<PAGE> 1
================================================================================
SCHEDULE 14A
(RULE 14a)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE SECURITIES
EXCHANGE ACT OF 1934
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
<TABLE>
<S> <C>
[ ] 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 sec.240.14a-11(c) or sec.240.14a-12
</TABLE>
ROBERDS, 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: ...........................................................
================================================================================
<PAGE> 2
[LOGO]
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
To Be Held May 13, 1997
April 4, 1997
To the Shareholders of
Roberds, Inc.:
The annual meeting of the shareholders of Roberds, Inc. will be held at
the Dayton Marriott Hotel, 1414 South Patterson Boulevard, Dayton, Ohio 45409 on
May 13, 1997 at 2:00 p.m., Eastern Daylight Savings Time, for the following
purposes:
1. To elect four Directors, each to hold office for a two-year
term and until their respective successors are elected and
qualified.
2. To consider a proposal to amend the Roberds, Inc. Employee
Stock Purchase Plan to increase the number of shares that may
be sold under the Plan, extend the term of the Plan, change
the composition of the Plan's administrative committee to
conform with recent changes to the rules governing
compensatory stock plans under the Securities Exchange Act of
1934, and clarify the scope of the Company's indemnification
of directors serving on the committee administering the Plan.
3. To transact such other business as may properly come before
the meeting or any adjournment thereof.
Holders of Common Shares of record at the close of business on March 28, 1997
will be entitled to vote at the meeting.
By Order of the Board of Directors,
/s/ Robert M. Wilson
---------------------------------
ROBERT M. WILSON, Secretary
<PAGE> 3
ROBERDS, INC.
1100 East Central Avenue
Dayton, Ohio 45449-1888
PROXY STATEMENT
April 4, 1997
GENERAL INFORMATION
The Proxy enclosed with this Proxy Statement is solicited by the Board
of Directors of Roberds, Inc. (the "Company" or "Roberds"). When the Proxy is
properly executed and returned, the shares of the Company represented by the
Proxy will be voted at the 1997 annual meeting of shareholders as directed on
the Proxy, or if no direction is given on the Proxy, the shares will be voted
for the election of the nominees listed in this proxy statement and in favor of
the proposal to amend the Roberds, Inc. Employee Stock Purchase Plan. A
shareholder may revoke a Proxy by giving notice to the Company at the meeting
or, in writing, at any time before its exercise. A revocation will not affect
any vote taken before the revocation. The presence of a shareholder at the
annual meeting does not by itself revoke a Proxy. The approximate date on which
the Proxy Statement and Proxy will first be sent to shareholders is April 4,
1997.
The cost of solicitation of proxies in the enclosed form will be borne
by the Company. In addition to solicitation by mail, arrangements have been made
with brokerage houses and other custodians, nominees and fiduciaries to send
proxy materials to their principals, and the Company may reimburse them for
their expenses in so doing. Officers, employees and agents of the Company also
may request the return of proxies in person or by telephone, facsimile
transmission or telegram.
The holders of record of the Company's Common Shares at the close of
business on March 28, 1997 (the "Record Date") will be entitled to vote at the
meeting. As of the Record Date, there were 5,964,830 such Common Shares
outstanding and entitled to vote at the meeting, each share being entitled to
one vote. The presence, in person or by proxy, of persons entitled to vote a
majority of the Common Shares outstanding constitutes a quorum for the conduct
of all business to be considered at the annual meeting.
<PAGE> 4
ELECTION OF DIRECTORS
The Company's Amended and Restated Code of Regulations ("Regulations")
fixes the number of Directors at seven but authorizes the Board of Directors to
increase or decrease the number of Directors by not more than two. The number of
Directors authorized by the Board under the Regulations currently is eight. The
Regulations authorize the Board of Directors to fill any vacancies by the
affirmative vote of a majority of the Directors then in office.
The Regulations also classify the members of the Board of Directors
into two groups, with terms expiring in alternate years. All of the Directors,
including the current nominees, are identified in the table below. The terms of
the current nominees, Messrs. Fletcher, Gunter, Robeson and Wilson, expire at
the annual meeting to be held on May 13, 1997. All nominees are currently
members of the Board of Directors.
The Board of Directors of the Company has nominated the persons listed
below for election as Directors to hold office for two years or until the
election and qualification of their successors. If any nominee declines or is
unable to serve, which the Board of Directors has no reason to expect, the
persons named in the accompanying Proxy intend to vote for the balance of those
nominees named, and, if they deem it advisable, for a substitute nominee.
The following table sets forth information with respect to each of the
nominees and, in addition, the Directors whose terms expire at the 1998 Annual
Meeting of Shareholders:
<TABLE>
<CAPTION>
NAME AGE POSITION
- ---------------- --- ---------------------------------------------------
NOMINEES FOR TERMS TO EXPIRE IN 1999
<S> <C> <C>
Kenneth W. Fletcher 64 Chairman of the Board, Chief Executive Officer and
President
Carl E. Gunter 69 Director
Dr. James F. Robeson 60 Director
Robert M. Wilson 44 Executive Vice President, Chief Financial Officer,
Assistant Treasurer, General Counsel, Secretary and
Director
DIRECTORS WHOSE TERMS EXPIRE IN 1998
Jerry L. Kirby 62 Director
Howard W. Smith 54 Director
Gilbert P. Williamson 60 Director
Donald C. Wright 60 Vice Chairman of the Board and Assistant
Secretary
</TABLE>
-2-
<PAGE> 5
During the past fiscal year, the Board of Directors of the Company met
on five occasions. The Company's audit committee, which currently consists of
James F. Robeson, Chairman, Jerry L. Kirby, Gilbert P. Williamson and Carl E.
Gunter, met two times during the last fiscal year. The audit committee reviews
and acts, and reports to the Board of Directors, with respect to various
auditing and accounting matters, including the selection of the Company's
independent accountants, the scope of audit procedures, the Company's internal
audit program and results, the nature of services to be performed by the
independent accountants and the Company's accounting practices. The Company's
compensation committee, which currently consists of Jerry L. Kirby, Chairman,
James F. Robeson, Gilbert P. Williamson and Carl E. Gunter, met four times
during the last fiscal year. The compensation committee establishes and monitors
executive compensation. All Directors attended more than 75% of the aggregate of
the total number of meetings of the Board of Directors during the last fiscal
year and the total number of meetings held by each committee on which each
Director served during the last fiscal year. The Board of Directors does not
have a separate nominating committee.
BUSINESS EXPERIENCE OF DIRECTORS AND NOMINEES
Kenneth W. Fletcher is a co-founder of the Company. In June, 1993, he
was elected to the offices of Chairman of the Board and Chief Executive Officer.
He has served as President and a Director of the Company since its founding in
1971. Prior to founding Roberds, Mr. Fletcher was employed in various capacities
with the Frigidaire Division of General Motors Corporation.
Donald C. Wright is a co-founder of the Company, and has served as a
Director of the Company since 1971. He was elected Vice Chairman of the Board
and Assistant Secretary in June 1993, prior to which time he served as Treasurer
and Secretary since 1971. He owns and operates Don Wright Realty, Dayton, Ohio,
a firm providing real estate brokerage services to the public.
Howard W. Smith was elected a Director of Roberds, Inc. in March 1993.
He was President, Dayton Market from 1988 through March 1996, when he retired
from the Company. He was also the Company's furniture buyer from 1988 through
March 1993. He was a Director of Roberds of Atlanta, Inc. from its founding
through December 1992, when it was merged into Roberds, Inc.
