<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
UNIVERSAL FOREST PRODUCTS
- -------------------------------------------------------------------------------
(Name of Registrant as Specified in Its Charter)
UNIVERSAL FOREST PRODUCTS
- -------------------------------------------------------------------------------
(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:
- --------------------------------------------------------------------------------
<PAGE> 2
UNIVERSAL FOREST PRODUCTS, INC.
NOTICE OF ANNUAL MEETING
UNIVERSAL FOREST PRODUCTS, INC. 2801 East Beltline NE Grand Rapids, Michigan
49525
March 16, 1998
The Annual Meeting of Shareholders of Universal Forest Products, Inc. will be
held in the Continental Ballroom at the Amway Grand Plaza Hotel, 187 Monroe NW,
Grand Rapids, Michigan, on Wednesday, April 22, 1998, at 8:30 a.m. local time
(registration begins at 8:00 a.m.) for the following purposes:
(1) Election of two directors for three-year terms expiring in 2001.
(2) The transaction of such other business as may properly come before the
meeting.
Shareholders of record at the close of business on March 1, 1998, are entitled
to notice of, and to vote at the meeting.
A copy of the Annual Report to Shareholders for the year ended December 27,
1997, is being mailed to you concurrently with this Notice.
By Order of the Board of Directors
Matthew J. Missad, Secretary
YOUR VOTE IS IMPORTANT. EVEN IF YOU PLAN TO ATTEND THE MEETING,
PLEASE SIGN, DATE AND RETURN THE ENCLOSED PROXY PROMPTLY.
<PAGE> 3
ANNUAL MEETING OF SHAREHOLDERS
UNIVERSAL FOREST PRODUCTS, INC. 2801 East Beltline NE Grand Rapids, Michigan
49525
March 16, 1998
PROXY STATEMENT
SOLICITATION OF PROXIES. This Proxy Statement and the enclosed Proxy are being
furnished to holders of Common Stock, no par value, of Universal Forest
Products, Inc. (the "Company"), in connection with the solicitation by the Board
of Directors of proxies for use at the Annual Meeting of Shareholders to be held
on April 22, 1998, and at any adjournment of that meeting. The annual meeting
will be held in the Continental Ballroom of the Amway Grand Plaza Hotel, 187
Monroe NW, Grand Rapids, Michigan, at 8:30 a.m. local time. Registration for the
meeting begins at 8:00 a.m.
If a Proxy in the enclosed form is properly executed and returned to the
Company, the shares represented by the Proxy will be voted at the annual meeting
and at any adjournment thereof. If a shareholder specifies a choice, the Proxy
will be voted as specified. If no choice is specified, the shares represented by
the Proxy will be voted for the election of all nominees named in the Proxy
Statement, and in accordance with the judgment of the persons named as proxies
with respect to any other matter which may come before the meeting. A Proxy may
be revoked at any time before it is exercised by written notice delivered to the
Secretary of the Company, executing a subsequent Proxy or attending the annual
meeting and voting in person.
The cost of the solicitation of Proxies will be borne by the Company. In
addition to the use of the mails, Proxies may be solicited personally or by
telephone or facsimile by regular employees of the Company without additional
compensation. The Company does not intend to pay any compensation for the
solicitation of Proxies, except that brokers, nominees, custodians, and other
fiduciaries will be reimbursed by the Company for their expenses in connection
with sending proxy materials to beneficial owners and obtaining their Proxies.
VOTING SECURITIES. Holders of record of Common Stock at the close of business on
the record date for the annual meeting, March 1, 1998, will be entitled to vote
at the annual meeting. As of March 1, 1998, there were 17,576,822 shares of
Common Stock outstanding. Shareholders are entitled to one vote for each share
of Common Stock registered in their names at the close of business on March 1,
1998. Votes cast at the meeting or submitted by Proxy will be counted by
inspectors of the meeting who will be appointed by the Company.
ELECTION OF DIRECTORS. The Company's Articles of Incorporation provide that the
Board of Directors, which consists of seven members, shall be divided into three
classes, as equal in number as possible, with the classes to hold office for
staggered terms of three years each. In accordance with the recommendation of
the Nominating Committee, the Board of Directors has nominated incumbent
directors William G. Currie and Philip M. Novell for re-election as directors
for three-year terms expiring at the 2001 annual meeting.
