable the Company to remain competitive in inducing qualified individuals to
enter its service and to remain in its employ.
The principal features of the 1993 Stock Option Plan Nare summarized
below.
General. The 1993 Stock Option and Incentive Plan provides for awards
in the form of stock options. Each award shall be on such terms and conditions,
consistent with the Plan, as the committee administering the Plan may determine.
Shares may be either authorized but unissued shares or reacquired
shares held by the Company in its treasury. Any shares subject to an award
which expires or is terminated unexercised will again be available for issuance
under the 1993 Stock Option Plan. Generally, no award or any right or interest
therein is assignable or transferable except under certain limited exceptions
set forth in the Plan.
The 1993 Stock Option Plan is administered by a committee consisting
of two or more members of the Board of Directors of the Company (the
"Committee"), none of whom are eligible to receive discretionary awards under
the 1993 Stock Option Plan or any other plan of the Company or its subsidiaries.
Directors Cheney, Dolan, Rosen, Rowe and Woodlief are the current members of the
Committee.
Stock Options. The term of stock options granted under the 1993 Stock
Option Plan will not exceed ten years from the date of grant. The Committee may
grant either "Incentive Stock Options" ("ISOs") as defined under Section 422 of
the Code or stock options not intended to qualify as such ("non-qualified stock
options"). The Committee determines whether to grant ISOs or non-qualified
stock options based on all relevant factors, including the identity of the
grantee and the respective tax and accounting consequences to the Company.
15
<PAGE>
In general, stock options granted under the 1993 Stock Option Plan are
not exercisable after the expiration of their terms. In the event that a
participant ceases to maintain continuous service (as defined in the 1993 Stock
Option Plan) for any reasons other than death or termination for cause, an
already exercisable stock option will remain exercisable for a period of three
months, but in no event after the expiration date of the option. In the case of
a participant who has served the Company for at least ten years and who takes
normal retirement, a stock option awarded to such an individual may be
exercisable for a period of five years following the date of retirement, but in
no event later than ten years from the date of grant. In the event of the death
of a participant during such service or within the three month or five year
periods referred to above, an exercisable option will continue to be exercisable
for one year, to the extent exercisable by the participant immediately prior to
his death, but in no event later than ten years from the date of grant.
Following the death of any participant, the Committee may, as alternative means
of settlement of an option, elect to pay to the holder the amount by which the
market value of the shares covered by the option on the date of exercise exceeds
the exercise price. A stock option will automatically terminate and will no
longer be exercisable as of the date a participant ceases to serve as a
director, officer, or employee if such individual was terminated for cause.
The exercise price for the purchase of shares subject to a stock
option at the date of grant may not be less than 100% of the market value of the
shares covered by the option on that date. The exercise price must be paid in
full in cash or shares of Common Stock, or a combination of both, as determined
by the Committee.
The 1993 Stock Option Plan provides for the grant of a non-incentive
stock option to purchase 4,500 shares of Common Stock to each director who is
not a full-time employee of the Company on the first Monday of February of each
year during the term of the 1993 Stock Option Plan. The exercise price per
share of such options shall be equal to the fair market value of the Common
Stock on the date of grant.
Effect of Merger and Other Adjustments. Shares as to which awards may
be granted under the 1993 Stock Option Plan, and shares then subject to awards
will be adjusted by the Committee in the event of any reorganization,
recapitalization, stock split, stock dividend, combination or exchange of
shares, merger, consolidation, or other change in the corporate structure or
shares of the Company.
In the event of any merger, consolidation or combination of the
Company with or into another entity, whereby either the Company is not the
continuing entity or its outstanding shares are converted into or exchanged for
different securities, cash or other property or any combination thereof, any
participant to whom a stock option has been granted will generally have the
right, upon exercise of the option, to an amount equal to the excess of fair
market value on the date of exercise over the consideration receivable in the
merger, consolidation or combination with respect to the shares covered or
represented by the stock option over the exercise price of the option,
multiplied by the number of shares with respect to which the options have been
exercised.
In addition, in the event a tender or exchange offer for shares (other
than such an offer by the Company) is commenced, or in the event the
stockholders of the Company approve a transaction pursuant to which
substantially all of the Company's assets will be sold, or pursuant to which the
Company will cease to be an independent publicly owned entity, all outstanding
stock options not fully exercisable will become exercisable in full and remain
so for a period of 60 days
16
<PAGE>
from the date of such commencement of the offer or from the date of stockholder
approval, as the case may be, after which they will revert to being exercisable
in accordance with their terms.