Robert M. Wilson was elected General Counsel, Secretary and a Director
in June, 1993. He has also served as Executive Vice President and Chief
Financial Officer of Roberds and its affiliated companies since 1988. He served
as Treasurer from June 1993 through May 1995, when he was elected Assistant
Treasurer. Prior thereto he was a partner in the public accounting firm of
Touche Ross & Co. (now Deloitte & Touche LLP). He was with that firm from 1972
through 1988, in various capacities, most recently as Managing Partner-Tax, of
the Dayton and Cincinnati, Ohio offices.
Jerry L. Kirby became a Director of the Company in November 1993. He
has been CEO and a director of CitFed Bancorp, Inc., the parent of Citizens
Federal Bank, FSB of which Mr. Kirby also serves as a Director, President and
CEO. CitFed Bancorp is a bank holding company with approximately $2.5 billion in
assets. Mr. Kirby is also a director of Supply One, a distributor of plumbing
and building supplies, and Neff Folding Box Company, a manufacturer of boxes,
Dayton, Ohio. He was for six years a director of the Cincinnati Branch of the
Federal Reserve Bank of Cleveland.
Dr. James F. Robeson became a Director of the Company in November
1993. He is the Herbert E. Markley Executive Professor of Business in the
Richard T. Farmer School of Business Administration at Miami University, Oxford,
Ohio. He served as Dean of the School from 1988 through 1993. Prior to that
appointment he held the Joseph C. Seibert Professorship in Marketing and served
as chairman of the Department of Marketing from 1985 through 1987. He also
served as chairman of the Faculty of Marketing at the Ohio State University from
1973 through 1976, and as Associate Dean of the College of Administrative
Science from 1976 through 1979. He currently serves as a director of Danis
Industries Corp., a construction contractor and real estate developer in Dayton,
Ohio; Gummer Wholesale, a regional distributor of grocery, candy, and tobacco
products, located in Newark, Ohio;
-3-
<PAGE> 6
Accordia of Columbus, Columbus, Ohio, an insurance brokerage firm and plan
administrator; and Huffy Corporation, a diversified manufacturer and supplier of
services to retailers, located in Dayton, Ohio. Dr. Robeson has been a
consultant to, and Vice President of, Management Horizons, a national consultant
to retailers. He has been a consultant to Retail Planning Associates, a retail
planning and design firm.
Gilbert P. Williamson became a Director of the Company in November
1993. He retired as Chairman and Chief Executive Officer of NCR Corporation in
May 1993. Mr. Williamson was named Chairman and CEO of NCR and named to the
Management Executive Committee and board of directors of AT&T following the
purchase of NCR by AT&T in 1991. Prior thereto, since 1988 he served as
President of NCR. He is a director of SCO, Inc., a provider of computer
software, Santa Cruz, California; Retix, Inc., a manufacturer of electronic
products, Santa Monica, California; and CitFed Bancorp, Inc., a bank holding
company, Dayton, Ohio.
Carl E. Gunter became a Director of the Company in November 1994. Mr.
Gunter was President, Chief Executive Officer and Chairman of Broyhill Furniture
Industries ("Broyhill"), a manufacturer of furniture located in Lenoir, North
Carolina, from 1983 until his retirement from Broyhill in February 1993.
Interco, Inc. (the parent company of Broyhill) filed for bankruptcy protection
for Interco, Inc. and all of its subsidiaries, on January 24, 1991. Mr. Gunter
is a member of the local advisory board of First Union National Bank of Lenoir,
Lenoir, North Carolina.
-4-
<PAGE> 7
EXECUTIVE COMPENSATION
COMPENSATION OF EXECUTIVE OFFICERS
Summary Compensation Table
--------------------------
The following table summarizes the compensation paid to the Chief
Executive Officer, Kenneth W. Fletcher, and each of the Company's four other
most highly compensated executive officers determined as of the end of the last
fiscal year (together with Mr. Fletcher, the "Named Executive Officers") during
or with respect to the fiscal years ended December 31, 1996, 1995, and 1994 for
services in all capacities to the Company.
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------------------------------
Long Term
Annual Compensation Compensation
Awards
---------------------------------------------------------------------------------
(a) (b) (c) (d) (e) (f)
Other
Annual All Other
Salary Bonus Compensation(1) Options Compensation(2)
Name and Principal Position Period ($) ($) ($) (# of shares) ($)
- --------------------------- ------ ------ --------- ------------------ ------------- --------------
<S> <C> <C> <C> <C> <C> <C>
Kenneth W. Fletcher, FY 1996 350,000 -0- N/A -0- N/A
Chairman, Chief Executive FY 1995 350,000 -0- N/A -0- 1,371
Officer and President FY 1994 350,000 -0- N/A -0- 985
Robert M. Wilson, FY 1996 270,000 -0- N/A -0- N/A
Executive-Vice-President, FY-1995 250,000 -0- N/A -0- 1,371
Chief Financial Officer, FY 1994 250,000 15,000 N/A 20,000 985
Assistant Treasurer, General
Counsel and Secretary
Michael Van Autreve, FY 1996 160,000 -0- N/A -0- N/A
Vice President-Bedding FY 1995 160,000 -0- N/A -0- 1,095
FY 1994 130,056 38,000 N/A 10,000 985
Robert M. (Mickey) James FY 1996 147,462 -0- N/A -0- N/A
President-Atlanta Market FY 1995 119,642 -0- N/A -0- 960
FY 1994 67,600 12,000 N/A 4,000 523
Arthur C. Lanciers FY 1996 144,808 -0- N/A -0- N/A
Vice President - Furniture FY 1995 129,038 -0- N/A -0- 430
FY 1994 124,712 7,000 N/A 6,000 865
<FN>
1 Other annual compensation for each Named Executive Officer did not exceed
$50,000 or 10% of each of their combined annual salaries and bonuses for
any period reported.
2 All other compensation consists of contributions to the individual's profit
sharing account and reallocations of those contributions in the year
indicated. For fiscal year 1996 the Company made no profit sharing
contribution, and the results of reallocations of accounts during 1996 are
not available as of the date of this Proxy Statement.
</TABLE>
-5-
<PAGE> 8
Option Grants in Last Fiscal Year
---------------------------------
There were no stock options granted to the Named Executive Officers
during the year ended December 31, 1996.
Aggregated Option Exercises in Last Fiscal Year and Fiscal Year-End
-------------------------------------------------------------------
Option Value
------------
The following table sets forth information for each Named Executive
Officer with regard to the aggregate stock options exercised during the year
ended December 31, 1996, and the stock options held as of December 31, 1996.
<TABLE>
<CAPTION>
(a) (b) (c) (d) (e)
Value of Unexercised
Number of Unexercised in-the-Money Options
Options at December 31, 1996 at December 31, 1996 ($)(2)
------------------------------ --------------------------
Shares Acquired Value
Name on Exercise (#) Realized($)1 Exercisable Unexercisable Exercisable Unexercisable
---- --------------- ------------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Kenneth W. Fletcher none none none none $none $none
Robert M. Wilson none none 21,250 13,750 none none
Michael Van Autreve none none 8,750 6,250 none none
Robert M. (Mickey) James none none 3,500 2,500 none none
Arthur C. Lanciers none none 6,750 4,250 none none
<FN>
1 Market value of underlying securities at exercise, minus the exercise price.
2 Market Value of underlying securities at year end (based upon market value of $8.25 as of December 31, 1996) minus
the exercise price.
</TABLE>
COMPENSATION OF DIRECTORS
Directors who are members of management receive no additional compensation for
their service as Directors. Directors who are not members of management receive
a monthly fee of $500, plus a fee of $1,000 for each meeting attended. Directors
are also reimbursed for their out-of-pocket travel expenses incurred in
connection with Company business.
