<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
Tractor Supply Company
- ------------------------------------------------------------------------------
(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) (1)
and 0-11.
(1) Title of each class of securities to which transaction applies:
- ------------------------------------------------------------------------------
(2) Aggregate number of securities to which transaction applies:
- ------------------------------------------------------------------------------
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which the filing fee
is calculated and state how it was determined):
- ------------------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
- ------------------------------------------------------------------------------
(5) Total fee paid:
- ------------------------------------------------------------------------------
[ ] Fee paid previously with preliminary materials:
- ------------------------------------------------------------------------------
[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a) (2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number, or
the form or schedule and the date of its filing.
(1) Amount previously paid:
- ------------------------------------------------------------------------------
(2) Form, Schedule or Registration Statement no.:
- ------------------------------------------------------------------------------
(3) Filing Party:
- ------------------------------------------------------------------------------
(4) Date Filed:
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<PAGE> 2
[TRACTOR SUPPLY CO. LOGO]
TRACTOR SUPPLY COMPANY
320 PLUS PARK BOULEVARD
NASHVILLE, TENNESSEE 37217
To Our Stockholders:
On behalf of the Board of Directors, it is our pleasure to invite you
to attend the 1998 Annual Meeting of Stockholders of Tractor Supply Company.
As shown in the formal notice enclosed, the meeting will be held on
Thursday, April 23, 1998, at 10:00 a.m. (central time) at our management
headquarters in Nashville, Tennessee. The purpose of this year's meeting is to
elect one Class I Director for a term of three years, to ratify the
reappointment of Price Waterhouse LLP as the Company's independent certified
public accountants for fiscal 1998, and to transact such other business as may
properly come before the meeting. The meeting will include a report on Tractor
Supply Company's activities for the fiscal year ended December 27, 1997 and
there will be an opportunity for comments and questions from stockholders.
Whether or not you plan to attend the meeting, it is important that you
be represented and that your shares be voted. Accordingly, after reviewing the
Proxy Statement, we ask you to complete, sign and date the proxy card and return
it as soon as possible in the postage-paid envelope provided. Early return of
your proxy will permit us to avoid the expense of soliciting the votes of
stockholders who are late sending in their proxy cards.
Sincerely,
Joseph H. Scarlett, Jr.
Chairman of the Board
and Chief Executive Officer
March 20, 1998
<PAGE> 3
TRACTOR SUPPLY COMPANY
320 PLUS PARK BOULEVARD
NASHVILLE, TENNESSEE 37217
(615) 366-4600
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD APRIL 23, 1998
NOTICE IS HEREBY GIVEN that the 1998 Annual Meeting of Stockholders of
Tractor Supply Company, a Delaware corporation (the "Company"), will be held at
the Company's management headquarters, 320 Plus Park Boulevard, Nashville,
Tennessee, on Thursday, April 23, 1998, at 10:00 a.m. (central time) (the
"Annual Meeting") for the following purposes:
1. To elect one Class I Director for a three-year term ending at
the 2001 Annual Meeting of Stockholders;
2. To ratify the reappointment of Price Waterhouse LLP as
independent certified public accountants for the fiscal year
ending December 26, 1998; and
3. To transact such other business as may properly come before
the meeting and any continuations and adjournments thereof.
The Board of Directors has fixed the close of business on March 11,
1998 as the record date for determining the holders of the Common Stock of the
Company entitled to notice of and to vote at the Annual Meeting and any
adjournments thereof.
The Common Stock of the Company should be represented as fully as
possible at the Annual Meeting. Therefore, please sign and return the enclosed
proxy at your earliest convenience. You may, of course, revoke your proxy at any
time before it is voted at the meeting. However, signing and returning the proxy
will assure your representation at the Annual Meeting if you do not attend.
By Order of the Board of Directors
Michael J. Kincaid
Vice President-Controller and Secretary
Nashville, Tennessee
March 20, 1998
- ------------------------------------------------------------------------------
YOUR VOTE IS IMPORTANT. PLEASE COMPLETE, SIGN,
DATE AND RETURN YOUR PROXY.
- ------------------------------------------------------------------------------
<PAGE> 4
TRACTOR SUPPLY COMPANY
320 PLUS PARK BOULEVARD
NASHVILLE, TENNESSEE 37217
(615) 366-4600
PROXY STATEMENT
ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD APRIL 23, 1998
INTRODUCTION AND VOTING PROCEDURES
This Proxy Statement is being furnished in connection with the
solicitation of proxies by the Board of Directors (the "Board") of Tractor
Supply Company, a Delaware corporation (the "Company"), for use at the 1998
Annual Meeting of Stockholders of the Company to be held at the Company's
management headquarters, 320 Plus Park Boulevard, Nashville, Tennessee, on
Thursday, April 23, 1998, at 10:00 a.m. (central time) and at any continuations
and adjournments thereof (the "Annual Meeting"). This Proxy Statement is first
being mailed on or about March 20, 1998 to holders of record of the common
stock, par value $.008 per share, of the Company (the "Common Stock") at the
close of business on March 11, 1998.
The shares of Common Stock held by each stockholder who signs and
returns the enclosed proxy will be counted for purposes of determining the
presence of a quorum at the meeting unless such proxy shall be timely revoked.
If the enclosed form of proxy is executed and returned, it may, nevertheless, be
revoked at any time before it is voted by delivery of a written revocation or a
duly executed proxy bearing a later date to the Secretary of the Company at its
management headquarters or by the stockholder personally attending and voting
his or her shares at the meeting.
The Board has fixed the close of business on March 11, 1998 as the
record date (the "record date") for the meeting. Only stockholders of record at
the close of business on March 11, 1998 are entitled to notice of and to vote at
the Annual Meeting. At the close of business on March 11, 1998, there were
8,736,494 shares of Common Stock outstanding and entitled to vote at the Annual
Meeting. Each share of Common Stock entitles the holder thereof to one vote on
each matter to be considered at the Annual Meeting. A quorum (i.e., holders of
record of a majority of the shares of Common Stock outstanding and entitled to
vote at the Annual Meeting) is required for any vote taken at the Annual
Meeting. Assuming a quorum is present with respect to such matters, the
affirmative vote of the holders of a plurality of the shares of Common Stock
present in person or represented by proxy is required for the election of
directors, and the affirmative vote of the holders of a majority of the shares
of Common Stock present in person or represented by proxy is required for the
approval of any other matter submitted to a vote of the stockholders at the
Annual Meeting. Under Delaware law, abstentions are treated as present and
entitled to vote and, therefore, will be counted in determining whether a quorum
is present and will have the effect of a vote withheld on the election of
directors or a vote against any other matter. A broker non-voted share (i.e., a
share held by a broker or nominee as to which instructions have not been
received from the beneficial owner or person entitled to vote and as to which
the broker or nominee does not have discretionary power to vote on a particular
matter) is considered not entitled to vote on that matter and, therefore, will
not be counted in determining whether a quorum is present or whether a matter
has been approved.