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<PAGE> 4
Unless otherwise directed by a shareholder's Proxy, the persons named as proxy
holders in the accompanying Proxy will vote for the above-named nominees. If a
nominee is not available for election as a director at the time of the annual
meeting (a situation which is not now anticipated), the Board of Directors may
designate a substitute nominee, in which case the accompanying Proxy will be
voted for the substituted nominee.
A vote of the shareholders holding a plurality of the shares present in person
or represented by proxy is required to elect directors. Accordingly, the two
individuals who receive the greatest number of votes cast at the meeting will be
elected as directors. For purposes of counting votes on the election of
directors, abstentions, broker non-votes, and shares otherwise withheld from
voting will not be counted as shares voted, and will not have a bearing on the
outcome of the election.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE ELECTION OF ALL PERSONS
NOMINATED BY THE BOARD.
The following table provides certain biographical information for each person
who is nominated for election as a director at the annual meeting and for each
person who is continuing as an incumbent director.
................................................................................
<TABLE>
<CAPTION>
NAMES, (AGES), POSITIONS AND BACKGROUNDS OF
DIRECTORS AND NOMINEES SERVICE AS A DIRECTOR
------------------------------------------- ---------------------
<S> <C>
Nominees for Terms Expiring in 2001
WILLIAM G. CURRIE (50) is the President and Chief Director since 1978.
Executive Officer of the Company. He joined the Company
in 1971, serving as a Salesman, General Manager, Vice
President, and Executive Vice President from 1971 to
1983. From 1983 to 1990, Mr. Currie was President of
Universal Forest Products, Inc. and since 1989 has been
the Chief Executive Officer of the Company.
PHILIP M. NOVELL (59) has been General Sales Manager for Director since 1993.
the Ford Division of Ford Motor Company since 1989. Member of Audit Committee.
Prior to that time, he was the Ford Division's General
Marketing Manager. Mr. Novell also serves on the Board
of Directors of the Detroit Visitors Council.
</TABLE>
2
<PAGE> 5
<TABLE>
<CAPTION>
NAMES, (AGES), POSITIONS AND BACKGROUNDS OF
DIRECTORS AND NOMINEES SERVICE AS A DIRECTOR
------------------------------------------- ---------------------
<S> <C>
Incumbent Directors -- Terms Expiring in 2000
PETER F. SECCHIA (60) joined the Company in 1962, and Director since 1967.
has been the Chairman of the Board since January of Chairman of Nominating
1993. From 1971 until 1989, Mr. Secchia was the Committee.
President, Chief Executive Officer, and Chairman of the
Company. From 1989 until January of 1993, Mr. Secchia
served as U.S. Ambassador to Italy. Mr. Secchia also
serves as a director of Old Kent Financial Corporation.
RICHARD M. DEVOS (72) is a Co-founder and Former Director since 1993.
President of Amway Corporation, and its affiliates, in Member of Compensation
Ada, Michigan, and principal owner of RDV Sports, Inc. Committee.
JOHN W. GARSIDE (58) is the President and Treasurer of Director since 1993.
Woodruff Coal Company, Kalamazoo, Michigan. Mr. Garside Chairman of Compensation
also serves as a Director of Arcadia Bank and Trust Committee.
Company, and a Director of PRAB, Inc.
Incumbent Directors -- Terms Expiring in 1999
LOUIS A. SMITH (58) is a Partner in the law firm of Director since 1993.
Smith and Johnson, Attorneys, P.C., of Traverse City, Chairman of Audit Committee.
Michigan. Mr. Smith also serves as a director of Empire
National Bank, and as a Trustee for the Interlochen
Center for the Arts.
JOHN C. CANEPA (67) is a Consulting Principal for Crowe Director since 1996.
Chizek and Company, LLP, of Grand Rapids, Michigan. Mr. Member of Compensation
Canepa retired as Chairman of the Board of Old Kent Committee.
Financial Corporation on November 1, 1995, with whom he
had been affiliated since its formation in 1972. Mr.
Canepa also serves on the boards of Thorn Apple Valley,
Inc. and Foremost Corporation of America.
</TABLE>
...............................................................................
The Board of Directors has an Audit Committee that recommends to the Board of
Directors the selection of independent accountants; approves the nature and
scope of services to be performed by the independent accountants and reviews the
range of fees for such services; confers with the independent accountants and
reviews the results of the annual audit; reviews with the independent
accountants the Company's internal auditing, accounting and financial controls;
and reviews policies and practices regarding compliance with laws and conflicts
of interest. During 1997, the Audit Committee held two formal meetings.