REPORT OF THE COMPENSATION COMMITTEE
ON EXECUTIVE COMPENSATION
GENERAL
In November 1993, the Company consummated the initial public offering ("IPO")
of its Common Shares. In December 1993, following the IPO, the Board of
Directors elected Messrs. Kirby, Robeson, and Williamson, none of whom are
employees of the Company, to the newly formed Compensation Committee of the
Board of Directors (the "Committee"). Mr. Kirby was elected chair of the
Committee. In March 1995, the Board of Directors elected Mr. Gunter as an
additional member of the Committee. The Board of Directors established the power
and authority of the Committee to (i) review the recommendations of the CEO and
adopt compensation philosophy and guidelines for the Company; (ii) review the
role of the CEO, his performance, and compensation, and determine the base
compensation, annual incentive bonus, and stock-based awards made to the CEO;
and (iii) determine the base compensation, annual incentive bonus, and
stock-based awards for all executive officers of the Company.
-6-
<PAGE> 9
In 1994, the Committee engaged a compensation consulting firm to study the
Company's compensation system for executive officers; to compare the Company's
base pay, cash incentives, and stock-based compensation for executive officers
to those paid by comparable companies; and to develop a recommendation for an
overall compensation system for executive officers and other senior managers.
The consultant focused on the compensation arrangements for the CEO, the Market
Presidents, and the Vice Presidents of Merchandising. Among other things, the
consultant reported that the Company's base pay for those positions was
generally within the range of that paid by comparable companies, though some
were at the higher end of their ranges; that the annual cash incentives were
lower than those paid by comparable companies; and that the percentage of stock
held by the executive officers (with the exception of Mr. Fletcher), as a result
of the stock-based awards made by the Company, was considerably below the
ownership percentage of executive officers in comparable companies. The
consultant also noted that the Company's benefit package for executive officers
was of considerably less value than those offered by comparable companies. Based
on the consultant's report, the Committee adopted the Roberds, Inc. Executive
Compensation Plan (the "Executive Plan") in November 1994, effective for
calendar 1995, and amended the Executive Plan in February 1996 and again in
February 1997. In 1996, the Committee engaged the compensation consulting firm
to update its report. The Committee considered the update in setting and
reviewing compensation for executive officers.
Based on the current levels of pay of the CEO and other executive officers of
the Company, the Committee does not believe that the limitations on
deductibility of annual compensation in excess of $1 million as provided by
section 162(m) of the Internal Revenue Code of 1986, as amended, are likely to
have an effect on the compensation plans of the Company in the foreseeable
future. As a result, the Committee has not adopted a policy with respect to
compensation exceeding the deductible limits. The Committee will consider the
deductibility of compensation, along with other factors, in future
determinations of compensation.
BASE PAY
Based upon the salary ranges recommended by the compensation consultants in
their reports, the base pay of comparable executives employed by comparable
companies, and periodic changes in duties and responsibilities, the Committee
has made periodic adjustments in the base pay of the Company's executive
officers. Mr. Fletcher's base pay has not been adjusted since 1993. Based on the
consultant's report, the Committee believes that the base pay for Roberds' CEO
and other executive officers is competitive within the industry and similar to
that offered by comparable companies.
ANNUAL INCENTIVES
The Committee annually establishes Threshold, Target, and Ceiling amounts of
pre-tax income for the Company. Below the Threshold, no cash bonuses are awarded
to the executive officers. As pre-tax income grows above the Threshold, the pool
of money available for cash bonuses increases. At the Ceiling amount, the pool
reaches a maximum size.
The CEO's cash bonus is expressed as a percentage of his base pay, depending
on the performance of the Company against the Threshold, Target, and Ceiling
amounts. Below the Threshold, no bonus is awarded to the CEO.
The other executive officers, and approximately thirty other senior managers,
share in a pool of money that increases as the Company's performance increases
against the Threshold, Target, and Ceiling amounts. Once the size of the pool is
determined, each participant is awarded a bonus based on his "share" of the
pool. The shares are determined by reference to each manager's base pay as a
percentage of the base pay of the entire group. The group (and the individuals)
receives no bonus if the Company's performance is below the Threshold. Beginning
at the Threshold, managers receive approximately five percent of their base pay,
and the bonuses grow to a maximum of approximately 75 percent of managers' base
pay at the Ceiling amount. In addition, a percentage of the cash bonus pool is
available for awards in the discretion of the CEO, to managers other than the
CEO, to recognize outstanding achievement.
-7-
<PAGE> 10
The Threshold, Target, and Ceiling amounts are set for the entire Company.
However, each of the Company's market areas also establishes a profit plan. For
1996, those executives with specific market responsibilities, such as Market
Presidents, had their bonuses adjusted upward or downward based on their
particular market's pre-tax earnings in comparison to its plan. This adjustment
can cause an executive's bonus to be adjusted to as low as approximately 25
percent, or as high as approximately 123 percent, of the amount otherwise
awarded based on Company-wide performance under the Executive Plan. The market
adjustment concept was removed from the Plan for 1997.
Effective for 1997, the Plan was amended to permit the CEO to recommend to the
Committee that the amounts awarded to executives under the formula system may be
adjusted upward and downward by up to 50 percent, in order to reflect the
individual performance of each executive. However, the total amount awarded to
all executives cannot exceed the total computed under the formula plan. The
Committee believes that the Executive Plan provides significant incentives for
the Company's CEO, the executive officers, and other senior managers to meet or
exceed the Company's annual profit plan. The Executive Plan makes a significant
portion of senior management's compensation contingent on the Company's
financial performance for the year. The combination of the base pay described
above and the bonuses established by the Executive Plan is intended to yield
total cash compensation that is comparable to the total cash compensation paid
by comparable companies to their CEOs and other executive officers.
The Company failed to meet the Threshold amount for 1996, and no cash bonuses
were paid to the CEO, other executive officers, or senior managers participating
in the Executive Plan.
LONG-TERM INCENTIVES
The Executive Plan established a mechanism for awarding ISOs to senior
management. ISOs are awarded as a percentage of each executive's base pay. No
awards are made if the Company's earnings are below the Threshold amount.
Beginning at the Threshold amount, awards are made to each executive as a
percentage of his base pay. Such percentage grows as earnings reach the Target,
and hit a maximum at the Ceiling amount. The minimum percentage for the CEO is
zero percent of his base pay, growing to a maximum of 85 percent of his base
pay. The minimum percentage for all other participants (including the other
executive officers) is zero percent of their base pay, growing to a maximum of
75 percent of their base pay. All executive officers are eligible for ISO
awards, as are a number of other managers. Once the dollar amount of the awards
is determined under the formula, the dollar amount is converted to a number of
shares, based on the then-current value of the Company's shares at the time of
the award. Options on that number of shares are granted at 100 percent of the
then market value (except that any ISOs granted to Mr. Fletcher would be granted
at 110% of the then market value). In addition, options may be awarded based
upon the recommendation of the CEO to the Committee in order to reward efforts
or results beyond those recognized by the formula system.
The Committee believes that the stock-based awards to be made under the
Executive Plan will further align the interests of the Company's CEO, executive
officers, and senior and middle managers with those of the shareholders, and
will motivate management to increase the value of the Company's shares over the
long term.
Because the Company failed reach the Threshold amount in 1996, no stock
options were awarded under the Plan.
