<PAGE>
SCHEDULE 14A
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 Section 240.14a-11(c) or Section 240.14a-12
Wickes Inc.
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[_] Fee computed on table below per Exchange Act Rules 14a-6(i)(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 (set forth the amount on which
the filing fee is calculated and state how it was determined):
-------------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
-------------------------------------------------------------------------
(5) Total fee paid:
-------------------------------------------------------------------------
[_] Fee paid previously with preliminary materials.
[_] Check box if any part of the fee is offset as provided by Exchange
Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee
was paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
-------------------------------------------------------------------------
(2) Form, Schedule or Registration Statement No.:
-------------------------------------------------------------------------
(3) Filing Party:
-------------------------------------------------------------------------
(4) Date Filed:
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Notes:
<PAGE>
706 NORTH DEERPATH DRIVE
VERNON HILLS, ILLINOIS 60061
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
April 21, 2000
To Our Shareholders:
You are cordially invited to attend the Annual Meeting of Shareholders of
Wickes Inc. to be held on Thursday, May 18, 2000, at 10:00 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 two members of the Board of Directors for three-year terms and
until their successors have been elected and qualified.
(2) To approve the appointment of Deloitte & Touche LLP as independent
auditors for the Company.
(3) To transact such other business as may properly come before the
meeting.
Shareholders of record at the close of business on April 7, 2000, 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,
[SIGNATURE OF J. STEVEN WILSON]
J. Steven Wilson,
Chairman and Chief Executive Officer
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
----
<S> <C>
General Information........................................................ 1
Securities Outstanding and Voting.......................................... 1
Principal Security Holders and Security Ownership of Management............ 2
Election of Directors...................................................... 3
Board of Directors' Meetings and Compensation.............................. 5
Management................................................................. 6
Report of the Compensation and Benefits Committee.......................... 6
Executive Compensation..................................................... 8
Certain Relationships and Related Transactions............................. 12
Compliance with Section 16(a) of the Securities Exchange Act of 1934....... 13
Comparison of Cumulative Total Return...................................... 14
Approval of Auditors....................................................... 15
Other Matters.............................................................. 15
Shareholder Proposals...................................................... 15
Form 10-K.................................................................. 15
Expenses of Solicitation................................................... 15
</TABLE>
<PAGE>
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 2000 Annual Meeting of Shareholders of the Company
(the "Meeting"). The Meeting will be held on Thursday, May 18, 2000, at 10:00
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 21,
2000.
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 James A. Hopwood, VP--Finance 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.
SECURITIES OUTSTANDING AND VOTING
Only holders of shares of the Company's common stock, par value $.01 per
share ("Wickes Common Stock"), of record at the close of business on April 7,
2000, will be entitled to vote at the Meeting. On that date, 8,245,573 shares
of Wickes Common Stock were outstanding.
Each share of Wickes 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.
<PAGE>
PRINCIPAL SECURITY HOLDERS AND SECURITY OWNERSHIP OF MANAGEMENT
The following table contains information as of February 29, 2000,
concerning beneficial ownership of Wickes Common Stock by persons known by the
Company to own beneficially more than five percent of Wickes Common Stock and
by (i) the Company's directors, (ii) the executive officers of the Company
named in the Summary Compensation Table on page 8 hereof and (iii) all
executive officers and directors of the Company as a group.
The following table also contains information as of February 29, 2000,
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 of Amount and Nature of
Beneficial Ownership Beneficial Ownership
Name and Address of Wickes % of of Riverside % of
of Beneficial Owner Common Stock (1) Class Common Stock (1) Class
- ------------------- -------------------- ----- -------------------- -----
<S> <C> <C> <C> <C>
5% Stockholders:
Riverside Group, Inc.... 3,000,513(2) 36.5 -- --
7800 Belfort Parkway
Jacksonville, Florida
32256
J. Steven Wilson........ 3,145,513(2)(3) 37.6 2,703,696(4) 56.7
7800 Belfort Parkway
Jacksonville, Florida
32256
Imagine Investments,
Inc.................... 1,082,000(5) 13.2 785,173(6) 16.5
8150 North Central
Expressway,
Suite 1901
Dallas, Texas 75206
Harry T. Carneal........ 1,082,000(7) 13.2 785,173(7) 16.5
8150 North Central
Expressway
Suite 1901
Dallas, Texas 75206
Robert T. Shaw.......... 1,457,000(8) 17.7 785,173(8) 16.5
4211 Norbourne Blvd.
Louisville, Kentucky
40207
Wellington Management
Company, LLP........... 685,000 8.3 -- --
75 State Street
Boston, Massachusetts
02109
Willow Creek Capital
Management............. 498,300 6.1 -- --
17 E. Sir Francis Drake
Boulevard
Suite 100
Larkspur, California
94939
Dimensional Fund
Advisors, Inc.......... 471,100 5.7 -- --
1299 Ocean Avenue
Santa Monica,
California 90401
Other Directors and
Named Executive
Officers:
Albert Ernest, Jr....... 42,885(9) * -- --
William H. Luers........ 22,565(10) * -- --
Robert E. Mulcahy III... 9,627(9) * -- --
Frederick H. Schultz.... 150,520(9)(11) 1.8 369,778(12) 7.8
Claudia B. Slacik....... 30,584(9) * -- --
David T. Krawczyk....... 72,790(13) * -- --
George C. Finkenstaedt.. 35,314(14) * -- --
Jimmie J. Frank......... 9,605(15) * -- --
James A. Hopwood........ 9,897(16) * -- --
All directors and
executive officers as a
group
(12 persons)........... 4,986,300(17) 58.5 3,858,647 80.9
</TABLE>
- --------
*Less than 1.0%
2
<PAGE>
(1) Unless otherwise noted, the owner has sole voting and dispositive power.
(2) Essentially all of the shares of Wickes 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 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. A default under any of this indebtedness
could result in a change of control of the Company.
(3) Includes 145,000 shares presently acquirable pursuant to employee stock
options.
(4) Includes 2,543,553 shares held by a corporation controlled by Mr. Wilson.
Essentially all of the voting securities of Riverside beneficially owned
by Mr. Wilson are pledged to secure indebtedness of Mr. Wilson and his
affiliates. A default under this indebtedness could result in a change of
control of the Company.
(5) Imagine Investments, Inc. ("Imagine") is a wholly-owned subsidiary of
Stone Investments, Inc., which is a wholly-owned subsidiary of Stone
Capital, Inc., which is a wholly-owned subsidiary of Stone Holdings,
Inc., which is wholly-owned by the James M. Fail Living Trust, which is
exclusively controlled by James M. Fail.
(6) Includes 785,173 shares presently acquirable by Imagine pursuant to an
option from Mr. Wilson and a corporation controlled by Mr. Wilson.
(7) Includes beneficial ownership by Imagine, of which Mr. Carneal is a
director and executive officer. Mr. Carneal is also an executive officer
and director of Imagine's parent corporations.
(8) Includes beneficial ownership by Imagine, of which Mr. Shaw is President.
(9) Includes 9,002 shares presently acquirable pursuant to director stock
options.
(10) Includes 7,002 shares presently acquirable pursuant to director stock
options.
(11) Includes 5,027 shares owned for the benefit of Mr. Schultz's grandchild.
(12) Includes 42,500 shares held by Mr. Schultz's spouse and 76,454 shares
owned for the benefit of Mr. Schultz's grandchildren.
(13) Includes 61,663 shares presently acquirable pursuant to employee stock
options.
(14) Includes 30,833 shares presently acquirable pursuant to employee stock
options and 3,714 shares allocated to Mr. Finkenstaedt's account in the
Company's 401(k) plan.
(15) Includes 9,167 shares presently acquirable pursuant to employee stock
options and 438 shares allocated to Mr. Frank's account in the Company's
401(k) plan.