Amendment or Termination. The Board of Directors of the Company may
at any time amend, suspend or terminate the Plan or any portion thereof but may
not, without the prior approval of the stockholders, make any amendment which
(i) materially increases the total number of shares which may be subject to
awards, (ii) materially increases the aggregate number of shares which may be
subject to awards to participants who are not employees or (iii) changes the
class of persons eligible to participate in the Plan. Unless previously
terminated, the Plan shall continue in effect for a term of ten years, after
which no further awards may be granted under the Plan.
Federal Income Tax Consequences. Under present federal income tax
laws, awards under the 1993 Stock Option Plan will have the following
consequences: (1) the grant of an award will not, by itself, result in the
recognition of taxable income to the participant nor entitle the Company to a
deduction at the time of such grant. (2) The exercise of a stock option which
is an ISO within the meaning of Section 422 of the Code will generally not, by
itself, result in the recognition of taxable income to the participant nor
entitle the Company to a deduction at the time of such exercise. However, the
difference between the exercise price and the fair market value of the option
shares on the date of exercise is an item of tax preference which may, in
certain situations, trigger the alternative minimum tax to the participant. The
alternative minimum tax is incurred only when it exceeds the regular income tax.
The alternative minimum tax will be payable at the rate of 26% to the first
$175,000 of "minimum taxable income" in excess of $33,750 (single individual) or
$45,000 (married individual filing jointly). This tax applies at a flat rate of
28% of so much of the taxable excess as exceeds $175,000. If a taxpayer has
alternative minimum taxable income in excess of $150,000 (married individuals
filing jointly) or $112,500 (single individual), the $45,000 or $33,750
exemptions are reduced by an amount equal to 25% of the amount by which the
alternative minimum taxable income of the taxpayer exceeds $150,000 or $112,500,
respectively. (3) If the shares acquired upon exercise of an ISO are not held
for at least one year after transfer of such shares to the participant or two
years after the grant of the ISO, whichever is later, the participant will
recognize ordinary income or loss upon disposition of the shares in an amount
equal to the difference between the exercise price and the fair market value on
the date of exercise of the shares. In such an event, the Company will
generally be entitled to a corresponding deduction, provided the Company meets
its federal withholding tax obligations. The participant will also recognize
capital gain or loss in an amount of the difference, if any, between the sale
price and the fair market value of the shares on the date of exercise of the
ISO; such capital gain or loss will be characterized as long-term if the shares
were held for more than one year after the date of exercise of the ISO. The
Company will not be entitled to a corresponding deduction for such capital gain
or loss. (4) If the shares are held by the participant for one year after the
ISO is exercised and two years after the ISO was granted, the participant will
recognize a long-term capital gain or loss upon disposition of the shares and
the Company will not be entitled to a corresponding deduction. The amount of
such gain or loss will be equal to the difference between the amount realized by
the participant upon disposition of the shares and the amount paid by the
participant for such shares. (5) The exercise of a non-qualified stock option
will result in the recognition of ordinary income by the participant on the date
of exercise in an amount equal to the difference between the exercise price and
the fair market value on the date of exercise of the option shares acquired
pursuant to the stock option. (6) The Company will be allowed a deduction at
the time, and in the amount of any ordinary income recognized by the participant
upon the exercise of a non-qualified stock option, provided the Company meets is
federal withholding tax obligations. (7) Upon sale of the shares acquired upon
exercise of a non-qualified stock option, any appreciation or depreciation in
the value
17
<PAGE>
of such shares from the time of exercise will result in the recognition of a
capital gain or loss by the participant. Such gain or loss will be long-term
capital gain or loss if the participant held the shares for more than one year
following exercise of the non-qualified stock option.
Awards Under the 1993 Stock Option Plan. The following table presents
information with respect to the dollar value and the number of awards
outstanding as of December 1, 1996 under the 1993 Stock Option Plan.
<TABLE>
<CAPTION>
Participant Value of Options(1) Number of Options(2)
- ----------- ------------------- --------------------
<S> <C> <C>
G. M. Birnbach $ 272,084 146,400
H. I. Ptashek 133,581 64,750
A. H. Dunkin 124,956 61,750
M. M. Johnson 46,875 12,500
C. A. Pedrolie 77,500 30,000
All executive officers
as a group (5 persons) 654,996 315,400
All directors who are not
executive officers as a
group (6 persons) 383,121 170,435
All employees other than
executive officers
(96 persons) 34,323,102 443,402
</TABLE>
- --------------
(1) Represents the difference between the aggregate option exercise price and
the fair market value of the underlying shares at December 1, 1996.
(2) Includes options currently exercisable and not currently exercisable.
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 1994,
1995 and 1996 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
November 3, 1997. Any such proposal shall be subject to the requirements of the
proxy rules adopted under the Securities Exchange Act of 1934, as amended.
