<PAGE> 1
SCHEDULE 14A
(RULE 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. )
Filed by the registrant [X]
Filed by a party other than the registrant [ ]
Check the appropriate box:
[ ] Preliminary proxy statement [ ] Confidential, for use of the
Commission Only (as permitted by
Rule 14a-6(e)(2))
[X] Definitive proxy statement
[ ] Definitive additional materials
[ ] Soliciting material pursuant to Rule 14a-11(c) or Rule 14a-12
WICKES INC.
- --------------------------------------------------------------------------------
(Name or Registrant as Specified in Its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement if other than Registrant)
Payment of filing fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(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:
- --------------------------------------------------------------------------------
(5) Total fee paid:
- --------------------------------------------------------------------------------
[ ] Fee paid previously with preliminary materials.
- --------------------------------------------------------------------------------
[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number, or
the form or schedule and the date of its filing.
(1) Amount previously paid:
- --------------------------------------------------------------------------------
(2) Form, schedule or registration statement no.:
- --------------------------------------------------------------------------------
(3) Filing party:
- --------------------------------------------------------------------------------
(4) Date filed:
- --------------------------------------------------------------------------------
<PAGE> 2
WICKES LUMBER LOGO
706 North Deerpath Drive
Vernon Hills, Illinois 60061
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
April 22, 1998
To Our Shareholders:
You are cordially invited to attend the Annual Meeting of Shareholders of
Wickes Inc. to be held on Monday, May 18, 1998, at 9:00 a.m., Central Daylight
Time, at the executive offices of the Company, 706 North Deerpath Drive, Vernon
Hills, Illinois.
The meeting will be held for the following purposes:
(1) To elect three members of the Board of Directors for three-year terms
and until their successors have been elected and qualified.
(2) To consider for approval an amendment to the Company's Amended and
Restated 1993 Long-Term Incentive Plan.
(3) To approve the appointment of Coopers & Lybrand L.L.P. as independent
auditors for the Company.
(4) To transact such other business as may properly come before the
meeting.
Shareholders of record at the close of business on April 10, 1998, will be
entitled to vote at the Annual Meeting.
Whether or not you expect to attend the meeting, please read the
accompanying Proxy Statement and complete, sign, date and return the
accompanying Proxy in the enclosed postage paid envelope at your earliest
convenience. You may revoke your Proxy at any time before it is exercised by
following the instructions set forth on the first page of the accompanying Proxy
Statement.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR EACH NOMINEE AND EACH
PROPOSAL.
We hope you will plan to attend the meeting.
Sincerely yours,
J. Steven Wilson
J. Steven Wilson,
Chairman
and Chief Executive Officer
<PAGE> 3
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
General Information......................................... 1
Securities Outstanding and Voting........................... 2
Principal Security Holders and Security Ownership of
Management................................................ 2
Election of Directors....................................... 4
Board of Directors' Meetings and Compensation............... 5
Management.................................................. 7
Report of the Compensation and Benefits Committee........... 8
Executive Compensation...................................... 10
Amendment of 1993 Long-Term Incentive Plan.................. 14
Certain Relationships and Related Transactions.............. 17
Compliance with Section 16(a) of the Securities Exchange Act
of 1934................................................... 17
Comparison of Cumulative Total Return....................... 18
Approval of Auditors........................................ 19
Other Matters............................................... 19
Shareholder Proposals....................................... 19
Form 10-K................................................... 19
Expenses of Solicitation.................................... 19
</TABLE>
<PAGE> 4
WICKES INC.
------------------------
PROXY STATEMENT
------------------------
GENERAL INFORMATION
This Proxy Statement is furnished to shareholders of Wickes Inc. (the
"Company") in connection with the solicitation by the Board of Directors of
Proxies to be used at the 1998 Annual Meeting of Shareholders of the Company
(the "Meeting"). The Meeting will be held on Monday, May 18, 1998, at 9:00 a.m.,
Central Daylight Time, at the executive offices of the Company, 706 North
Deerpath Drive, Vernon Hills, Illinois. This Proxy Statement and enclosed form
of Proxy were first sent to shareholders on or about April 22, 1998.
The Board of Directors of the Company is soliciting Proxies so that each
shareholder is given an opportunity to vote. These Proxies enable shareholders
to vote on all matters that are scheduled to come before the Meeting. When
Proxies are returned properly executed, the shares represented thereby will be
voted by the Proxy Committee in accordance with the shareholders' directions.
Shareholders are urged to specify their choices by marking the enclosed Proxy;
if no choice has been specified, the shares will be voted "with" authority to
vote for directors and "for" the proposals. The Proxy also confers upon the
Proxy Committee discretionary authority to vote the shares represented thereby
on any other matter that may properly be presented for action at the Meeting.
If the enclosed Proxy is duly executed and returned, it may nevertheless be
revoked at any time, insofar as it has not been exercised, by voting in person,
by duly executing and delivering a subsequent Proxy or by providing written
notice to the Company's President or Secretary. The shares represented by a
Proxy will be voted unless the Proxy is revoked or is mutilated or otherwise
received in such form or at such time as to render it not votable.
Votes cast by proxy or in person at the Meeting, which will be tabulated by
inspectors of election appointed for the Meeting, will determine whether or not
a quorum is present. The inspectors of election will treat abstentions as shares
that are present for purposes of determining the presence of a quorum but as
unvoted for purposes of determining the approval of any matter submitted to the
shareholders for a vote. If a broker indicates on the proxy that it does not
have discretionary authority as to certain shares to vote on a particular
matter, those shares will not be considered as present and entitled to vote with
respect to that matter.
The Proxy Committee is composed of J. Steven Wilson, Chairman and Chief
Executive Officer of the Company, and Kenneth M. Kirschner, Vice Chairman, Chief
Administrative Officer, General Counsel and Secretary of the Company, who will
vote all shares represented by Proxies.
The principal executive offices of the Company are located at 706 North
Deerpath Drive, Vernon Hills, Illinois 60061.
1
<PAGE> 5
SECURITIES OUTSTANDING AND VOTING
Only holders of shares of the Company's common stock, par value $.01 per
share ("Wickes Voting Common Stock"), of record at the close of business on
April 10, 1998, will be entitled to vote at the Meeting. On that date, 7,687,342
shares of Wickes Voting Common Stock were outstanding.
Each share of Wickes Voting Common Stock is entitled to one vote on all
matters submitted to a vote of shareholders, including election of directors.
Approval of each of the matters to be acted upon at the Meeting will require a
majority of the votes cast at the Meeting to be cast in favor of the matter,
except that directors will be elected by a plurality of the votes cast.
PRINCIPAL SECURITY HOLDERS AND SECURITY OWNERSHIP OF MANAGEMENT
The following table contains information as of February 28, 1998,
concerning beneficial ownership of Wickes Voting Common Stock by persons known
by the Company to own beneficially more than five percent of Wickes Voting
Common Stock and by (i) the Company's directors, (ii) the executive officers of
the Company named in the Summary Compensation Table on page 10 hereof and (iii)
all executive officers and directors of the Company as a group.