Jerry L. Kirby, Chair
C.E. Gunter
Dr. James F. Robeson
Gilbert P. Williamson
-8-
<PAGE> 11
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
PROPERTIES
The Company leases two of its Atlanta-area properties from Howard Investments,
an Ohio general partnership. The general partners of Howard Investments are
Messrs. Fletcher, Wright and Smith. The annual rental for each facility,
exclusive of operating expenses, is $600,000 during the current term. Each lease
provides for two extensions of 10 years each at the election of the Company, and
the annual rental during the extensions will be the "prevailing market rate"
determined at the time of such extensions. The current terms under these leases
are as shown in the following table:
<TABLE>
<CAPTION>
COMMENCEMENT EXPIRATION
LOCATION DATE DATE
- -------------------- ------------ ----------
<S> <C> <C>
Marietta, Georgia 5/10/84 5/31/2004
Forest Park, Georgia 11/01/87 9/30/2007
</TABLE>
Effective October 1, 1993, the Company modified its leases with Howard
Investments covering the Forest Park and Marietta, Georgia facilities, pursuant
to the terms of a Rent-Up Guarantee Agreement. As a result of these
modifications, the Company receives the income from, and absorbs the expense
associated with, the third party rental space in these two facilities. Prior to
October 1, 1993, the income associated with these third party rental spaces was
received, and the expense absorbed, by Howard Investments. The third party
rental spaces include approximately 14,000 square feet in the Marietta facility
and 60,000 square feet in the Forest Park facility. Portions of each facility
are presently leased to third parties, and other portions are available for
lease.
Pursuant to the Rent-Up Guarantee Agreement, Howard Investments
guaranteed to the Company that the net rental income from the third party rental
space would be not less than $240,000 for calendar year 1996, after which the
agreement expired.
The Company leased its facilities at 1000 and 1100 East Central
Avenue, Dayton, Ohio from DAF Investments LTD., an Ohio limited liability
company controlled by Mr. Fletcher. During 1996, DAF Investments Ltd.
transferred ownership of the properties located at 1000 and 1100 East Central
Avenue, Dayton, Ohio to a newly formed entity, DAF West Carrollton Plaza Ltd.
The transfer was made in connection with a refinancing of the properties. Mr.
Fletcher controls DAF West Carrollton Plaza Ltd., which is an Ohio limited
liability company.
During 1996, DAF Investments Ltd. assigned Roberds' leases on the
properties located at 1000 and 1100 East Central Avenue, Dayton, Ohio to DAF
West Carrollton Plaza Ltd., and Roberds consented to the assignments. The leases
were assigned without any modification to their business terms, but merely to
recognize the change in ownership of the two properties. The Company's
facilities in Piqua, Ohio and Richmond, Indiana are leased from Mr. Wright. The
term and annual rent under the leases associated with these four Dayton-area
properties, exclusive of operating expenses, are shown in the following table:
<TABLE>
<CAPTION>
CURRENT
COMMENCEMENT EXPIRATION
LOCATION DATE DATE ANNUAL RENT
- --------------------- ------------ ---------- -----------
<S> <C> <C> <C>
1000 E. Central Ave., 4/1/90 3/31/2015 $120,000
Dayton, Ohio
(Service Bldg.)
1100 E. Central Ave., 4/1/90 3/31/2015 600,000
Dayton, Ohio
(Store)
Richmond, Indiana 4/1/88 3/31/2013 240,000
Piqua, Ohio 6/1/88 5/31/2013 240,000
</TABLE>
-9-
<PAGE> 12
The Company leases its Springfield, Ohio facility from Springfield
Properties, Inc., an Ohio corporation owned by Messrs. Fletcher and Wright. The
term and annual rent under the lease associated with this property, exclusive of
operating expenses, are shown in the following table:
<TABLE>
<CAPTION>
CURRENT
COMMENCEMENT EXPIRATION
LOCATION DATE DATE ANNUAL RENT
- -------------- ------------ ---------- -----------
<S> <C> <C> <C>
Springfield, Ohio 3/1/92 2/28/2017 $240,000
</TABLE>
OTHER TRANSACTIONS AND RELATIONSHIPS
Messrs. Fletcher and Wright personally guaranteed the mortgage loans
made in connection with the acquisition of two of the Company's stores prior to
the IPO. At December 31, 1996, the principal amount of such mortgage loans was
approximately $6.6 million.
In connection with the IPO, the Company and the initial shareholders of
the Company entered into a Tax Indemnification Agreement (the "Indemnification
Agreement") that requires the Company to reimburse the initial shareholders for
certain additional taxes that they may have to pay for any adjustments in prior
years' taxable income. In addition, the Indemnification Agreement requires the
initial shareholders to reimburse the Company for certain decreases in taxes
that are refunded to them for adjustments in prior years taxable income. The
Company also agreed to conduct, at its own expense, the defense of, or the
negotiations in settlement with respect to, any challenge to the Company's S
Corporation status in prior years.
-10-
<PAGE> 13
PERFORMANCE COMPARISON
The following graph illustrates the return that would have been
realized (assuming reinvestment of dividends) by an investor who invested $100
on November 16, 1993 (the first date on which the Company's Common Shares were
traded on the Nasdaq Stock Market) in each of (i) the Company's Common Shares,
(ii) the Nasdaq Stock Market (U.S.) Index and (iii) the Nasdaq Retail Trade
Stocks Index.
PERFORMANCE GRAPH
-----------------
ROBERDS, INC.
-------------
<TABLE>
<CAPTION>
11/16/93 12/31/93 12/31/94 12/31/95 12/31/96
-------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C>
Roberds, Inc. $100 $114 $56 $69 $64
Nasdaq Stock Market 100 103 101 143 176
Nasdaq Retail 100 100 91 100 120
</TABLE>
-11-
<PAGE> 14
PROPOSAL FOR SHAREHOLDER APPROVAL OF THE ROBERDS, INC.
AMENDED EMPLOYEE STOCK PURCHASE PLAN
The Company's Board of Directors (the "Board") adopted the Roberds,
Inc. Employee Stock Purchase Plan (the "Plan") on September 24, 1993, and the
Plan was approved by the shareholders on September 24, 1993. The Plan became
effective upon the effectiveness of the Company's Registration Statement, filed
by the Company under the Securities Act of 1933, on January 10, 1994,
Registration No. 33-73900. On November 1, 1996, the Board adopted certain
amendments to the Plan as described below. On February 20, 1997, the Board
further amended the Plan, subject to shareholder approval, and determined to
submit the Plan as so amended to the shareholders for their approval. The text
of the Plan, as proposed to be amended, is set forth as Exhibit A, to which
reference is made for a complete description.
DESCRIPTION OF THE PLAN
Purpose
-------
The Plan was adopted by the Company in order to encourage Company
employees to remain in the employ of the Company and to acquire a proprietary
interest in the Company through the purchase of its Common Stock. The Plan
permits employees to purchase Common Stock of the Company, at a price less than
its fair market value on the date of purchase, from funds accumulated through
payroll deductions within a specified period after the effective date of any
offering under the Plan.
Administration
--------------
The Plan provides that it shall be administered by the Board or by a
committee ("Committee") of the Board, as determined from time to time by the
Board. The Plan provides that the Committee shall consist of no fewer than three
directors of the Company who shall be appointed, from time to time, by the
Board. The Committee has full power to construe and interpret the Plan (subject
to advice of the Company's General Counsel with respect to any question of law),
to determine and fix the terms of offerings and options to purchase stock
pursuant to offerings, subject to the requirements and provisions of the Plan,
and generally to determine any and all questions arising under the Plan.
Operation of the Plan
---------------------
The Plan authorizes the granting of options to employees to purchase
shares using funds accumulated through payroll deductions. The exercise price
for the options is equal to 85% of the lesser of (i) the fair market value of
such shares on the commencement date of the option period or (ii) the fair
market value of such shares at the close of the option period. The Plan
generally provides for semi-annual option periods with the option periods
commencing on January 1 and July 1 of each calendar year and ending on June 30
and December 31 respectively in each year. The Plan as originally adopted
provided that the number of shares sold under the Plan could not exceed 150,000.
Subject to shareholder approval of this proposal to amend the Plan, the maximum
aggregate number of shares of Stock that may be sold pursuant to the Plan would
be increased to 500,000.