The Board of Directors has a Nominating Committee that is responsible for
recommending to the Board suitable candidates for nomination for positions on
the Board of Directors and committees
3
<PAGE> 6
of the Board of Directors. During 1997, the Nominating Committee held one
meeting. The Nominating Committee will consider nominees recommended by
shareholders, provided that any recommendations are submitted in writing to the
Chairman of the Nominating Committee at the address of the Company, on or before
the 30th day preceding the date of the annual meeting, including a description
of the proposed nominee, his or her consent to serve as a director, and other
information regarding the proposed nominee as would be required to be included
in a proxy statement filed under the Exchange Act.
The Board of Directors has a Compensation Committee that is responsible for
reviewing and recommending to the Board of Directors the timing and amount of
compensation for key employees, including salaries, bonuses, and other benefits.
The Compensation Committee also is responsible for administering the Company's
stock option and other equity-based incentive plans, recommending retainer and
attendance fees for non-employee directors, reviewing compensation plans and
awards as they relate to key employees, and administering the Company's
retirement plans. During 1997, the Compensation Committee held two meetings.
During the Company's last fiscal year, there were four regular meetings of the
Board of Directors, and the Board took action by unanimous written consent on
two occasions. Each of the directors, except Mr. DeVos who had major heart
transplant surgery, attended 75% or more of the aggregate number of meetings of
the Board of Directors and meetings of committees on which they were eligible to
attend.
COMPENSATION OF DIRECTORS. Directors who are also employees of the Company
receive no annual retainer and are not compensated for attendance at Board or
committee meetings. Directors who are not employees of the Company receive a
$10,000.00 annual retainer fee, plus $500.00 for attendance at each regular and
special meeting of the Board of Directors and each committee meeting held on a
day other than the day of a Board meeting. Directors receive no compensation for
attendance at a committee meeting held on the day of a Board meeting.
Beginning in 1997, the Company instituted a Directors' Stock Grant Program. In
lieu of a cash increase in the amount of the Directors' fees, each outside
Director is granted 100 shares of stock for each Board meeting attended, up to a
maximum of 400 shares per year. These shares will be issued from the authorized
but unissued shares of the Company.
Each outside Director has the opportunity to participate in the Director
Retainer Stock Plan. The Director Retainer Stock Plan, approved by shareholders
in April 1994, provides that each Director may elect to receive Company stock,
on a deferred basis, in lieu of cash compensation for such Director's retainer
and meeting fees. In addition, Directors receive reimbursement of ordinary and
necessary expenses to attend meetings. The Chairmen of the Audit, Compensation,
and Nominating Committees do not receive additional compensation.
4
<PAGE> 7
OWNERSHIP OF COMMON STOCK. The following table sets forth information as to each
shareholder known to the Company to have been the beneficial owner of more than
five percent (5%) of the Company's outstanding shares of Common Stock as of
March 1, 1998:
................................................................................
<TABLE>
<CAPTION>
NAME AND ADDRESS OF AMOUNT AND NATURE OF PERCENT
BENEFICIAL OWNER BENEFICIAL OWNERSHIP(1) OF CLASS(2)
------------------- ----------------------- -----------
<S> <C> <C>
Peter F. Secchia 3,972,219(3) 22.6%
2801 East Beltline NE
Grand Rapids, MI 49525
William G. Currie 885,097(4) 5.0%
2801 East Beltline NE
Grand Rapids, MI 49525
</TABLE>
................................................................................
(1) Except as otherwise indicated by footnote, each named person has sole voting
and investment power with respect to the shares indicated.
(2) Shares outstanding for this calculation include 13,401 shares which are
subject to issuance under the Director Retainer Stock Plan, and 7,080 shares
which are subject to issuance under a Deferred Compensation Plan.
(3) Includes 50,000 shares owned by Mr. Secchia's wife. Includes 363,892 shares
held by a Grantor Retained Annuity Trust of which Mr. Secchia is the
beneficiary. Includes 365,213 shares held by a family Limited Liability Company
of which Mr. Secchia is a member. Includes 1,200,000 shares held by a family
limited partnership of which Mr. Secchia is a partner. Also includes 100,000
shares held by a family foundation.