The following table also contains information as of February 28, 1998,
concerning beneficial ownership by such persons of common stock, par value $.10
per share ("Riverside Common Stock"), of Riverside Group, Inc. ("Riverside").
Riverside may be deemed the parent of the Company.
<TABLE>
<CAPTION>
AMOUNT AND NATURE AMOUNT AND NATURE
OF BENEFICIAL OF BENEFICIARY
OWNERSHIP OF OWNERSHIP OF
WICKES VOTING % OF RIVERSIDE % OF
NAME AND ADDRESS OF BENEFICIAL OWNER COMMON STOCK(1) CLASS COMMON STOCK(1) CLASS
------------------------------------ ----------------- ----- ----------------- -----
<S> <C> <C> <C> <C>
5% STOCKHOLDERS:
Riverside Group, Inc. .................. 4,152,413(2) 54.0 -- --
7800 Belfort Parkway
Jacksonville, Florida 32256
J. Steven Wilson........................ 4,184,413(2)(3) 54.2 2,664,804(4) 50.4
7800 Belfort Parkway
Jacksonville, Florida 32256
Wellington Management Company........... 790,100 10.3 -- --
75 State Street
Boston, Massachusetts 02109
Dimensional Fund Advisors, Inc. ........ 459,700(5) 6.0 -- --
1299 Ocean Avenue
Santa Monica, California 90401
OTHER DIRECTORS AND NAMED EXECUTIVE
OFFICERS:
Albert Ernest, Jr. ..................... 39,328(6) * -- --
Kenneth M. Kirschner.................... 126,340(7) 1.6 433,100(8) 8.1
William H. Luers........................ 10,966(9) * -- --
Robert E. Mulcahy, III.................. 6,070(6)(10) * -- --
Frederick H. Schultz.................... 138,327(6)(11) 1.8 330,456(12) 6.3
Claudia B. Slacik....................... 18,234(6) * -- --
David T. Krawczyk....................... 11,127 * -- --
Jimmie J. Frank......................... -- * -- --
All directors and executive officers as
a group (13 persons).................. 4,569,680(13) 58.7 3,428,360(14) 64.5
</TABLE>
- ---------------
* Less than 1.0%
2
<PAGE> 6
(1) Unless otherwise noted, the owner has sole voting and dispositive power.
(2) Approximately 1,750,000 of the shares of Wickes Voting Common Stock owned
by Riverside are directly or indirectly pledged to secure indebtedness of
Riverside. Mr. Wilson is the Chairman, President and Chief Executive
Officer and controlling shareholder of Riverside and shares voting and
dispositive power over the shares of Wickes Voting Common Stock
beneficially owned by Riverside. Essentially all of the voting securities
of Riverside beneficially owned by Mr. Wilson are pledged to secure
indebtedness of Mr. Wilson and his affiliates.
(3) Includes 32,000 shares presently acquirable pursuant to employee stock
options.
(4) Includes 2,543,553 shares held by a corporation controlled by Mr. Wilson
and 47,738 shares held in Mr. Wilson's account in Riverside's employee
stock ownership plan. Essentially all of the voting securities of Riverside
beneficially owned by Mr. Wilson are pledged to secure indebtedness of Mr.
Wilson and his affiliates.
(5) Includes 54,700 and 102,100 shares owned by DFA Investment Dimensions
Group, Inc. and DFA Investment Trust Company, respectively, of which
certain officers of Dimensional Fund Advisors Inc. are officers.
(6) Includes 5,445 shares presently acquirable pursuant to director stock
options.
(7) Includes 600 shares owned by a retirement account for Mr. Kirschner's
spouse, 12,900 shares held by retirement plans and accounts for Mr.
Kirschner's benefit, 21,300 shares presently acquirable pursuant to
employee stock options, and 5,850 shares allocated to Mr. Kirschner's
account in the Company's savings and retirement plan (the "401(k) Plan").
(8) Includes 85,725 shares in various retirement accounts for Mr. Kirschner's
benefit, 30,000 shares presently acquirable pursuant to director stock
options, and 7,000 shares held in a retirement account for the benefit of
Mr. Kirschner's spouse.
(9) Includes 2,889 shares presently acquirable pursuant to director stock
options.
(10) Includes 125 shares owned by Mr. Mulcahy's daughter.
(11) Includes 5,510 shares owned by Mr. Schultz's spouse, as to which Mr.
Schultz disclaims beneficial ownership.
(12) Includes 61,378 shares held in various retirement accounts for Mr.
Schultz's benefit and 42,500 shares held by Mr. Schultz's spouse.
(13) Includes 103,369 shares acquirable pursuant to presently exercisable
warrants and options.
(14) Includes 30,000 shares presently acquirable pursuant to stock options.
3
<PAGE> 7
ELECTION OF DIRECTORS
In accordance with the Bylaws of the Company, the Company's Board of
Directors has provided for a Board of Directors, divided into three classes,
consisting of seven members. The directors of each class are to be elected at
the annual meeting of shareholders held in the year in which the term for such
class expires and serve thereafter for three years. The term of office for
directors in Class II expires at the Meeting. The term of office for directors
in Class III expires in 1999 and that for Class I directors in 2000.
Unless authority is withheld, the Proxy Committee will vote for the
election of the three nominees named below as directors of the Company. Each
nominee has consented to being named as such in this Proxy Statement and has
agreed to serve if elected. If a nominee should become unavailable, the members
of the Proxy Committee may in their discretion vote for a substitute. However,
in no event will Proxies be voted for more than three persons. The Board of
Directors has no reason to believe that any substitute nominee or nominees will
be required.
The following table gives the names of the nominees for election to the
Board of Directors, their ages and the years they first became directors.
<TABLE>
<CAPTION>
YEAR FIRST
NAME AGE BECAME DIRECTOR
---- --- ---------------
<S> <C> <C>
Albert Ernest, Jr. ..................................... 67 1993
William H. Luers........................................ 68 1995
Claudia B. Slacik....................................... 41 1992
</TABLE>
Mr. Ernest has been a director of the Company since September 1993. Mr.
Ernest currently is the president of Albert Ernest Enterprises, an investment
firm. From 1971 through 1991, Mr. Ernest was associated with Barnett Bank of
Jacksonville, N.A. and Barnett Banks, Inc. ("BBI"), serving as Vice Chairman and
a director of BBI from 1982 to 1988 and President and Chief Operating Officer
and a director of BBI from 1988 to 1991. He is also a director of the Emerald
Funds, FRP Properties, Inc., Florida Rock Industries, Inc., Regency Realty
Corporation and Stein Mart, Inc.
Mr. Luers has been a director of the Company since June 1995. Mr. Luers has
been President of The Metropolitan Museum of Art since 1986. He served in the
United States Foreign Service from 1957 to 1986 and was Ambassador to
Czechoslovakia from 1983 to 1986 and Ambassador to Venezuela from 1978 to 1982.