With certain exceptions, all employees of the Company other than
part-time employees are eligible to participate in the Plan. Employees who,
immediately after the granting of an option, would own, or be deemed to own
under Section 423(b)(3) or 424(d) of the Internal Revenue Code of 1986, as
amended (the "Code"), stock of any and all classes possessing 5% or more of the
total combined voting power or value of all classes of stock of the Company are
not eligible to participate in the Plan.
To participate during an option period, an employee may authorize
payroll deductions at any whole percentage rate up to a maximum of 15% of his or
her total compensation. No employee may be granted options to purchase stock of
the Company at a rate which exceeds $25,000 of the fair market value of the
stock (determined when the option is granted) for each calendar year for which
the option is outstanding. As of December 31, 1996,
-12-
<PAGE> 15
approximately 2,000 employees were eligible to participate in the Plan.
Approximately 132 employees were participating in the Plan as of that date.
Federal Income Tax Consequences
-------------------------------
The Plan, and the right of participants to make purchases thereunder,
is intended to qualify under the provisions of Sections 421 and 423 of the Code.
Under these provisions, no income is taxable to a participant until the shares
purchased under the Plan are sold or otherwise disposed of. Upon sale or other
disposition of the shares, the participant will generally be subject to tax and
the amount of the tax will depend upon the holding period for the shares. If the
shares are sold or otherwise disposed of in a taxable disposition more than two
years from the first day of the option period, or following the participant's
death while holding the shares, the participant will recognize ordinary income
measured as the lesser of (a) the excess of the fair market value of the shares
at the time of such sale or disposition or at the time of the employee's death
over the exercise price, or (b) an amount equal to 15% of the fair market value
of the shares as of the first day of the option period. Generally, the amount of
ordinary income recognized by the participant at the time of such a disposition
will be added to the basis of the shares (except for a participant who dies
while owning such shares). Any additional gain on such a disposition will be
treated as long-term capital gain. If the shares are sold or otherwise disposed
of in a taxable disposition before the expiration of this two-year holding
period, the participant will recognize ordinary income generally measured as the
excess of the fair market value of the shares on the date the shares were
purchased over the exercise price for those shares. Any additional gain or loss
on such sale or disposition will be long-term or short-term capital gain or
loss, depending on the holding period for the shares. The Company is not
entitled to a deduction for amounts taxed as ordinary income or capital gain to
a participant except to the extent of ordinary income recognized by a
participant upon the sale or disposition of shares prior to the expiration of
the holding period described above.
The foregoing is only a summary of the effect of federal income
taxation upon participants and the Company with respect to the shares purchased
under the Plan and does not purport to be complete.
Amendments to the Plan
----------------------
Following the adoption of the Plan, the Board determined, in
consultation with the Company's outside legal counsel, that certain
modifications to the Plan would be appropriate to change the composition of the
Plan's Administrative Committee to conform with recent changes to Rule 16b-3
under the Securities Exchange Act of 1934 (the "Exchange Act"), which provides
an exemption from the short-swing profit recapture provisions under Section
16(b) of the Exchange Act for certain employee benefit plan transactions.
Accordingly, the Board adopted certain amendments concerning the administration
of the Plan on November 1, 1996. In January, 1997, the Company determined that
at current rates of issuance, the maximum number of shares authorized to be sold
pursuant to the Plan would be exhausted sometime during fiscal year 1998. The
Board therefore amended the Plan on February 20, 1997, subject to shareholder
approval, to increase the aggregate number of shares of Stock that may be sold
pursuant to the Plan from 150,000 to 500,000, and to extend the term of the Plan
from December 31, 1999 to December 31, 2007. The Board also determined, in
consultation with the Company's outside legal counsel, that certain amendments
to clarify the indemnification by the Company of directors serving on the
Committee administering the Plan would be appropriate, and such amendments were
adopted by the Board on February 20, 1997. The Company believes that the
amendments to the indemnification provisions will assist it in attracting and
retaining qualified administrators for the Plan.
The Plan currently provides that it may be amended by the Board at any
time, provided that, without the approval of the shareholders, no amendment
shall be made which (a) shall cause any option under the Plan to fail to qualify
as an option under Section 423 of the Code, (b) shall increase the number of
shares of stock which may be optioned or sold pursuant to any offering, (c)
shall make any change in the employees or class of employees eligible to
participate in any offering, or (d) shall amend the Plan to extend its term.
Plan Approval
-------------
Approval of the amendments to the Plan requires the affirmative vote of
a majority of the shares represented at the 1997 annual meeting of shareholders.
Proxies solicited by the Board of Directors will be voted in favor of approval
of the amendments to the Plan unless shareholders specify in their proxies a
contrary choice.
-13-
<PAGE> 16
The Company believes the amendments to the Plan will assist it in
attracting and retaining qualified employees.
THE BOARD OF DIRECTORS THEREFORE RECOMMENDS A VOTE FOR THIS PROPOSAL.
-14-
<PAGE> 17
SECURITY OWNERSHIP OF
CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth certain information regarding the
beneficial ownership of the Company's Common Shares by all nominees for election
as Directors, by all Directors, by all Named Executive Officers, by all
Directors and Officers as a group, and by each person known to the Company to be
the beneficial owner of five percent or more of the outstanding Common Shares as
of January 31, 1997.
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
SHARES BENEFICIALLY OWNED(1)
-----------------------------------
BENEFICIAL OWNER NUMBER PERCENT
- --------------------------------------------------------------------------------
<S> <C> <C>
Kenneth W. Fletcher(2) 1,496,020 25.1
1100 East Central Avenue
Dayton, Ohio 45449
Donald C. Wright(3) 1,495,670 25.1
1100 East Central Avenue
Dayton, Ohio 45449
Howard W. Smith 176,627 3.0
2311 Wood Trails Court
Dayton, Ohio 45459
Robert M. Wilson(4) 21,400 *
1100 East Central Avenue
Dayton, Ohio 45449
Jerry L. Kirby(5) 3,500 *
One Citizens Federal Centre
Dayton, Ohio 45402
James F. Robeson(6) 4,172 *
5120 Bonham Road
Oxford, Ohio 45056
Gilbert P. Williamson(7) 3,057 *
2320 Kettering Tower
Dayton, Ohio 45423
Carl E. Gunter(8) 2,000 *
117 Lakeview Drive
Lenoir, North Carolina 28645
Michael Van Autreve(9) 8,750 *
1100 East Central Avenue
Dayton, Ohio 45449
Robert M. (Mickey) James(10) 10,106 *
1100 East Central Avenue
Dayton, Ohio 45449
Arthur C. Lanciers(11) 8,081 *
1100 East Central Avenue
Dayton, Ohio 45449
All Directors and executive officers 3,254,741 54.6
as a group (19 persons)(12)
Wellington Management Company, LLP 337,000 5.7
75 State Street
Boston, Massachusetts 02109
Piedmont Capital Management Corporation 630,800 10.6
One James Center
Richmond, Virginia 23219
<FN>
- ----------
* Less than one percent.
</TABLE>
-15-
<PAGE> 18
1 The persons named in the above table have sole voting and investment power
with respect to all shares shown as beneficially owned by them, except as
noted in the footnotes below.
2 Includes 1,000 shares held by Mr. Fletcher's spouse, for which Mr. Fletcher
disclaims any beneficial ownership.
3 Includes 650 shares held by Mr. Wright's spouse, for which Mr. Wright
disclaims any beneficial ownership.
4 Includes 21,250 shares underlying options that are currently exercisable,
and 150 shares held by Mr. Wilson as custodian for his minor son, over
which Mr. Wilson has voting power and dispositive power, but as to which he
disclaims beneficial ownership in all other respects.
5 Includes 500 shares held by Mr. Kirby's spouse, for which Mr. Kirby
disclaims any beneficial ownership, and 2,000 shares underlying options
that are currently exercisable.
