SECURITIES AND EXCHANGE COMMISSION
Washington D.C. 20549
SCHEDULE 14A INFORMATION
Proxy Statement
(Pursuant to Section 14(a) of the Securities Exchange Act of 1934)
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Materials Pursuant to Rule 14a-11(c) or Rule 14a-12
WINSLOEW FURNITURE, INC.
(Name of Registrant as specified in its Charter)
WINSLOEW FURNITURE, INC.
(Name of Person(s) Filing Proxy Statement)
Payment of Filing Fee (Check the appropriate box):
[X] No Fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and
0-11.
(1) Title of each class of securities to which transaction applies:
(2) Aggregate number of securities to which transaction applies:
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11:
(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 No.:
(3) Filing Parties:
(4) Date Filed:
WINSLOEW FURNITURE, INC.
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
To be held on June 11, 1997
To the Shareholders of
WinsLoew Furniture, Inc.
The 1997 Annual Meeting of Shareholders (the "Annual Meeting") of
WinsLoew Furniture, Inc., a Florida corporation (the "Company"), will
be held at 9:00 a.m., local time, on Wednesday, June 11, 1997, at The
Grand Bay Hotel, 2669 South Bayshore Drive, Miami, Florida 33133, for
the following purposes:
(1) To elect three members to the Company's Board of Directors to
hold office until the Company's 2000 Annual Meeting of
Shareholders or until their successors are duly elected and
qualified;
(2) To consider and vote upon a proposal to approve the adoption
of the Company's amended and restated 1994 Stock Option Plan;
and
(3) To transact such other business as may properly come before
the Annual Meeting and any adjournments or postponements
thereof.
The Board of Directors has fixed the close of business on April 14, 1997
as the record date for determining those shareholders entitled to notice
of, and to vote at, the Annual Meeting and any adjournments or
postponements thereof.
Whether or not you expect to be present, please sign, date and return
the enclosed proxy card in the enclosed pre-addressed envelope as
promptly as possible. No postage is required if mailed in the United
States.
By Order of the Board of Directors
Bobby Tesney
President and Chief Executive Officer
Birmingham, Alabama
April 28, 1997
THIS IS AN IMPORTANT MEETING AND ALL SHAREHOLDERS ARE INVITED TO ATTEND THE
MEETING IN PERSON. ALL SHAREHOLDERS ARE RESPECTFULLY URGED TO EXECUTE AND
RETURN THE ENCLOSED PROXY CARD AS PROMPTLY AS POSSIBLE. SHAREHOLDERS WHO
EXECUTE A PROXY CARD MAY NEVERTHELESS ATTEND THE MEETING, REVOKE THEIR PROXY
AND VOTE THEIR SHARES IN PERSON.
1997 ANNUAL MEETING OF SHAREHOLDERS
OF
WINSLOEW FURNITURE, INC.
_____________________________
PROXY STATEMENT
_____________________________
DATE, TIME AND PLACE OF ANNUAL MEETING
This Proxy Statement is furnished in connection with the solicitation
by the Board of Directors of WinsLoew Furniture, Inc., a Florida
corporation (the "Company"), of proxies from the holders of the
Company's common stock, par value $.01 per share (the "Common Stock"),
for use at the 1997 Annual Meeting of Shareholders of the Company to be
held at 9:00 a.m., local time, on Wednesday, June 11, 1997, at The
Grand Bay Hotel, 2669 South Bayshore Drive, Miami, Florida, or at any
adjournments or postponements thereof (the "Annual Meeting"), pursuant
to the foregoing Notice of Annual Meeting of Shareholders. The
approximate date that this Proxy Statement and the enclosed form of
proxy are first being sent to shareholders is April 28, 1997.
Shareholders should review the information provided herein in
conjunction with the Company's 1996 Annual Report to Shareholders
which accompanies this Proxy Statement. The Company's principal
executive offices are located at 201 Cahaba Valley Parkway, Pelham,
Alabama, 35124 and its telephone number is (205) 403-0206.
INFORMATION CONCERNING PROXY
The enclosed proxy is solicited on behalf of the Company's Board of
Directors. The giving of a proxy does not preclude the right to vote
in person should any shareholder giving the proxy so desire.
Shareholders have an unconditional right to revoke their proxy at
any time prior to the exercise thereof, either in person at the Annual
Meeting or by filing with the Company's Secretary at the Company's
headquarters a written revocation or duly executed proxy bearing a
later date; however, no such revocation will be effective until written
notice of the revocation is received by the Company at or prior to the
Annual Meeting.
The cost of preparing, assembling and mailing this Proxy Statement, the
Notice of Annual Meeting of Shareholders and the enclosed proxy is to
be borne by the Company. In addition to the use of mail, officers and
employees of the Company may solicit proxies personally and by
telephone. The Company's employees will receive no compensation for
soliciting proxies other than their regular salaries. The Company may
request banks, brokers and other custodians, nominees and fiduciaries
to forward copies of the proxy material to their principals and to
request authority for the execution of proxies. The Company may
reimburse such persons for their expenses in so doing.
PURPOSES OF THE MEETING
At the Annual Meeting, the Company's shareholders will consider and
vote upon the following matters:
(1) The election of three members to the Company's Board of Directors to
serve until the Company's 2000 Annual Meeting of Shareholders or until
their successors are duly elected and qualified;
(2) A proposal to approve the adoption of the Company's amended and
restated 1994 Stock Option Plan; and
(3) Such other business as may properly come before the Annual Meeting,
including any adjournments or postponements thereof.
Unless contrary instructions are indicated on the enclosed proxy,
all shares represented by valid proxies received pursuant to this
solicitation (and which have not been revoked in accordance with the
procedures set forth above) will be voted for the election of the
three nominees for director named below. In the event that a
shareholder specifies a different choice by means of the enclosed
proxy, such shareholder's shares will be voted in accordance with the
specification so made.
OUTSTANDING VOTING SECURITIES AND VOTING RIGHTS
The Board of Directors has set the close of business on April 14, 1997
as the record date (the "Record Date") for determining shareholders of
the Company entitled to notice of and to vote at the Annual Meeting. As
of the Record Date, there were 7,446,483 shares of Common Stock issued
and outstanding, all of which are entitled to be voted at the Annual
Meeting. Each share of Common Stock is entitled to one vote on each
matter submitted to shareholders for approval at the Annual Meeting.
Shareholders do not have the right to cumulate their votes for
directors.
The attendance, in person or by proxy, of the holders of a majority of
the outstanding shares of Common Stock entitled to vote at the Annual
Meeting is necessary to constitute a quorum. Directors will be elected
by a plurality of the votes cast by the shares of Common Stock
represented in person or by proxy at the Annual Meeting. The proposal
to approve the adoption of the Company's Amended and Restated 1994 Stock
Option Plan will be approved if a majority of the shares of Common Stock
voted on the matter are voted in favor of the proposal. Any other
matter that may be submitted to a vote of the shareholders will be
approved if the number of shares of Common Stock voted in favor of the
matter exceeds the number of shares voted against the matter, unless
such matter is one for which a greater vote is required by law or by
the Company's Articles of Incorporation or Bylaws. If less than a
majority of outstanding shares of Common Stock are represented at the
Annual Meeting, a majority of the shares so represented may adjourn the
Annual Meeting to another date, time or place, and notice need not be
given of the new date, time or place if the new date, time or place is
announced at the meeting before an adjournment is taken.
Prior to the Annual Meeting, the Company will select one or more
inspectors of election for the meeting. Such inspectors shall determine
the number of shares of Common Stock represented at the meeting, the
existence of a quorum and the validity and effect of proxies, and shall
receive, count and tabulate ballots and votes and determine the results
thereof. Abstentions will be considered as shares present and entitled
to vote at the Annual Meeting and will be counted as votes cast at the
Annual Meeting, but will not be counted as votes cast for or against
any given matter. The inspectors of election will treat shares referred
to as "broker or nominee non-votes" that are represented at the meeting
(shares held by brokers or nominees as to which instructions have not
been received from the beneficial owners or other persons entitled to
vote and the broker or nominee does not have discretionary voting power
on a particular matter) as shares that are present and entitled to vote
for purposes of determining the presence of a quorum. For purposes of
determining the outcome of any matter as to which the proxies reflect
broker or nominee non-votes, shares represented by such proxies will be
treated as not present and not entitled to vote on that subject matter
and therefore will not be considered by the inspectors of election when
counting votes cast on the matter (even though those shares are
considered entitled to vote for quorum purposes and may be entitled
to vote on other matters). Accordingly, broker or nominee non-votes
will not have the same effect as a vote against the election of any
director or against the proposal to approve the Amended and Restated
1994 Stock Option Plan. Abstentions will not have the same effect as
a vote against the election of any director but will have the same
effect as a vote against the proposal to approve the Amended and
Restated 1994 Stock Option Plan.