Mr. Luers is also a director of IDEX Corporation and several Scudder
international and domestic mutual funds. He is also a trustee or director of
many not-for-profit organizations, such as the Rockefeller Brothers Fund.
Ms. Slacik has been a director of the Company since June 1992. Ms. Slacik
has been a Vice President in the Structured Finance Group at Citicorp N.A. since
July 1993. She was Vice President, Strategic Planning at World Color Press,
Inc., a commercial printer, from June 1992 to March 1993. Prior to that time,
from 1979, Ms. Slacik was a Vice President of Bankers Trust Company.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR EACH NOMINEE.
4
<PAGE> 8
The following table presents information with respect to the members of the
Board of Directors whose terms do not expire at the Meeting:
<TABLE>
<CAPTION>
DIRECTOR
NAME AGE POSITIONS SINCE
---- --- --------- --------
<S> <C> <C> <C>
J. Steven Wilson.......................... 54 Director (Class I); Chairman 1991
and Chief Executive Officer
Kenneth M. Kirschner...................... 55 Director (Class I); Vice 1993
Chairman, Chief
Administrative Officer,
General Counsel and
Secretary
Robert E. Mulcahy III..................... 61 Director (Class III) 1988
Frederick H. Schultz...................... 69 Director (Class III) 1993
</TABLE>
Mr. Wilson has been Chief Executive Officer and a director of the Company
since November 1991 and Chairman since August 1993. Mr. Wilson also assumed the
duties of President from July 1996 to May 1997. For more than the past five
years, Mr. Wilson has been Chairman, President and Chief Executive Officer of
Riverside. Mr. Wilson is also a director of Riverside and First Industrial
Realty Trust, Inc.
Mr. Kirschner has been a director and Secretary of the Company since August
1993, Vice Chairman and General Counsel of the Company since February 1994, and
Chief Administrative Officer since February 1998. From August 1993 to February
1994, Mr. Kirschner was also Vice President of the Company. For more than the
past five years, Mr. Kirschner has been a partner of the law firm Holland &
Knight LLP or a shareholder of a Jacksonville, Florida law firm that combined
with Holland & Knight LLP in February 1998. Mr. Kirschner is also a director and
Vice Chairman of Riverside.
Mr. Mulcahy has been a director of the Company since April 1988. Since
April 15, 1998, Mr. Mulcahy has been Director of Athletics of Rutgers
University. For more than five years prior to that time, Mr. Mulcahy was
President and Chief Executive Officer of New Jersey Sports & Exposition
Authority, a racing, sports and entertainment enterprise. He is also a director
of First Morris Bank and Orange & Rockland Utilities, Inc.
Mr. Schultz has been a director of the Company since September 1993. Mr.
Schultz is a private investor. From 1979 to 1982, Mr. Schultz served as Vice
Chairman of the Board of Governors of the Federal Reserve System. He is also a
director of American Heritage Life Insurance Company and Riverside.
BOARD OF DIRECTORS' MEETINGS AND COMPENSATION
The Board of Directors met six times in 1997; all directors attended more
than 75 percent of all meetings of the Board of Directors and the committees on
which they served.
The Company has standing Audit, Compensation and Benefits, and Related
Party Committees. The members of the Audit Committee are Messrs. Mulcahy
(chair), Luers and Schultz. The Audit Committee, which met formally three times
in 1997, reviews and approves the selection of and the services performed by the
Company's independent accountants, meets with and receives reports from the
Company's financial and accounting staff and independent accountants, and
reviews the scope of audit procedures, accounting practices and internal
controls. The members of the Compensation and Benefits Committee, which met
formally five times in 1997, are Mr. Ernest (chair) and Ms. Slacik. The
Compensation and Benefits Committee establishes and approves all elements of the
compensation of the Chief Executive officer and other senior executive
5
<PAGE> 9
officers, advises the Board with respect to compensation of the Company's
directors, approves all executive compensation plans, reviews such other
compensation and employee benefit plans, as it deems appropriate, performs
administrative or other duties with respect to certain compensation and benefit
plans and reviews the Company's management organization and development. The
members of the Related Party Committee are Ms. Slacik (chair) and Messrs.
Ernest, Luers and Mulcahy. The Related Party Committee reviews proposed
transactions between the Company and related parties and either approves or
disapproves such transactions or makes a recommendation to the full Board of
Directors with respect to such transactions.
During 1997, directors received $27,000 per year for their services as
directors. In addition, the chairs of the Audit, Compensation and Benefits and
Related Party Committees received $3,600 per year, and the other members of
these committees received $2,700.
Outside directors also participate in the 1993 Director Incentive Plan. For
information concerning this plan, including stock options granted during 1997 to
directors other than Messrs. Wilson and Kirschner, see "Executive Compensation
- -- Employee Plans -- Director Incentive Plan."
6
<PAGE> 10
MANAGEMENT
Set forth below is information regarding the executive officers of the
Company:
<TABLE>
<CAPTION>
EXECUTIVE
OFFICER
NAME AGE POSITION SINCE
---- --- -------- ---------
<S> <C> <C> <C>
J. Steven Wilson........ 54 Chairman and Chief Executive 1991
Officer
Kenneth M. Kirschner.... 55 Vice Chairman, Chief 1993
Administrative Officer, General
Counsel and Secretary
David T. Krawczyk....... 41 President and Chief Operating 1996
Officer
Gene L. Curtin.......... 50 Vice President -- Management 1994
Information Systems
George C.
Finkenstaedt.......... 46 Vice President -- Merchandising 1990
Jimmie J. Frank......... 43 Vice President -- Merchandising 1997
James A. Hopwood........ 36 Vice President -- Finance 1998
Gene R. Logan........... 58 Vice President -- Sales 1997
</TABLE>
For information regarding Messrs. Wilson and Kirschner, see "Election of
Directors."
Mr. Krawczyk joined the Company in December 1996 as Senior Vice President
- -- Operations and was elected President and Chief Operating Officer in May 1997.
For more than five years prior to that time Mr. Krawczyk held various management
positions with Grossman's, Inc., including president of its Contractor's
Warehouse division from April 1993 to December 1996.
Mr. Curtin joined the Company in December 1992 as Director of Information
Systems. He was elected Vice President, Information Systems in November 1993.
For more than five years prior to joining the Company, Mr. Curtin was employed
by Montgomery Ward Co., Inc. in various systems and logistics management
positions.
Mr. Finkenstaedt has been associated in various capacities with the Company
and its predecessor since 1979. Mr. Finkenstaedt has held various executive
positions with the Company and was elected Vice President in 1990.
Mr. Frank joined the Company in January 1997 and was appointed Vice
President -- Merchandising in April 1997. From February 1994 to January 1997 Mr.
Frank was senior merchandise manager for Contractor's Warehouse. Prior to that
time, Mr. Frank was general manager of merchandising for Builder Marts of
America.