6 Includes 1,000 shares held by Mr. Robeson's spouse for which Mr. Robeson
disclaims any beneficial ownership and 2,000 shares underlying options that
are currently exercisable.
7 Includes 2,000 shares underlying options that are currently exercisable.
8 All 2,000 shares underlie options that are currently exercisable.
9 All 8,750 shares underlie options that are currently exercisable.
10 Includes 3,500 shares underlying options that are currently exercisable.
11 Includes 6,750 shares underlying options that are currently exercisable.
12 Includes 3,184,241 shares held directly and by attribution and 70,500
shares underlying options that are currently exercisable.
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Based on the Company's review of Forms 3, 4 and 5 and certain written
representations from Directors and executive officers that have been submitted
to the Company with respect to the 1996 fiscal year, pursuant to Section 16(a)
of the Exchange Act, it appears that no such person failed to file, on a timely
basis, any reports required by that section.
INDEPENDENT AUDITORS
The firm of Deloitte & Touche LLP has served as the independent
auditors for the Company since 1987 including for the fiscal year ended December
31, 1996. The Company expects Deloitte & Touche LLP to so serve for the year
ending December 31, 1997. A representative of Deloitte & Touche LLP is expected
to be present at the annual meeting of shareholders. This representative will be
afforded an opportunity to make a statement at the meeting, if he so desires,
and will be available to respond to appropriate questions.
-16-
<PAGE> 19
SHAREHOLDER PROPOSALS
The deadline for shareholders to submit proposals to be considered for
inclusion in the Proxy Statement for next year's annual meeting of shareholders
is December 5, 1997. The Regulations of the Company impose additional
requirements affecting the submission of proposals by shareholders.
OTHER MATTERS
The management of the Company does not know of any matters which may
properly be presented at the meeting other than as specifically set forth in the
Notice of Annual Meeting. If any other matters come before the meeting or any
adjournment thereof, the persons named in the accompanying form of Proxy and
acting thereunder will vote in accordance with their best judgment with respect
to such matters.
ROBERDS, INC.
/s/ Robert M. Wilson
--------------------------------
By: ROBERT M. WILSON, Secretary
-17-
<PAGE> 20
EXHIBIT A
FOLLOWING IS THE AMENDED ROBERDS, INC. EMPLOYEE STOCK PURCHASE PLAN,
EDITED TO REFLECT THE AMENDMENTS PROPOSED TO BE APPROVED AT THE ANNUAL MEETING
OF SHAREHOLDERS ON MAY 13, 1997. CHANGES ARE INDICATED AS FOLLOWS: UNDERLINED
WORDS ARE TO BE ADDED TO, AND WORDS STRUCK THROUGH WITH A LINE ARE TO DELETED
FROM, THE AMENDED EMPLOYEE STOCK PURCHASE PLAN.
ROBERDS, INC.
AMENDED EMPLOYEE STOCK PURCHASE PLAN
AS AMENDED MAY [ ], 1997
ARTICLE I - PURPOSE
Section 1.1 - The Roberds, Inc. Employee Stock Purchase Plan (the
"Plan") is intended to encourage employees of Roberds, Inc. and its Subsidiaries
to remain in the employ of the Corporation or its Subsidiaries and to acquire a
proprietary interest in the Corporation through the purchase of its Common
Stock. It is intended that this Plan shall constitute an "Employee Stock
Purchase Plan" within the meaning of Section 423 of the Code. Pursuant to the
Plan, Employees will be able to purchase Common Stock of the Corporation, at a
price less than its fair market value on the date of purchase, from funds
accumulated through payroll deductions within a specified period from the
effective date of any Offering under the Plan.
ARTICLE II - DEFINITIONS
Section 2.1 - The following words and phrases shall have the meanings
indicated for the purposes of the Plan, unless the context clearly indicates
otherwise:
(a) "Board" - The Board of Directors of Roberds, Inc..
(b) "Code" - The Internal Revenue Code of 1986, as amended.
(c) "Committee" - The Committee provided for in Article III of the
Plan.
(d) "Stock" - The Common Stock of the Company, without par value, or
any Common Stock which is a successor to that class.
(e) "Corporation" - Roberds, Inc., an Ohio corporation.
(f) "Employee" - Any individual employed by the Corporation or any
Subsidiary except persons whose customary employment is for either (i) not more
than 20 hours per week, or (ii) not more than 5 months during any calendar year,
provided that he shall have at least 90 days of continuous employment
immediately prior to any Offering Date specified in Section 6.1.
(g) "Offering" - Any offering made by the Corporation in accordance
with applicable laws and regulations and the terms and conditions of the Plan,
permitting eligible Employees to purchase Stock under the Plan.
(h) "Option" - The right of an eligible Employee to purchase Stock
pursuant to an Offering.
(i) "Participating Employee" - An Employee who makes an authorization
for payroll deductions pursuant to Section 6.2 below.
-18-
<PAGE> 21
(j) "Plan" - The Roberds, Inc. Employee Stock Purchase Plan, as herein
set forth, and as amended from time to time pursuant to Section 13.1 below.
(k) "Subsidiary" - A corporation of which shares having 50% or more of
the voting power are owned or controlled, directly or indirectly, by the
Corporation.
Section 2.2 - The masculine gender shall include the feminine, and the
singular shall include the plural, where appropriate.
ARTICLE III - ADMINISTRATION OF THE PLAN
Section 3.1 - The Plan shall be administered by the Company's Board, or
by a committee ("Committee") of the Board, as determined from time to time by
the Board. The Committee shall consist of no fewer than three directors of the
Company who shall be appointed, from time to time, by the Board. All references
in this Plan to the Committee shall be understood to refer either to the full
Board or to the Committee, to the extent administration of the Plan has been
delegated by the Board to the Committee.
Section 3.2 - The Committee shall have full power to construe and
interpret the Plan (subject to advice of the Corporation's General Counsel with
respect to any question of law), to determine and fix the terms of Offerings and
Options, subject to the requirements and provisions of the Plan, and generally
to determine any and all questions arising under the Plan.
ARTICLE IV - EMPLOYEES ELIGIBLE TO PURCHASE STOCK
Section 4.1 - All Employees of the Corporation or of any Subsidiary of
the Corporation as of 9 p.m., Eastern Time, on an Offering Date as specified in
Section 6.1, shall be granted an Option to purchase Stock as described in more
detail herein, except for any such Employee, who immediately after the granting
of an Option, would own (or be deemed to own under the rules of Section
423(b)(3) or 425(d) of the Code) stock of any and all classes possessing five
percent (5%) or more of the total combined voting power or value of all classes
of stock of the Corporation or any Subsidiary. If the effect of the granting of
an Option to an Employee is such that his total stock ownership (as determined
under Sections 423(b)(3) and 425(d) of the Code) equals or exceeds such five
percent (5%) limitation, such Option shall be entirely void in the case of any
such Employee as if that Option had never been granted to him.
ARTICLE V - STOCK
Section 5.1 - The Stock subject to Offerings shall be the Corporation's
authorized but unissued shares of Stock and shares of Stock held in the
treasury, whether acquired by the Company specifically for use under the Plan or
otherwise, which may be used, as the Committee may from time to time determine,
for purposes of the Plan.
ARTICLE VI - OFFERINGS, GRANTING OF OPTIONS, AUTHORIZATION OF PAYROLL DEDUCTIONS
BY PARTICIPATING EMPLOYEES
Section 6.1 - Unless a different time period is specified by the
Committee, two six-month Offerings of Options to purchase shares of Stock under
the Plan will be made by the Committee to all Employees each calendar year,
commencing, respectively, on January 1 and July 1 of each calendar year (the
"Offering Dates") and terminating on June 30 and December 31 of each such year.