SECURITY OWNERSHIP
The following table sets forth information regarding the beneficial
ownership of the Company's Common Stock as of March 31, 1997 by (i)
each person known by the Company to beneficially own more than five
percent of the outstanding shares of Common Stock, (ii) each director
of the Company, (iii) each "Named Executive Officer" of the Company
(as defined below in "Executive Compensation Summary Compensation
Table"), and (iv) all directors and executive officers of the Company
as a group:
Beneficial Ownership
of Common Stock(2)
------------------------------
Name of Beneficial Owner(1) Number of Shares Percentage
- --------------------------- ------------------------------
Earl W. Powell(3)(4) 1,921,487 25.7%
Phillip T. George, M.D.(3)(5) 1,851,252 24.8%
Trivest Group, Inc.(3)(6) 908,455 12.2%
Trivest Special Situations Funds 1985,
L.P.(3)(7) 542,816 7.3%
Heartland Advisors, Inc. (8) 445,800 5.9%
R. Craig Watts (9) 155,737 2.1%
M. Miller Gorrie(10) 132,450 1.8%
Bobby Tesney(11) 104,648 1.4%
Stephen C. Hess(12) 71,202 *
Vincent A. Tortorici, Jr. (13) 35,821 *
Peter W. Klein(3)(14) 20,725 *
James S. Smith(15) 20,500 *
Henry C. Cheek(16) 14,000 *
Peter C. Brockway(3)(17) 5,000 *
Sherwood M. Weiser(18) 6,675 *
William H. Allen, Jr.(19) 4,050 *
Richard McLeod (20) 650 *
All directors and executive officers
as a group (16 persons)(21) 2,643,295 34.2%
______________________
(*) Less than 1%
(1) Except as otherwise indicated below, the address of each beneficial
owner is 201 Cahaba Valley Parkway, Pelham, Alabama 35124.
(2) Except as otherwise indicated below, all shares are owned directly
and each person has sole voting and investment power with respect to
all shares. For purposes of this table, a person is deemed to have
"beneficial ownership" of any shares as of a given date which the
person has the right to acquire within 60 days after such date. For
purposes of computing the outstanding shares held by each person named
above on a given date, any shares which such person has the right to
acquire within 60 days after such date are deemed to be outstanding,
but are not deemed to be outstanding for the purpose of computing the
percentage ownership of any other person.
(3) The beneficial owner's address is 2665 South Bayshore Drive, Suite 800,
Miami, Florida 33133.
(4) Includes 184,435 shares owned directly, 33,625 shares subject to
exercisable options granted under the Company's stock option plan,
662,484 shares held of record by Trivest Fund I, Ltd., 245,971 shares
held of record by Trivest Equity Partners I, Ltd. and 116,459
shares held of record by Trivest Principals' Fund 1988, of which
Mr. Powell is a general partner, 542,816 shares owned of record
by Trivest Special Situations Fund 1985, L.P. ("TSSF") (see note (7)),
and 135,697shares owned of record by Trivest Annuity Fund, Ltd.
("Annuity Fund"). The General Partner of Annuity Fund is Trivest
Plan Sponsor. Messrs. Powell and George are executive officers and
directors of Trivest Plan Sponsor and beneficially own 100% of its
outstanding capital stock.
(5) Includes 126,175 shares owned directly, 900 shares held of record by
Dr. George as custodian for his minor children under the Florida
Uniform Gifts to Minors Act as to which Dr. George disclaims
beneficial ownership, 20,750 shares subject to exercisable options
under the Company's stock option plan, 662,484 shares held of record
by Trivest Fund I, Ltd., 245,971 shares held of record by Trivest
Equity Partners I, Ltd. and 116,459 shares held of record by Trivest
Principals' Fund 1988, of which Dr. George is a general partner,
542,816 shares owned of record by TSSF (see note (7)), and 135,697
shares owned of record by Annuity Fund. The General Partner of
Annuity Fund is Trivest Plan Sponsor. Messrs. Powell and George are
executive officers and directors of Trivest Plan Sponsor and
beneficially own 100% of its outstanding capital stock.
(6) Trivest Group, Inc. serves as the sole general partner of Trivest 1988
Fund Managers, Ltd., which in turn is the sole general partner of
(i) Trivest Fund I, Ltd., a privately held investment partnership
that holds of record 662,484 shares of Common Stock, and (ii) Trivest
Equity Partners I, Ltd., a privately held investment partnership that
holds of record 245,971 shares of Common Stock, Messrs. Powell and
George are executive officers and directors of Trivest Group, Inc.
and beneficially own 100% of its outstanding capital stock.
(7) The general partner of TSSF is Trivest Associates, L.P. ("Associates"),
a Florida limited partnership whose general partner is Trivest, Inc.
Messrs. Powell and George are executive officers and directors of
Trivest, Inc. and beneficially own 100% of its outstanding stock.
Messrs. Powell and George are also limited partners of Associates.
(8) The address for Heartland Advisors, Inc. is 790 North Milwaukee
Street, Milwaukee, Wisconsin 53202.
(9) Includes 110,562 shares owned directly and 45,175 shares subject to
exercisable options granted under the Company's Stock Option Plan.
Mr. Watts' address is 1801 N. Andrews Extension, Pompano Beach,
Florida 33061.
(10) Includes 45,750 shares owned directly and 8,000 shares subject to
exercisable options granted under the Company's stock option plan
and 78,700 shares owned by Brasfield & Gorrie, General Contractors,
Incorporated. Mr. Gorrie's address is c/o Brasfield and Gorrie,
729 South 30th Street, Birmingham, Alabama 35223.
(11) Includes 49,648 shares owned directly and 55,000 shares subject to
exercisable options granted under the Company's stock option plan.
(12) Includes 31,202 shares owned directly and 40,000 shares subject to
exercisable options granted under the Company's stock option plan.
(13) Includes 15,821 shares owned directly and 20,000 shares subject to
exercisable options granted under the Company's stock option plan.
(14) Represents 20,725 shares subject to exercisable options granted under
the Company's stock option plan.
(15) Includes 12,500 shares owned directly and 8,000 shares subject to
exercisable options granted under the Company's stock option plan.
Mr. Smith's address is Suite 916, 10 Rockefeller Plaza, New York,
New York 10020.
(16) Includes 6,000 shares owned directly and 8,000 shares subject to
exercisable options granted under the Company's stock option plan.
Mr. Cheek's address is 3713 Fairway Drive, DCBE, Granbury, Texas
76049.
(17) Represents 5,000 shares subject to exercisable options granted under
the Company's stock option plan.
(18) Represents 3,675 shares held by Mr. Weiser's wife and 3,000 shares
subject to exercisable options granted under the Company's Stock
Option Plan. Mr. Weiser's address is 3250 Mary Street, 5th Floor,
Miami, Florida 33133.
(19) Represents 1,050 shares owned directly and 3,000 shares subject to
exercisable options granted under the Company's Stock Option Plan.
Mr. Allen's address is Nations Bank South, 200 S.E. 1st Street,
Suite 800, Miami, Florida 33131.
(20) Mr. McLeod's address is 205 Mill Drive, Cookeville, Tennessee 38501.
(21) Includes an aggregate of 274,375 shares subject to exercisable
options granted under the Company's stock option plan, 1,024,914
shares owned of record by Trivest Fund I, Ltd., Trivest Equity
Fund I, Ltd., and Trivest Principals' Fund 1988 and 678,513 shares
owned of record by TSSF and Annuity Fund. See notes (4), (5), (6),
and (7).
Compliance with Section 16(a) of the Securities Exchange Act of 1934
Section 16(a) of the Securities Exchange Act of 1934 requires the
Company's directors and executive officers, and persons who own more
than ten percent of the Company's Common Stock, to file with the
Securities and Exchange Commission (the "SEC") initial reports of
ownership and reports of changes in ownership of Common Stock. Such
persons are required by SEC regulation to furnish the Company with
copies of all such reports they file.
To the Company's knowledge, based solely on a review of the copies
of such reports furnished to the Company and written representations
that no other reports were required, all Section 16(a) filing with
respect to the Company's 1996 fiscal year were timely made except
for the Form 4 required to be filed by Atlantis Plastics, Inc.