Mr. Hopwood joined the Company in January 1994 and has held management
positions with responsibilities in accounting, finance, investor relations and
treasury activities. Mr. Hopwood was appointed Vice President -- Finance in
February 1998. Prior to 1994, Mr. Hopwood was associated with Goldman Sachs &
Company. Mr. Hopwood was also employed by the predecessor of the Company from
1983 until 1990.
7
<PAGE> 11
Mr. Logan joined the Company in February 1995 as National Sales Executive
and was appointed Vice President -- Sales in January 1997. Prior to joining the
Company, Mr. Logan served in various executive capacities with General Electric
Company.
REPORT OF THE COMPENSATION AND BENEFITS COMMITTEE
EXECUTIVE COMPENSATION PHILOSOPHY
The Company's compensation philosophy is to adopt compensation programs
sufficient to attract and assist in retaining qualified executives. These
programs consist of base salary and short-term and long-term incentives intended
to provide competitive compensation for achieving good results and highly
competitive compensation for achieving aggressive objectives. These programs are
also intended to motivate management to increase shareholder value and to
emphasize stock ownership to align the interests of management with those of
shareholders.
BASE SALARY
The base salary component of an executive's compensation has historically
been established, based upon performance, experience and other factors, within
the middle of a salary range intended to approximate the ranges of base pay for
positions of comparable responsibility in a self-selected group of companies in
the building materials distribution industry about which appropriate
compensation information is available to the Company (the "Industry Group"). In
order to obtain a broader and more representative group for comparison purposes,
the Industry Group is more extensive than the companies whose securities are
included in the Peer Group Index described in "Comparison of Cumulative Total
Return" below. Mr. Wilson's base salary was established in conformity with
principles applicable to the Company's other executives.
As part of the Company's efforts to control costs, effective in 1996, the
Company instituted a salary reduction and freeze for senior management, with
limited exceptions, and the base salaries of Mr. Wilson and Mr. Kirschner (along
with those of certain other executive officers) were reduced five percent and
frozen. This freeze remains in place for Mr. Wilson and Mr. Kirschner.
SHORT-TERM INCENTIVES
Short-term incentives are provided by a cash bonus opportunity established
as a target percentage of an executive's base salary and based upon meeting
established objectives. For 1997, Mr. Wilson's incentive bonus was solely
dependent upon the Company's achieving specific performance objectives for
income from operations and net asset turnover. The Company did not meet the
income objective, and accordingly no 1997 incentive bonus was paid to Mr.
Wilson. 70%, or in two cases 80%, of the incentive bonuses of the Company's
other executive officers was based upon the same Company performance objectives
with the balance dependent upon individual objectives if the Company's threshold
objectives were achieved. Because these threshold objectives were not met, the
only 1997 incentive bonuses were discretionary bonuses paid to two executive
officers. The Company also paid Mr. Krawczyk a $100,000 bonus during 1997 in
accordance with the terms of his hiring in late 1996.
8
<PAGE> 12
LONG-TERM INCENTIVES
Awards under the Company's 1993 Long-Term Incentive Plan (the "Incentive
Plan") are designed to provide additional incentives to achieve long-term
corporate objectives, to promote the identity of the long-term interests of the
Company's executives and shareholders and to assist in the retention of
executives.
During 1997, the Compensation and Benefits Committee granted options for an
aggregate of 77,800 shares of Wickes Voting Common Stock to executive officers
of the Company, including an option for 50,000 shares to Mr. Krawczyk, an option
for 15,000 shares to Mr. Frank and an option for 12,800 to another executive
officer. In addition, during 1997, the Compensation and Benefits Committee
granted options to purchase an additional 23,800 shares of Wickes Voting Common
Stock to key employees other than executive officers. The allocation of these
stock options was based generally upon level of responsibility and, to a lesser
extent, subjective factors.
In addition, on February 16, 1998, the Committee awarded options for an
aggregate of 228,750 shares of Wickes Voting Common Stock to executive officers
and other selected key employees, including an option for 60,000 shares for Mr.
Wilson (subject to approval of the amendment of the Incentive Plan by the
Company's shareholders), an option for 40,000 shares for Mr. Kirschner, an
option for 55,000 shares for Mr. Krawczyk (subject to approval of the amendment
of the Incentive Plan by the Company's shareholders), and an option for 12,500
shares for Mr. Frank. See "Amendment of 1993 Long-Term Incentive Plan."
Awards to executive officers are designed to provide long-term incentives
comparable to those provided to the senior management of the Industry Group. The
Compensation and Benefits Committee is committed to making awards that are
deductible to the Company for federal income tax purposes and believes that the
awards granted under the Incentive Plan will qualify for the performance-based
exemption from the $1 million compensation limit under section 162(m) on the
Internal Revenue Code.
Albert Ernest, Jr.
Claudia B. Slacik
9
<PAGE> 13
EXECUTIVE COMPENSATION
The Summary Compensation Table below summarizes the compensation paid in
the years indicated to the Company's Chief Executive Officer and to each of the
other four most highly compensated executive officers of the Company who were
serving as executive officers at December 27, 1997.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG TERM
COMPENSATION
------------
AWARDS
------------
ANNUAL COMPENSATION(1) SECURITIES
--------------------------------------------- UNDERLYING ALL OTHER
NAME & SALARY BONUS OTHER ANNUAL OPTIONS/ COMPENSATION
PRINCIPAL POSITION YEAR ($) ($) COMPENSATION(2) SARS(#) ($)(3)
------------------ ---- ------ ----- --------------- ---------- ------------
<S> <C> <C> <C> <C> <C> <C>
J. Steven Wilson............. 1997 473,400 -- 7,200 -- 10,300
Chief Executive Officer 1996 474,300 -- 18,000 50,000 24,700
1995 490,000 -- 3,300 -- 4,700
Kenneth M. Kirschner......... 1997 284,000 -- 8,400 -- 13,700
Vice Chairman 1996 284,600 -- 5,900 30,000 11,400
1995 294,000 -- -- 60,000 --
David T. Krawczyk............ 1997 259,900 100,000 70,100 50,000 6,600
President
Jimmie J. Frank.............. 1997 136,800 75,000 81,200 15,000 --
Vice President
George A. Bajalia............ 1997 189,400 -- 4,400 -- 5,500
Chief Financial Officer 1996 185,900 -- 9,800 15,000 17,200
1995 175,100 15,000 5,000 -- 8,400
</TABLE>
- ---------------
(1) Certain of the named executive officers received annual compensation
consisting of perquisites and personal benefits valued at less than 10
percent of total annual salary and bonus.