(4) Includes 349,332 shares held by partnerships of which Mr. Currie is a
general partner. The Partnership Agreements provide that Mr. Currie has the
authority to vote all of the shares held by the partnership. Each partner is
deemed to have beneficial ownership of all the shares held by these
partnerships. Excludes shares held by the Company's Profit Sharing Trust, except
for 91,770 shares allocated to Mr. Currie's account. Mr. Currie, as a Trustee,
disclaims beneficial ownership of all other shares held by the Trust.
SECURITIES OWNERSHIP OF MANAGEMENT. The following table contains information
with respect to ownership of the Company's Common Stock by all directors,
nominees for election as director, executive officers named in the tables under
the caption "Executive Compensation," and all executive officers and directors
as a group. The information in this table was furnished by the
5
<PAGE> 8
Company's officers, directors, and nominees for election of directors, and
represents the Company's understanding of circumstances in existence as of March
1, 1998.
................................................................................
<TABLE>
<CAPTION>
AMOUNT AND NATURE OF PERCENT
NAME OF BENEFICIAL OWNER BENEFICIAL OWNERSHIP(1) OF CLASS(2)
------------------------ ----------------------- -----------
<S> <C> <C>
Peter F. Secchia 3,972,219(3) 22.6%
William G. Currie 885,097(4)(5) 5.0%
Michael B. Glenn 482,272(4) 2.7%
James H. Ward 403,732(4) 2.3%
Robert K. Hill 342,583(4) 1.9%
Richard M. DeVos 25,000 *
John W. Garside 23,550 *
Louis A. Smith 16,541(6) *
John C. Canepa 9,152(6) *
Philip M. Novell 7,008(6) *
All directors and executive officers as a group
(14 persons) 5,480,781(4)(6) 31.2%
</TABLE>
................................................................................
* Less than one percent (1%).
(1) Except as otherwise indicated by footnote, each named person has sole voting
and investment power with respect to the shares indicated.
(2) Shares outstanding for this calculation include 13,401 shares which are
subject to issuance under the Director Retainer Stock Plan, and 7,080 shares
which are subject to issuance under a Deferred Compensation Plan.
(3) Includes 50,000 shares owned by Mr. Secchia's wife. Includes 363,892 shares
held by a Grantor Retained Annuity Trust of which Mr. Secchia is the
beneficiary. Includes 365,213 shares held by a family Limited Liability Company
of which Mr. Secchia is a member. Includes 1,200,000 shares held by a family
limited partnership of which Mr. Secchia is a partner. Also includes 100,000
shares held by a family foundation.
(4) Twenty-four current and former employees of the Company, including Messrs.
Currie, Ward, Glenn, and Hill, along with other executive officers of the
Company, are partners of a general partnership that owns 300,000 shares of the
Company's Common Stock. The terms of this Partnership Agreement provide that Mr.
Currie has the authority to vote all the shares held by the partnership. Each
partner is deemed to have beneficial ownership of all the shares held by this
partnership.
(5) Includes 49,332 shares held by a partnership of which Mr. Currie is a
general partner. The Partnership Agreement provides that Mr. Currie has the
authority to vote all of the shares held by the partnership. Each partner is
deemed to have beneficial ownership of all the shares held by this partnership.
Excludes shares held by the Company's Profit Sharing Trust, except for 91,770
shares allocated to Mr. Currie's account. Mr. Currie, as a Trustee, disclaims
beneficial ownership of all other shares held by the Trust.
(6) Includes shares obtained through the Company's Director Retainer Stock Plan
for Mr. Smith, Mr. Novell, and Mr. Canepa who hold 6,141 shares, 5,508 shares,
and 1,752 shares through such plan, respectively.
6
<PAGE> 9
EXECUTIVE COMPENSATION
SUMMARY COMPENSATION TABLE. The following Summary Compensation Table shows
certain information concerning the compensation for the Chief Executive Officer
and each of the Company's four most highly compensated executive officers for
fiscal 1997, and their compensation for 1996 and 1995:
................................................................................
<TABLE>
<CAPTION>
ANNUAL COMPENSATION ALL OTHER
PRINCIPAL POSITION YEAR SALARY BONUS(1) COMPENSATION(2)
------------------ ---- ------ -------- ---------------
<S> <C> <C> <C> <C>
Peter F. Secchia 1997 $326,333 $350,000 $ 9,288
Chairman of the Board 1996 320,750 400,000 12,299
1995 308,937 362,674 14,273
William G. Currie 1997 360,500 418,000 9,288
Chief Executive Officer 1996 345,751 450,000 12,367
and Director 1995 333,937 387,674 14,275
James H. Ward 1997 201,791 239,251 9,288
President 1996 193,166 268,814 12,367
Universal Forest Products 1995 183,250 211,934 14,275
Eastern Division
Michael B. Glenn 1997 194,333 474,981 9,288
President 1996 186,000 469,111 12,367
Universal Forest Products 1995 173,750 263,630 14,275
Western Division
Robert K. Hill 1997 178,958 254,927 9,288
Senior Vice President 1996 166,875 73,469 11,681
Universal Forest Products 1995 158,500 59,701 14,275
Western Division
</TABLE>
................................................................................