The Annual Report to Stockholders of the Company for the fiscal year
ended December 27, 1997, including audited financial statements (the "Annual
Report"), is being mailed concurrently with this Proxy Statement to all holders
of record of Common Stock at the close of business on March 11, 1998. In
addition, the Company has provided brokers, dealers, banks, voting trustees and
their nominees, at Company expense,
1
<PAGE> 5
with additional copies of the Annual Report so that such record holders could
supply such material to beneficial owners as of March 11, 1998. Additional
copies of the Annual Report and the Company's Annual Report on Form 10-K for the
fiscal year ended December 27, 1997 to be filed with the Securities and Exchange
Commission (the "Form 10-K") (but without exhibits to the Form 10-K) may be
obtained without charge upon request to the Company's investor relations firm,
Corporate Communications, Inc., 523 Third Avenue South, Nashville, Tennessee
37210. See "Availability of Form 10-K and Annual Report to Stockholders."
EACH PROPERLY EXECUTED PROXY RECEIVED IN TIME FOR THE MEETING WILL BE
VOTED AS SPECIFIED THEREIN. IF NO SPECIFICATION IS MADE, THE SHARES REPRESENTED
THEREBY WILL BE VOTED FOR THE ELECTION OF THOMAS O. FLOOD AS CLASS I DIRECTOR,
AND FOR RATIFICATION OF THE REAPPOINTMENT OF PRICE WATERHOUSE LLP AS THE
COMPANY'S INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS FOR THE FISCAL YEAR ENDING
DECEMBER 26, 1998.
ELECTION OF CLASS I DIRECTOR
AND INFORMATION REGARDING DIRECTORS
ELECTION OF CLASS I DIRECTOR
Pursuant to the Company's Restated Certificate of Incorporation, as
amended, the Board is divided into three classes designated as Class I, Class II
and Class III, respectively. At the Annual Meeting the current term of the Class
I director will expire. The Board has nominated the incumbent Class I director,
Thomas O. Flood, for election as Class I director for a three-year term expiring
at the 2001 Annual Meeting of Stockholders. The following table sets forth
certain information concerning the nominee for election as Class I director.
<TABLE>
<CAPTION>
NAME AND AGE DIRECTOR POSITIONS WITH COMPANY, DIRECTORSHIPS AND
SINCE BUSINESS EXPERIENCE FOR LAST FIVE YEARS
- ------------------------------------------- --------------- --------------------------------------------------
<S> <C> <C>
Thomas O. Flood, 51 .......................... 1985 Senior Vice President of Administration and
Finance, Treasurer and Chief Financial Officer
of the Company since January 1996, after having
served as Vice President of Administration and
Finance of the Company since 1984 and Chief
Financial Officer and Treasurer since June
1993. Previously served as Vice President of
Finance of the Company from 1982 to 1984, as
Controller from 1981 to 1982 and in various
financial and management information systems
capacities between 1969 and 1981.
</TABLE>
If a nominee becomes unwilling or unable to serve, which is not
expected, the proxies will be voted for a substitute person designated by the
Board.
- ------------------
THE BOARD UNANIMOUSLY RECOMMENDS THAT THE STOCKHOLDERS OF THE COMPANY
VOTE "FOR" THE PROPOSAL TO ELECT THOMAS O. FLOOD AS CLASS I DIRECTOR OF THE
COMPANY TO HOLD OFFICE UNTIL THE 2001 ANNUAL MEETING OF STOCKHOLDERS.
2
<PAGE> 6
INFORMATION CONCERNING CLASS II DIRECTORS
The following table sets forth certain information concerning the Class
II directors of the Company, whose terms expire at the 1999 Annual Meeting of
Stockholders.
<TABLE>
<CAPTION>
DIRECTOR POSITIONS WITH COMPANY, DIRECTORSHIPS AND
NAME AND AGE SINCE BUSINESS EXPERIENCE FOR LAST FIVE YEARS
- ------------------------------------------- --------------- --------------------------------------------------
<S> <C> <C>
Thomas J. Hennesy, III, 68 ................ 1982 Retired as Vice Chairman of the Company in June.
1995, after having served as Vice Chairman of
the Company since February 1993, Chairman and
Chief Executive Officer of the Company from 1982
to February 1993 and President of the Company
from 1982 to 1987. Previously served as
President of several subsidiaries of, and as
Vice President - Operations of, Fuqua
Industries, Inc. from 1974 to 1982
Joseph D. Maxwell, 59 ..................... 1985 Retired as Vice President of Marketing of the
Company in June 1996, after having served as
Vice President of Marketing of the Company
since 1984 Previously served in various
capacities with the Company from 1980 to 1984
From 1967 to 1980, was employed by Hallmark Auto
Centres, Ltd., a retail subsidiary of Goodyear
Canada, last serving as Chief Operating
Officer for five years.
Joseph M. Rodgers, 64 .................... 1995 Chairman of The JMR Group, an investment company
located in Nashville, Tennessee, since 1984.
Previously served as the United States
Ambassador to France from 1985 until 1989.
Other directorships: AMR Corporation / American
Airlines, Inc., Fort Worth, Texas, since 1989;
Gaylord Entertainment Company, Nashville,
Tennessee, since 1991; Gryphon Holdings Inc.,
New York, New York, since 1993; Lafarge
Corporation, Reston, Virginia, since 1989;
SunTrust Bank, Nashville, N.A., Nashville,
Tennessee, since 1989; Thomas Nelson, Inc.,
Nashville, Tennessee, since 1992; and Willis
Corroon Group plc, London, England and
Nashville, Tennessee, since 1990.
</TABLE>
<PAGE> 7
INFORMATION CONCERNING CLASS III DIRECTORS
The following table sets forth certain information concerning the Class
III directors of the Company, whose terms expires at the 2000 Annual Meeting of
Stockholders.
<TABLE>
<CAPTION>
DIRECTOR POSITIONS WITH COMPANY, DIRECTORSHIPS AND
NAME AND AGE SINCE BUSINESS EXPERIENCE FOR LAST FIVE YEARS
- ------------------------------------------- --------------- --------------------------------------------------
<S> <C> <C>
Joseph H. Scarlett, Jr., 55 ............... 1982 Chairman and Chief Executive Officer of the
Company since February 1993 after having served
as President and Chief Operating Officer of the
Company since 1987. Between 1979 and 1987,
served as Vice President of Personnel, Senior
Vice President of Administration and Executive
Vice President of Operations of the Company.
Prior to 1979, held operational positions,
including District Supervisor and Personnel
Director, with Two Guys Discount Stores in New
Jersey over a 15 year period. Member of the
International Mass Retail Association Board.
S.P. Braud, 67 ............................ 1993 President and director of Braud Design/Build
Inc., a residential construction company located
in Ponte Vedra Beach, Florida, since October
1992. Previously served as a Vice President and
the Treasurer and Chief Financial Officer of
Service Merchandise Company, Inc. from 1986 to
1993, a Vice President and the Controller of the
Retail Group of General Mills from 1982 to 1986,
the Chief Financial Officer of the Specialty
Retailing Group of W.R. Grace & Company and the
Senior Vice President of Operations of Shepler's
Western Wear (a subsidiary of W.R. Grace &
Company) from 1977 to 1982, the Senior Vice
President of Finance and Administration for
White Stores from 1975 to 1977 and the
Controller of the North Central Region of
Montgomery Ward from 1972 to 1975.