(2) Other Annual Compensation includes for 1997: reimbursements for taxes with
respect to the taxable portion of long-term disability insurance premiums
paid by the Company ($7,200 for Mr. Wilson, $8,400 for Mr. Kirschner, $3,100
for Mr. Krawczyk, and $1,700 for Mr. Bajalia); the taxable portion of
reimbursements for living, travel and other personal expenses incurred while
away from home on Company business ($37,500 for Mr. Krawczyk, $43,400 for
Mr. Frank and $1,600 for Mr. Bajalia); and reimbursements for taxes with
respect to these taxable living, travel and other personal expenses ($29,500
for Mr. Krawczyk, $37,800 for Mr. Frank and $1,100 for Mr. Bajalia).
Includes for 1996: reimbursements for taxes with respect to the taxable
portion of long-term disability insurance premiums paid by the Company
($18,000 for Mr. Wilson, $5,900 for Mr. Kirschner, and $1,600 for Mr.
Bajalia); reimbursement of $1,500 to Mr. Bajalia for expenses incurred
while away from home on Company business; and reimbursement of $6,700 to
Mr. Bajalia for taxes with respect to these personal and certain moving
expenses.
Includes for 1995: reimbursements for taxes with respect to the taxable
portion of long-term disability insurance premiums paid by the Company
($3,300 for Mr. Wilson and $3,500 for Mr. Bajalia); and
10
<PAGE> 14
reimbursement of $1,500 to Mr. Bajalia for expenses incurred while away
from home on Company business.
(3) All Other Compensation includes for 1997: payment of premiums for long-term
disability insurance ($10,300 for Mr. Wilson, $9,700 for Mr. Kirschner,
$4,000 for Mr. Krawczyk and $2,500 for Mr. Bajalia); the Company's
contributions to the executives' accounts under the Company's 401(k) plan
($4,000 for Mr. Kirschner and $3,000 for Mr. Bajalia); and reimbursement of
$2,600 to Mr. Krawczyk for certain moving expenses.
Includes for 1996: payment of premiums for long-term disability insurance
($24,700 for Mr. Wilson, $8,400 for Mr. Kirschner and $2,400 for Mr.
Bajalia); the Company's contributions to the executives' accounts under the
Company's 401(k) plan ($3,000 for Mr. Kirschner and $3,800 for Mr. Bajalia);
and reimbursement of $11,000 to Mr. Bajalia for certain moving expenses.
Includes for 1995: payment of premiums for long-term disability insurance
($4,700 for Mr. Wilson and $4,500 for Mr. Bajalia); and the Company's $3,900
contribution to Mr. Bajalia's account under the Company's 401(k) plan.
OPTION GRANTS IN LAST FISCAL YEAR
The following table contains information regarding grants of options during
fiscal 1997 to each of the named executive officers.
<TABLE>
<CAPTION>
POTENTIAL REALIZABLE
VALUE AT ASSUMED
NUMBER OF % OF TOTAL ANNUAL RATES OF STOCK
SECURITIES OPTIONS/SARS PRICE APPRECIATION FOR
UNDERLYING GRANTED TO EXERCISE OR OPTION TERM
OPTIONS/SARS EMPLOYEES IN BASE PRICE EXPIRATION -----------------------
NAME GRANTED FISCAL YEAR ($/SH) DATE 5%($) 10%($)
---- ------------ ------------ ----------- ---------- ----- ------
<S> <C> <C> <C> <C> <C> <C>
J. Steven Wilson.............. -- -- -- -- -- --
Kenneth M. Kirschner.......... -- -- -- -- -- --
David T. Krawczyk............. 50,000 48.4 $5.00 5/18/07 $157,300 $398,500
Jimmie J. Frank............... 15,000 14.5 $5.63 2/17/07 $ 53,100 $134,500
George A. Bajalia............. -- -- -- -- -- --
</TABLE>
11
<PAGE> 15
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR AND FY-END OPTION VALUES
The following table contains information regarding the values of certain
unexercised options to purchase shares of Wickes Voting Common Stock held by the
named executive officers at the end of fiscal 1997. No options were exercised by
these persons in fiscal 1997.
<TABLE>
<CAPTION>
NUMBER OF SECURITIES VALUE OF UNEXERCISED
UNDERLYING UNEXERCISED IN-THE-MONEY
OPTIONS/SARS OPTIONS/SARS
AT FY-END(#) AT FY-END($)
------------------------- -------------------------
NAME EXERCISABLE/UNEXERCISABLE EXERCISABLE/UNEXERCISABLE
---- ------------------------- -------------------------
<S> <C> <C>
J. Steven Wilson................................... 24,000/126,000 --
Kenneth M. Kirschner............................... 14,200/75,800 --
David T. Krawczyk.................................. 0/80,000 --
Jimmie J. Frank.................................... 0/15,000 --
George A. Bajalia.................................. 14,250/30,750 --
</TABLE>
EMPLOYEE PLANS
1993 LONG-TERM INCENTIVE PLAN
For a description of the Incentive Plan as currently in effect and as
amended, see "Amendment of 1993 Long-Term Incentive Plan."
DIRECTOR INCENTIVE PLAN
Operation of Plan. The Director Incentive Plan was originally adopted by
the Board of Directors on October 6, 1993, and approved by the Company's
shareholders on October 14, 1993. The Director Incentive Plan was amended and
restated by the Board of Directors on February 22, 1994, subject to the approval
of the Company's shareholders, which was received on May 10, 1994.
Under the Director Incentive Plan, any individual who serves as a member of
the Company's Board of Directors can be granted (either alone or in tandem)
stock options, stock appreciation rights, restricted shares, performance shares
or performance units. A total number of 75,000 shares are reserved for issuance
under the Director Incentive Plan.
The Director Incentive Plan is administered by the Compensation and
Benefits Committee of the Board of Directors and must consist of not less than
two members of the Board of Directors.
Stock Options. The Director Incentive Plan provides for the automatic grant
to each director who is not an employee of the Company of an option to acquire
1,000 shares of Wickes Voting Common Stock on January 1 of each year.
Accordingly, options for 1,000 shares with an exercise price of $4.125 and
$3.063 were issued in January 1997, and January 1998, respectively, to each of
the Company's five non-employee directors. The Director Incentive Plan also
provides for discretionary stock option grants on terms prescribed by the
Compensation and Benefits Committee, provided that the exercise price of such
options may be not less than the fair market value of Wickes Voting Common Stock
on the date of grant.
Election to Receive Shares in Lieu of Fees. Under the Director Incentive
Plan, directors may make an annual irrevocable election to receive up to 100% of
their annual retainer and committee fees, which are
12
<PAGE> 16
payable quarterly, in the form of stock. Such election must be made in writing
prior to July 1 in the year prior to the year for which the election is made,
and shares will be issued on January 1, April 1, July 1 and October 1 of each
year. Shares so received may not be sold, assigned, transferred, pledged or
otherwise encumbered while the director is serving on the Board and until the
later of (i) three months from the last date that the Director Participant
served as a director of the Company and (ii) six months from the date of
purchase of such Shares.