18
<PAGE>
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 14, 1997. 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 3, 1997
19
<PAGE>
ROWE FURNITURE CORPORATION
1993 Stock Option and Incentive Plan
1. Plan Purpose. The purpose of the Plan is to promote the long-term
------------
interests of the Corporation and its stockholders by providing a means for
attracting and retaining directors, officers and employees of the Corporation
and its Affiliates. It is intended that designated Options granted pursuant to
the provisions of this Plan to persons employed on a full-time basis will
qualify either as Incentive Stock Options or Non-Qualified Stock Options, as
designated under the terms of the Award. Options granted to persons who are not
full-time employees will be Non-Qualified Stock Options.
2. Definitions. The following definitions are applicable to the Plan:
-----------
"Affiliate" - means any "parent corporation" or "subsidiary
corporation" of the Corporation, as such terms are defined in Section 424(e) and
(f), respectively, of the Code.
"Award" - means the grant of an Incentive Stock Option or a Non-
Qualified Stock Option, or any combination thereof, as provided in the Plan.
"Code" - means the Internal Revenue Code of 1986, as amended.
"Committee" - means the Committee referred to in Section 3 hereof.
"Continuous Service" - means the absence of any interruption or
termination of service as a director, officer or employee of the Corporation or
an Affiliate, except that, when used with respect to persons granted an
Incentive Stock Option, means the absence of any interruption or termination of
service as a full-time employee of the Corporation or an Affiliate. Service
shall not be considered interrupted in the case of sick leave, military leave or
any other leave of absence approved by the Corporation or in the case of
transfers between payroll locations of the Corporation or between the
Corporation, its subsidiaries or its successor.
"Corporation" -means Rowe Furniture Corporation, a Nevada
corporation.
"Disinterested Person" - means any member of the Board of
Directors of the Corporation who within the prior year has not been, and is not
being, granted any awards related to the Shares under this Plan or any other
plan of the Corporation or any of its Affiliates except for awards which (i) are
calculated in accordance with a formula as contemplated in paragraph (c)(ii) of
Rule 16b-3 ("Rule 16b-3") under the Securities Exchange Act of 1934; (ii) result
from participation in an ongoing securities acquisition plan meeting the
conditions of paragraph (d)(2)(i) of Rule 16b-3; or, (iii) arise from an
individual election by a director to receive all or part of his annual board
fees in securities. No recipient of a stock award granted pursuant to Section 18
hereof shall be deemed not to be a Disinterested Person solely by reason of such
grant.
"Employee" - means any person, including an officer or director,
who is employed by the Corporation or any Affiliate.
20
<PAGE>
"ERISA" - means the Employee Retirement Income Security Act of 1974,
as amended.
"Exercise Price" - means in the case of an Option, the price per Share
at which the Shares subject to such Option may be purchased upon exercise of
such Option.
"Incentive Stock Option" - means an option to purchase Shares granted
by the Committee pursuant to Section 6 hereof which is subject to the
limitations and restrictions of Section 8 hereof and is intended to qualify
under Section 422 of the Code.
"Market Value" - means the average of the high and low quoted sales
price on the date in question (or, if there is no reported sale on such date, on
the last preceding date on which any reported sale occurred) of a Share on the
Composite Tape for the American Stock Exchange-Listed Stocks, or, if the Shares
are not listed or admitted to trading on such Exchange, on the principal United
States securities exchange registered under the Securities Exchange Act of 1934
on which the Shares are listed or admitted to trading, or, if the Shares are not
listed or admitted to trading on any such exchange, the mean between the closing
high bid and low asked quotations with respect to a Share on such date on the
National Association of Securities Dealers, Inc., Automated Quotations System,
or any similar system then in use, or if no such quotations are available, the
fair market value on such date of a Share as the Committee shall determine.
"Non-Qualified Stock Option" - means an option to purchase Shares
granted by the Committee pursuant to Section 6 hereof, which option is not
intended to qualify under Section 422 of the Code.
"Option" - means an Incentive Stock Option or a NonQualified Stock
Option.
"Participant" - means any director, officer or employee of the
Corporation or any Affiliate who is selected by the Committee to receive an
Award and any director of the Corporation who is granted an Award pursuant to
Section 18 hereof.
"Plan" - means the 1993 Stock Option and Incentive Plan of the
Corporation.
"Shares" - means the shares of common stock of the Corporation.