</TABLE>
BOARD OF DIRECTORS
AND COMMITTEES OF THE BOARD
COMPENSATION OF DIRECTORS - The Company pays each director who is not
also an employee of the Company an annual retainer of $8,000. In addition, the
Company pays all such non-employee directors $500 for each Board meeting
attended, or committee meeting attended if not held in conjunction with a Board
4
<PAGE> 8
meeting, and reimburses all directors for out-of-pocket expenses incurred in
connection with their attendance at Board and committee meetings. Moreover, each
of the directors is eligible to participate in the Company's 1994 Stock Option
Plan under which non-qualified stock options for 500 shares of Common Stock are
automatically granted annually to each of the non-employee directors with an
exercise price equal to the fair market value of such shares at the time of
grant. No director who is an employee of the Company receives compensation for
services rendered as a director.
BOARD OF DIRECTORS - During the Company's fiscal year ended December
27, 1997 ("fiscal 1997"), the Board held four meetings. The Board has three
standing committees, the Audit Committee, the Compensation Committee and the
Executive Committee. The Board does not have a standing nominating committee.
During fiscal 1997, the Audit Committee held three meetings, the Compensation
Committee held three meetings and the Executive Committee held none. During
fiscal 1997, all of the incumbent directors of the Company attended 100% of the
aggregate number of meetings of the Board and the respective Committees of the
Board on which they served that were held during the period of time that such
person served on the Board or such Committee.
AUDIT COMMITTEE - The Audit Committee, which is comprised of Messrs.
Braud (Chairman) and Rodgers, is responsible for overseeing the auditing
procedures and financial reporting of the Company, reviewing the general scope
of the Company's annual audit and the fee charged by the Company's independent
certified public accountants, determining the duties and responsibilities of the
internal auditors, receiving, reviewing and accepting the reports of the
Company's independent certified public accountants, reviewing and approving
related-party transactions and overseeing the Company's systems of internal
accounting and management controls.
COMPENSATION COMMITTEE - The Compensation Committee, which is comprised
of Messrs. Braud (Chairman) and Rodgers, is responsible for reviewing and
recommending the appropriate compensation and benefits of directors and officers
of the Company, considering and making grants and awards under and administering
the Company's 1994 Stock Option Plan and overseeing the Company's various other
compensation and benefit plans.
EXECUTIVE COMMITTEE - The Executive Committee, which is comprised of
Messrs. Scarlett (Chairman) and Braud, is responsible for exercising all of the
powers of the Board between Board meetings, except as otherwise limited by the
Company's Amended and Restated By-laws and applicable law.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
Messrs. Braud and Rodgers serve on the Compensation Committee of the
Board. There are no, and during fiscal 1997 there were no, interlocking
relationships between any officers of the Company and any entity whose directors
or officers serve on the Board's Compensation Committee, nor did any current or
past officers of the Company serve on the Compensation Committee during fiscal
1997.
5
<PAGE> 9
EXECUTIVE COMPENSATION
The following table summarizes information concerning cash and non-cash
compensation paid to or accrued for the benefit of the Company's Chief Executive
Officer and each of the four other most highly compensated executive officers of
the Company for all services rendered in all capacities to the Company for the
fiscal years ended December 27, 1997, December 28, 1996 and December 30, 1995:
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
Long-Term
Annual Compensation Compensation
----------------------------------------------- ------------
Awards
------------
Fiscal Other Annual Stock Options All Other
Name and Principal Position Year Salary (1) Bonus Compensation (in shares) Compensation (2)
--------------------------- ------ ---------- ------- ------------ -------------- ---------------
<S> <C> <C> <C> <C> <C> <C>
Joseph H. Scarlett, Jr .......... 1997 $ 325,000 $ -- -- -- $ 14,766
Chairman of the Board and 1996 $ 325,000 $65,000 -- -- $ 22,768
Chief Executive Officer 1995 $ 291,512 $87,450 -- -- $ 27,559
Thomas O. Flood ................. 1997 $ 182,000 $ -- -- -- $ 10,538
Senior Vice President- 1996 $ 182,000 $36,400 -- -- $ 12,798
Administration and Finance, 1995 $ 176,306 $52,890 -- -- $ 19,746
Treasurer and Chief Financial
Officer (3)
James R. McMurray ............... 1997 $ 146,601 $ -- -- 13,000 $ 9,751
Vice President-Information 1996 $ 125,008 $18,750 -- 10,000 $ 12,292
Technology and Chief 1995 $ 120,250 $24,000 -- 2,000 $ 4,812
Information Officer (4)
Daisy L. Vanderlinde ............ 1997 $ 122,653 $15,000 -- 13,000 $ 14,058
Vice President-Human 1996 $ 89,993 $24,000 -- 8,000 $ 4,019
Resources (5) 1995 $ -- $ -- -- -- $ --
Lawrence Goldberg ............... 1997 $ 128,102 $ -- -- 13,000 $ 7,403
Vice President-Logistics 1996 $ 125,008 $18,750 -- 10,000 $ 7,774
1995 $ 115,518 $23,100 -- 2,000 $ 10,913
</TABLE>
- ---------------
(1) Includes portion of salary deferred at named executive's election under the
Tractor Supply Company Employee 401(k) Retirement Plan (the "401(k) Plan").
(2) Compensation reflected in this column is comprised of Company contributions
to the 401(k) Plan, amounts credited as Company contributions under the
Deferred Compensation Plan, amounts paid by the Company pursuant to the
Medical Expense Reimbursement Plan, premiums paid by the Company pursuant
to the Executive Life Insurance Plan and amounts paid or reimbursed for
certain moving and relocation expenses. Amounts for fiscal 1997 are as
follows:
(a) Company contributions to the 401(k) Plan in the amount of $10,124 for
Mr. Scarlett; $6,793 for Mr. Flood; $4,182 for Mr. McMurray; $0 for Ms.
Vanderlinde; and $4,501 for Mr. Goldberg.
(b) Amounts credited as Company contributions under the Deferred
Compensation Plan in the amount of $0 for Mr. Scarlett; $0 for Mr.
Flood; $0 for Mr. McMurray; $0 for Ms. Vanderlinde; and $0 for Mr.
Goldberg.
(c) Amounts paid by the Company pursuant to the Medical Expense
Reimbursement Plan in the amount of $1,656 for Mr. Scarlett; $1,948 for
Mr. Flood; $4,199 for Mr. McMurray; $5,898 for Ms. Vanderlinde; and
$1,707 for Mr. Goldberg.
(d) Premiums paid by the Company pursuant to the Executive Life Insurance
Plan in the amount of $2,986 for Mr. Scarlett; $1,798 for Mr. Flood;
$1,370 for Mr. McMurray; $1,114 for Ms. Vanderlinde; and $1,195 for Mr.
Goldberg.
(e) Amount paid or reimbursed by the Company for certain moving and
relocation expenses in the amount of $7,046 for Ms. Vanderlinde.