401(K) PLAN
The Company has in effect a savings and retirement plan (the "401(k)
Plan"). All employees who are at least 21 years of age and have met certain
service requirements are eligible to participate in the 401(k) Plan. The 401(k)
Plan is intended to qualify under Section 401(a) of the Internal Revenue Code,
and has a cash or deferred arrangement intended to qualify under Section 401(k)
of the Code. Under the 401(k) Plan's cash or deferred arrangement, each eligible
employee may elect to make before tax contributions of from 2% to 8% of his or
her gross pay or after-tax contributions of from 1% to 15% of gross pay, subject
to an aggregate limit of 15% of gross pay and certain statutory limitations. The
Company currently matches 50% of the first 5% of an employee's contribution.
Certain long-time employees are entitled to receive an additional 1% or 3% of
gross pay. Each participant invests his individual account in selected
investment alternatives as directed by the trustee of the 401(k) Plan, including
a fund that invests primarily in shares of Wickes Voting Common Stock. The
Company may in its discretion make a profit sharing contribution to the 401(k)
Plan, which may be made in cash or in shares of Wickes Voting Common Stock.
Shares of Wickes Voting Common Stock so contributed by the Company do not become
subject to the investment control of the participants until the calendar year
following the date of contribution.
1994-5 SENIOR EXECUTIVE COMPENSATION PACKAGE
The Wickes Inc. 1994-5 Senior Executive Compensation Package (the
"Package") was adopted by the Compensation and Benefits Committee on November
30, 1994 as a standard package of awards under the 1993 Long-Term Incentive Plan
and was approved by the Company's shareholders at the 1995 Annual Meeting. The
Package consists of two components: (i) a Long-Term Stock Option to purchase
shares of Wickes Voting Common Stock with an exercise price per share equal to
the higher of $15.00 or the fair market value of Wickes Voting Common Stock on
the date of grant and (iii) a Long-Term Performance Bonus payable after the end
of the Company's fiscal year 1998 if the Company meets certain minimum
performance tests.
SPECIAL SEVERANCE AND STAY INCENTIVE BONUS PLAN
On November 25, 1997, the Compensation and Benefits Committee adopted the
Special Severance and Stay Incentive Bonus Plan (the "Stay Plan"). The Stay Plan
was implemented in order to provide the Company with the ability to retain
selected key employees during the Company's consideration and implementation of
strategic and operational alternatives.
The Stay Plan consists of two types of awards: special severance awards and
stay incentive bonuses. Special severance bonuses are payable to participants
whose employment is terminated by the Company during a defined period other than
for cause or disability. Special severance bonuses consist of a lump sum in cash
equal to the participants' bonus percentages multiplied by their deemed base
compensation. Stay incentive bonuses are payable to participants who have
remained a Company employee through any Group Transfer (as defined) or Change of
Control (as defined). Stay incentive bonuses consist of a lump sum in cash
13
<PAGE> 17
equal to the participants' bonus percentages multiplied by their deemed base
compensation. Participants may elect, in lieu of any special severance bonus or
stay incentive bonus, to receive any severance benefits for which they are then
otherwise eligible under any Company severance plan (other than the Stay Plan).
Through March 31, 1998, twelve key employees have been selected by the
Committee to participate in the Stay Plan. The bonus percentages of Mr.
Kirschner, Mr. Krawczyk and Mr. Bajalia under the Stay Plan are 200%, and that
of Mr. Frank is 100%.
AMENDMENT OF
1993 LONG-TERM INCENTIVE PLAN
The Amendment
The sole purpose and effect of the proposed amendment of the 1993 Long-Term
Incentive Plan is to increase from 50,000 to 60,000 the limit on the number of
shares of Wickes Voting Common Stock that may be the subject of award grants to
any participant in any calendar year.
General
The 1993 Long-Term Incentive Plan (the "Incentive Plan") was originally
adopted by the Board of Directors on October 6, 1993, and approved by the
Company's shareholders on October 14, 1993. The Incentive Plan was amended and
restated by the Compensation and Benefits Committee on November 30, 1994,
effective upon approval of the Company's shareholders at the 1995 Annual
Meeting. The Incentive Plan was further amended by the Compensation and Benefits
Committee on December 11, 1996, effective upon approval of the Company's
shareholders at the 1997 Annual Meeting and on February 16, 1998, subject to the
approval of the Company's shareholders at the Meeting.
Operation of the Plan
The Incentive Plan consists of two separate sub-plans, the "Wickes Inc.
Non-director Employee Incentive Sub-Plan" (the "Non-Director Sub-Plan") and the
"Wickes Inc. Employee-Director Incentive Sub-Plan" (the "Employee-Director
Sub-Plan"), each of which is administered by the Compensation and Benefits
Committee, which must continue to consist of not less than two members of the
Board of Directors. The current members of the Compensation and Benefits
Committee are Mr. Ernest and Ms. Slacik. The members of the Compensation and
Benefits Committee are not eligible to receive Awards under the Incentive Plan.
The Compensation and Benefits Committee has authority to administer the plan and
to determine participants, awards and terms and conditions of awards, including,
in its sole discretion, the establishment of annual financial and performance
goals of the Company which will be considered in determining awards.
Awards under the Non-Director Sub-Plan may be granted only to any employee
of the Company or any Related Entity whom the Compensation and Benefits
Committee identifies as having a direct and significant effect on the
performance of the Company or such Related Entity. Members of the Board of
Directors of the Company are ineligible to receive Awards under the Non-Director
Sub-Plan. Awards under the Employee-Director Sub-Plan may be granted only to any
employee of the Company or any Related Entity who serves as a member of the
Board of Directors of the Company.
A total of 835,000 shares are reserved for issuance under the Incentive
Plan. Approximately 3,600 employees of the Company are currently eligible to
participate.
14
<PAGE> 18
Stock Options. Under the Incentive Plan, key employees are eligible to
receive "incentive stock options" ("incentive options") qualifying under Section
422 of the Internal Revenue Code or "non-qualified options" which do not qualify
under Section 422 of the Code ("non-incentive options") to purchase shares of
Wickes Voting Common Stock. Options are exercisable at such time and on such
terms as the Compensation and Benefits Committee determines, except that the
exercise price of any option granted may not be less than the fair market value
(110% of fair market value in the case of incentive stock options granted to
holders of more than 10 percent of Wickes Voting Common Stock) per share of
Wickes Voting Common Stock on the date of grant. No incentive options may be
granted after ten years from the date of adoption of the plan. Subject to
certain additional limitations, no option by its terms is exercisable after the
expiration of 10 years (5 years in the case of incentive stock options granted
to holders of more than 10 percent of Wickes Voting Common Stock) from the date
of grant, or such other period (in the case of non-qualified options) or such
shorter period (in the case of incentive options) as the Compensation and
Benefits Committee in its sole discretion may determine. Unless the Compensation
and Benefits Committee determines otherwise, stock options are exercisable only
if the holder is an officer or employee of the Company at the time of exercise
(subject to certain grace periods). Stock options are not transferable, except
by will and by the laws of descent and distribution. Options become exercisable
as determined by the Compensation and Benefits Committee.
