<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:
- --------------------------------------------------------------------------------
<PAGE> 2
[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 1999 Annual Meeting of Stockholders of Tractor Supply Company.
As shown in the formal notice enclosed, the meeting will be held on
Thursday, April 22, 1999, at 10:00 a.m. (central time) at our management
headquarters in Nashville, Tennessee. The purpose of this year's meeting is to
elect two Class II Directors for a term of three years, to ratify the
reappointment of PricewaterhouseCoopers LLP as the Company's independent
certified public accountants for fiscal 1999, 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
26, 1998 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, President
and Chief Executive Officer
March 19, 1999
<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 22, 1999
NOTICE IS HEREBY GIVEN that the 1999 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 22, 1999, at 10:00 a.m. (central time) (the
"Annual Meeting") for the following purposes:
1. To elect two Class II Directors for a three-year term ending
at the 2002 Annual Meeting of Stockholders;
2. To ratify the reappointment of PricewaterhouseCoopers LLP as
independent certified public accountants for the fiscal year
ending January 1, 2000; 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 10,
1999 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,
Treasurer and Secretary
Nashville, Tennessee
March 19, 1999
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 22, 1999
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 1999
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 22, 1999, 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 19, 1999 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 10, 1999.
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 10, 1999 as the
record date (the "record date") for the meeting. Only stockholders of record at
the close of business on March 10, 1999 are entitled to notice of and to vote at
the Annual Meeting. At the close of business on March 10, 1999, there were
8,751,129 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 26, 1998, 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 10, 1999. 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 10, 1999. Additional
copies of the Annual Report and the Company's Annual Report on Form 10-K for the
fiscal year ended December 26, 1998 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 JOSEPH D. MAXWELL AND JOSEPH M.
RODGERS AS CLASS II DIRECTORS, AND FOR RATIFICATION OF THE REAPPOINTMENT OF
PRICEWATERHOUSECOOPERS LLP AS THE COMPANY'S INDEPENDENT CERTIFIED PUBLIC
ACCOUNTANTS FOR THE FISCAL YEAR ENDING JANUARY 1, 2000.
ELECTION OF CLASS II DIRECTORS
AND INFORMATION REGARDING DIRECTORS
ELECTION OF CLASS II DIRECTORS
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
II directors will expire. The Board has nominated two of the incumbent Class II
directors, Joseph D. Maxwell and Joseph M. Rodgers, for election as Class II
directors for a three-year term expiring at the 2002 Annual Meeting of
Stockholders. The following table sets forth certain information concerning the
nominees for election as Class II directors.
<TABLE>
<CAPTION>
NAME AND AGE DIRECTOR POSITIONS WITH COMPANY, DIRECTORSHIPS AND
SINCE BUSINESS EXPERIENCE FOR LAST FIVE YEARS
- ---------------------------- --------- -----------------------------------------
<S> <C> <C>
Joseph D. Maxwell, 60 .... 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, 65 .... 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; Lafarge
Corporation, Reston, Virginia, since 1989;
SunTrust Bank, Nashville, N.A., Nashville,
Tennessee, since 1989; Thomas Nelson, Inc.,
Nashville, Tennessee, since 1992; and Towne
Services, Inc., Atlanta, Georgia, since 1998.
</TABLE>
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<PAGE> 6
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 JOSEPH D. MAXWELL AND JOSEPH M. RODGERS AS
CLASS II DIRECTORS OF THE COMPANY TO HOLD OFFICE UNTIL THE 2002 ANNUAL MEETING
OF STOCKHOLDERS.
INFORMATION CONCERNING CLASS III DIRECTORS
The following table sets forth certain information concerning the Class
III directors of the Company, whose terms expire 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., 56 ..... 1982 Chairman, President and Chief Executive Officer
of the Company since July 1998 after having
served as Chairman and Chief Executive Officer
of the Company since February 1993 and as
President and Chief Operating Officer of the
Company from 1987 to February 1993. 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, 68 .................. 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>
3
<PAGE> 7
INFORMATION CONCERNING CLASS I DIRECTOR
The following table sets forth certain information concerning the Class
I director of the Company, whose terms expires at the 2001 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 O. Flood, 52 ............. 1985 Senior Vice President of Administration and
Finance, and Chief Financial Officer since July
1998, after having served as Senior Vice
President of Administration and Finance,
Treasurer and Chief Financial Officer of the
Company since January 1996, 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>
BOARD OF DIRECTORS
AND COMMITTEES OF THE BOARD
COMPENSATION OF DIRECTORS - On July 23, 1998, the Board adopted certain
changes to the compensation package for non-employee directors of the Company.