(16) Includes 9,167 shares presently acquirable pursuant to employee stock
options and 730 shares allocated to Mr. Hopwood's account in the
Company's 401(k) plan.
(17) Includes 298,840 shares acquirable pursuant to presently exercisable
options.
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 eight 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 I expires at the Meeting. The term of office for directors
in Class II expires in 2001 and that for Class III directors in 2002.
Unless authority is withheld, the Proxy Committee will vote for the
election of the two nominees named below as directors of the Company. Each
nominee has consented to being named as such in this Proxy Statement
3
<PAGE>
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 two
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>
J. Steven Wilson...................................... 56 1991
Robert T. Shaw........................................ 65 1998
</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 six
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. Shaw has been president and a director of Imagine for approximately
three years.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR EACH NOMINEE.
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>
Harry T. Carneal........................ 47 Director (Class III) 1998
Albert Ernest, Jr....................... 69 Director (Class II) 1993
William H. Luers........................ 70 Director (Class II) 1995
Robert E. Mulcahy III................... 63 Director (Class III) 1988
Frederick H. Schultz.................... 71 Director (Class III) 1993
Claudia B. Slacik....................... 43 Director (Class II) 1992
</TABLE>
Mr. Carneal has been president and a director of Stone Capital, Inc. and an
executive officer and director of its parent and subsidiary corporations,
including Imagine, for more than the past six years. Stone Capital, Inc. is a
privately-held investment company. Imagine beneficially owns approximately
13.2 percent of the outstanding shares of Wickes Common Stock.
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 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 since February 1, 1999 president and chairman of the United Nations
Association of the United States of America, a not-for-profit
4
<PAGE>
organization. Prior to that time, Mr. Luers was 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 Kemper international and domestic mutual
funds.
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 Trust.
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.
Ms. Slacik has been a director of the Company since June 1992. For more
than the past six years, Ms. Slacik has held senior positions with Citigroup
Inc., including most recently Managing Director.
BOARD OF DIRECTORS' MEETINGS AND COMPENSATION
The Board of Directors met eight times in 1999; all directors attended more
than 75 percent of all meetings of the Board of Directors and the committees
on which they served, except for Mr. Shaw who attended 63% of all meetings of
the Board of Directors..
The Company has standing Audit, Compensation and Benefits, and Related
Party Committees. The members of the Audit Committee are Messrs. Schultz
(chair) and Ernest and Ms. Slacik. The Audit Committee, which met formally
three times in 1999, 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 four times in 1999, are Messrs. Luers (chair), Carneal and
Mulcahy. The Compensation and Benefits Committee establishes and approves all
elements of the compensation of the Chief Executive Officer and other senior
executive 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 1999, directors received $30,000 per year for their services as
directors. Directors will receive $35,000 for their services in 2000. In
addition, the chairs of the Audit, Compensation and Benefits and Related Party
Committees received $4,000 per year, and the other members of these committees
received $3,000 each.
Outside directors also participate in the 1993 Director Incentive Plan. For
information concerning this plan, including stock options granted during 1999
and 2000 to directors other than Messrs. Wilson, Carneal and Shaw see
"Executive Compensation--Employee Plans--Director Incentive Plan."
5
<PAGE>
MANAGEMENT
Set forth below is information regarding the executive officers of the
Company:
<TABLE>
<CAPTION>
Executive
Name Age Position Officer Since
---- --- -------- -------------
<S> <C> <C> <C>
J. Steven Wilson........ 56 Chairman and Chief Executive Officer 1991
David T. Krawczyk....... 43 President and Chief Operating Officer 1996
Russell J. Bonaguidi.... 49 Vice President--Controller 2000
George C. Finkenstaedt.. 48 Vice President--Merchandising 1990
Jimmie J. Frank......... 45 Vice President--Merchandising and Marketing 1997
James A. Hopwood........ 38 Vice President--Finance 1998
</TABLE>
For information regarding Mr. Wilson, see "Election of Directors."