(see "Certain Transactions" Repurchase of stock from Atlantis
Plastics, Inc.) which was filed after the original due date thereof,
although relevant information as to such repurchase was included in
press releases issued by both Atlantis Plastics, Inc. and the Company
at the time of the repurchase.
ELECTION OF DIRECTORS; DIRECTOR NOMINEES
The Company's Articles of Incorporation provide that the Company's
Board of Directors shall consist of not less than seven nor more than
thirteen members, with the exact number to be fixed from time to time
by resolution of the Board of Directors. The Board has fixed the number
of directors on the Board at ten for the ensuing year.
The Company's Articles of Incorporation divide the Board of Directors
into three classes (Classes I, II and III). The term of office of Class
III directors expires at the Annual Meeting. The current directors of
the Company and their respective classes and terms of office are as
follows:
Director Class Term Expires At
- --------------------- ----- -----------------------
Earl W. Powell I 1998 Annual Meeting
William H. Allen, Jr. I 1998 Annual Meeting
James S. Smith I 1998 Annual Meeting
Phillip T. George, M.D. II 1999 Annual Meeting
Peter W. Klein II 1999 Annual Meeting
Bobby Tesney II 1999 Annual Meeting
Sherwood M. Weiser II 1999 Annual Meeting
Peter C. Brockway II 1997 Annual Meeting
Henry C. Cheek III 1997 Annual Meeting
M. Miller Gorrie III 1997 Annual Meeting
Accordingly, three Class III directors are to be elected at the
Annual Meeting, for a term expiring at the Company's 2000 Annual
Meeting of Shareholders. The Company's current Class III directors,
Messrs. Brockway, Cheek and Gorrie have been nominated by the Board
to be re-elected as Class III directors at the Annual Meeting. The
Board of Directors has no reason to believe that any of such nominees
will refuse or be unable to accept election; however, in the event
that any of the nominees is unable to accept election or if any other
unforeseen contingencies should arise, each proxy that does not
direct otherwise will be voted for the remaining nominees and for
such other replacement nominees as may be designated by the Board of
Directors.
MANAGEMENT
Executive Officers and Directors
The executive officers and directors of the Company are as follows:
Name Age Position
- ------------------------ --- ---------------------------------------
Earl W. Powell 58 Chairman of the Board
Bobby Tesney 52 President, Chief Executive Officer
and Director
R. Craig Watts 43 Executive Vice President
- Contract Seating
Stephen C. Hess 48 Executive Vice President
- Casual Furniture
Richard McLeod 47 Executive Vice President
- Futons
Vincent A. Tortorici, Jr. 43 Vice President
and Chief Financial Officer
Phillip T. George, M.D. 57 Director
Peter C. Brockway 40 Director
Peter W. Klein 41 Director
William H. Allen, Jr. 61 Director
Sherwood M. Weiser 66 Director
M. Miller Gorrie 61 Director
James S. Smith 68 Director
Henry C. Cheek 71 Director
The Company was formed in September 1994, and in December 1994 the
Company merged with each of Winston Furniture Company, Inc. ("Winston")
and Loewenstein Furniture Group, Inc. ("Loewenstein"). Each of the
Company's directors and executive officers were also directors or
officers of Winston and/or Loewenstein, as described below. Prior to
the merger, each of Winston and Loewenstein were publicly held
corporations whose common stock traded on the NASDAQ National Market.
Mr. Powell, Chairman of the Board of the Company since October 1994,
serves as President and Chief Executive Officer of Trivest, Inc.
("Trivest"), a private investment firm specializing in management
services and acquisitions, dispositions and leveraged buyouts, which
was formed by Messrs. Powell and George in 1981. Mr. Powell has also
served as Chairman of the Board of Atlantis Plastics, Inc., an American
Stock Exchange company whose subsidiaries are engaged in the plastics
industry ("Atlantis"), since founding that company in February 1984, as
Chief Executive of Atlantis from its organization until February 1995
and as President of Atlantis from November 1993 to February 1995.
Mr. Powell has served as Chairman of the Board of Biscayne Apparel,
Inc., an American Stock Exchange company whose principal subsidiaries
are engaged in the apparel industry ("Biscayne"), since October 1985
and presently serves as President and Chief Executive Officer of
Biscayne. Mr. Powell also served as Chairman of the Board of Winston
from December 1988 to December 1994, Chairman of the Board of
Loewenstein from February 1985 to December 1994 and as Loewenstein's
President and Chief Executive Officer from May 1994 to December 1994.
From 1971 until 1985, Mr. Powell was a partner with KPMG Peat Marwick,
Certified Public Accountants ("Peat Marwick"), where his positions
included serving as managing partner of Peat Marwick's Miami office.
Mr. Tesney, President, Chief Executive Officer and a director of the
Company since October 1994, served as President, Chief Executive
Officer and a director of Winston from December 1993 to December 1994,
General Manager of Winston from 1985 to December 1993 and as Senior
Vice President-Operations of Winston from January to December 1993.
Mr. Tesney also served as Vice President of Winston from 1979 until
January 1992.
Mr. Watts, Executive Vice President-Contract Seating of the Company
since October 1994, served as a director of Loewenstein from December
1990 to December 1994, and was appointed Loewenstein's Executive Vice
President-Contract Seating in May 1993, after serving as Vice President
since May 1991. Mr. Watts also serves as the President and Chief
Operating Officer of the Company's Loewenstein and Gregson divisions,
and has served in a number of management positions since joining
Loewenstein in April 1981.
Mr. Hess, the Company's Executive Vice President-Casual Furniture
since October 1994, served as Winston's Executive Vice President
from December 1993 to December 1994, Winston's Senior Vice President
-Marketing and Sales from January 1992 to September 1993, and as
Winston's Vice President-Marketing and Sales from January 1983 until
January 1992.
Mr. McLeod was appointed the Company's Executive Vice President Futons
in December, 1995. Prior to joining the Company in September 1995,
Mr. McLeod served as Vice President of Manufacturing for American of
Martinsville and American Drew, both divisions of Ladd Furniture
Company, from 1992 to October 1995; Vice President of Manufacturing
for GF Furniture from 1988 to 1992; and Vice President of Operations
and General Manager for Corry Hiebert, a division of Hon industries,
an office furniture manufacturer traded on the New York Stock Exchange,
from 1985 to 1988.
Mr. Tortorici, the Company's Vice President and Chief Financial Officer
since October 1994, served as Winston's Vice President-Finance and
Administration and Chief Financial Officer from March 1988 to December
1994. Mr. Tortorici is a certified public accountant and was employed
by Arthur Andersen & Co. from 1976 until March 1988.
Dr. George, a director of the Company since October 1994, served as a
director of Winston from October 1989 to December 1994 and as a director
of Loewenstein from February 1985 to December 1994. Dr. George also
serves as the Chairman of the Board of Trivest and as the Vice Chairman
of the Board and Chairman of the Executive Committee of the Board of
Directors of Atlantis and as a director of Biscayne. Dr. George's
executive position with Trivest has been his principal occupation since
retiring from the private practice of plastic and reconstructive
surgery in February 1986.
Mr. Brockway, a director of the Company since October 1994, served as a
director of Winston from December 1988 to December 1994. Mr. Brockway
has served as an executive officer of Trivest since September 1986 and
is presently Managing Director and Executive Vice President.
Mr. Klein, a director of the Company since October 1994, served as a
director of Winston from December 1988 to December 1994 and as a
director of Loewenstein from May 1993 to December 1994. Mr. Klein has
served as an executive officer of Trivest since May 1986 and is
presently Senior Vice President, Managing Director and General Counsel
of Trivest. Prior to joining the Trivest, Mr. Klein practiced law in
Chicago, Illinois and Cleveland, Ohio.
Mr. Allen, a director of the Company since October 1994, served as a
director of Loewenstein from September 1993 to December 1994. Mr. Allen
serves as Vice Chairman of NationsBank South, and served as Chairman
of the Board and Chief Executive Officer of Intercontinental Bank, a
NASDAQ National Market company headquartered in Miami, Florida, since
April 1987 until its merger with NationsBank South in December 1994.
Mr. Allen also serves as a director of American Bankers Insurance
Group, a NASDAQ National Market company headquartered in Miami,
Florida and Decorator Industries, Inc., traded on the American Stock
Exchange, headquartered in Hollywood, Florida.
Mr. Weiser, a director of the Company since October 1994, has been
since 1970 the Chairman of the Board, President and Chief Executive
Officer of CHC International, Inc., a leading hotel and casino
development and management company that does business as "Carnival
Hotels and Casinos," and its predecessors. Mr. Weiser also serves
as a director of Carnival Corporation, a cruise line traded on the
New York Stock Exchange.