In connection with the new compensation package, the Company pays each director
who is not also an employee of the Company an annual retainer of $20,000. In
addition, the Company pays all such non-employee directors $1,500 for each Board
meeting attended and $500 for each committee meeting attended if not held in
conjunction with a Board 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 (i) for
3,500 shares of Common Stock are automatically granted to each non-employee
director of the Company upon election to the Board, and (ii) for 1,500 shares of
Common Stock are automatically granted to each non-employee director annually
thereafter, with exercise prices 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
26, 1998 ("fiscal 1998"), the Board held four meetings. The Board has four
standing committees, the Audit Committee, the Compensation Committee, the
Nominating Committee and the Executive Committee. During fiscal 1998, the Audit
Committee held three meetings, the Compensation Committee held two meetings and
the Nominating Committee and the Executive Committee held none. During fiscal
1998, all of the incumbent directors of the Company attended at least 75% 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,
4
<PAGE> 8
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.
NOMINATING COMMITTEE - The Nominating Committee, which is comprised of
Messrs. Braud (Chairman), Scarlett and Maxwell, is responsible for nominating
persons to serve on the Board for consideration at the Company's annual meeting
of stockholders and recommending persons to fill any interim vacancy on the
Board.
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 1998 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
1998.
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 26, 1998, December 27, 1997 and December 28, 1996:
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 ............ 1998 $374,039 $300,000 -- -- $113,767
Chairman of the Board, President 1997 $325,000 $ -- -- -- $ 14,766
and Chief Executive Officer 1996 $325,000 $ 65,000 -- -- $ 22,768
Gerald W. Brase ................... 1998 $210,000 $105,000 -- -- $ 89,474
Senior Vice President- 1997 $ 50,767 $ 42,000 -- 25,000 $ 6,205
Merchandising and Marketing (3) 1996 $ -- $ -- -- -- $ --
Thomas O. Flood ................... 1998 $188,461 $ 95,000 -- -- $ 58,790
Senior Vice President- 1997 $182,000 $ -- -- -- $ 10,538
Administration and Finance, 1996 $182,000 $ 36,400 -- -- $ 12,798
and Chief Financial Officer
Michael E. Brown .................. 1998 $182,967 $ 92,500 -- 25,000 $106,833
Senior Vice President- 1997 $ -- $ -- -- -- $ --
Operations (4) 1996 $ -- $ -- -- -- $ --
Lawrence Goldberg ................. 1998 $128,102 $ 51,240 -- -- $ 14,290
Vice President-Logistics 1997 $128,102 $ -- -- 13,000 $ 7,403
1996 $125,008 $ 18,750 -- 10,000 $ 7,774
</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 1998 are as
follows:
(a) Company contributions to the 401(k) Plan in the amount of $2,844 for
Mr. Scarlett; $0 for Mr. Brase; $3,356 for Mr. Flood; $0 for Mr. Brown;
and $3,356 for Mr. Goldberg.
(b) Amounts credited as Company contributions under the Deferred
Compensation Plan in the amount of $0 for Mr. Scarlett; $12,600 for Mr.
Brase; $0 for Mr. Flood; $11,100 for Mr. Brown; and $7,686 for Mr.
Goldberg.
(c) Amounts paid by the Company pursuant to the Medical Expense
Reimbursement Plan in the amount of $1,739 for Mr. Scarlett; $4,418 for
Mr. Brase; $3,636 for Mr. Flood; $8,894 for Mr. Brown; and $2,053 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; $2,117 for Mr. Brase;
$1,798 for Mr. Flood; $1,867 for Mr. Brown; and $1,195 for Mr.
Goldberg.
(e) Amount paid or reimbursed by the Company for certain moving and
relocation expenses in the amount of $70,339 for Mr. Brase and $84,972
for Mr. Brown.
(f) Premiums paid by the Company pursuant to Split-Dollar Agreements in the
amount of $106,198 for Mr. Scarlett and $50,000 for Mr. Flood (the
Company pays all premiums and retains a collateral interest in the
executive's insurance policy equal to the amount of the premiums, which
it will recover after 15 policy years).
(3) Mr. Brase was elected Senior Vice President-Merchandising and Marketing
effective in September 1997.
(4) Mr. Brown was elected Senior Vice President-Operations effective in January
1998.
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<PAGE> 10
OPTION GRANTS IN LAST FISCAL YEAR
The following table reflects certain information with respect to
options to acquire shares of the Company's Common Stock granted under the
Company's 1994 Stock Option Plan to the executive officers named in the Summary
Compensation Table above (excluding Messrs. Scarlett and Flood, who do not
participate in the Stock Option Plan) during the fiscal year ended December 26,
1998.