Subject to certain limitations in the case of incentive options, an
optionee under the Incentive Plan must pay the full option price upon exercise
of an option (i) in cash, (ii) with the consent of the Compensation and Benefits
Committee, by delivering shares of Wickes Voting Common Stock already owned by
such optionee (including shares to be received upon exercise of the option) and
having a fair market value at least equal to the exercise price or (iii) in any
combination of the foregoing. The Compensation and Benefits Committee may
require the optionee to satisfy the Company's federal tax withholding
obligations with respect to the exercise of options by (a) additional
withholding from the optionee's salary, (b) requiring the optionee to pay in
cash, (c) reducing the number of shares of Wickes Voting Common Stock to be
issued or (d) other method selected by the Compensation and Benefits Committee.
Option Grants. The Compensation and Benefits Committee granted options
(other than executive officers) to selected key employees for 23,800 shares of
Wickes Voting Common Stock in May 1997. These options are intended to be
incentive options and vest in equal installments over a three-year period. The
exercise price of these options is $5.00 per share.
In addition, in February 1997 the Compensation and Benefits Committee
granted option for 15,000 and 12,800 shares of Wickes Voting Common Stock to Mr.
Frank and another executive officer of the Company. These options are intended
to qualify as incentive stock options and generally become exercisable on
January 1, 2001 at an exercise price per share of $5.625. Also, in May 1997 the
Compensation and Benefits Committee granted option for 50,000 shares of Wickes
Voting Common Stock to Mr. Krawczyk. This option is intended to qualify as an
incentive stock option and generally becomes exercisable on January 1, 2001 at
an exercise price per share of $5.00.
15
<PAGE> 19
In addition, subject to shareholder approval of the amendment of the
Incentive Plan, the Compensation and Benefits Committee made the following
additional grants to executive officers and other key employees of the Company
in February 1998:
<TABLE>
<CAPTION>
NO. OF SHARES
SUBJECT TO
NAME AND POSITION OPTION GRANTS
----------------- -------------
<S> <C>
J. Steven Wilson............................................ 60,000
Chairman Chief Executive Officer
Kenneth M. Kirschner........................................ 40,000
Vice Chairman
David T. Krawczyk........................................... 55,000
President
Jimmie J. Frank............................................. 12,500
Vice President
All current executive officers as a group................... 196,250
All employees (other than executive officers) as a group.... 228,750
</TABLE>
These options are intended to qualify as incentive stock options (except in
the case of Mr. Wilson, Mr. Kirschner and Mr. Krawczyk) and generally (i) become
exercisable in equal installments on January 1 of 1999, 2000 and 2001 (subject
to the acceleration provisions discussed below) at an exercise price per share
of $3.41, (ii) subject to certain additional limitations, may not be exercised
after ten years from the date of grant, and (iii) are exercisable only within
certain periods after the grantee ceases to be an employee of the Company. These
options become exercisable in full upon the occurrence of certain changes in
control or upon the termination of the grantees' employment by the Company
without cause after December 31, 1998 and become exercisable for 50% of the
subject shares upon the termination of the grantees' employment by the Company
without cause during 1998. These options are not transferable, except by will
and by the laws of descent and distribution.
On February 16, 1998, the date of the grant of the options discussed in the
immediately preceding paragraph, the last sale price of Wickes Voting Common
Stock on the Nasdaq National Stock Market was $3.406. On April 13, 1998, the
last sale price of Wickes Voting Common Stock on the Nasdaq National Stock
Market was $6.75.
Federal Income Tax Consequences. The anticipated federal income tax
consequences in respect of awards of stock options under the Incentive Plan are
generally as described below.
An optionee will not recognize any taxable income at the time a stock
option is granted and the Company will not be entitled to a federal income tax
deduction at that time.
No ordinary income will be recognized by the holder of an incentive option
at the time of exercise. The excess of the fair market value of the shares at
the time of exercise over the aggregate option price will be an adjustment to
alternative minimum taxable income for purposes of the federal 'alternative
minimum tax' at the date of exercise. If the optionee holds the shares for two
years after the date the option was granted and one year after the acquisition
of such shares, the difference between the aggregate option price and the amount
realized upon disposition of the shares will constitute a long term capital gain
or loss, as the case may be, and the Company will not be entitled to a federal
income tax deduction. If the shares are disposed of in a sale,
16
<PAGE> 20
exchange or other 'disqualifying disposition' within two years after the date of
grant or within one year after date of exercise, the optionee will realize
taxable ordinary income in an amount equal to the excess of the fair market
value of the shares purchased at the time of exercise over the aggregate option
price (the bargain purchase element) and the Company will be entitled to a
federal income tax deduction equal to such amount. The amount of any gain in
excess of the bargain purchase element realized upon a 'disqualifying
disposition' will be taxable as a capital gain to the holder. The Company will
not be entitled to a federal income tax deduction for the capital gain amount.
Upon the exercise of a non-incentive option, taxable ordinary income will
be recognized by the holder in an amount equal to the excess of the fair market
value of the shares purchased at the time of such exercise over the aggregate
option price. The Company will be entitled to a corresponding federal income tax
deduction. Upon any subsequent sale of the shares, the optionee will generally
recognize a taxable capital gain or loss based upon the difference between the
per share fair market value at the time of exercise and the per share selling
price at the time of the subsequent sale of the shares.
Registration of Shares. The Company has registered the shares issuable
pursuant to the Incentive Plan under the Securities Act of 1933.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR APPROVAL OF THE AMENDMENT OF
THE 1993 LONG-TERM INCENTIVE PLAN.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
In 1997, the Company paid approximately $925,000 to an affiliate of the
Company's chairman for use of a corporate aircraft and $364,000 to Riverside for
costs related to services provided to the Company during 1997 by certain
employees of Riverside.
In June of 1996, the Company entered into a mortgage lending agreement with
Riverside. Pursuant to this agreement, in exchange for providing home
construction loans to the Company's customers the Company reimbursed $1,045,000
to Riverside for certain start-up expenses. In late 1997, this affiliate's
involvement in the program, and the Company's reimbursement obligation, ceased.
During 1997, the Company paid a law firm in which Mr. Kirschner was a
shareholder $665,000 for legal services provided to the Company.
In February 1998, the Company sold its internet and utilities marketing
operations to Riverside as a result of the determination made by the Company to
discontinue or sell non-core operations. In consideration, the Company received
Riverside's $870,000 three-year unsecured promissory note and Riverside's
agreement to pay ten percent of the future net income of these operations,
subject to a maximum of $429,249 plus interest. The terms of the transaction
were approved by a committee of the disinterested members of the Company's board
of directors.
COMPLIANCE WITH SECTION 16(A) OF THE
SECURITIES EXCHANGE ACT OF 1934
The following reports with respect to the Company filed under Section 16(a)
of the Securities Exchange Act of 1934 during or with respect to 1996 were not
filed on a timely basis: Riverside and one of its subsidiaries each filed late a
Statement of Changes in Beneficial Ownership on Form 4 reporting one
transaction; and Ms. Slacik filed late her Annual Statement of Changes in
Beneficial Ownership with respect to 1997.