Mr. Krawczyk joined the Company in December 1996 as Senior Vice President--
Operations and was appointed 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. Bonaguidi joined the Company in March 2000 as Vice President--
Controller. From November 1998 to October 1999, Mr. Bonaguidi was associated
with Morgan Stanley Dean Witter & Co. as Principal, Internal Reporting. From
April 1994 to November 1998, Mr. Bonaguidi was Vice President and Controller
of SPS Transaction Services, Inc., which at the time was a majority owned
subsidiary of Morgan Stanley Dean Witter & Co.
Mr. Finkenstaedt has been associated in various capacities with the Company
and its predecessor since 1979. Mr. Finkenstaedt was appointed Vice President
in 1990 and has held various executive positions with the Company in
Operations and Merchandising.
Mr. Frank joined the Company in January 1997 and was appointed Vice
President 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,
real estate 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 Company and
its predecessor from 1983 until 1990.
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.
6
<PAGE>
Base Salary
The base salary component of an executive's compensation has historically
been established, based upon performance, experience and other factors, within
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.
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 1999, the incentive bonuses of Mr. Wilson and the
other executive officers were solely dependent upon the Company's achieving
specific performance objectives for return on capital employed and certain
strategic objectives. Based upon the Company's performance relative to these
objectives, Mr. Wilson and the other executive officers were paid 1999
incentive bonuses equal to 176% of their respective target bonuses.
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 1999, the Compensation and Benefits Committee awarded options for an
aggregate of 116,475 shares of Wickes Common Stock to executive officers and
other selected key employees, including options for 15,000 shares to Mr.
Wilson, 15,000 shares to Mr. Krawczyk, 7,500 shares to Mr. Finkenstaedt, 2,500
shares to Mr. Frank and 4,100 shares to Mr. Hopwood. These options have an
exercise price of $4.875. The allocation of these stock options was based
generally upon level of responsibility and, to a lesser extent, subjective
factors.
In addition, in February, 2000, the Committee awarded options with an
exercise price of $7.00 per share for an aggregate of 64,500 shares of Wickes
Common Stock to executive officers and other key employees, including options
for 20,000 shares to Mr. Krawczyk, 10,000 shares to Mr. Finkenstaedt, 10,000
shares to Mr. Frank and 2,500 shares to Mr. Hopwood.
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 $1 million compensation limit under section 162(m) on
the Internal Revenue Code.
William H. Luers
Harry T. Carneal
Robert E. Mulcahy III
7
<PAGE>
EXECUTIVE COMPENSATION
The Summary Compensation Table below summarizes the compensation paid in
the years indicated to the Company's Chief Executive Officer and to each of
the other four most highly compensated executive officers of the Company who
were serving as executive officers at December 25, 1999.
Summary Compensation Table
<TABLE>
<CAPTION>
Long-Term
Compensation
---------------------
Annual Compensation (1) Awards
------------------------------------ --------------------- All Other
Name and Principal Salary Bonus Other Annual Securities Underlying Compensation
Position Year ($) ($) Compensation(2) Options/SARs (#) ($)(3)
- ------------------ ---- ------- ------- --------------- --------------------- ------------
<S> <C> <C> <C> <C> <C> <C>
J. Steven Wilson........ 1999 497,300 528,000 10,300 15,000 10,600
Chief Executive Officer 1998 473,400 -- 17,300 60,000 10,600
1997 473,400 -- 7,200 -- 10,300
David T. Krawczyk....... 1999 371,300 330,000 38,400 15,000 8,000
President 1998 303,000 95,300 46,800 55,000 8,000
1997 259,900 -- 70,200 50,000 6,600
George C. Finkenstaedt.. 1999 183,500 138,500 3,100 7,500 6,300
Vice President 1998 171,700 76,000 1,500 12,500 5,700
1997 164,400 24,000 2,800 -- 8,800
Jimmie J. Frank......... 1999 183,500 115,500 53,900 2,500 4,000
Vice President 1998 167,700 85,000 75,000 12,500 2,200
1997 136,800 75,000 81,200 15,000 --
James A. Hopwood........ 1999 127,800 83,200 -- 4,100 3,400
Vice President 1998 105,600 28,100 -- 10,000 2,900
</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 1999: reimbursement for taxes with
respect to certain personal benefits and with respect to the taxable
portion of long-term disability insurance premiums paid by the Company
($8,900 for Mr. Wilson, $5,100 for Mr. Krawczyk, $1,900 for Mr. Frank and
$3,100 for Mr. Finkenstaedt); the taxable portion of reimbursements for
living, travel and personal expenses while away from home on Company
business ($2,000 for Mr. Wilson, $18,600 for Mr. Krawczyk and $26,100 for
Mr. Frank); and reimbursements for taxes with respect to these taxable
living travel and personal expenses ($1,400 for Mr. Wilson, $14,600 for
Mr. Krawczyk and $25,900 for Mr. Frank).