(1) Includes annual bonus payments under a performance-based bonus plan tied to
the Company's cost of capital, which covers substantially all salaried
employees. The bonus amounts herein represent the amounts earned in each
respective year, which are paid in the subsequent year.
(2) The amounts set forth in this column represent Company contributions to the
Company's Profit Sharing and 401(k) Plan. Subject to certain age and service
requirements, all employees of the Company and its subsidiaries are eligible to
participate in the Plan.
7
<PAGE> 10
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR AND FISCAL YEAR-END OPTION
VALUES. The following table sets forth information regarding the number and
value of exercised and unexercised options held by the named officers at
December 27, 1997. Messrs. Currie and Secchia exercised options to purchase
125,000 and 12,500 shares, respectively, during the last fiscal year.
................................................................................
<TABLE>
<CAPTION>
NUMBER OF SECURITIES
SHARES UNDERLYING UNEXERCISED VALUE OF UNEXERCISED
ACQUIRED OPTIONS AT IN-THE-MONEY OPTIONS
ON VALUE DECEMBER 27, 1997(#) AT DECEMBER 27, 1997($)(2)
EXECUTIVE EXERCISE(#) REALIZED($)(1) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
--------- ----------- -------------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Peter F. Secchia 12,500 $ 115,625 0 62,500 $0 $ 543,750
William G. Currie 125,000 1,317,755 0 125,000 0 1,087,500
James H. Ward 0 0 0 45,000 0 355,000
Michael B. Glenn 0 0 0 45,000 0 355,000
Robert K. Hill 0 0 0 45,000 0 355,000
</TABLE>
................................................................................
(1) Represents aggregate value of the closing market price of the Company's
stock as of the date on which the options were exercised, less the exercise
price.
(2) Values based on the difference between the closing market price of the
Company's stock as of December 27, 1997 and the exercise price of the options.
COMPENSATION COMMITTEE REPORT. The Compensation Committee of the Board of
Directors has furnished the following report on executive compensation:
During 1997, the Company maintained its compensation program in accordance
with the Compensation Committee's goals. Its compensation policies and
plans are designed to align the financial interests of its officers and key
executives with those of its shareholders. The focus of the Committee has
been to tie executive compensation to the creation of shareholder value,
both short and long term.
The Committee believes executives should be rewarded for achieving Company
objectives, with a major emphasis on providing a return on investment in
excess of the Company's cost of capital. By increasing the Company's return
on investment, the value of the Company is dramatically increased, and each
shareholder will benefit. In addition, a major initiative for 1997 was
profitable sales growth and increasing market share in the Company's core
markets. With these objectives in mind, the Committee has determined that
the following combination of base salary, bonus and benefits will best
motivate Company executives to increase shareholder value.
Base Salaries. Annual base salaries are based on past and present corporate
and individual performance, with reference to base salary data of
similar-sized corporations and industry competitors so such salaries are
generally competitive in the market place.
The Committee has complete discretion in determining base salary amounts
(including the grant and amount of any annual discretionary incentive
payments or stock option awards),
8
<PAGE> 11
regardless of whether corporate or individual performance goals are
achieved. The Committee exercised its complete discretion in setting base
salaries for 1997.
Each year the Committee reviews, with the Chief Executive Officer, and
approves, with such modifications as it may deem appropriate, an annual
salary plan for the ensuing February 1 to January 31, based on current
available survey data, cost of living factors, and performance judgments as
to the past and expected future contributions of the individual officers.
Incentive Compensation. The Company relies heavily on annual discretionary
incentive compensation to attract and retain Company officers and other key
employees of outstanding abilities, and to motivate them to perform to the
full extent of their abilities. Fiscal 1997 was the third and final year of
the phase-in of the Company's incentive compensation system which focuses
on the Company's modified calculation of Return on Investment (ROI). For
Messrs. Ward, Glenn, and Hill, 1997 bonuses are based entirely on the ROI
of their respective operations. For Messrs. Currie and Secchia, incentive
compensation is based entirely on the ROI of the Company as a whole.