"Senior Officer" - means the Corporation's president, principal
financial officer, or principal accounting officer, any vice president of the
Corporation in charge of a principal business unit, division or function (such
as administration or finance), any other officer who performs a policy-making
function, or any other person who performs similar policy-making functions for
the Corporation. Officers of the Corporation's Affiliates shall be deemed
senior officers of the Corporation if they perform such policy-making functions
for the Corporation.
"Ten Percent Beneficial Owner" - means the beneficial owner of more
than ten percent of any class of the Corporation's equity securities registered
pursuant to Section 12 of the Securities Exchange Act of 1934.
3. Administration. The Plan shall be administered by a Committee
--------------
consisting of two or more members, each of whom shall be a Disinterested Person.
The members of the Committee shall be appointed by the Board of Directors of the
Corporation. Except as limited by the express provisions of the Plan, the
Committee shall have sole and complete authority and discretion to (i)
21
<PAGE>
select Participant and grant Awards; (ii) determine the number of Shares to be
subject to types of Awards generally, as well as to individual Awards granted
under the Plan; (iii) determine the terms and conditions upon which Awards shall
be granted under the Plan; (iv) prescribe the form and terms of instruments
evidencing such grants; and (v) establish from time to time regulations for the
administration of the Plan, interpret the Plan, and make all determinations
deemed necessary or advisable for the administration of the Plan. The Committee
may maintain, and update from time to time as appropriate, a list designating
selected directors as Disinterested Persons. The purpose of such list shall be
to evidence the status of such individuals as Disinterested Persons, and the
Board of Directors may appoint to the Committee any individual actually
qualifying as a Disinterested Person, regardless of whether identified as such
on said list.
A majority of the Committee shall constitute a quorum, and the acts of a
majority of the members present at any meeting at which a quorum is present, or
acts approved in writing by a majority of the committee without a meeting, shall
be acts of the Committee.
4. Participation in Committee Awards. The Committee may select from time
---------------------------------
to time Participants in the Plan from those, directors, officers and employees
(other than Disinterested Persons), of the Corporation or its Affiliates who, in
the opinion of the Committee, have the capacity for contributing to the
successful performance of the Corporation or its Affiliates.
5. Shares Subject to Plan. Subject to adjustment by the operation of
----------------------
Section 9 hereof, the maximum number of Shares with respect to which Awards may
be made under the Plan is 1,468,125. The Shares with respect to which Awards may
be either authorized and unissued shares or issued shares heretofore or
hereafter reacquired and held as treasury shares. An Award shall not be
considered to have been made under the Plan with respect to any Option which
terminates, and new Awards may be granted under the Plan with respect to the
number of Shares as to which such termination has occurred.
6. General Terms and Conditions of Options. The Committee shall have
---------------------------------------
full and complete authority and discretion, except as expressly limited by the
Plan, to grant Options and to provide the terms and conditions (which need not
be identical among Participants) thereof. In particular, the Committee shall
prescribe the following terms and conditions: (i) the Exercise Price of any
Option, which shall not be less than the Market Value per Share at the date of
grant of such Option, except as set forth in Section 15 hereof, (ii) the number
of Shares subject to, and the expiration date of, any Option, which expiration
date shall not exceed ten years from the date of grant, (iii) the manner, time
and rate (cumulative or otherwise) of exercise of such Option, and (iv) the
restrictions, if any, to be placed upon such Option or upon Shares which may be
issued upon exercise of such Option.
7. Exercise of Options.
-------------------
(a) An Option granted under the Plan shall be exercisable during the
lifetime of the Participant to whom such Option was granted only by such
Participant and, except as provided in paragraphs (c) and (d) of this Section 7,
no such Option may be exercised unless at the time such Participant exercises
such Option, such Participant has maintained Continuous Service since the date
of grant of such Option.
(b) To exercise an Option under the Plan, the Participant to whom
such Option was granted shall give written notice to the Corporation in form
satisfactory to the Committee (and, if
22
<PAGE>
partial exercises have been permitted by the Committee, by specifying the number
of Shares with respect to which such Participant elects to exercise such Option)
together with full payment of the Exercise Price, if any and to the extent
required. The date of exercise shall be the date on which such notice is
received by the Corporation. Payment, if any is required, shall be made either
(i) in cash (including check, bank draft or money order) or (ii) if permitted by
the Committee in the terms of the Award, by delivering (A) Shares already owned
by the Participant and having a fair market value equal to the applicable
exercise price, such fair market value to be determined in such appropriate
manner as may be provided by the Committee or as may be required in order to
comply with or to conform to requirements of any applicable laws or regulations,
or (B) a combination of cash and such Shares. In addition, the Committee may, in
the agreement evidencing the Award, also permit Participants (either on a
selective or group basis) to simultaneously exercise Options and sell the Shares
thereby acquired, pursuant to a brokerage "cashless exercise" arrangement,
selected by and approved of in all respects in advance by the Committee, and use
the proceeds from such sale as payment of the exercise price of such Options,
all in accordance with Section 220.3(e)(4) of Regulation T, 12 C.F.R., Part 220;
provided, however, that a Participant who is, or within the preceding six months
was, subject to the provisions of Section 16 of the Securities Exchange Act of
1934, may not elect to utilize this arrangement within six months after the date
the Option is granted (unless death or disability occurs prior to the expiration
of such six month period), and any such election as well as the exercise of the
Option shall be made or become effective during any period beginning on the
third business day following the release of a summary statement of the
Corporation's quarterly or annual sales and earnings and ending on the twelfth
business day following such date. Payment instruments shall be received by the
Corporation subject to collection.