<TABLE>
<CAPTION>
Individual Grants (1) Potential Realizable Value at
- ----------------------------------------------------------------------------- Assumed Annual Rates of Stock Price
Appreciation for Option Term (2)
-------------------------------------
Percent of
Total
Number of Options
Securities Granted to
Underlying Employees Exercise or
Options in Fiscal Base Price Expiration
Name Granted (#) Year (%) ($/Sh) Date 5% ($) 10% ($)
- ---------------- ----------- ------------ ----------- ----------- ------------ ---------
<S> <C> <C> <C> <C> <C> <C>
Michael E.
Brown 25,000 58.8 14.5625 1/5/08 228,957 580,222
</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 one-third each year, beginning on the third
anniversary of the grant date, thus becoming 100% vested on the fifth
anniversary of the grant date, provided, however, that options granted to
non-employee directors of the Company generally vest one-third each year,
beginning on the first 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 26, 1998 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>
Gerald W.
Brase -0- -0- -0- / 25,000 -0- / 55,469
Michael E.
Brown -0- -0- -0- / 25,000 -0- / 172,656
Lawrence
Goldberg -0- -0- 1,333 / 24,667 -0- / 42,531
</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, 1998 was $21 15/32.
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 26, 1998, Joseph H. Scarlett, Jr., the
Company's Chairman of the Board, President and Chief Executive Officer, received
a base salary of $374,039, an increase of 15.1% over 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 salary increase was based on the comparison of base
salaries of chief executive officers of retailers participating in the
compensation surveys referred to above, the Company's overall performance and
the Compensation Committee's assessment of Mr. Scarlett's personal performance
and accomplishments and expectations of Mr. Scarlett's future contributions in
leading the Company. Under Mr. Scarlett's leadership, after a year of transition
to rebuild the Company's foundation to better support its aggressive growth and
expansion plans going forward, the Company achieved record sales and earnings in
fiscal 1998, with sales increasing 18.0% (comparable store sales increased
10.9%) and net income per share (on a fully diluted basis) increasing 25.4%, and
is now repositioned to accommodate its 12% new store unit growth rate plans in
1999. The Company believes that after considering Mr. Scarlett's salary increase
in fiscal 1998, that Mr. Scarlett's base salary is still 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 1998, 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
one-third each year, beginning on the third anniversary of the grant date, thus
becoming 100% vested on the fifth anniversary of the grant date, provided,
however, that stock options granted to non-employee directors of the Company
generally vest one-third each year, beginning on the first 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
9
<PAGE> 13
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. Due to the accelerated granting
of additional stock options late in fiscal 1997, no general grant of stock
options was made in fiscal 1998. 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 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 intended to provide additional incentives to Messrs. Scarlett
and Flood and replace their existing DCP's. In connection therewith, in 1998,
the Company entered into Split-Dollar Agreements (the "SDA's") with Messrs.
Scarlett and Flood. Pursuant to the terms of the SDA's, the Company (i) pays the
premiums under the SDA's ($106,198 annually and $50,000 annually regarding
Messrs. Scarlett and Flood, respectively) for a period of 10 years, (ii) the
Company obtained 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 (iii) 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 26, 1998 (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.
[LINE CHART]
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------
2/17/94 12/31/94 12/30/95 12/28/96 12/27/97 12/26/98
- ---------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Tractor Supply Company
Common Stock $100.00 $105.00 $98.75 $102.50 $72.50 $107.35
- ---------------------------------------------------------------------------------------------------------
S&P Retail (Building Supplies) - $100.00 $102.31 $99.56 $119.90 166.04 $343.92
500 Index*
- ---------------------------------------------------------------------------------------------------------
S&P 500 Index $100.00 $100.52 $138.29 $173.53 214.78 $277.32
- ---------------------------------------------------------------------------------------------------------
</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 seven of its stores
from certain current and former members of its Board and senior management,
their wives, and 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 Audit Committee.
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, Maxwell, Flood, and Thomas J. Hennesy, III (each of whom
are current executive officers and/or directors of the Company) and a former
member of the Board and senior management 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, Maxwell, Flood and a former member of the Board
and senior management of the Company 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.
12
<PAGE> 16
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 and Toledo, Ohio stores, a
former member of the Board and senior management of the Company 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 $1,552,000 as of December
26, 1998.
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
13
<PAGE> 17
the remaining 1,763 outstanding shares of the Preferred Stock (at a total
repurchase price of approximately $1,763,000 plus unpaid accrued dividends).
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 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.
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, 1999
(except for T. Rowe Price Associates, Inc., Luther King Capital Management
Corporation, Skyline Asset Management, L.P., Artisan Partners Limited
Partnership, and Investors Bank and Trust Company, trustee under the Tractor
Supply Company Restated 401(k) Retirement Plan, which are as of December 31,
1998) 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 8,751,129 shares of Common Stock issued and outstanding
on January 31, 1999.