Mr. Gorrie, a director of the Company since October 1994, served as a
director of Winston from February 1993 to December 1994 and from May
1986 to December 1988. Mr. Gorrie has been President of Brasfield &
Gorrie General Contractor, Inc., a diversified general contractor
based in Birmingham, Alabama, since 1964. Mr. Gorrie also serves as
a director of AmSouth Bancorporation, a New York Stock Exchange
company which is the holding company of AmSouth Bank of Alabama.
Mr. Gorrie is a director of Colonial Properties Trust, a real estate
investment trust traded on the New York Stock Exchange.
Mr. Smith, a director of the Company since October 1994, served as a
director of Winston from February 1993 to December 1994, and as a
director of Biscayne from June 1986 to February 1992. Mr. Smith has
been engaged in private investment activities as his principal
occupation for more than the prior five years. Mr. Smith served as
Executive Vice President of Stephens, Inc., an investment banking firm
based in Little Rock, Arkansas, from January 1985 until May 1987.
Mr. Smith has also served as President of the Arnold D. Frese
Foundation since March 1979.
Mr. Cheek, a director of the Company since October 1994, served as a
director of Winston from February 1993 to December 1994. Mr. Cheek
has been engaged in private investment activities as his principal
occupation for more than the prior five years. From 1951 until his
retirement in 1984, Mr. Cheek was Vice President of U.S. Industries,
Inc., a diversified holding company and served as Chief Executive
Officer of its Furniture Group. Mr. Cheek served as a director of
Winston from May 1987 through December 1988.
Meetings and Committees of the Board of Directors
During 1996, the Board of Directors held three meetings and took
certain actions by written consent. During 1996, except for Mr. Weiser,
no director attended fewer than 75 percent of the aggregate of (i)
the number of meetings of the Board of Directors held during the period
he served on the Board, and (ii) the number meetings of committees of
the Board of Directors held during the period he served on such
committees.
The Board of Directors has established three standing committees:
(1) the Executive Committee, (2) the Audit Committee, and (3) the
Compensation Committee.
Messrs. Powell, George and Tesney are members of the Executive
Committee, which took certain actions by unanimous written consent
during 1996. The Executive Committee has and may exercise all the
powers and authority of the Board of Directors in the management of
the business and affairs of the Company.
During 1996, Messrs. Smith, Allen and Weiser served as members of the
Compensation Committee. The Compensation Committee held one meeting
during 1996. Mr. Smith is Chairman of the Compensation Committee. The
authority and responsibilities of the compensation Committee include
(i) establishing compensation policies with respect to the Company's
executive officers, (ii) making recommendations to the full Board on
compensation actions involving the Company's executive officers,
including actions regarding salary, bonus and employment agreements,
(iii) approving long term incentive awards for executive officers,
and (iv) administering the Company's stock option plan and other
incentive and long-term compensation plans maintained by the Company
from time to time.
During 1996, Messrs. Gorrie and Cheek served as members of the Audit
Committee. The Audit Committee did not have any meetings during 1996.
Mr. Gorrie is Chairman of the Audit Committee. The authority and
responsibilities of the Audit Committee include (i) recommending to
the full Board the appointment of the Company's auditors and any
termination of engagement, (ii) reviewing the plan and scope of audits,
(iii) reviewing the Company's significant accounting policies and
internal controls, and (iv) having general responsibility for all
related auditing matters.
EXECUTIVE COMPENSATION
Summary Compensation Table
The following table sets forth compensation awarded to, earned by or
paid to the Company's Chief Executive Officer, and each of the
Company's other executive officers whose total 1996 salary and bonus
from the Company was $100,000 or more (the Chief Executive Officer and
such other executive officers are referred to herein as the "Named
Executive Officers"). Except as disclosed in the footnotes, the table
does not include any 1994 compensation paid by Winston or Loewenstein
prior to the Company's merger with Winston and Loewenstein in December
1994.
<TABLE> Long Term
Annual Compensation Compensation
--------------------------------------------- ---------------
Other Securities
Fiscal Annual Underlying
Name and Principal Position Year Salary(2) Bonus Compensation (1) Options
- --------------------------- ------ --------- -------- ------------ ---------------
<C> <C> <C> <C> <C>
Bobby Tesney 1996 $216,400 $162,300 $28,240 -
President and Chief 1995 200,000 127,500 - 50,000
Executive Officer 1994 7,363(2) 129,579 - 35,000(3)
Steven C. Hess 1996 178,218 133,663 18,606 -
Executive Vice President 1995 165,000 100,000 - 25,000
- Casual Furniture 1994 7,069(2) 104,579 - 30,000(3)
Vincent A. Tortorici, Jr. 1996 129,900 64,950 8,718 -
Vice President and Chief 1995 120,000 51,000 - 25,000
Financial Officer 1994 5,567(2) 26,884 - 10,000(3)
R. Craig Watts 1996 166,138 121,103 20,357 -
Executive Vice President 1995 150,052 40,506 - 25,000
- Contract Seating 1994 8,305(2) 46,985 - 35,175(3)
Richard McLeod 1996 129,536 - 2,019 -
Executive Vice President 1995 22,115(4) - - -
- Futons
</TABLE>
________________________
(1) "Other Annual Compensation" represents amounts paid by the Company on
behalf of the Named Executive Officer under the Company's Non-Qualified
Supplemental Executive Retirement Plan established in October 1996.
Under the terms of this Plan, selected employees make after-tax
contributions of their salary to one or more investment alternatives
vailable under such Plan, and the Company then matches the amount (up
to 10% of compensation) on an after-tax basis depending on the
employee's length of service up to 50%, for 15 or more years of
continuous service, of the employee's contributions. The employee is
vested at all times in the deferred compensation and is vested
immediately in the matching contribution.
(2) Mr. Tesney's and Mr. Hess's and Mr. Tortorici's 1994 salary paid by
Winston prior to Winston's merger with the Company in December 1994
was $120,262, $115,451 and $90,933, respectively. Mr. Watts' 1994
salary paid by Loewenstein prior to the merger was $135,656.
(3) These options were granted in connection with the Company's merger
with Winston and Loewenstein as replacements for options for Winston
or Loewenstein shares held by the Named Executive Officers prior to
the merger.
(4) Mr. McLeod commenced employment with the Company in September, 1995.
Option Grants Table
There were no stock options granted in 1996.
Aggregated 1996 Fiscal Year-End Option Value Table
The following table sets forth certain information concerning
unexercised stock options held by the Named Executive Officers as of
December 31, 1996. No stock options were exercised by such persons
during 1996.
<TABLE>
Number of Value of
Securities Underlying Unexercised
Unexercised Options In-the-Money Options
at December 31, 1996 at December 31, 1996
----------------------------- -----------------------------
Exercisable Unexercisable Exercisable Unexercisable
----------- ------------- ----------- -------------
<C> <C> <C> <C>
Bobby Tesney 45,000 40,000 $32,500 $130,000
Stephen C. Hess 35,000 20,000 16,250 65,000
Vincent A. Tortorici, Jr. 15,000 20,000 16,250 65,000
R. Craig Watts 40,175 20,000 56,885 65,000
</TABLE>
401 (k) Plan
Effective January 1, 1997, the WinsLoew Furniture, Inc. 401 (k) Plan
was established. Employees of the Company and its subsidiaries are
eligible to participate in the Plan following the later to occur of
(i) the employee's completion of one year of service or (ii) the
employee's 21st birthday. Eligible employees may make a salary
reduction contributions to the Plan on a pre- tax basis. For each
calendar year, the Company and the other participating employers may
make matching contributions to the Plan based on a discretionary
matching percentage to be determined each year by the Company. In
addition, the Company and the other participation employers may make
a discretionary profit sharing contribution to the plan on behalf of
each participant who completes more than 500 hours of service during
the year or who is employed on the last day of the year. This latter
contribution is allocated proportionately based on each participants
compensation. An employee's vested benefits are payable upon his
retirement, death, disability, or other termination of employment or
upon his attainment of age 59-1/2. An employee is always fully vested
in his account balance attributable to his own contributions to the
Plan. The employee's interest in the account attributable to his
employers contributions and earnings thereon becomes fully vested upon
the earlier of his attainment of his normal retirement date (age 65),
his death, his permanent and total disability, or his completion of
six years of service. If an employee terminates employment for
reasons other than retirement, death, or disability, his vested
interest is based on a graduated vesting schedule which provides for
20% vesting after two years of service and 20% for each year thereafter.