(c) If a Participant to whom an Option was granted shall cease to
maintain Continuous Service for any reason (including total or partial
disability and normal or early retirement, but excluding death and termination
of employment by the Corporation or any Affiliate for cause), such Participant
may, but only within the period of three months immediately succeeding such
cessation of Continuous Service and in no event after the expiration date of
such Option, exercise such Option to the extent that such Participant was
entitled to exercise such Option at the date of such cessation, provided,
however, that such right of exercise after cessation of Continuous Service shall
not be available to a Participant if the Committee otherwise determines and so
provides in the applicable instrument of instruments evidencing the grant of
such Option. Notwithstanding the foregoing, if a Participant to whom an Option
was granted shall cease to maintain Continuous Service due to normal retirement,
and such Participant has served the Corporation for at least ten years, the
Participant may, but only during the period of five years immediately succeeding
such cessation of Continuous Service and in no event after the expiration of
such Option, exercise such Option. Notwithstanding anything herein to the
contrary, if the Continuous Service of a Participant to whom an Option was
granted by the Corporation is terminated for cause, all rights under any Option
of such Participant shall expire immediately upon the giving to the Participant
of notice of such termination.
(d) In the event of the death of a Participant while in the
Continuous Service of the Corporation or an Affiliate or within the three month
and five year periods referred to in paragraph (c) of this Section 7, the person
to whom any Option held by the Participant at the time of his death is
transferred by will or the laws of descent and distribution may, but only to the
extent such Participant was entitled to exercise such Option immediately prior
to his death, exercise such Option at any time within a period of one year
succeeding the date of death of such Participant, but in no event later than ten
years from the date of grant of such Option. Following the death of any
23
<PAGE>
Participant to whom an Option was granted under the Plan, the Committee may, as
an alternative means of settlement of such Option, elect to pay to the person to
whom such Option is transferred by will or by the laws of descent and
distribution or pursuant to a qualified domestic relations order as defined in
the Code or Title I of the ERISA or the rules thereunder, the amount by which
the Market Value per Share on the date of exercise of such Option shall exceed
the Exercise Price of such Option, multiplied by the number of Shares with
respect to which such Option is properly exercised. Any such settlement of an
Option shall be considered an exercise of such Option for all purposes of the
Plan.
8. Incentive Stock Options. Incentive Stock Options may be granted only
-----------------------
to Participants who are Employees. Any provision of the Plan to the contrary
notwithstanding, (i) no Incentive Stock Option shall be granted more than ten
years from the date the Plan is adopted by the Board of Directors of the
Corporation and no Incentive Stock Option shall be exercisable more than ten
years from the date such Incentive Stock is granted, (ii) the Exercise Price of
any Incentive Stock Option shall not be less than the Market Value per Share on
the date such Incentive Stock Option is granted, (iii) any Incentive Stock
Option shall not be transferable by the Participant to whom such Incentive Stock
Option is granted other than by will or the laws of descent and distribution and
shall be exercisable during such Participant's lifetime only by such
Participant, (iv) no Incentive Stock Option shall be granted to any individual
who, at the time such Incentive Stock Option is granted, owns stock possessing
more than ten percent of the total combined voting power of all classes of stock
of the Corporation or any Affiliate unless the Exercise Price of such Incentive
Stock Option is at least 110 percent of the Market Value per Share at the date
of grant and such Incentive Stock Option is not exercisable after the expiration
of five years from the date such Incentive Stock Option is granted, and (v) the
aggregate Market Value (determined as of the time any Incentive Stock Option is
granted) of the Shares with respect to which Incentive Stock Options are
exercisable for the first time by a Participant in any calendar year shall not
exceed $100,000.