(3) Mr. Flood was elected Senior Vice President of Administration and Finance,
Treasurer and Chief Financial Officer in January 1996, having previously
served as Vice President of Administration and Finance since 1984 and as
Chief Financial Officer and Treasurer since June 1993.
(4) Mr. McMurray was elected Vice President-Information Technology and Chief
Information Officer in January 1996, having previously served as Vice
President-Management Information Systems since December 1994.
(5) Ms. Vanderlinde was elected Vice President-Human Resources in April 1996.
6
<PAGE> 10
OPTION GRANTS IN LAST FISCAL YEAR
The following table reflects certain information with respect to
options to acquire shares of the Company's Common Stock granted under the
Company's 1994 Stock Option Plan to the executive officers named in the Summary
Compensation Table above (excluding Messrs. Scarlett and Flood, who do not
participate in the Stock Option Plan) during the fiscal year ended December 27,
1997.
<TABLE>
<CAPTION>
Individual Grants (1) Potential Realizable Value at
- ----------------------------------------------------------------------------- Assumed Annual Rates of Stock Price
Appreciation for Option Term (2)
--------------------------------------
Percent of
Total
Number of Options
Securities Granted to
Underlying Employees Exercise or
Options in Fiscal Base Price Expiration
Name Granted (#) Year (%) ($/Sh) Date 5% ($) 10% ($)
- ------------------ --------------- --------------- -------------- ----------- --------------------- ----------------
<S> <C> <C> <C> <C> <C> <C>
James R.
McMurray 3,000 3.3 20.00 1/22/07 37,734 95,625
10,000 3.9 17.75 8/15/07 111,629 282,889
Daisy L.
Vanderlinde 3,000 3.3 20.00 1/22/07 37,734 95,625
10,000 3.9 17.75 8/15/07 111,629 282,889
Lawrence
Goldberg 3,000 3.3 20.00 1/22/07 37,734 95,625
10,000 3.9 17.75 8/15/07 111,629 282,889
</TABLE>
(1) The exercise price of the options granted is equal to the fair market value
of the Company's Common Stock on the date of grant. Options generally have a
10-year term. Options generally vest 33 % each year, beginning on the third
anniversary of the grant date, thus becoming 100% vested on the fifth
anniversary of the grant date.
(2) The potential realizable value amounts shown illustrate the values that
might be realized upon exercise immediately prior to the expiration date using
5% and 10% appreciation rates set by the Securities and Exchange Commission,
compounded annually, and, therefore, are not intended to forecast possible
future appreciation, if any, of the Company's Common Stock price. Additionally,
these values do not take into consideration the terms of the options providing
for nontransferability, vesting, or termination of the options following
termination of employment.
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR
AND FISCAL YEAR-END OPTION VALUES
The following table reflects certain information with respect to options to
acquire shares of the Company's Common Stock under the Company's 1994 Stock
Option Plan exercised during the fiscal year ended December 27, 1997 and options
held at fiscal year end by the officers named in the Summary Compensation Table
above (excluding Messrs. Scarlett and Flood, who do not participate in the Stock
Option Plan).
7
<PAGE> 11
<TABLE>
<CAPTION>
Number of Value of
Securities Underlying Unexercised
Unexercised In-the-Money
Options Options at
at FY-End (#) FY-End ($) (1)
-------------------------- --------------------------
Shares Value
Name Acquired on Realized Exercisable/ Exercisable/
Exercise (#) ($) Unexercisable Unexercisable
- ------------------ --------------- ----------------- -------------------------- --------------------------
<S> <C> <C> <C> <C>
James R.
McMurray -0- -0- -0- / 25,000 -0- / -0-
Daisy L.
Vanderlinde -0- -0- -0- / 21,000 -0- / -0-
Lawrence
Goldberg -0- -0- 333 / 26,000 -0- / -0-
</TABLE>
(1) The value of unexercised in-the-money options is calculated based on the
difference between the option exercise price and the closing price of the
Company's Common Stock at fiscal year end, multiplied by the number of shares
underlying the options. The closing price of the Company's Common Stock as
reported on The Nasdaq National Market on December 24, 1997 was $14.50.
COMPENSATION COMMITTEE'S REPORT ON EXECUTIVE COMPENSATION
This report by the Compensation Committee is provided in accordance with
rules adopted by the Securities and Exchange Commission to inform stockholders
of the Compensation Committee's policies for executive officers and the
rationale for compensation paid to the Company's Chief Executive Officer. It is
not to be incorporated by reference by any general statement which incorporates
by reference this proxy statement into any filing under the Securities Act of
1933, as amended, or the Securities Exchange Act of 1934, as amended, and is not
to be otherwise deemed filed under either such Act.
The Compensation Committee of the Board has furnished the following report
on executive compensation:
Under the supervision of the Compensation Committee of the Board, the
Company has developed and implemented compensation policies, plans and programs
("Compensation Policies") which seek to structure executive compensation
consistent with the Company's overall business strategy, philosophy and
objectives. The Compensation Policies are intended to embody a
"pay-for-performance" philosophy which rewards executives for long-term
strategic management and enhancement of stockholder value by providing
performance-based incentives that measure rewards against personal and Company
goals. The Company believes this philosophy attracts, retains and motivates key
executives critical to the long-term success of the Company.
This compensation philosophy is implemented through compensation packages
which include various cash and non-cash components. Although no formal analysis
of compensation was conducted by the Compensation Committee, the Company
believes, based in part on independent compensation surveys of the retail
industry in general and the Company's survey of select retailers, that its base
salaries are generally set somewhat below competitive levels; it therefore
relies to a larger degree on annual and longer term "incentive" compensation.
In setting annual salaries, the Compensation Committee reviews an annual
salary plan recommended by the Company for each of the Company's officers. The
annual salary plan is based on numerous subjective factors which include the
officer's individual performance and responsibility level, and the Company's
performance for the preceding fiscal year as well as objective factors such as
inflation and matching the
8
<PAGE> 12
officer's position to comparable positions in the competitive marketplace by
reference to the surveys referred to above. Generally, the salary goal for
officers is targeted at or below the salary range mid-point of the 50th
percentile of salaries for comparable positions (based on the surveys referred
to above) so that a larger portion of the officer's compensation is tied to
Company performance, thereby more closely linking executive and stockholder
interests. The annual salary plans are established by the Compensation Committee
based on its assessment of the foregoing factors, as well as its assessment of
the officer's past performance and the Compensation Committee's expectation of
the officer's future contributions in leading the Company.
For the fiscal year ended December 27, 1997, Joseph H. Scarlett, Jr., the
Company's Chairman of the Board and Chief Executive Officer, received a base
salary of $325,000, the same base salary as in the prior fiscal year. Mr.
Scarlett's salary is determined by the Compensation Committee substantially in
accordance with the policies described above relating to all officers of the
Company. In particular, the Compensation Committee determined that the Company's
overall, below expectation performance outweighed Mr. Scarlett's personal
performance and accomplishments and expectations of Mr. Scarlett's future
contributions in leading the Company. The Company believes that Mr. Scarlett's
base salary is below the salary mid-point of the 50th percentile of salaries for
chief executive officers for retail companies of comparable size based on the
compensation surveys referred to above.