14
<PAGE> 18
<TABLE>
<CAPTION>
Name and Address Shares Beneficially Percent
Class of Beneficial Owner (a) Owned of Class
- ---------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Common
Stock
Joseph H. Scarlett, Jr. (c) (d)..................... 1,479,692 16.9%
Thomas O. Flood (c) (e)............................. 549,842 6.3%
Gerald W. Brase..................................... -- --
Michael E. Brown.................................... 600 *
Lawrence Goldberg (b)............................... 6,166 *
Investors Bank and Trust Company (g)................ 555,914 6.4%
Artisan Partners Limited Partnership (h)............ 487,900 5.6%
Skyline Asset Management, L.P. (i).................. 516,600 5.9%
Luther King Capital Management
Corporation..................................... 469,700 5.4%
T. Rowe Price Associates, Inc. (j).................. 1,106,600 12.6%
S.P. Braud (b)...................................... 1,500 *
Thomas J. Hennesy, III.............................. 167 *
Joseph D. Maxwell (f)............................... 365,354 4.2%
Joseph M. Rodgers................................... 884 *
All directors and executive officers as a group
(18 persons) (b) (c) (d) (e) (f)................ 2,432,566 27.8%
</TABLE>
* Less than 1%
- ------------------
(a) The addresses of Messrs. Scarlett, Flood, Brase, Brown, Goldberg, Hennesy,
Maxwell, Braud, and Rodgers 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 Skyline
Asset Management, L.P. is 311 South Wacker Drive, Suite 4500, Chicago,
Illinois 60606, the address of Artisan Investment Corporation is 1000 North
Water Street, #1770, Milwaukee, Wisconsin 53202, 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. Goldberg, Braud, Hennesy, Rodgers
and the directors and executive officers as a group include approximately
5,666; 1,000; 167; 334 and 34,078 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, 1999.
(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
62,866 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, 700 shares owned by Mr. Flood's son with respect to
which such son has investment and voting power and Mr. Flood disclaims
beneficial ownership and 700 shares owned by Mr. Flood's daughter with
respect to which such daughter 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, 1,200 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 6,170 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) Based solely on information set forth in a Schedule 13G filed with the
Securities and Exchange Commission on February 11, 1999, these shares are
owned by various client accounts for which Artisan Partners Limited
Partnership serves as investment adviser. Artisan Partners Limited
Partnership, its general partner (Artisan Investment Corporation) and the
principal stockholders of Artisan Investment Corporation (Andrew A. Ziegler
and Carlene Murphy Ziegler) have reported shared power to vote and direct
the investment of such shares.
(i) Based solely on information set forth in a Schedule 13G filed with the
Securities and Exchange Commission on February 12, 1999, these shares are
owned by various client accounts for which Skyline Asset Management, L.P.
serves as investment adviser with shared power to vote and direct the
investment of such shares.
(j) Based solely on information set forth in a Schedule 13G filed with the
Securities and Exchange Commission on February 12, 1999, 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
800,000 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 306,600 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 PricewaterhouseCoopers LLP as the firm of
independent certified public accountants to audit the financial statements of
the Company for the fiscal year ending January 1, 2000. PricewaterhouseCoopers
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
PricewaterhouseCoopers LLP as the Company's independent auditors for fiscal
1999. In the event of a negative vote on such ratification, the Board of
Directors will reconsider its selection.
Representatives of PricewaterhouseCoopers 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 PRICEWATERHOUSECOOPERS
LLP AS THE COMPANY'S INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS FOR THE FISCAL
YEAR ENDING JANUARY 1, 2000.
STOCKHOLDER PROPOSALS
Stockholders who desire to submit to the Company proposals for
inclusion in the Company's proxy materials for the 2000 Annual Meeting of
Stockholders must submit such proposals to the Secretary of the Company by
November 19, 1999.
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 26, 1998, 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 26, 1998, 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
PROXY
TRACTOR SUPPLY COMPANY
ANNUAL MEETING OF STOCKHOLDERS
PROXY SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
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 22, 1999 and
at any adjournment thereof.
SEE REVERSE
SIDE
CONTINUED AND TO BE SIGNED ON 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.
1. Election of two Class II Directors for a three year term ending at the 2002
Annual Meeting of Stockholders.
NOMINEES FOR CLASS II DIRECTORS:
Joseph D. Maxwell and Joseph M. Rodgers
FOR WITHHOLD
ALL / / / / FROM ALL
NOMINEES NOMINEES
/ / ________________________________________
For all nominees except as noted above
FOR AGAINST ABSTAIN
2. Ratification of the reappointment of / / / / / /
PricewaterhouseCoopers LLP as independent
certified public accountants for the fiscal
year ending January 1, 2000.
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_______________