9. Adjustments Upon Changes in Capitalization. In the event of any
------------------------------------------
change in the outstanding Shares subsequent to the effective date of the Plan by
reason of any reorganization, recapitalizaiton, stock split, stock dividend,
combination or exchange of shares, merger, consolidation or any change in the
corporate structure or Shares of the Corporation, the maximum aggregate number
and class of shares as to which Awards may be granted under the Plan and the
number and class of shares with respect to which Awards theretofore have been
granted under the Plan shall be appropriately adjusted by the Committee, whose
determination shall be conclusive.
10. Effect of Merger on Options. In the event of any merger or
---------------------------
consolidation of the Corporation (other than a merger or consolidation in which
the Corporation is the continuing entity and which does not result in the
outstanding Shares being converted into or exchanged for different securities,
cash or other property, or any combination thereof) pursuant to a plan or
agreement the terms of which are binding upon all stockholders of the
Corporation (except to the extent that dissenting stockholders may be entitled,
under statutory provisions or provisions contained in the certificate of
incorporation, to receive the appraised or fair value of their holdings), any
Participant to whom an Option has been granted at least 6 months prior to such
event shall have the right (subject to the provisions of the Plan and any
limitation applicable to such Option), thereafter and during the term of each
such Option, to receive upon exercise of any such Option an amount equal to the
excess of the fair market value on the date of such exercise of the securities,
cash or other property, or combination thereof, receivable upon such merger,
consolidation or combination in respect of a Share over the Exercise Price of
such Option, multiplied by the number of Shares with respect to which such
Option shall have been exercised. Such amount may be payable fully in
24
<PAGE>
cash, fully in one or more of the kind or kinds of property payable in such
merger, consolidation or combination, or partly in cash and partly in one or
more of such kind or kinds of property, all in the discretion of the Committee.
11. Effect of Change in Control. Each of the events specified in the
---------------------------
following clauses (i) through (iii) of this Section 11 shall be deemed a "change
of control": (i) any third person, including a "group" as defined in Section
13(d)(3) of the Securities Exchange Act of 1934, shall become the beneficial
owner of shares of the Corporation with respect to which 25% or more of the
total number of votes for the election of the Board of Directors of the
Corporation may be cast, (ii) as a result of, or in connection with, any cash
tender offer, merger or other business combination, sale of assets or contested
election, or combination of the foregoing, the persons who were directors of the
Corporation shall cease to constitute a majority of the Board of Directors of
the Corporation or (iii) the shareholders of the Corporation shall approve an
agreement providing either for a transaction in which the Corporation will cease
to be an independent publicly owned entity or for a sale or other disposition of
all or substantially all the assets of the Corporation; provided, however, that
the occurrence of any such events shall not be deemed a "change in control" if,
prior to such occurrence, a resolution specifically approving such occurrence
shall have been adopted by at least a majority of the Board of Directors of the
Corporation. If a tender offer or exchange offer for Shares (other than such an
offer by the Corporation) is commenced, or if the event specified in clause
(iii) above shall occur, unless the Committee shall have otherwise provided in
the instrument evidencing the grant of an Option, all Options theretofore
granted and not fully exercisable shall become exercisable in full upon the
happening of such event and shall remain so exercisable for a period of sixty
days following such date, after which they shall revert to being exercisable in
accordance with their terms; provided, however, that no Option shall be
exercisable by a Ten Percent Beneficial Owner, director or Senior Officer of the
Corporation within six months of the date of grant of such Option and no Option
which has previously been exercised or otherwise terminated shall become
exercisable.
12. Assignments and Transfers. No Award nor any right or interest of
-------------------------
a Participant under the Plan in any instrument evidencing any Award under the
Plan may be assigned, encumbered or transferred except, in the event of the
death of a Participant, by will or the laws of descent and distribution or in
the case of an Award other than an Incentive Stock Option, pursuant to a
qualified domestic relations order as defined in the Code or Title I of the
ERISA or the rules thereunder.
13. Employee Rights Under the Plan. No director, officer or employee
------------------------------
shall have a right to be selected as a Participant nor, having been so selected,
to be selected again as a Participant and no director, officer, employee or
other person shall have any claim or right to be granted an Award under the Plan
or under any other incentive or similar plan of the Corporation or any
Affiliate. Neither the Plan nor any action taken thereunder shall be construed
as giving any employee any right to be retained in the employ of the
Corporation or any Affiliate.