All executive officers participate in the Company's Senior Executive
Incentive Plan ("SEIP") under which they are eligible to receive a bonus ranging
from 20% of their annual base salary if the Company realizes a FIFO pretax
profit increase ("profit increase") ranging from 3% to 6%, to 70% of their
annual base salary if the Company realizes a profit increase of 41% or more.
Certain other officers participate in the Company's Other Executive Incentive
Plan ("OEIP") under which they are eligible to receive a bonus ranging from 15%
of their annual base salary if the Company realized a profit increase ranging
from 3% to 6%, to 50% of their annual base salary if the Company realizes a
profit increase of 41% or more. The Compensation Committee may recommend, and
the Board may award, at its discretion, bonuses based on other subjective
factors such as the executive's individual performance, unusual factors,
strategic long-term decisions affecting the Company's performance during the
fiscal year, and the perceived expectation of the executive officer's future
contributions in leading the Company. The Compensation Committee or the Board
may amend or terminate the SEIP or the OEIP at any time. For fiscal 1997, all of
the officers were awarded bonuses as reflected in the Summary Compensation Table
contained elsewhere in the proxy statement.
A large portion of the officers' total compensation is tied to stock
performance, thus more closely aligning their interests with the long-term
interests of stockholders. This is accomplished primarily through the Company's
1994 Stock Option Plan, which is administered by the Compensation Committee of
the Board of Directors. Stock options generally are granted annually to all
officers and other key employees (excluding Messrs. Scarlett and Flood), have a
10 year term, are exercisable at the market price on the date of grant, and vest
33 % each year, beginning on the third anniversary of the grant date, thus
becoming 100% vested on the fifth anniversary of the grant date. The stock
option grant size is determined by the Compensation Committee and generally is
based on the number of shares whose present value equals a percentage of the
salary mid-point for a comparable position in the retailing industry, with the
largest number of option shares being granted to senior executive officers (100%
of such salary mid-point) decreasing incrementally, based on position, to 50% of
such salary mid-point. The stock option grant size may also be impacted by the
officer's individual past performance, expectation of the officer's future
contributions in leading the Company, and the Company's overall performance.
Messrs. Scarlett and Flood have chosen not to participate in the Company's 1994
Stock Option Plan due to their already large stock ownership as shown elsewhere
in the proxy statement.
The Company's officers are also compensated, to a lesser extent,
pursuant to several other plans. The Deferred Compensation Plan ("DCP"), which
is administered by the Compensation Committee, provides additional incentives
for officers of the Company (excluding Messrs. Scarlett and Flood) and enhances
the
9
<PAGE> 13
Company's ability to attract and retain the services of qualified persons.
According to the terms of the DCP, each year a percentage of the officer's
annual base salary (ranging from 2% of his or her annual base salary if the
Company's net income increase over the prior year (the "net income increase") is
less than or equal to 0%, to 6% of his or her annual base salary if the
Company's net income increase is greater than 20%) will be allocated to his or
her deferred compensation account under the DCP (provided, however, that no
allocation will be made if the Company's net income is less than 2.5% of net
sales), which account earns simple interest at the prime rate as in effect on
January 1 each year and vests upon the officer's retirement after attaining age
55, contingent (in most cases) on such officer's continued employment with the
Company until age 55. In July 1997, after considering that Messrs. Scarlett and
Flood have chosen not to participate in the Company's 1994 Stock Option Plan due
to their already large stock ownership, the Compensation Committee recommended,
and the Board approved, the SERPSwap Collateral Assignment Split Dollar
Insurance Plans (the "SERP Plans") intended to provide additional incentives to
Messrs. Scarlett and Flood and replace their existing DCP's. Pursuant to the
terms of the SERP Plans, premiums under the SERP Plans will be paid by the
Company (estimated to be approximately $105,000 annually and $48,500 annually
regarding Messrs. Scarlett and Flood, respectively) for a period of 10 years,
the Company will obtain a collateral assignment in each of their respective
insurance policies covering the full amount of the premiums paid by the Company
(the Company will be reimbursed from the cash surrender value or death proceeds
from each of their respective insurance policies), and the insurance policies
will be released to each of their respective trusts in the 16th year, at which
time the death benefit value of the insurance policies is estimated to be
approximately $2.8 million and $1.9 million regarding Messrs. Scarlett and
Flood, respectively. Officers also participate in (i) the Medical Expense
Reimbursement Plan, which provides for reimbursement in amounts up to $20,000
annually for certain medical expenses for themselves and their families not
otherwise covered by the Company's group medical insurance plan and (ii) the
Executive Life Insurance Plan, which provides for basic term life insurance
coverage (equal to four times salary rounded to the next highest $1,000 to a
maximum of $1,000,000) in excess of that which is provided by the Company's
group life insurance plan.
The Company's officers also participate in the various qualified and
non-qualified employee benefit plans sponsored by the Company. The Company makes
only nominal use of perquisites in compensating its executive officers.
The Compensation Committee believes that the Company's Compensation
Policies are strongly linked to the Company's performance and the enhancement of
stockholder value. The Compensation Committee intends to continually evaluate
the Company's Compensation Policies and plans to ensure that they are
appropriately configured to align the interests of officers and stockholders and
that the Company can attract, motivate and retain talented management personnel.
The tables included in the proxy statement and the accompanying narrative
and footnotes reflect the decisions covered by the above discussion. The
foregoing report has been furnished by the members of the Compensation
Committee:
S.P. Braud (Chairman)
Joseph M. Rodgers
10
<PAGE> 14
PERFORMANCE GRAPH
The following graph compares the percentage change in the cumulative
total stockholder return on the Company's Common Stock from February 17, 1994
(the commencement date of the Company's initial public offering of Common Stock)
to December 27, 1997 (the Company's fiscal year-end) with the cumulative total
returns of the S&P 500 Index and the S&P Retail (Building Supplies)-500 Index
over the same period. The comparison assumes that $100 was invested on February
17, 1994 in the Company's Common Stock and in each of the foregoing indices. The
historical stock price performance shown on this graph is not necessarily
indicative of future performance.
[GRAPH]
<TABLE>
- -----------------------------------------------------------------------------------------------------------------
2/17/94 12/31/94 12/30/95 12/28/96 12/27/97
- -----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Tractor Supply Company
Common Stock $ 100.00 $ 105.00 $ 98.75 $ 102.50 $ 72.50
- -----------------------------------------------------------------------------------------------------------------
S&P Retail (Building Supplies)- $ 100.00 $ 102.31 $ 99.56 $ 119.90 $ 168.36
500 Index*
- -----------------------------------------------------------------------------------------------------------------
S&P 500 Index $ 100.00 $ 100.52 $ 138.29 $ 173.53 $ 219.27
- -----------------------------------------------------------------------------------------------------------------
</TABLE>
* Formerly known as S&P Specialty Retail Group Index
11
<PAGE> 15
INTERESTS OF MANAGEMENT IN CERTAIN TRANSACTIONS
The Company leases its management headquarters and eight of its stores
from certain current and former members of its Board, senior management and
their wives, or certain entities controlled by them. Such persons entered into
these transactions principally to realize certain passive loss tax benefits that
were available at the time of entering into the leases, but were significantly
reduced by the Tax Reform Act of 1986. The Company believes these transactions
were consummated on general business terms comparable to those which would have
been available if they had been entered into with unrelated parties. The Company
does not intend to enter into any such transactions in the future without the
approval of its independent directors.