Nonvested amounts are forfeited.
Long Term Incentive and Pension Plans
The Company has no Long Term Incentive or Pension Plans.
Compensation of Directors
During 1996 and during the first quarter of 1997, the Company paid each
director who was neither an employee of the Company nor Trivest an
annual retainer of $10,000, an additional retainer of $2,500 for serving
on the Compensation Committee, a $500 fee for each meeting of the Board
of Directors attended and, unless held on the same day as a Board
meeting, $500 for each committee meeting attended. The Company also
reimburses all directors for expenses incurred in connection with their
activities as directors.
Additionally, prior to 1997, on March 31 of each year, each director
who was neither an employee of the Company nor Trivest received
automatic grants of options to purchase 5,000 shares of Common Stock
pursuant to the Company's 1994 Stock Option Plan. Such options became
exercisable at the rate of 20% on each anniversary of the date of grant,
and had an exercise price equal to the fair market value of Common Stock
on the date of grant. The unexercised portion of any such option will
terminate upon the earliest to occur of the following: (i) the
expiration of 10 years from the date of grant of the option, (ii) twelve
months after the date on which the optionee ceases to be a director by
reason of the death of the optionee, or (iii) three months after the
optionee ceases to be a director for any other reason. In addition,
each other director of the Company was eligible to receive discretionary
grants of options pursuant to such plan. These automatic grants were
terminated in connection with the adoption of the Amended and Restated
1994 Stock Option Plan by the Board of Directors in February 1997.
The Board of Directors approved new compensation policies effective
April 1, 1997. Directors who are neither employees of the Company nor
Trivest are paid a $2,500 cash fee for each meeting attended in person
and a $500 cash fee for each meeting attended by telephone. In
addition, each member of the Compensation Committee receives a $2,500
annual retainer, payable quarterly in advance.
Employment Contracts, Termination of Employment and Change in Control
Arrangements
Effective January 1, 1995, the Company entered into five-year
employment agreements with each of Messrs. Tesney, Watts, Hess and
Tortorici. The employment agreements provide for the Company to pay
Messrs. Tesney, Watts, Hess and Tortorici base salaries of $200,000,
$150,000, $165,000 and $120,000, respectively (base year 1995), in
each case subject to annual cost of living adjustments. Such
employment agreements also provide for annual incentive compensation
payments of up to 75% of the executive's then base salary (50% in the
case of Mr. Tortorici) based on the operating earnings (adjusted to
exclude the effect of goodwill amortization) of (i) the Company, in
the case of Messrs. Tesney and Tortorici, (ii) the Company's Contract
Seating divisions, in the case of Mr. Watts,) and (iii) the Company's
Casual Furniture divisions, in the case of Mr. Hess. None of such
officers will receive any incentive compensation payment under his
employment agreement for any particular year unless the relevant
operating earnings for such year are at least 75% of the "target
earnings" for such year. Each employment agreement also provides
that the executive will receive six months base salary if his
employment is terminated without "cause" (as defined), and prohibits
the executive from directly or indirectly competing with the Company
for one year after termination of his employment (six months if he is
terminated by the Company without "cause"). Such employment agreements
were approved by the Compensation Committee of the Company's Board of
Directors.
Effective, September 1, 1995, the Company entered into a five-year
employment agreement with Richard W. McLeod. The employment agreement
provides for the Company to pay Mr. McLeod a base salary of $115,000,
(base year 1995) subject to annual cost of living adjustments. Such
employment agreement also provides for annual incentive compensation
payments of up to 15% of the executive's then base salary based on the
operating earnings (adjusted to exclude the effect of goodwill
amortization) of the Company's Futon and Southern Wood Divisions.
Mr. McLeod will not receive any incentive compensation payment under
his employment agreement for any particular year unless the relevant
operating earnings for such year are at least 75% of the "target
earnings" for such year. The employment agreement also provides that
Mr. McLeod will receive three months base salary if his employment is
terminated without "cause" as defined), and prohibits Mr. McLeod from
directly or indirectly competing with the Company for one year after
termination of his employment (six months if he is terminated by the
Company).
Compensation Committee Interlocks and Insider Participation
Mr. Powell, the Company's Chairman, also serves on the Board of
Directors of CHC International, Inc., a hotel and casino development
and management company. Mr. Weiser, a director and member of the
Compensation Committee of the Board of Directors, serves as Chairman
of the Board, President and Chief Executive Officer of CHC
International, Inc. See "Management."
Compensation Committee Report on Executive Compensation
The Compensation Committee's general philosophy with respect to the
compensation of the Company's executive officers is to offer competitive
compensation programs designed to attract and retain key executives
critical to the long-term success of the Company and to recognize an
individual's contribution and personal performance. The components of
such compensation programs include a base salary and annual bonus, a
supplemental nonqualified retirement plan and a stock option plan
designed to provide long-term incentives.
In November 1994, the Compensation Committee approved the Company's
employment agreements with each of Messrs. Tesney, Watts, Hess and
Tortorici. Compensation pursuant to such agreements commenced in
January 1995. In September 1995, the Compensation approved the
Company's employment agreement with Mr. McLeod. The agreements
provide for, among other things, annual incentive compensation payments,
the amounts of which are directly related to earnings of the Company or
specified divisions of the Company. See "Employment Contracts,
Termination of Employment and Change in Control Arrangements" for a
description of the terms of such agreements.
The Company's stock option plan is administered by the Compensation
Committee (with respect to all eligible persons except directors) and
is designed to attract and retain executive officers and other employees
of the Company and its subsidiaries, and to reward them for their
successful efforts to deliver growth in value to the Company's
shareholders. The stock option plan provides for discretionary grants
of options to selected eligible persons, directors and consultants to
the Company. In 1996, there were no grants of stock options under the
plan.
WILLIAM H. ALLEN, JR.
JAMES S. SMITH
SHERWOOD M. WEISER
PERFORMANCE GRAPH
The following graph compares the cumulative total shareholder returns
on the Company's Common Stock, based on the market price of Common
Stock from December 19, 1994 (the date upon which public trading of the
Common Stock commenced) through December 31, 1996, with (i) the NASDAQ
market index, and (ii) the Media General Furniture and Home Furnishings
Index.
Comparison of Cumulative Total Return
<TABLE>
<C> <C> <C> <C> <C>
12/19/94 06/30/95 12/29/95 06/28/96 12/31/96
WinsLoew Furniture, Inc. 100 84.78 102.17 100.00 169.57
Nasdaq Stock Market Index 100 98.58 102.22 119.43 126.19
Media General Furniture and
Home Furnishings Index 100 112.63 124.48 139.88 150.50
</TABLE>
Notes:
A. The points represent monthly index levels derived from compounded daily
returns that include all dividends.
B. If the last day of the month is not a trading day, the preceding day is
used.
C. The index level for all series was set 100.0 on 12/19/94, the first trading
day for the Common Stock of WinsLoew Furniture, Inc.
CERTAIN TRANSACTIONS
Investment Services Agreement. In December 1994, the Company entered
into a ten-year Investment Services Agreement with Trivest (the
"Investment Services Agreement), pursuant to which Trivest provides
corporate finance, strategic and capital planning and other management
advice to the Company, including (i) conducting relations on behalf of
the Company with accountants, attorneys, financial advisors and other
professionals, (ii)providing reports to the Company with respect to
the value of its assets, and (iii) rendering advice with respect to
acquisitions, dispositions, financings and refinancings. Pursuant to
the Investment Services Agreement, Trivest receives a base annual fee
of $500,000, (base year 1994) subject to cost-of-living increases.
In addition, for each additional business acquired by the Company,
Trivest's base compensation will generally be increased by the greater
of (i) $100,000, and (ii) the sum of 5% of the additional business's
projected annual earnings before income taxes, interest expense and
amortization of goodwill ("EBITA") for the fiscal year in which it is
acquired up to $2.0 million of EBITA, plus 3.5% of EBITA in excess of
$2.0 million. Moreover, subject to the approval of the Company's board
(including a majority of disinterested directors), for each acquisition
or disposition of any business operation by the Company introduced or
negotiated by Trivest, Trivest will generally receive a fee of up to 3%
of the purchase price. The Company paid Trivest $603,660 for services
rendered under the Investment Services Agreement during 1996.
Trivest Legal Department. Trivest maintains an internal legal
department. The Trivest legal department accounts for its time on an
hourly basis and bills Trivest and its affiliates, including the
Company, for services rendered at prevailing rates. In 1996, the
company paid Trivest $23,171 for services rendered by the Trivest legal
department. The Company believes that the fees charged by the Trivest
legal department in 1996 were no less favorable to the Company than fees
charged by unaffiliated third parties for similar services.