Notwithstanding the foregoing, the initial Offering under the Plan commenced on
January 1, 1994 and terminated on June 30, 1994. A new Offering of Options
shall be made with no further Committee action on the first day of each
subsequent six-month period thereafter, until the earlier of the expiration or
termination of the Plan, the suspension of further Offerings by the Committee or
providing a different
-19-
<PAGE> 22
time period for the Offerings. Every Employee on the effective date of any
Offering shall be deemed to have been granted an Option to purchase Stock in an
amount as provided in Section 6.2.
Section 6.2 - In an Offering, each Employee is granted an Option to
purchase the maximum number of whole shares of Stock which may be acquired based
on the percentage of the employee's total compensation which he has elected to
have withheld (up to a maximum of 15%) during his participation in the Offering.
Each eligible Employee may become a Participating Employee in an Offering by the
execution and delivery to the Corporation of a payroll deduction form not later
than the commencement date of any Offering under the Plan, as provided by the
Committee. A Participating Employee may authorize payroll deductions at the rate
of any whole percentage (up to a maximum of 15) of his total compensation (which
shall, for purposes of the Plan, be determined without excluding the amount of
any elective deferrals or other amounts withheld from his compensation) during
the period of the Offering.
After an Employee has become a Participating Employee in an Offering
his participation shall continue on the same basis in each subsequent Offering
thereafter, until: (i) such Offerings are terminated, (ii) the Participating
Employee withdraws or changes his payroll deduction pursuant to Section 6.4 or,
(iii) the Plan is terminated or expires.
For each Participating Employee authorizing a payroll deduction, the
Corporation will establish on its books a stock purchase account to which
payroll deductions will be credited. The amount credited to the account of each
Participating Employee shall be applied to pay for Stock purchased by such
Employee upon the exercise of his Option as provided herein. Stock subject to
Option under the Plan may only be purchased with amounts credited to an
Employee's stock purchase account; cash purchases are not permitted.
Section 6.3 - Amounts withheld from an Employee's pay shall be under
the control of the Corporation and need not be held in trust. Amounts credited
to the accounts of employees of Subsidiaries of the Corporation shall be
remitted to the Corporation from time to time.
Section 6.4 - A Participating Employee may, at any time not later than
five (5) business days prior to the close of any Offering, by written notice to
the Committee, direct the Corporation to reduce or cease payroll deductions and,
as the case may be:
(a) Exercise his Option to purchase with respect to the number
of shares which may be purchased at the Option Price for such Offering
(as determined pursuant to Section 7.1) with all or any specified part
of the amount then credited to his account, and withdraw in cash any
amount remaining in such account;
(b) Reduce the amount of his subsequent payroll deductions
and/or withdraw in cash all or any specified part of the amount then
credited to his account, in which event his Option to purchase shall be
reduced to the number of shares of Stock which may be purchased, at the
Option Price for such Offering (as determined pursuant to Section 7.1)
taking into account such reduced deduction or withdrawal;
(c) Withdraw in cash the amount credited to his account and
terminate his Option.
Any reduction made in the number of shares subject to Option to
purchase is subject to the provisions of Section 6.2 hereof and shall be
permanent.
ARTICLE VII - TERMS AND CONDITIONS OF OFFERINGS AND OPTIONS
Section 7.1 - Except as provided in subparagraph (d) of this Section
7.1, all eligible Employees shall have the same rights and privileges.
(a) Option Price.
-20-
<PAGE> 23
Except as the Committee may otherwise provide before the commencement
of any Offering, the price per share at which Stock may be purchased thereunder
shall be the lesser of (1) eighty-five percent (85%) of the fair market value
per share of Stock determined on the first day of the Offering, or (ii)
eighty-five (85%) of the fair market value per share of Stock determined on the
last day of the Offering. For purposes of Stock to be purchased pursuant to any
Offering hereunder, "fair market value" of a share shall mean the average of the
high and low prices reported in the consolidated reporting system (for exchange
traded securities and last sale reported over-the-counter securities) or the
average of the bid and asked prices (for other over-the-counter securities),
determined on the date the Offering commences and on the date the Offering
terminates, or, if no such prices are available, the fair market value on such
dates of a share as the Board shall determine. Unless other dates are specified
by the Committee, the date on which the Offering commences and the date the
Offering terminates shall be deemed the dates on which the fair market value of
a share of Stock shall be determined.
(b) Purchase of Stock
At the close of each Offering, a Participating Employee's
Option shall be exercised automatically for the purchase of that number
of full shares of Stock which the accumulated payroll deductions
credited to his account will purchase at the Option Price specified in
Section 7.1(a). Unless the Participating Employee otherwise directs,
any unused credit balance in his stock purchase account shall be used
to purchase Stock in the subsequent Offering, if he is a participant
therein.
(c) Term of Offering
The terms and Expiration Date of each Offering shall be
specified in each such Offering, but in no event shall any Offering
under the Plan be more than sixty (60) months in duration.
(d) Accrual Limitation
Notwithstanding any other provision of the Plan, no Offering
shall be deemed to have the effect of granting to any Employee an
Option which permits him to purchase Stock pursuant to all unexpired
Offerings under the Plan of the Corporation or any Subsidiary to accrue
at a rate which exceeds at any time twenty-five thousand dollars
($25,000) of the fair market value of the Stock (determined at the time
such Option is granted) during any calendar year in which such Option
is outstanding. For the purposes of this subparagraph (d):
(A) an Option accrues when the Option (or any portion thereof)
first becomes exercisable during any calendar year;
(B) an Option accrues at the rate provided in the applicable
Offering, but in the case of no Employee may such rate exceed
twenty-five thousand dollars ($25,000) of the fair market value of the
Stock (determined at the time the Option is granted) during any one
calendar year;
(C) an Option that has accrued under any one Offering may not
be carried over by an Employee to any other Offering; and
(D) only Options to purchase Stock that have been granted
under an Employee Stock Purchase Plan which complies with Section 423
of the Code shall be taken into account for purposes of this
subparagraph (d).
(e) Nontransferability of Options
An Option shall not be transferable by the Employee to whom it
has been granted otherwise than by will or the laws of descent and
distribution, and shall be exercisable, during his lifetime, only by
him. However, in the discretion of the Committee, the terms of any
Offering may prohibit transfer under any circumstances and provide for
cancellation of the unexercised portion of any Option upon the death of
an Employee.
-21-
<PAGE> 24
(f) Rights on Termination of Employment
Subject to any specific limitations and rules of uniform
application prescribed by the Committee in any Offering, in the event
that a Participating Employee ceases to be an Employee he shall have
the right for not more than three (3) months thereafter (or, in the
event of his death, his beneficiary or estate shall have the right for
not more than one (1) year thereafter) but not beyond the expiration of
any Offering, to: (i) elect to exercise his Option in respect to whole
Shares by applying all or any part of the amount previously credited to
his share purchase account and to receive any balance in cash; or (ii)
withdraw in cash the amount in his share purchase account and terminate
his election to purchase. In no event, however, shall anything
contained in this subparagraph (f) be deemed to confer upon any
Employee (or his beneficiary or estate in the event of his death) the
right to purchase more than the maximum number of shares of Stock that
he would otherwise have been entitled to purchase pursuant to the terms
of the applicable Offering.
(g) Other Provisions
Each Offering shall contain such other provisions as the
Committee shall deem advisable, provided that no such provision may in
any way conflict, or be inconsistent with, the terms of the Plan as
amended from time to time.
(h) Legal Requirements Re Issuing Shares
No shares of Stock shall be issued or transferred pursuant to
an Option unless and until all legal requirements applicable to the
issuance or transfer or such shares have, in the opinion of counsel to
the Company, been complied with. In connection with any such issuance
or transfer, the person acquiring the shares shall, if requested by the
Corporation, give assurances satisfactory to counsel to the Corporation
that the shares are being acquired for investment and not with a view
to resale or distribution thereof and assurances in respect of such
other matters as the Corporation or a Subsidiary may deem desirable to
assure compliance with all applicable legal requirements.