In setting incentive compensation for Messrs. Currie and Secchia for 1997,
the Committee considered management's success in improving top line sales
growth and expanding into new markets consistent with the Company's
strategic objectives.
Chief Executive. The Committee annually reviews and establishes the
discretionary component of the base salary of the Chief Executive Officer.
His salary is based on comparable compensation data, the Committee's
assessment of his past performance and its expectation as to his future
contributions in leading the Company and its businesses. The Chief
Executive Officer's base salary fell within the middle-range of the
salaries of comparable executives. The Committee has complete discretion in
setting base salary for Mr. Currie (who does not have an employment
agreement with the Company).
In determining the Chief Executive Officer's incentive bonus amount for
1997, the Committee used the incentive bonus plan established by the
Committee. The plan, based on the ROI for the entire Company, considered
its evaluation of the Company's performance, both on an absolute basis and
relative to the performance of similar companies in similar industries. The
Chief Executive Officer's bonus for 1997 reflects the Committee's
assessment of the Company's overall performance, including record net sales
achieved in 1997. The decrease in his bonus, relative to 1996, reflects the
fact that the Company's 1997 ROI was slightly below the 1996 ROI.
Changes For 1998. For fiscal 1998, the Company continues to modify its
incentive compensation system based on the Company's ROI. By basing the
individual's incentive compensation on the ROI generated by the profit
center, the individual is rewarded for properly managing assets, increasing
cash flow, and obtaining higher net margins. To encourage greater emphasis
on total Company performance, the Company has established both regional and
Company goals which the participant must meet to achieve the full bonus
level. The full bonus amount is based 100% on the ROI achieved, and is
subject to downward adjustment by up to 20% if the Company and regional
goals are not achieved. A
9
<PAGE> 12
discretionary bonus component will be available for operations which have
not yet hit the ROI target, but which demonstrate improvement over the
previous year.
For the Chief Executive and other named officers, incentive compensation
will be paid as provided in the incentive compensation plan, as approved by
the Committee. Financial, strategic, management, and individual performance
are also considered in establishing compensation packages. Financial goals
for 1998 include increased net earnings, sales, and ROI. Strategic
performance principally consists of such factors as increasing market share
of value-added products, expansion into new markets, such as residential
and commercial truss manufacturing, industrial products, new product
development, and initiatives designed to achieve the lowest cost of
production. Management performance criteria include productivity and
quality improvement, management development, increasing shareholder value,
environmental management, and control of casualty losses. No specific
weighting is given to any factor.
The Company continues to review the One Million Dollar ($1,000,000.00)
limitation on compensation deductions set forth in sec.162(m) of the
Internal Revenue Code in order to determine what action, if any, the
Company will take. No action is proposed at the present time. As a result
of stock option exercises from previously granted non-qualified options,
the CEO's total compensation exceeded the one million dollar limitation in
1997, but since the option grant preceded the requirements of sec.162(m),
the Compensation is fully deductible for tax purposes.
This report has been furnished by the members of the Board of Directors'
Compensation Committee.
John W. Garside, Chairman
John C. Canepa
Richard M. DeVos
The report of the Compensation Committee shall not be deemed incorporated by
reference in any general statement incorporating by reference this Proxy
Statement into any filing under the Securities Act of 1933 or under the
Securities Exchange Act of 1934, except to the extent that the Company
specifically incorporates this information by reference, and shall not otherwise
be deemed filed under such Acts.
10
<PAGE> 13
STOCK PERFORMANCE GRAPH. The following graph depicts the cumulative total return
on the Company's common stock compared to the cumulative total return on the
indices for The NASDAQ Stock Market(SM) (all U.S. companies) and a forest
industry peer group selected by the Company. The graph assumes an investment of
$100.00 on November 10, 1993, the first day of public trading of the Company's
stock, and reinvestment of dividends in all cases.
................................................................................
<TABLE>
<CAPTION>
12/24/92 12/27/93 12/27/94 12/27/95 12/27/96 12/26/97
<S> <C> <C> <C> <C> <C> <C>
Universal Forest Products, Inc. 128.3 81.2 127.5 178.8 176.2
NASDAQ Stock Market (US
Companies) 85.8 98.0 97.2 138.0 170.5 201.1
Self-Determined Peer Group 83.4 106.5 94.4 101.4 110.2 113.6
</TABLE>
The companies included in the self-determined forest industry peer group are as
follows:
<TABLE>
<S> <C>
ABT Building Products Corp. Armstrong World Industries, Inc.