14. Delivery and Registration of Stock. The Corporation's obligation
----------------------------------
to deliver Shares with respect to an Award shall, if the Committee so requests,
be conditioned upon the receipt of a representation as to the investment
intention of the Participant to whom such Shares are to be delivered, in such
form as the Committee shall determine to be necessary or advisable to comply
with the provisions of the Securities Act of 1933 or any other Federal, state or
local securities legislation or regulation. It may be provided that any
representation requirement shall become inoperative upon a registration of the
Shares or other action eliminating the necessity of such
25
<PAGE>
representation under such Securities Act or other securities legislation. The
Corporation shall not be required to deliver any Shares under the Plan prior to
(i) the admission of such shares to listing on any stock exchange on which
Shares may then be listed, and (ii) the completion of such registration or other
qualification of such Shares under any state or Federal law, rule or regulation,
as the Committee shall determine to be necessary or advisable.
This Plan is intended to comply with Rule 16b-3 under the Securities
Exchange Act of 1934. Any provision of the Plan which is inconsistent with said
Rule shall, to the extent of such inconsistency, be inoperative and shall not
affect the validity of the remaining provisions of the Plan.
15. Withholding Tax. The Corporation shall have the right to deduct
---------------
from all amounts paid in cash with respect to the exercise of an Option under
the Plan any taxes required by law to be withheld with respect to such exercise.
Where a Participant or other person is entitled to receive Shares pursuant to
the exercise of an Option pursuant to the Plan, the Corporation shall have the
right to require the Participant of such other person to pay the Corporation the
amount of any taxes which the Corporation is required to withhold with respect
to such Shares, or, in lieu thereof, to retain, or sell without notice, a number
of such Shares sufficient to cover the amount required to be withheld.
16. Amendment or Termination. The Board of Directors of the Corporation
------------------------
may amend, suspend or terminate the Plan or any portion thereof at any time, but
(except as provided in Section 9 hereof) no amendment shall be made without
approval of the Stockholders of the Corporation which shall (i) materially
increase the aggregate number of Shares with respect to which Awards may be made
under the Plan, (ii) materially increase the aggregate number of Shares which
may be subject to Awards to Participants who are not Employees or (iii) change
the class of persons eligible to participate in the Plan; provided, however,
that no such amendment, suspension or termination shall impair the rights of any
Participant, without his consent, in any Award theretofore made pursuant to the
Plan.
Notwithstanding anything in the Plan to the contrary, to the extent that
the Plan provides for formula awards, as defined in Rule 16b-3(c)(2)(ii) under
the Securities Exchange Act of 1934, such provisions may not be amended more
than every six months, other than to comport with changes in the code, ERISA or
the rules thereunder.
17. Effective Date and Term of Plan. The Plan shall become effective
-------------------------------
upon its adoption by the Board of Directors of the Corporation, subject to the
approval of the Plan by vote of the holders of a majority of the outstanding
shares of the Corporation entitled to vote on the adoption of the Plan. It
shall continue in effect for a term of ten years unless sooner terminated under
Section 16 hereof.
18. Grant to Directors. By, and simultaneously with, the adoption of
------------------
this Plan, each member of the Board of Directors of the Corporation who is not a
full-time employee on the first Monday of February is hereby granted Options on
the fist Monday of February of each year during the term of the Plan to purchase
4,500 Shares. The Option exercise price per Share shall be equal to the Market
Value of one such Share on the date such Options are granted. Each such Option
shall be evidenced by a Non-Qualified Stock Option Agreement in a form approved
by the Board of Directors and shall be subject in all respects to the terms and
conditions of this Plan, which are controlling.
26
<PAGE>
RESTATED FOR THE JANUARY 15, 1993, OCTOBER 5, 1993, JANUARY 15, 1994
AND DECEMBER 6, 1994 STOCK SPLITS
27
<PAGE>
FIRST AMENDMENT
TO THE
ROWE FURNITURE CORPORATION
1993 STOCK OPTION AND INCENTIVE PLAN
In order to bring the Rowe Furniture Corporation 1993 Stock Option and
Incentive Plan (the "Plan") into conformity with the requirements of Section
162(m) of the Internal Revenue Code of 1986, as amended, and the regulations
thereunder, which Section limits the deductibility of the compensation of the
chief executive officer and the four highest compensated officers for the
taxable year (other than the chief executive officer) to $1,000,000.00 and
provides for an exclusion from such limit for "performance-based" plans,
including stock option plans which meet certain requirements, the Plan shall be
and hereby is amended, in accordance with Section 16 thereof, to bring the Plan
into conformity with such requirements, pursuant to the Section 162(m)
transition rules for plans that had been previously approved by shareholders.