Pursuant to a lease agreement dated September 15, 1986, the Company
leases its management headquarters from GOF Partners, a general partnership of
which Messrs. Scarlett, Hennesy, Maxwell and Flood (each of whom are current
executive officers and/or directors of the Company) and Gerald E. Newkirk,
former President, Chief Operating Officer and Director of the Company, are the
general partners. In September 1996, the Company exercised its option to renew
the lease for two successive five-year terms ending on February 9, 2007. Monthly
rent is $30,000 for the first five years, $32,000 for the second five years,
$35,000 for the first renewal term and $39,000 for the second renewal term. The
Company has the option to terminate the lease at any time after the end of the
initial lease term by offering to purchase the premises at a price of
$4,775,000. If GOF Partners were to reject the Company's offer to purchase, the
lease would terminate 90 days after the date of the offer.
Under a lease agreement dated September 1, 1991, the Company previously
leased its Plainfield, Indiana store from GOF Indiana Corp., a corporation of
which Messrs. Scarlett, Hennesy, Newkirk, Maxwell and Flood were the sole
shareholders, directors and executive officers. The initial term of the lease
was 20 years, commencing on September 1, 1991 and ending on August 31, 2011,
subject to renewal at the option of the Company for two successive five-year
terms. Monthly rent was $8,437.50 for the first five years, $8,750 for the
second five years, $9,062.50 for the third five years and $9,375 for the final
five years of the initial term. The Company had the option to terminate the
lease at any time after August 31, 2001 by offering to purchase the premises at
a price that increased from $873,300 to $1,012,500, depending on the date of the
offer. If GOF Indiana Corp. were to reject the Company's offer to purchase, the
lease would terminate 90 days after the date of the offer. The related land was
leased by GOF Indiana Corp. from the Company pursuant to a ground lease
agreement dated July 1, 1991 which provided for a 50-year lease term, commencing
on July 1, 1991 and ending on June 30, 2041 and annual rental payments that
increased from $15,000 per annum to $24,300 per annum. In October 1996, the
Board approved a proposed transaction to relocate the Plainfield, Indiana store
to a larger facility. In June 1997, the Company (i) acquired the Plainfield,
Indiana store's building from GOF Indiana Corp. for $650,000, the purchase price
provided for under the lease agreement between the Company and GOF Indiana Corp.
effective through August 31, 1996 (GOF Indiana Corp. waived the increase in the
purchase price effective September 1, 1996 since the transaction on the property
was not expected to close until approximately June 1997), (ii) canceled the
ground lease agreement with GOF Indiana Corp. respecting said property, (iii)
sold the Plainfield, Indiana store (building and land) to Premier Ventures, LLC,
an unaffiliated real estate developer, for $750,000 (which was approximately
$650,000 below the appraised value of said property), and (iv) leased a new
larger store from Premier Ventures, LLC (said new store was built by Premier
Ventures, LLC on a nearby site owned by them of approximately four acres and in
accordance with the Company's specifications), pursuant to which the Company
received a discounted rent (approximately $6.30 per square foot initially
compared to the market rate of approximately $8.60 per square foot or
approximately $750,000 over the fifteen year initial lease) in consideration for
the reduced purchase price on the Plainfield, Indiana store building and land.
In July 1997, GOF Indiana Corp. was dissolved.
On January 1, 1986, the Company entered into capitalized sale-leaseback
transactions with Mr. Scarlett and his wife for its Omaha, Nebraska store, Mr.
Hennesy and his wife for its Corpus Christi, Texas
12
<PAGE> 16
and Toledo, Ohio stores, Mr. Newkirk and his wife for its Waterloo, Iowa and
Sioux Falls, South Dakota stores, Mr. Maxwell and his wife for its Nashville,
Tennessee store and Mr. Flood and his wife for its Mandan, North Dakota store.
The Company sold and leased back and provided the financing for such properties
at estimated fair values totaling $2,575,000. Management determined such sale
prices based on the appraised value of comparable stores acquired by the Company
around that time. The related gains arising from the sale-leaseback of these
properties are deferred and amortized on a straight-line basis over the lives of
the related leases. Properties under capital leases acquired through such
sale-leaseback transactions have been reduced by the related deferred gains on
the properties and are classified with property and equipment on the Company's
financial statements. Pursuant to substantially similar lease agreements dated
January 1, 1986, the Company leases such stores for initial terms of 20 years,
commencing on January 1, 1986 and ending on December 31, 2005, subject to
renewal at the option of the Company for two successive five-year terms. The
Company has the option to terminate such leases after December 31, 1995 by
offering to purchase the premises at purchase prices ranging from $389,500 to
$523,500 for the Corpus Christi, Texas store to $934,800 to $1,256,300 for the
Omaha, Nebraska store, depending on the date of the offer. If the landlord were
to reject an offer to purchase a particular store, the lease would terminate 90
days after the date of the offer. Monthly rent payments under such leases range
from $2,580 to $6,081 for the Corpus Christi, Texas store to $6,193 to $14,595
for the Omaha, Nebraska store. Rent payments under all such leases totaled
approximately $425,000 for the fiscal year ended December 27, 1997. In December
1993, all of the 20 year nonrecourse installment deed notes between the Company
and such executive officers and/or directors and their wives, except the two
issued by Mr. Hennesy and his wife, were repaid. During the fiscal year ended
December 31, 1994, (i) the Company exchanged the mortgage on the note issued by
Mr. Hennesy and his wife respecting the Toledo, Ohio store with a mortgage on
the Paris, Texas store, which was owned by the Company and had a comparable fair
market value, and (ii) the two notes issued by Mr. Hennesy and his wife were
repaid. The balance of these capitalized lease obligations, which are included
in total capital lease obligations on the Company's financial statements, was
$1,692,000 as of December 27, 1997.
The leases do not contain any restrictions on assignment by the
landlords. Moreover, if a landlord were to sell or otherwise transfer the leased
premises, it would not remain secondarily liable under the lease; rather, the
purchaser or transferee would be deemed, without any agreement with the Company,
to have assumed all of the obligations of the landlord arising after the date of
such sale or transfer.