Georgia Pacific Corp. Louisiana Pacific Corp.
Morgan Products Ltd. Nortek, Inc. (acquired PlyGem
Triangle Pacific Corp. Industries, Inc.)
Weyerhaeuser Company
</TABLE>
The returns of each company included in the self-determined peer group are
weighted according to each respective company's stock market capitalization at
the beginning of each period presented in the graph above.
NOTES:
A. The lines represent monthly index levels derived from compounded daily
returns that include all dividends.
B. The indexes are reweighted daily, using the market capitalization on the
previous trading day.
C. If the monthly interval, based on the fiscal year-end, is not a trading
day, the preceding trading day is used.
D. The index level for all series was set to $100.0 on 11/10/93.
................................................................................
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SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE. Section 16(a) of the
Exchange Act requires directors, executive officers and greater than 10%
beneficial owners to file reports of ownership and changes in ownership of
shares of Common Stock with the Securities and Exchange Commission, and
applicable regulations require them to furnish the Company with copies of all
Section 16(a) reports they file. Based solely upon review of the copies of such
reports furnished to the Company, or written representations that no such
reports were required, all Section 16(a) filing requirements applicable to the
reporting persons were complied with, except for Mr. Garside and Mr. Ward who
each filed one late Form 4 report covering one transaction each.
INDEPENDENT PUBLIC ACCOUNTANTS. Deloitte & Touche LLP, certified public
accountants, have audited the financial statements of the Company and its
subsidiaries for the fiscal year ended December 27, 1997, and management intends
to recommend the reappointment of the firm of Deloitte & Touche LLP as
independent auditors of the Company for the current fiscal year. Representatives
of Deloitte & Touche LLP are expected to be present at the annual meeting, will
have an opportunity to make a statement and are expected to be able to respond
to appropriate questions from the shareholders.
AVAILABILITY OF FORM 10-K. Shares of the Company's stock are traded under the
symbol UFPI on The NASDAQ Stock Market(SM). The Company's 10-K Report filed with
the Securities and Exchange Commission will be provided free of charge to any
shareholder upon written request. For more information, contact the Investor
Relations Department, 2801 East Beltline NE, Grand Rapids, Michigan 49525.
SHAREHOLDER PROPOSALS. Shareholder proposals intended to be presented at the
1999 Annual Meeting of Shareholders must be received by the Company no later
than November 16, 1998, to be considered for inclusion in the proxy materials
relating to that meeting. Proposals of shareholders should be addressed to the
attention of Secretary, 2801 East Beltline NE, Grand Rapids, Michigan 49525.
By Order of the Board of Directors,
Matthew J. Missad, Secretary
March 16, 1998
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UNIVERSAL FOREST PRODUCTS, INC.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby appoints Peter F. Secchia and Matthew J. Missad as
Proxies, each with the power to appoint his substitute, and hereby authorizes
them to represent and to vote, as designated below, all the shares of Common
Stock of Universal Forest Products, Inc. held of record by the undersigned on
March 1, 1998 at the Annual Meeting of Shareholders to be held April 22, 1998,
and at any adjournment thereof.
(To be Signed on Reverse Side)
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<S><C>
/X/ Please mark your
votes as in this
example using
dark ink only.
FOR WITHHELD
1. Directors to be / / / /
Elected by Holders
of Common Stock
(Instruction: To withhold authority to vote for any individual nominee,
strike a line through the nominee's name in the list below.)
William G. Currie, Philip M. Novell
This Proxy, when properly executed,
will be voted in the manner directed
herein by the undersigned shareholder.
IF NO DIRECTION IS MADE, THIS PROXY
WILL BE VOTED FOR ALL NOMINEES LISTED
IN PROPOSAL 1.
_____________________________ Date ___________________, 1998 ___________________________________Date ___________________, 1998
SIGNATURE SIGNATURE IF HELD JOINTLY
NOTE: Please sign exactly as name appears hereon. When shares are given by
joint tenants, both should sign. When signing as attorney, executor,
administrator, trustee, or guardian, please give full title as such. If a
corporation, please sign in full corporate name by president or other authorized
officer. If a partnership, please sign in partnership name by authorized person.
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