The Plan had been approved by shareholders prior to December 20, 1993. The
amendments set forth herein (i) require the administrative committee, effective
as of March 7, 1996, to be composed solely of disinterested persons, as defined
in the Plan, who are also "outside directors," as the number of shares, that can
be awarded to any one individual under the Plan to 100,000 shares in any
calendar year. Such amendments are as follows:
1. Effective as of March 7, 1996, Section 3 of the Plan shall be and
hereby is amended to read as follows:
3. Administration. The Plan shall be administered by a Committee
--------------
consisting of two or more members, each of whom shall be a Disinterested
Person and each of whom shall be an "outside director," as set forth at
Section 162(m) of the Code and defined in the regulations promulgated
hereunder. The members of the Committee shall be appointed by the Board of
Directors of the Corporation. Except as limited by the express provisions
of the Plan, the Committee shall have sole and complete authority and
discretion to (i) select Participants and grant Awards; (ii) determine the
number of Shares to be subject to types of Awards generally, as well as to
individual Awards granted under the Plan; (iii) determine the terms and
conditions upon which Awards shall be granted under the Plan; (iv)
prescribe the form and terms of instruments evidencing such grants; and (v)
establish from time to time regulations for the administration of the Plan,
interpret the Plan, and make all determinations deemed necessary or
advisable for the administration of the Plan. The Committee may maintain,
and update from time to time as appropriate, a list designating selected
outside directors (as hereinabove defined) as Disinterested Persons. The
purpose of such list shall be to evidence the status of such individuals as
Disinterested Persons, and the Board of Directors may appoint to the
Committee any individual actually qualifying as a Disinterested Person,
regardless of whether identified as such on said list.
28
<PAGE>
2. Effective as of March 7, 1996, the following sentence shall be and
hereby is added at the conclusion of Section 6:
Notwithstanding the foregoing, no individual shall be granted Awards with
respect to more than 100,000 Shares (such number to be adjusted hereafter
in accordance with the adjustments provided by operation of Section 9
hereof) in any calendar year.
The Rowe Furniture Corporation 1993 Stock Option and Incentive Plan is
hereby reaffirmed in all respects, except as specifically amended by this First
Amendment.
IN WITNESS WHEREOF the duly authorized officers of Rowe Furniture
Corporation have executed this First Amendment on this 7th day of March, 1996.
ROWE FURNITURE CORPORATION
A Nevada Corporation
ATTEST:
-------------------------------
Gerald M. Birnbach
President
- ---------------------
Arthur H. Dunkin
Secretary-Treasurer
29
<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 1, 1997, AT THE ROANOKE AIRPORT MARRIOTT, ROANOKE, VIRGINIA
The undersigned hereby appoints G. M. Birnbach and A. H. Dunkin 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 or any adjournments and or postponements thereof,
upon the matters set forth in the Notice of Annual Meeting of Stockholders and
Proxy Statement dated March 3, 1997, as follows:
1. ELECTION OF DIRECTORS. The nominees to serve until 2000 are Messrs.
Gerald O. Woodlief Harvey I. Ptashek W. Patrick Dolan
[ ] VOTE FOR all nominees [ ] VOTE WITHHELD for all nominees
[ ] VOTE FOR, except vote withheld from the following nominee(s):
----------------------------------------------------------
2. THE AMENDMENT OF THE COMPANY'S 1993 STOCK OPTION AND INCENTIVE PLAN IN
ORDER TO INCREASE THE NUMBER OF SHARES RESERVED FOR ISSUANCE THEREUNDER.
[ ] VOTE FOR [ ] VOTE AGAINST [ ] ABSTAIN
In their discretion, the Proxies are authorized to vote upon such other matters
as may properly come before the Annual Meeting or any adjournments or
postponements thereof.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" EACH OF THE NOMINEES AND FOR THE
AMENDMENT TO THE 1993 STOCK OPTION AND INCENTIVE PLAN.
(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 AND FOR THE AMENDMENT TO THE 1993 STOCK OPTION
AND INCENTIVE PLAN. IF ANY OTHER MATTER IS PRESENTED AT THE ANNUAL MEETING,
THIS PROXY WILL BE VOTED BY THOSE NAMED IN THEIR BEST JUDGMENT. AT THE PRESENT
TIME, THE BOARD OF DIRECTORS KNOWS OF NO OTHER MATTER TO BE PRESENTED AT THE
ANNUAL MEETING.
Any proxy heretofore given by the undersigned with respect to such stock is
hereby revoked. Receipt of the Notice of the 1997 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.
<PAGE>
ROWE FURNITURE CORPORATION
Dear Shareholder:
Please take note of the important information enclosed with this Proxy Ballot.
Pleae mark the boxes on the proxy card to indicate how your shares shall be
voted. Then sign the card, detach it and return your proxy vote in the enclosed
postage paid envelope.
Your vote must be received prior to the Annual Meeting of Stockholders, April 1,
1997.
Sincerely,
Rowe Furniture Corporation