Repurchase of Stock from Atlantis Plastics, Inc. On December 21, 1996,
the Company repurchased 933,540 shares of the Company's Common Stock
held by Atlantis Plastics, Inc. Atlantis is controlled by affiliates
of Trivest, Inc. and Messrs. Powell and George, directors of the
Company, are directors and executive officers of Atlantis. The
foregoing shares were initially acquired by Atlantis on April 10, 1991
in connection with the sale of certain furniture operations by
Atlantis to a subsidiary of Loewenstein Furniture Group, Inc. In
December 1994, the Company was formed by the merger of Loewenstein
Furniture Group, Inc. and Winston Furniture, Inc. with and into the
Company. In connection with the Merger, Atlantis' Loewenstein Furniture
Group shares were converted into the foregoing shares of common stock
of the Company. The Company repurchased these shares for a purchase
price of $10 per share. The purchase price was determined by
negotiation between management of Atlantis and management of the Company
and was approved by a majority of the independent directors of the
Company; i.e., directors who are neither employees of the Company or
directors or officers of Trivest, Inc.
APPROVAL OF AMENDED AND RESTATED 1994
STOCK OPTION PLAN
The following resolution will be considered at the Annual Meeting:
RESOLVED, that the amended and restated 1994 Stock Option Plan of the Company,
as adopted by the Board of Directors of the Company (subject to shareholder
approval) on January 23, 1997, in the form of Appendix A of the proxy statement
for the 1997 Annual Meeting of Shareholders, is hereby approved.
General
The Company's Board of Directors and shareholders initially adopted
the Company's 1994 Stock Option Plan ('the Plan") in October 1994. On
January 23, 1997, the Board of Directors adopted a resolution amending
and restating the Plan, subject to the approval of the Company's
shareholders at the 1997 Annual Meeting.
The purpose of the Plan is to provide an additional incentive to attract
and retain qualified competent persons who provide management services
and upon whose efforts and judgment the success of the Company is
largely dependent, through the encouragement of stock ownership in the
Company by such persons. In furtherance of this purpose, the Plan
authorizes, among other things, the discretionary granting of incentive
or nonqualified stock options to purchase Common Stock to persons
selected by the administrators of the plan from the class of all regular
employees of the Company (including directors and officers who are
regular employees), non-employee directors, and consultants to the
Company, which class presently consists of approximately 1200 persons.
The Plan also provides for loans to participants to finance the exercise
of options and the payment of taxes in connection therewith, and the use
of already owned Common Stock as payment of the exercise price for
options granted under the Plan.
The principal reason for amending and restating the Plan is to ensure
that awards under the Plan will continue to qualify as performance-based
compensation for purposes of Section 162(m) of the Internal Revenue Code
(the "Code"). That section, which became law in 1994, generally
disallows a tax deduction for certain compensation over $1 million
paid, or otherwise taxable, to persons named in the Summary
Compensation Table and employed by the Company at the end of the year
for which the deduction is claimed. Qualifying performance-based
compensation is not subject to the deduction limit if certain
requirements are met.
Another reason for amending and restating the Plan is to eliminate the
"formula grant" provisions of the Plan which, prior to the amendment
and restatement, provided for automatic grants of stock options to
certain non-employee directors of the Company on each March 31. See
"Executive Compensation -- Compensation of Directors". These "formula
grant" provisions were incorporated into the Plan in order to comply
with certain exemption provisions under Rule 16b-3, promulgated under
the Securities Exchange Act of 1934 (the "Exchange Act"), at the time
the Plan was initially adopted. Such provisions exempt certain
transactions involving the grant and exercise of stock options under
the Plan (as well as the sale of the underlying shares of Common Stock)
by directors, executive officers and principal shareholders of the
Company from the short-swing profit recovery provisions of Section 16
of the Exchange Act. In August 1996, changes to Rule 16b-3 became
effective which eliminated the necessity of the Plan's "formula grant"
provisions in order for the Plan to be eligible for certain Rule 16b-3
exemptions.
A summary of the material amendments to the amended and restated Plan is
set forth below, followed by a description of the entire Plan, as
amended and restated. The full text of the amended and restated Plan
is annexed to this Proxy Statement as Appendix A, and the following
summaries are qualified in their entirety by reference to Appendix A.
The bold face portions of the Plan reflect the proposed amendments to
be voted on at the Annual Meeting.
Summary of Plan Changes
1. Compliance With Section 162(m) of the Code. The Plan was
initially adopted before the adoption of final regulations
under Section 162(m) of the Code and therefore was not
specifically designed to meet the requirements of those
regulations. Certain limits and other requirements are added
to the Plan to ensure that awards of options may qualify as
performance-based compensation for the purposes of Section
162(m). Under the amendment and restatement, an overall limit
of 450,000 shares is set for awards of options to any individual
under the Plan. The purpose of this limit is to help ensure that
the company's tax deductions for compensation expense under the
Plan are not limited by Section 162(m) of the Code. Section
162(m) can limit the deductibility of compensation expenses
over $1 million with respect to certain executives in certain
circumstances.
2. Elimination of Formula Grant Provisions. In August 1996,
changes to Exchange Act Rule 16b-3 became effective,
eliminating the necessity of the Plan's "formula grant"
provisions in order for the Plan to be eligible for certain
Rule 16b-3 exemptions. Accordingly, the Plan no longer provides
for automatic grants of options to non-employee directors.
Under the amended and restated Plan, the Committee or the Board
of Directors may grant options to directors who are not
employees of the Company or its subsidiaries or to other
persons who are eligible to receive grants under the Plan. In
addition, in connection with the changes described in this
paragraph and the preceding paragraph, the Plan was amended to
(i) provide that the Committee of directors administering the
Plan be comprised of "outside directors" (as required for
compliance with Section 162(m) and the amended Rule 16b-3),
rather than "disinterested directors" (as required under the
old Rule 16b-3), and (ii) enable the Board of Directors or the
Committee to amend, suspend or terminate the Plan from time to
time without shareholder approval; provided, however, that,
any amendment to the Plan shall be subject to the approval of
the Company's shareholders if such shareholder approval is
required by any federal or state law or regulation (including,
without limitation, Rule 16b-3 or to comply with Section 162(m)
of the Code) or the rules of any stock exchange or automated
quotation system on which the Common Stock may then be listed
or traded.
3. Incorporation of Provisions Regarding Exercisability of Options
and Termination of Option Period in Option Agreements. The Plan
as initially adopted provides that each outstanding option
automatically becomes exercisable in the event of certain
transactions, including certain changes in control of the
Company, certain mergers and reorganizations, and certain
dispositions of substantially all of the Company's assets.
In addition, the Plan as initially adopted contains provisions
governing the automatic termination of the option period for
unexercised options upon the occurrence of certain events, such
as the death, disability or termination of employment of an
optionee. These provisions have been removed from the amended
and restated Plan, which now provides that the Committee which
administers the Plan or the Board of Directors may incorporate
in the written option agreement governing each specific grant
of options under the Plan (the "Option Agreement") provisions
governing when options granted under the Plan shall become
exercisable and when the unexercised portion of any option
shall become null and void.
4. Eligibility of Consultants. Pursuant to the amendments to the
Plan, persons who provide consulting or other services as
independent contractors to the Company will also be eligible to
receive options under the Plan. The Company currently has one
consultant that is not an employee, and the Company has not
granted options to such person as of the date of this Proxy
Statement.
Summary of Plan as Amended and Restated
The Plan limits the total aggregate number of options that any one
person can receive under the Plan to options for 450,000 shares of
Common Stock.
The Plan provides that it shall be administered by a committee
consisting of not less than two directors designated by the Board
of Directors (the "Committee"), which directors shall be "outside
directors" (i.e., a member of the Board who qualifies as an "outside
director" under Section 162(m) of the Code and the regulations
thereunder and as a "non-employee director" under Rule 16b-3).
However, the Plan provides that the Board of Directors may grant
options to directors who are not employees of the Company or its
subsidiaries or to other persons who are eligible to receive grants
under the Plan. The Board has designated its Compensation Committee to
administer the Plan.
Both the Board and the Committee have the power to determine the
persons to be awarded options, the number of shares subject thereto and
the exercise price and other terms thereof. In addition, both the
Committee and the Board have the power and authority to construe and
interpret the Plan, and the acts of the Committee or the Board are
final, conclusive and binding upon all interested parties, including
the Company, its shareholders, its officers and employees, recipients
of grants under the plan, and all persons or entities claiming by or
through such persons.