Pursuant to the Plan of Reorganization and Exchange Agreement dated as
of May 1, 1991 between the Company and Thomas J. Hennesy, III, a director of the
Company, the Company acquired 2,408,334 (constituting all) of the shares of
Common Stock held by Mr. Hennesy in exchange for 5,875 shares of Series B
Preferred Stock, par value $1.00 per share, of the Company (the "Preferred
Stock"). Dividends on outstanding shares of the Preferred Stock are cumulative
and payable semi-annually on May 1 and November 1 at a rate of 8% of the stated
value ($1,000 per share) of such shares, increasing to 10% on May 1, 1999, 11%
on May 1, 2000, 12% on May 1, 2001 and 13% thereafter. Such shares may be
redeemed by the Company at any time and from time to time, in whole or in part,
after May 1, 1995 at a redemption price of $1,000 per share plus unpaid accrued
dividends. In connection with such Plan of Reorganization and Exchange, the
Company also purchased, at a cash redemption price of $2.44 per share, 481,817
shares of Common Stock from persons to whom Mr. Hennesy had transferred shares
of Common Stock. On May 26, 1995, the Company repurchased 2,350 shares of the
Preferred Stock at a total repurchase price of approximately $2,363,000
(including accrued dividends totaling approximately $13,000). On May 24, 1996,
the Company repurchased 1,762 shares of the Preferred Stock at a total
repurchase price of approximately $1,771,000 (including accrued dividends
totaling approximately $9,000). On May 23, 1997, the Company repurchased the
remaining 1,763 outstanding shares of the Preferred Stock (at a total repurchase
price of approximately $1,763,000 plus unpaid accrued dividends).
13
<PAGE> 17
Pursuant to a Consulting and Noncompetition Agreement between the
Company and Thomas J. Hennesy, III, dated as of May 1, 1991, Mr. Hennesy, who is
currently a director of the Company, has agreed to provide consulting and
advisory services to the Company from July 1, 1995 to June 30, 2000 and not to
compete with the Company during such period and for two years thereafter. During
such seven-year period, the Company will pay Mr. Hennesy a fee of $150,000 per
annum and will provide him and his wife with certain health benefits.
On November 12, 1997, the Company entered into two promissory notes
(one a bridge loan in the amount of $75,600 and the other an unsecured note for
$30,000, bearing interest at 8% per annum beginning January 11, 1998) with
Gerald W. Brase, the Company's recently hired Senior Vice President of
Merchandising and Marketing, in connection with Mr. Brase's relocation to
Nashville, Tennessee from San Antonio, Texas. Mr. Brase repaid part of the
promissory notes in January 1998 and the balance in February 1998.
COMPLIANCE WITH SECTION 16(A) OF THE
SECURITIES EXCHANGE ACT OF 1934
Section 16(a) of the Securities Exchange Act of 1934, as amended (the
"1934 Act") requires the Company's executive officers and directors and persons
who beneficially own more than ten percent (10%) of the Company's Common Stock
to file initial reports of ownership and reports of changes in ownership with
the Securities and Exchange Commission ("SEC") and The Nasdaq Stock Market and
to furnish the Company with a copy of each such report. Additionally, SEC
regulations require the Company to identify in its proxy statement those
individuals for whom any of such reports was not filed on a timely basis during
the most recent fiscal year or prior fiscal years. The Company believes that all
Section 16(a) filing requirements applicable to its executive officers and
directors were complied with, except for the Company has received neither a Form
5, nor a representation that no Form 5 was required to be filed, from Gerald E.
Newkirk, its former President, Chief Operating Officer and Director, with
respect to 1997.
SECURITY OWNERSHIP OF CERTAIN
BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth certain information with respect to the
beneficial ownership of the Company's Common Stock as of January 31, 1998
(except for T. Rowe Price Associates, Inc., Wellington Management Company, LLP,
Luther King Capital Management Corporation, and Investors Bank and Trust
Company, trustee under the Tractor Supply Company Restated 401(k) Retirement
Plan, which are as of December 31, 1997) by (i) each person who is known by the
Company to be the beneficial owner of more than 5% of the Company's outstanding
Common Stock, (ii) each director or person nominated to be a director, (iii)
each named executive officer and (iv) all directors and executive officers of
the Company as a group. The determinations of "beneficial ownership" of the
Common Stock are based upon responses to Company inquiries which cited Rule
13d-3 under the 1934 Act . Such Rule provides that shares shall be deemed to be
"beneficially owned" where a person has, either solely or in conjunction with
others, the power to vote or to direct the voting of shares and/or the power to
dispose, or to direct the disposition, of shares; or where a person has the
right to acquire any such beneficial ownership within 60 days after the date of
determination. Except as disclosed in the notes to the table, each named person
has sole voting and investment power with respect to the number of shares shown
as beneficially owned by him. There were 8,736,494 shares of Common Stock issued
and outstanding on January 31, 1998.
14
<PAGE> 18
<TABLE>
<CAPTION>
Name and Address Shares Beneficially Percent
Class of Beneficial Owner (a) Owned of Class
- -------------------------------------------------------------------------------------------------------------------
Common
Stock
<S> <C> <C> <C>
Joseph H. Scarlett, Jr. (c) (d).......................... 1,479,692 16.9%
Thomas O. Flood (c) (e).................................. 549,842 6.3%
James R. McMurray (b).................................... 667 *
Daisy L. Vanderlinde..................................... -- --
Lawrence Goldberg (b).................................... 1,833 *
Investors Bank and Trust Company (g)..................... 938,049 10.7%
Wellington Management Company, LLP (h)................... 627,200 7.2%
Luther King Capital Management
Corporation.......................................... 450,100 5.2%
T. Rowe Price Associates, Inc. (i)....................... 1,061,600 12.2%
S.P. Braud (b)........................................... 998 *
Thomas J. Hennesy, III................................... -- --
Joseph D. Maxwell (f).................................... 367,559 4.2%
Joseph M. Rodgers........................................ 550 *
All directors and executive officers as a group
(18 persons) (b) (c) (d) (e) (f)..................... 2,410,170 27.6%
* Less than 1%
</TABLE>
- ------------------
(a) The addresses of Messrs. Scarlett, Flood, McMurray, Goldberg, Maxwell,
Braud, Hennesy, Rodgers and Ms. Vanderlinde are c/o the Company, 320 Plus
Park Blvd., Nashville, Tennessee 37217, the address of Investors Bank and
Trust Company is 89 South Street, Boston, Massachusetts 02111, the address
of Wellington Management Company, LLP is 75 State Street, Boston,
Massachusetts 02109, the address of Luther King Capital Management
Corporation is 301 Commerce, Suite 1600, Forth Worth, Texas 76102, and the
address of T. Rowe Price Associates, Inc. is 100 East Pratt Street,
Baltimore, Maryland 21202.
(b) Shares of Common Stock owned by Messrs. McMurray, Goldberg, Braud and the
directors and executive officers as a group include approximately 667;
1,333; 498 and 9,577 shares of Common Stock, respectively, which are
beneficially owned pursuant to options granted under the Company's 1994
Stock Option Plan, because they will have the right to acquire beneficial
ownership of the shares of Common Stock relating thereto within 60 days
after January 31, 1998.
(c) Shares of Common Stock owned by Messrs. Scarlett, Flood, and the directors
and executive officers as a group exclude approximately 26,186; 21,157 and
68,038 shares of Common Stock, respectively, allocated to their respective
401(k) Plan accounts, with respect to which such directors and executive
officers have investment and voting power on a pass through basis.