Includes for 1998: reimbursement for taxes with respect to certain personal
benefits and with respect to the taxable portion of long-term disability
insurance premiums paid by the Company ($17,300 for Mr. Wilson, $4,700 for
Mr. Krawczyk, $1,500 for Mr. Frank and $1,500 for Mr. Finkenstaedt), the
taxable portion of reimbursements for living, travel and personal expenses
while away from home on Company business ($25,100 for Mr. Krawczyk and
$39,300 for Mr. Frank); and reimbursements for taxes with respect to these
taxable living travel and personal expenses ($17,000 for Mr. Krawczyk and
$34,200 for Mr. Frank).
Includes for 1997: reimbursements for taxes with respect to certain
personal benefits and with respect to the taxable portion of long-term
disability insurance premiums paid by the Company ($7,200 for Mr. Wilson,
8
<PAGE>
$3,100 for Mr. Krawczyk and $1,400 for Mr. Finkenstaedt); 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, $2,000 for Mr. Finkenstaedt and $43,400 for Mr. Frank); and
reimbursements for taxes with respect to these taxable living, travel and
other personal expenses ($29,500 for Mr. Krawczyk, $1,400 for Mr.
Finkenstaedt and $37,800 for Mr. Frank).
(3) All Other Compensation includes for 1999: payment of premiums for long-
term disability insurance ($10,600 for Mr. Wilson, $4,000 for Mr. Krawczyk
and $2,300 for Mr. Finkenstaedt); and the Company's contribution to the
executives' accounts under the Company's 401(k) plan ($4,000 for Mr.
Krawczyk, $4,000 for Mr. Frank, $4,000 for Mr. Finkenstaedt and $3,400 for
Mr. Hopwood).
Includes for 1998: payment of premiums for long-term disability insurance
($10,600 for Mr. Wilson, $4,000 for Mr. Krawczyk and $2,200 for Mr.
Finkenstaedt); and the Company's contribution to the executives' accounts
under the Company's 401(k) plan ($4,000 for Mr. Krawczyk, $2,200 for Mr.
Frank, $3,500 for Mr. Finkenstaedt and $2,900 for Mr. Hopwood).
Includes for 1997: payment of premiums for long-term disability insurance
($10,300 for Mr. Wilson, $4,000 for Mr. Krawczyk and $2,100 for Mr.
Finkenstaedt); the Company's contributions to the executives' accounts
under the Company's 401(k) plan ($4,000 for Mr. Finkenstaedt); and
reimbursement of $2,600 to Mr. Krawczyk for certain moving expenses.
Option Grants in Last Fiscal Year
The following table contains information regarding grants of options during
fiscal 1999 to each of the named executive officers.