An aggregate of 1,500,000 shares of Common Stock (subject to adjustment
as described below) are reserved for issuance upon exercise of options
granted under the Plan. The shares acquired upon exercise of options
granted under the Plan will be authorized and issued shares of Common
Stock. The Company's shareholders will not have any preemptive rights
to purchase or subscribe for any Common Stock by reason of the
reservation and issuance of Common Stock under the Plan. If any option
granted under the Plan should expire or terminate for any reason other
than having been exercised in full, the unpurchased shares subject to
that option will again be available for purposes of the Plan.
Options Granted Under the Plan
In December 1994 each of Winston and Loewenstein merged with and into
the Company. Pursuant to the merger agreement among the Company,
Winston and Loewenstein, all of the outstanding stock options under
the respective stock option plans of Winston and Loewenstein (the
"Original Options") were replaced with comparable options under the Plan
("Replacement Options"). Each Replacement Option was issued for the
number of shares of Common Stock equal to the number of shares subject
to the Original Option it replaced multiplied by the applicable Winston
or Loewenstein stock exchange ratio for the merger (the "Exchange
Ratio'), at an exercise price per share of Common Stock equal to the
exercise price of the Original Option divided by the applicable Exchange
Ratio. The Exchange Ratio for Winston was 1.0 and the Exchange Ratio
for Loewenstein was 1.05. All Replacement Options were granted
effective as of December 16, 1994 and are fully exercisable. An
aggregate of 518,075 Replacement Options were issued in connection
with the merger to an aggregate of 46 persons. The closing per-share
market price of Common Stock on December 19, 1994 (the first business
day following the grant of the Replacement Options) was $5.75, as
reported on the Nasdaq National Market System. Each Replacement Option
has the same expiration date as the Original Option it replaced (the
expiration dates range from June 1, 2003 to May 18, 2004).
On March 17, 1995, options for an aggregate of 275,000 shares of
Common Stock were granted to an aggregate of 16 persons. All such
options have an exercise price of $6.00 per share, a term of 10 years
and become exercisable at the rate of 20% per year on each anniversary
of the date of grant. The closing market price for a share of Common
Stock on March 17, 1995 was $6.00 per share, as reported on the Nasdaq
National Market System.
On January 23, 1997, options for an aggregate of 22,500 shares of
Common Stock were granted to the Company's nine non-employee directors,
subject to shareholder approval of the amended and restated Plan at the
1997 Annual Meeting. All such options have an exercise price of $11.13
per share, a term of 10 years and become exercisable at the rate of 20%
per year on each anniversary of the date of grant. The closing market
price of the Common Stock on January 23, 1997 was $11.50 per share, as
reported on the Nasdaq National Market System.
The table below indicates, as of March 31, 1997, certain information about
options that have been granted under the Plan to the persons and groups
indicated:
Aggregate Number Value of Options at
Option Grantees of Options Granted March 31, 1997 (1)
Bobby Tesney
President and
Chief Executive Officer 85,000 $128,125
Stephen C. Hess
Executive Vice President
-Casual Furniture 55,000 64,062
Craig Watts
Executive Vice President
- Contract Seating 60,175 93,868
Vincent A. Tortorici
Vice President and
Chief Financial Officer 35,000 64,062
All current executive officers
as a group ( 5 persons) 235,175 350,117
All current directors who are
not executive officers
as a group ( 9 persons) 167,625 196,418
All employees as a group, other
than executive officers
( 24 persons) 258,575 228,836
_____________________
(1) For purposes of this table, the value of each option equals the
amount, if any, by which the closing market price of a share of
Common Stock on March 31, 1997 ($8.56) exceeds the option's exercise
price. The value is determined without regard to whether the option
is currently exercisable or not.
The Company's management believes that options granted under the Plan
will be awarded primarily to those persons who possess a capacity to
contribute significantly to the successful performance of the Company.
Because persons to whom discretionary grants of options are to be made
are to be determined from time to time by the Committee or the Board
in their discretion, it is impossible at this time to indicate the
precise number, name or positions of persons who will hereafter receive
such options or the number of shares for which options will be granted.
Certain Terms and Conditions
All grants of options under the Plan must be evidenced by an Option
Agreement between the Company and the grantee. Such agreement shall
contain such terms and conditions as the Committee (or the Board) shall
prescribe, consistent with the Plan, including, without limitation, the
exercise price, term and any restrictions on the exercisability of the
options granted.
The price per share for discretionary grants may be any price determined
by the Committee (or the Board); provided, however, that in no event
shall the option price of any incentive stock option be less than the
fair market value per share of Common Stock on the date of grant. For
purposes of the Plan, and for so long as the Company's Common Stock is
listed on the Nasdaq National Market System, the term "fair market
value" means the closing price of the Common Stock as reported on the
Nasdaq National Market System on the business day immediately preceding
the date of grant, unless the Committee shall determine otherwise in a
fair and uniform manner. The closing price per share of Common Stock on
April 11, 1997 as reported on the Nasdaq National Market System was
$8.63. The exercise price of an option may be paid in cash, by
certified or official bank check, by money order, by delivery of
already owned shares of Common Stock having a fair market value equal
to the exercise price, or by a combination of the foregoing. The Plan
also authorizes the Company to make loans to optionees to enable them
to exercise their options. If the exercise price is paid with the
optionee's promissory note, the note must (i) provide for recourse to
the optionee, (ii) bear interest at a rate no less than the prime rate
of interest of the Company's principal lender, and (iii) be secured by
the shares of Common Stock purchased. Cash payments will be used by
the Company for general corporate purposes. Payments made in Common
Stock must be made by delivery of stock certificates in negotiable
form.
Already owned shares of Common Stock may be used to pay the exercise
price of an option in a single transaction or by "pyramiding" already
owned shares in successive, simultaneous option exercises. In general,
pyramiding permits an option holder to start with as little as one
share of Common Stock and exercise an entire option to the extent then
exercisable (no matter what the number of shares subject thereto). By
utilizing already owned shares of Common Stock, no cash (except for
fractional share adjustments) is needed to exercise an option.
Consequently, the optionee would receive Common Stock equal in value to
the spread between the fair market value of the shares subject to the
option and the exercise price of the option. In addition, the amended
Plan allows other forms of cashless exercise procedures approved by the
Committee or the Board.
Generally, options granted under the Plan are not assignable or
transferable, other than by will or by the laws of descent and
distribution or with the prior consent of the Committee or the Board.
During the lifetime of an optionee, an option is exercisable only by the
optionee. The expiration date of an option will be determined by the
Committee or the Board at the time of the grant, but in no event will
an option be exercisable after the expiration of 10 years from the date
of grant. An option may be exercised at any time or from time to time
or only after a period of time or in installments, as the Committee or
the Board determines. The Committee or the Board may in its sole
discretion accelerate the date on which any option may be exercised.
Each Option Agreement shall set forth when the unexercised portion of
any option granted under the Plan shall be terminated. To prevent
dilution of the rights of a holder of an option, the Plan provides for
appropriate adjustment of the number of shares for which options may be
granted, the number of shares subject to outstanding options and the
exercise price of outstanding options, in the event of any increase or
decrease in the number of issued and outstanding shares of the Company's
capital stock resulting from a stock dividend, recapitalization or other
capital adjustment of the Company. The Committee or the Board has
discretion to make appropriate antidilution adjustments to outstanding
options in the event of a merger, consolidation or other reorganization
of the Company or a sale or other disposition of substantially all the
Company's assets.
The Plan will expire on December 31, 2004, and any option outstanding
on such date will remain outstanding until it expires or is exercised.
The Committee or the Board may amend the Plan or any option at any time,
provided that such amendment may not substantially impair the rights of
an optionee under an outstanding option without the optionee's consent.
Any such amendment shall be subject to shareholder approval if necessary
under any federal law or state law or regulation or under the rules of
any stock exchange or automated quotation system on which the Common
Stock may be listed or traded.
Federal Income Tax Consequences
The Plan is not qualified under the provisions of Section 401(a) of the
Internal Revenue Code of 1986, as amended (the "Code"), nor is it
subject to any of the provisions of the Employee Retirement Income
Security Act of 1974, as amended.