17
<PAGE> 21
COMPARISON OF CUMULATIVE TOTAL RETURN
The graph below compares the performance of Wickes Voting Common Stock with
the Nasdaq Stock Market (U.S.) Index (the "Nasdaq Stock Market -- U.S.") and
with a Peer Group Index (as described below) by showing the cumulative total
return, through December 31, 1997, an investor would have received on each from
investing $100 in each on September 30, 1993 (October 15, in the case of Wickes
Voting Common Stock) and reinvesting all dividends received. The Peer Group
Index includes the common stock of the following companies included on a list
compiled by Nasdaq of companies whose common stock is traded on Nasdaq and whose
primary Standard Industrial Classification is Lumber and Other Building
Materials: BMC West Corporation, National Home Centers, Inc., the Company and
Wolohan Lumber Co. This Peer Group Index has been weighted for market
capitalization.
LOGO
18
<PAGE> 22
APPROVAL OF AUDITORS
The Board of Directors recommends approval of the appointment of Coopers &
Lybrand L.L.P., certified public accountants, as the independent auditors of the
Company for the 1998 fiscal year. Representatives of Coopers & Lybrand L.L.P.
are expected to be present at the Meeting. These representatives will have the
opportunity to make a statement if they desire to do so and will be available to
respond to appropriate questions.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR APPROVAL OF THE APPOINTMENT OF
COOPERS & LYBRAND L.L.P. AS INDEPENDENT AUDITORS FOR THE COMPANY.
OTHER MATTERS
The enclosed Proxy confers upon the Proxy Committee discretionary authority
to vote the shares represented thereby in accordance with their best judgment
with respect to any other matters which may come before the Meeting. The Board
of Directors does not know of any such matters; however, if any other matters
properly come before the Meeting, it is the intention of the persons designated
as proxies to vote in accordance with their best judgment on such matters.
SHAREHOLDER PROPOSALS
Securities and Exchange Commission regulations permit shareholders to
submit proposals for consideration at the Company's annual meetings of
shareholders. Any such proposals for the Company's annual meeting of
shareholders to be held in 1999 must be submitted in writing to the Company no
later than December 23, 1998, and must comply with applicable regulations of the
Securities and Exchange Commission in order to be included in the proxy
materials relating to that meeting.
FORM 10-K
UPON WRITTEN REQUEST, THE COMPANY WILL PROVIDE TO EACH SHAREHOLDER OF
RECORD ON APRIL 10, 1998 A COPY OF THE COMPANY'S ANNUAL REPORT ON FORM 10-K FOR
THE FISCAL YEAR ENDED DECEMBER 27, 1997. REQUESTS SHOULD BE DIRECTED TO JAMES A.
HOPWOOD, VICE PRESIDENT -- FINANCE, 706 NORTH DEERPATH DRIVE, VERNON HILLS,
ILLINOIS 60061.
EXPENSES OF SOLICITATION
The cost of soliciting proxies will be borne by the Company. In addition to
the use of the mails, proxies may be solicited personally, or by telephone or by
telegraph, by employees of the Company, without additional compensation. The
Company does not expect to pay any compensation for the solicitation of the
proxies but may reimburse brokers and other persons holding stock in their
names, or in the names of nominees, for their expenses for sending proxy
materials to the principals and obtaining their proxies.
SHAREHOLDERS ARE URGED TO SPECIFY THEIR CHOICES, DATE, SIGN AND RETURN THE
ENCLOSED PROXY IN THE ENCLOSED POSTAGE-PAID ENVELOPE WHETHER OR NOT THEY PLAN TO
ATTEND THE MEETING. SHAREHOLDERS PRESENT AT THE MEETING MAY REVOKE THEIR PROXIES
AND VOTE IN PERSON. PROMPT RESPONSE IS HELPFUL, AND YOUR COOPERATION WILL BE
APPRECIATED.
Dated: April 22, 1998
19
<PAGE> 23
PROXY
WICKES INC.
PROXY FOR ANNUAL MEETING OF SHAREHOLDERS
MAY 18, 1998
The undersigned hereby constitutes and appoints J. Steven Wilson and Kenneth M.
Kirschner, and each of them the undersigned's true and lawful attorneys and
proxies (with full power of substitution in each) (the "Proxy Agents"), to vote
all of the shares of Wickes Inc. owned by the undersigned on April 10, 1998 at
the Annual Meeting of Shareholders of Wickes Inc. to be held at the executive
offices of the Company located at 706 North Deerpath Drive, Vernon Hills,
Illinois 60061 on Monday, May 18, 1998 at 9:00 a.m., Central Daylight Time
(including adjournments), with all powers that the undersigned would possess
if personally present.
(Continued on Reverse Side)
- -------------------------------------------------------------------------------
FOLD AND DETACH HERE
<PAGE> 24
Please mark
your votes as [X]
indicated in
this example
THE BOARD RECOMMENDS A VOTE FOR EACH NOMINEE AND PROPOSAL.
1. Election of Directors:
WITH AUTHORITY WITHHOLD
to vote for all nominees [ ] AUTHORITY [ ]
listed (except as marked to vote for
to the contrary). all nominees listed.
(INSTRUCTION: To withhold authority to vote for any individual nominee, strike
a line through the nominee's name in the list below)
Nominees:
Albert Ernest, Jr.
William H. Luers
Claudia B. Slacik
2. To consider for approval an amendment FOR AGAINST ABSTAIN
to the Company's Amended and Restated [ ] [ ] [ ]
1993 Long-Term Incentive Plan.
3. To approve the appointment of Coopers & FOR AGAINST ABSTAIN
Lybrand L.L.P. as independent auditors for [ ] [ ] [ ]
the Company.
I plan to attend this meeting __________________
Should any other matter requiring a vote of the Shareholders arise,
the above-named Proxy Agents and each of them, are authorized to
vote the share represented by this Proxy as their judgment
indicates in the best interest of Wickes Inc.
IMPORTANT: Please date this proxy and sign exactly as your name or
names appear hereon. If shares are held jointly, both owners must
sign. Executors, administrators, trustees, guardians and others
signing in a representative capacity should give their full titles.
________________________________________________
Signature of Shareholder
________________________________________________
Signature of Shareholder
Dated: _______________________, 1998
PLEASE RETURN THIS PROXY PROMPTLY IN THE ENCLOSED ENVELOPE.
- --------------------------------------------------------------------------------
FOLD AND DETACH HERE
To Our Stockholders:
Whether or not you are able to attend our 1998 Annual Meeting of Stockholders,
it is important that your shares be represented, no matter how many shares you
own. Accordingly, please complete and sign the proxy provided above, detach it
at the perforation, and mail it in the enclosed postage paid envelope.
We look forward to receiving your voted proxy at your earliest convenience.