<TABLE>
<CAPTION>
Potential
Realizable
Value at Assumed
Annual Rates of
Number of % of Total Stock Price
Securities Options/SARs Exercise Appreciation
Underlying Granted to or base for Option Term
Options/SARs Employees in price Expiration ----------------
Name Granted Fiscal Year ($/Sh) Date 5% ($) 10% (%)
- ---- ------------ ------------ -------- ---------- ------- --------
<S> <C> <C> <C> <C> <C> <C>
J. Steven Wilson........ 15,000 12.9 4.875 2/12/09 46,000 117,500
David T. Krawczyk....... 15,000 12.9 4.875 2/12/09 46,000 117,500
George C. Finkenstaedt.. 7,500 6.4 4.875 2/12/09 23,000 58,300
Jimmie J. Frank......... 2,500 2.1 4.875 2/12/09 7,700 19,400
James A. Hopwood........ 4,100 3.5 4.875 2/12/09 12,600 31,900
</TABLE>
Aggregated Option Exercises in Last Fiscal Year and FY-End Option Values
The following table contains information regarding the values of certain
unexercised options to purchase shares of Wickes Voting Common Stock held by
the named executive officers at the end of fiscal 1999. No options were
exercised by these persons in fiscal 1999.
<TABLE>
<CAPTION>
Number of Securities Value of Unexercised
Underlying Unexercised In-the-Money
Options/SARs at FY-End (#) Options/SARs at FY-End ($)
-------------------------- --------------------------
Name Exercisable/Unexercisable Exercisable/Unexercisable
- ---- -------------------------- --------------------------
<S> <C> <C>
J. Steven Wilson.......... 120,000/105,000 35,600/109,200
David T. Krawczyk......... 18,331/131,669 32,600/ 99,300
George C. Finkenstaedt.... 24,167/ 25,833 7,400/ 23,800
Jimmie J. Frank........... 4,167/ 25,833 7,400/ 15,600
James A. Hopwood.......... 4,467/ 10,833 6,300/ 13,100
</TABLE>
9
<PAGE>
Employee Plans
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 (other than Messrs.
Carneal and Shaw) of an option to acquire 1,000 shares of Wickes Common Stock
on January 1 of each year. Accordingly, options for 1,000 shares with an
exercise price of $4.25 and $5.278 were issued in January 1999, and January
2000, respectively, to each of these 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. A discretionary grant of options for 2000 shares
with an exercise price of $7.00 was made in February 2000 to each of these
directors.
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 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.
1993 Long-Term Incentive Plan
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,
effective upon approval of the Company's shareholders at the 1998 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 Messrs. Leurs, Carneal and Mulcahy. The members of the
10
<PAGE>
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. A maximum of 50,000 shares of Wickes Common Stock may
be the subject of award grants to any participant in any calendar year.
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 3,800 employees of the
Company are currently eligible to participate.
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 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 Common Stock) per
share of Wickes 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 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 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 Common Stock to be issued or
(d) other method selected by the Compensation and Benefits Committee.
Option Grants. For information concerning stock option grants under the
Incentive Plan in and early 2000, see "Report of the Compensation and Benefit
Committee--Long-Term Incentives."
401(k) Plan
The Company has in effect a savings and retirement plan (the "401(k)
Plan"). All employees who are at least 18 years of age and have met certain
service requirements are eligible to participate in the 401(k) Plan. The
11
<PAGE>
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 non highly compensated eligible employee may elect to make
before-tax contributions of from 2% to 15% 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. Highly
compensated eligible employees (as defined by the Code) are limited to from 2%
to 8% of his or her before-tax contributions or after-tax contributions 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 or
her 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 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 Common Stock. Shares of Wickes 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.
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 amended in February 2000 to extend the covered period through
December 31, 2000. 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 the covered 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 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).
At March 31, 2000, six of the Company's current key employees have been
selected by the Committee to participate in the Stay Plan. The bonus
percentage of Mr. Krawczyk under the Stay Plan is 200%, and that of Messrs.
Frank, Finkenstaedt and Hopwood is 100%.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
In 1999, the Company paid approximately $509,000 to an affiliate of the
Company's chairman for use of a corporate aircraft and $150,000 to Riverside
for costs related to services provided to the Company during 1999 by certain
employees of Riverside.