(d) Includes 100,000 shares owned by Mr. Scarlett's wife with respect to which
Mrs. Scarlett has investment and voting power and Mr. Scarlett disclaims
beneficial ownership.
(e) Includes 100,000 shares owned by Mr. Flood's wife with respect to which
Mrs. Flood has investment and voting power and Mr. Flood disclaims
beneficial ownership.
(f) Includes 203,992 shares owned by Mr. Maxwell's wife with respect to which
Mrs. Maxwell has investment and voting power and Mr. Maxwell disclaims
beneficial ownership, 3,200 shares owned by Mr. Maxwell's son with respect
to which such son has investment and voting power and Mr. Maxwell disclaims
beneficial ownership and 6,375 shares owned by Mr. Maxwell's daughter with
respect to which such daughter has investment and voting power and Mr.
Maxwell disclaims beneficial ownership.
(g) Investors Bank and Trust Company, as trustee for the Tractor Supply Company
Restated 401(k) Retirement Plan, has advised the Company that they hold
these shares of record as trustee (which includes the shares described in
footnote (c) above). Plan participants have voting and investment power on
a pass through basis over the shares held by the trustee.
(h) Includes 346,200 shares for which Wellington Management Company, LLP has
shared voting power and 627,200 shares for which it has shared investment
power.
(i) These shares are owned by various individual and institutional investors,
including T. Rowe Price New Horizons Fund, Inc. (which has sole voting
power with respect to 792,500 of such shares or 9.1% of the shares
outstanding), for which T. Rowe Price Associates, Inc. serves as investment
advisor with sole power to direct the investment of such shares and, with
respect to 269,100 of such shares, sole power to vote such shares. T. Rowe
Price Associates, Inc. disclaims beneficial ownership of all such shares.
15
<PAGE> 19
RATIFICATION OF REAPPOINTMENT OF INDEPENDENT
CERTIFIED PUBLIC ACCOUNTANTS
The Board has reappointed Price Waterhouse LLP as the firm of
independent certified public accountants to audit the financial statements of
the Company for the fiscal year ending December 26, 1998. Price Waterhouse LLP
has served as independent auditors for the Company since 1983. At the Annual
Meeting, the stockholders are being asked to ratify the reappointment of Price
Waterhouse LLP as the Company's independent auditors for fiscal 1998. In the
event of a negative vote on such ratification, the Board of Directors will
reconsider its selection.
Representatives of Price Waterhouse LLP have been invited to and are
expected to attend the Annual Meeting, will have the opportunity to make a
statement if they so desire and are expected to be available to respond to
appropriate questions from stockholders.
THE BOARD UNANIMOUSLY RECOMMENDS THAT THE STOCKHOLDERS OF THE COMPANY
VOTE "FOR" THE PROPOSAL TO RATIFY THE REAPPOINTMENT OF PRICE WATERHOUSE LLP AS
THE COMPANY'S INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS FOR THE FISCAL YEAR
ENDING DECEMBER 26, 1998.
STOCKHOLDER PROPOSALS
Stockholders who desire to submit to the Company proposals for
inclusion in the Company's proxy materials for the 1999 Annual Meeting of
Stockholders must submit such proposals to the Secretary of the Company by
November 20, 1998.
OTHER MATTERS
The Board does not intend to present any business at the Annual Meeting
other than the items stated in the "Notice of Annual Meeting of Stockholders"
and knows of no other business to be presented for action at the meeting. If,
however, any other business should properly come before the meeting or any
continuations or adjournments thereof, it is intended that the enclosed proxy
will be voted with respect thereto in accordance with the best judgment and
discretion of the persons named in the proxy.
In addition to solicitation by mail, proxies may also be solicited by
certain of the Company's directors, officers and regular employees, without
additional compensation, personally or by telephone, telecopy or telegram. The
costs of such solicitation will be borne by the Company. The Company will also
make arrangements with brokerage houses, custodians and other nominees to send
proxy materials to the beneficial owners of shares of the Company's Common Stock
held in their names, and the Company will reimburse them for their related
postage and clerical expenses.
AVAILABILITY OF FORM 10-K
AND ANNUAL REPORT TO STOCKHOLDERS
Copies of the Company's Annual Report to Stockholders for the fiscal
year ended December 27, 1997, which includes certain audited financial
information about the Company, are currently being mailed to stockholders
together with this Proxy Statement. Additional copies of such Annual Report,
along with copies of the Company's Annual Report on Form 10-K for the fiscal
year ended December 27, 1997, as filed with the Securities and Exchange
Commission (exclusive of documents incorporated therein by reference), are
available without charge to stockholders upon written request to the Company's
investor relations firm, Corporate Communications, Inc., 523 Third Avenue South,
Nashville, Tennessee 37210.
16
<PAGE> 20
Appendix A
- ------------------------------------------------------------------------------
TRACTOR SUPPLY COMPANY
P ANNUAL MEETING OF STOCKHOLDERS
R
O PROXY SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
X
Y
The undersigned hereby appoints Thomas O. Flood and Michael J. Kincaid
and each of them (with power of substitution) proxies of the undersigned to
represent and vote, as designated on the reverse side, all shares of common
stock, par value $.008 per share ("Common Stock"), of Tractor Supply Company
(the "Company") which the undersigned would be entitled to vote if personally
present at the Annual Meeting of Stockholders to be held on April 23, 1998 and
at any adjournment thereof.
-----------------
CONTINUED AND TO BE SIGNED ON REVERSE SIDE SEE REVERSE SIDE
-----------------
- ------------------------------------------------------------------------------
<PAGE> 21
- --------------------------------------------------------------------------------
PLEASE MARK
[X] VOTES AS IN
THIS EXAMPLE.
THIS PROXY, WHEN PROPERLY EXECUTED, WILL BE VOTED IN THE MANNER DIRECTED HEREIN
BY THE UNDERSIGNED STOCKHOLDER. IF NO DIRECTION IS MADE, THIS PROXY WILL BE
VOTED "FOR" ITEMS 1 AND 2. THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR"
ITEMS 1 AND 2.
<TABLE>
<S> <C>
1. Election of one Class I Director for a 2. Ratification of the reappointment of Price FOR AGAINST ABSTAIN
three year term ending at the 2001 Waterhouse LLP as independent certified public ----- ----- -----
Annual Meeting of Stockholders. accountants for the fiscal year ending
December 26, 1998. ----- ----- -----
Nominee for Class I Director: Thomas O. Flood
FOR WITHHOLD In their discretion, the Proxies are authorized to vote upon such other business
----- ------ as may properly come before the annual meeting.
----- ------
MARK HERE -----
FOR ADDRESS
CHANGE AND -----
NOTE AT LEFT
IMPORTANT: Please date and sign as your name appears
at left and return in the enclosed envelope. When
signing as executor, administrator, trustee,
guardian, etc., please give full title as such. If
the stockholder is a corporation, this proxy should
be signed in the full corporation name by a duly
authorized officer whose title is stated.
Signature:________________________________ Date_______________
Signature:________________________________ Date_______________
- ----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