ARTICLE VIII - RECAPITALIZATION OR REORGANIZATION AND STOCK DIVIDENDS
Section 8.1 - If the Corporation shall be the surviving corporation in
any merger, consolidation or reorganization, each outstanding Option shall
pertain to and apply to the securities to which a holder of the number of shares
subject to that Option would have been entitled. Upon the adoption of any plan
for the dissolution or liquidation of the Corporation, or upon the approval of
any merger, consolidation or reorganization in which the Corporation is not the
surviving corporation, each outstanding Option shall terminate, provided,
however, that each Participating Employee shall, in such event, subject to such
rules and limitations of uniform applications as the Committee may prescribe, be
entitled to the rights of terminating Employees provided in Section 7(f) with
respect to the Offering in effect prior to the adoption or approval of any such
Plan.
Section 8.2 - The aggregate number of shares of Stock which may be sold
pursuant to all Offerings, the aggregate number of shares of Stock which may be
purchased by the exercise of outstanding Options in any Offering and the number
of shares of Stock and the Option Price per share covered by each such Offering
shall be proportionately adjusted for any increase or decrease in the number of
issued shares of Stock of the Corporation resulting from a subdivision or
consolidation of shares of Stock or other capital adjustment, or the payment of
a stock dividend or other increase or decrease in such shares of Stock effected
without the receipt of consideration by the Corporation.
Section 8.3 - The adjustments provided for in this Article shall be
made by the Committee, whose determination in that respect shall be final.
Section 8.4 - Except as provided in this Article, no Participating
Employee shall have any rights by reason of any subdivision or consolidation of
shares of stock of any class or the payment of any stock dividend or any other
-22-
<PAGE> 25
increase or decrease in the number of shares of stock of any class or by reason
of any dissolution, liquidation, merger or reorganization.
Section 8.5 - The grant of an Option under the Plan shall not affect in
any way the right or power of the Corporation to make adjustments,
reclassifications, reorganizations or changes of its capital or business
structure or to merge or to consolidate or to dissolve, liquidate or sell, or
transfer all or any part of its business or assets.
ARTICLE IX - RIGHTS AS STOCKHOLDERS
Section 9.1 - No Participating Employee nor the transferee of any
Option shall have any rights as a stockholder with respect to any Stock
purchased pursuant to any Offering until the issuance of a stock certificate for
such Stock. No adjustment shall be made for dividends (ordinary or
extraordinary, whether in cash, securities or other property) or distributions
or other rights for which the record date is prior to the date such stock
certificate is issued. Subject to Section 7(h), stock certificates shall be
issued promptly after the exercise of any Option in any Offering.
ARTICLE X - TERM OF PLAN
Section 10.1 - Offerings may be made under the Plan from time to time,
provided that no Offering shall terminate later than December 31, 2007.
ARTICLE XI - NUMBER OF SHARES
Section 11.1 - The aggregate number of shares of Stock that may be sold
pursuant to all Offerings under the Plan shall not exceed 500,000, subject to
adjustment pursuant to Article VIII.
ARTICLE XII - INDEMNIFICATION OF COMMITTEE
Section 12.1 - The members of the Committee shall be indemnified by the
Corporation against the reasonable expenses incurred in connection with the
defense of any action, suit or proceeding, or in connection with any appeal
thereof, to which they or any of them may be a party by reason of any action
taken or failure to act under or in connection with the Plan or any Offering or
Option, and against all amounts paid by them in settlement thereof (provided
such settlement is approved by legal counsel selected by the Corporation) or
paid by them in satisfaction of a judgment in any such action, suit or
proceeding. A member of the Committee shall not be entitled to indemnification
with respect to any matter or claim arising out of gross negligence or willful
misconduct by such member in the performance of his duties. As a condition of
any indemnification, a Committee member shall in writing offer the Corporation
the opportunity, as its own expense, to handle and defend any suit or claim
against him. The rights of indemnification provided in this Section 12.1 Shall:
(a) operate as a contract right of each member of the Committee, (b) be in
addition to (and shall not limit) any other rights of indemnification provided
to the member of the Committee pursuant to law, the articles of incorporation or
regulations of the Corporation, or any other instrument, and (c) survive
termination of service by the member of the Committee and termination of the
Plan.
ARTICLE XIII - AMENDMENT OR DISCONTINUANCE OF THE PLAN
Section 13.1 - The Plan may be amended by the Board at any time,
provided that, without the approval of the shareholders of the Corporation, no
amendment shall be made which (a) shall cause any Option to fail to qualify as
an option under Section 423 of the code, (b) shall increase the number of shares
of Stock which may be optioned or sold pursuant to any Offering, (c) shall make
any change in the Employees or class of Employees eligible to participate in any
Offering, (d) shall amend the provisions of Section 10.1 to extend the term of
the Plan, or (f) shall amend this Article XIII.
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Section 13.2 - The Board may by resolution adopted by a majority of the
entire Board discontinue the Plan.
Section 13.3 - No amendment or discontinuance of the Plan by the Board
or the shareholders of the Company shall adversely affect any Option theretofore
granted without the consent of any grantee of such Option.
ARTICLE XIV - EFFECTIVE DATE AND APPROVAL OF STOCKHOLDERS
Section 14.1 - The Plan was adopted by the Board on September 24, 1993
and approved by the shareholders on September 24, 1993. The Plan became
effective upon the effectiveness of the Company's Registration Statement, filed
by the Company under the Securities Act of 1933, on January 10, 1994,
Registration No. 33-73900.
The Plan was amended by the Board effective November 1, 1996, and was
amended again on February 20, 1997, to be effective upon approval by the
shareholders, and such shareholder approval was obtained on May [ ], 1997.
ROBERDS, INC., BY
/s/ Robert M. Wilson
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Robert M. Wilson, its
Executive Vice President
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ROBERDS, INC.
PROXY SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
ANNUAL MEETING OF SHAREHOLDERS
MAY 13, 1997
The undersigned hereby constitutes and appoints Kenneth W. Fletcher
and Robert M. Wilson, and each of them, his true and lawful agents and
proxies with full power of substitution in each, to represent the
undersigned at the annual meeting of shareholders of ROBERDS, INC. to
be held at the Dayton Marriott Hotel, 1414 South Patterson Boulevard,
Dayton, Ohio 45409 on May 13, 1997 at 2:00 p.m., Eastern Daylight
Savings Time, and at any adjournments thereof, on all matters coming
before said meeting.
1. The election as directors of all nominees listed below, except as
indicated to the contrary.
Kenneth W. Fletcher, Carl E. Gunter, Dr. James F. Robeson, and
Robert M. Wilson
[ ] FOR ALL NOMINEES LISTED ABOVE [ ] VOTE WITHHELD
For all the nominees above, except vote withheld from the following
nominee(s):
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2. Proposal to amend the Roberds, Inc. Employee Stock Purchase Plan.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
3. In their discretion, the Proxies are authorized to vote upon such
other business as may properly come before the meeting.
(CONTINUED ON REVERSE SIDE)
(CONTINUED FROM REVERSE SIDE)
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 THE NOMINEES AND PROPOSAL LISTED ABOVE.
Please sign exactly as name appears below.
When shares are held as 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.
Dated , 1997
---------------------
--------------------------------
Print Name of Shareholder
--------------------------------
Signature
--------------------------------
Print Shareholder Name if held
jointly
--------------------------------
Signature if held jointly
PLEASE MARK, SIGN, DATE AND RETURN THE PROXY CARD PROMPTLY USING THE
ENCLOSED ENVELOPE.