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
12
<PAGE>
terms of the transaction were approved by a committee of the disinterested
members of the Company's Board of Directors. At December 25, 1999, the
principal balance of the promissory note was $466,062 and Riverside was
delinquent with respect to required payments of $82,486 of principal and
interest. The committee of disinterested directors has approved a modification
of this note, pursuant to which delinquent interest was paid in March 2000,
interest thereafter will be paid quarterly, and quarterly principal payments
will resume in March 2001.
In early 2000 the Company entered into an agreement with Buildscape, Inc.,
an entity controlled by Riverside and Imagine, pursuant to which the Company
and Buildscape, Inc. are jointly conducting a pilot internet distribution
program.
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 1999 were not
filed on a timely basis: Annual Statements of Changes in Beneficial Ownership
on Form 5 were inadvertently filed several days (approximately two months in
the case of the Company's chairman) late on behalf of the Company's chairman
and four of the Company's other officers and five of the Company's other
directors.
13
<PAGE>
COMPARISON OF CUMULATIVE TOTAL RETURN
The graph below compares the performance of Wickes 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, 1999, an investor would have received on each from
investing $100 in each on January 1, 1995) 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.
Performance Graph
Building
Materials
NASDAQ WIKS Composite
-------- ------- ---------
30-Dec-1994 100.0 100.0 100.0
29-Dec-1995 139.9 48.8 81.7
31-Dec-1996 171.7 40.2 74.7
31-Dec-1997 208.8 31.7 65.9
31-Dec-1998 291.6 41.5 74.1
31-Dec-1999 541.2 52.4 69.4
14
<PAGE>
APPROVAL OF AUDITORS
The Board of Directors recommends approval of the appointment of Deloitte &
Touche LLP, certified public accountants, as the independent auditors of the
Company for the 2000 fiscal year. Representatives of Deloitte & Touche LLP 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
DELOITTE & TOUCHE LLP 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 2001 must be submitted in writing to the Company no
later than December 23, 2000, 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 7, 2000 a copy of the Company's Annual Report on Form 10-K for
the fiscal year ended December 25, 1999. 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 21, 2000
15
<PAGE>
- -------------------------------------------------------------------------------
PROXY
WICKES INC.
PROXY FOR ANNUAL MEETING OF SHAREHOLDERS
MAY 18, 2000
The undersigned hereby constitutes and appoints J. Steven Wilson and James A.
Hopwood, 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 7,
2000 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 Tuesday, May 18, 2000 at 10:00 a.m., Central Daylight
Time (including adjournments), with all powers that the undersigned would pos-
sess if personally present.
(Continued on Reverse Side)
- -------------------------------------------------------------------------------
. FOLD AND DETACH HERE .
<PAGE>
- --------------------------------------------------------------------------------
Please mark your votes as indicated in this example [X]
The Board recommends a vote FOR each nominee and proposal.
1. Election of Directors:
WITH AUTHORITY
to vote for all nominees
listed (except as marked [_]
to the contrary).
WITHHOLD AUTHORITY
to vote for [_]
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:
J. Steven Wilson
Robert T. Shaw
2. To approve the appointment of Deloitte & Touche LLP as independent auditors
for the Company.
FOR AGAINST ABSTAIN
[_] [_] [_]
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 shares repre-
sented by this Proxy as their judgment indicates is in the best interest of
Wickes Inc.
IMPORTANT: Please date this proxy and sign exactly as your name or names ap-
pear hereon. If shares are held jointly, both owners must sign. Executors,
administrators, trustees, guardians and others signing in a representative ca-
pacity should give their full titles.
- -------------------------------------------------------------------------------
Signature of Shareholder
- -------------------------------------------------------------------------------
Signature of Shareholder
Dated: ________________________ , 2000
PLEASE RETURN THIS PROXY PROMPTLY IN THE ENCLOSED ENVELOPE.
- --------------------------------------------------------------------------------
. FOLD AND DETACH HERE .
<PAGE>
- --------------------------------------------------------------------------------
To Our Stockholders:
Whether or not you are able to attend our 2000 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.