Nonqualified Stock Options. An optionee granted a nonqualified stock
option under the Plan will generally recognize, at the date of exercise
of such option, ordinary income equal to the difference between the
exercise price and the fair market value of the shares of Common Stock
subject to the nonqualified stock option. This taxable ordinary income
will be subject to Federal income tax withholding, and the Company will
be entitled to a deduction for Federal income tax purposes equal to the
amount of ordinary income recognized by the optionee, provided that such
amount constitutes an ordinary and necessary business expense to the
Company and is reasonable, and either the employee includes that amount
in his income or the Company timely satisfies its reporting requirements
with respect to that amount.
If an optionee exercises a nonqualified stock option by delivering
shares of the Company's Common Stock, the optionee will not recognize
gain or loss with respect to the exchange of such shares, even if their
then fair market value is different from the optionee's tax basis. The
optionee, however, will be taxed as described above with respect to the
exercise of the nonqualified stock option as if he had paid the exercise
price in cash, and the Company likewise generally will be entitled to an
equivalent tax deduction. Provided a separate identifiable stock
certificate is issued therefor, the optionee's tax basis in that number
of shares received on such exercise which is equal to the number of
shares surrendered on such exercise will be equal to his tax basis in
the shares surrendered, and his holding period for such number of
shares received will include his holding period for the shares
surrendered. The optionee's tax basis and holding period for the
additional shares received on exercise of a nonqualified stock option
paid for, in whole or in part, with shares will be the same as if the
optionee had exercised the nonqualified stock option solely for cash.
Incentive Stock Options. The Plan provides for the grant of stock
options that qualify as "incentive stock options" as defined in Section
422 of the Code. Under the Code, an optionee generally is not subject
to ordinary income tax upon the grant or exercise of an incentive stock
option. However, an employee who exercises an incentive stock option
by delivering shares of common stock previously acquired pursuant to the
exercise of an incentive stock option is treated as making a
"Disqualifying Disposition" (as defined below) of such shares if the
employee delivers such shares before the expiration of the holding
period applicable to such shares. The applicable holding period is the
longer of two years from the date of grant or one year from the date of
exercise. The effect of this provision is to prevent "pyramiding" the
exercise of an incentive stock option (i.e., the exercise of the
incentive stock option for one share and the use of that share to make
successive exercises of the incentive stock option until it is
completely exercised) without the imposition of current income tax.
If, subsequent to the exercise of an incentive stock option (whether
paid for in cash or in shares), the optionee holds the shares received
upon exercise for a period that exceeds (a) two years from the date
such incentive stock option was granted or, if later, (b) one year from
the date of exercise (the "Required Holding Period"), the difference
(if any) between the amount realized from the sale of such shares and
their tax basis to the holder will be taxed as long-term capital gain
or loss.
In general, if, after exercising an incentive stock option, an employee
disposes of the shares so acquired before the end of the Required
Holding Period (a "Disqualifying Disposition"), such optionee would be
deemed in receipt of ordinary income in the year of the Disqualifying
Disposition in an amount equal to the excess of the fair market value
of the shares at the date the incentive stock option was exercised over
the exercise price. If the Disqualifying Disposition is a sale or
exchange that would permit a loss to be recognized under the Code
(were a loss in fact to be sustained), and the sales proceeds are
less than the fair market value of the shares on the date of exercise,
the optionee's ordinary income would be limited to the gain (if any)
from the sale. If the amount realized upon disposition exceeds the
fair market value of the shares on the date of exercise, the excess
would be treated as short-term or long-term capital gain, depending
on whether the holding period for such shares exceeded one year.
The amount by which the fair market value of the shares of Common
Stock acquired pursuant to the exercise of an incentive stock option
exceeds the exercise price of such shares under such option generally
will be treated as an item of adjustment included in the optionee's
alternative minimum taxable income for purposes of the alternative
minimum tax for the year in which the option is exercised. If, however,
there is a Disqualifying Disposition of the shares in the year in which
the option is exercised, there will be no item of adjustment for
purposes of the alternative minimum tax as a result of the exercise of
the option with respect to those shares. If there is a Disqualifying
Disposition in a year after the year of exercise, the income on the
Disqualifying Disposition will not be considered income for purposes of
the alternative minimum tax in that subsequent year. The optionee's
tax basis for shares acquired pursuant to the exercise of an incentive
stock option will be increased for purposes of determining his
alternative minimum tax by the amount of the item of adjustment
recognized with respect to such shares in the year the option was
exercised.
Only employees of the Company or its subsidiaries qualify for the tax
treatment applicable to incentive stock options. Thus, optionees who
are non-employee advisors or consultants to the Company will be taxes
solely under the rules applicable to nonqualified stock options.
An income tax deduction is not allowed to the Company with respect to
the grant or exercise of an incentive stock option or the disposition,
after the Required Holding period, of shares acquired upon exercise.
In the event of a Disqualifying Disposition, a Federal income tax
deduction will be allowed to the Company in an amount equal to the
ordinary income to be recognized by the optionee, provided that such
amount constitutes an ordinary and necessary business expense to the
Company and is reasonable, and either the employee includes that amount
in his income or the Company timely satisfies its reporting requirements
with respect to that amount.
Importance of Consulting Tax Adviser. The information set forth above
is a summary only and does not purport to be complete. In addition, the
information is based upon current federal income tax rules and therefore
is subject to change when those rules change. Moreover, because the tax
consequences to any optionee may depend on his or her particular
situation, each optionee should consult his or her tax adviser as to
the Federal, state, local and other tax consequences of the grant or
exercise of an option or the disposition of Common Stock acquired on
exercise of an option.
Vote Required and Recommendation
The affirmative vote of a majority of the votes of Common Stock cast
by Shareholders in person or by proxy at the Annual Meeting will be
required for approval of the amended and restated Plan described above.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" APPROVAL OF THE COMPANY'S
AMENDED AND RESTATED 1994 STOCK OPTION PLAN.
RELATIONSHIP WITH INDEPENDENT AUDITORS
The firm of Ernst & Young LLP, independent auditors, served as the
Company's independent auditors for the fiscal year ended December 31,
1996. Such representatives will have the opportunity to make a
statement at the Annual Meeting if they desire to do so.
OTHER BUSINESS
The Board knows of no other business to be brought before the Annual
Meeting. If, however, any other business should properly come before
the Annual Meeting, the persons named in the accompanying proxy will
vote proxies as in their discretion they may deem appropriate, unless
they are directed by a proxy to do otherwise.
INFORMATION CONCERNING SHAREHOLDER PROPOSALS
Pursuant to Rule 14a-8 promulgated by the Securities and Exchange
Commission, a shareholder intending to present a proposal to be
included in the Company's proxy statement for the Company's 1998
Annual Meeting of Shareholders must deliver a proposal in writing
to the Company's principal executive offices no later than
December 29, 1997.
By Order Of The Board Of Directors
Bobby Tesney
President and Chief Executive Officer
Pelham, Alabama
April 28, 1997
Appendix A
_______________________________________
WINSLOEW FURNITURE, INC.
1994 STOCK OPTION PLAN
(As Amended and Restated Effective January 23, 1997)
_______________________________________
1. Purpose. The purpose of this Plan is to advance the interests
of WinsLoew Furniture, Inc., a Florida corporation (the
"Company"), and its Subsidiaries by providing an additional
incentive to attract and retain qualified and competent persons
who provide ^ services to the Company and its Subsidiaries, and
upon whose efforts and judgment the success of the Company and
its Subsidiaries is largely dependent, through the encouragement
of stock ownership in the Company by such persons.
2. Definitions. As used herein, the following terms shall have the
meaning indicated:
(a) "Board" shall mean the Board of Directors of the Company.
(b) "Committee" shall mean the committee appointed by the
Board pursuant to Section 13(a) hereof^.
(c) "Common Stock" shall mean the Company's Common Stock,
par value $.01 per share.
(d) "Director" shall mean a member of the Board.
^(e) "Fair Market Value" of a Share on any date of reference
shall mean the "Closing Price" (as defined below) of the
Common Stock on the business day immediately preceding
such date, unless the Committee in its sole discretion
shall determine otherwise in a fair and uniform manner.
For the purpose of determining Fair Market Value, the
"Closing Price" of the Common Stock on any business
day shall be (i) if the Common Stock is listed or
admitted for trading on any United States national
securities exchange, or if actual transactions are
otherwise reported on a consolidated transaction
reporting system, the last reported sale price of
Common Stock on such exchange or reporting system, as
reported in any newspaper of general circulation, (ii)
if the Common Stock is quoted on the National
Association of Securities Dealers Automated Quotations
System ("NASDAQ"), or any similar system of automated
dissemination of quotations of securities prices in
common use, the last reported sale price of Common
Stock on such system or, if sales prices are not
reported, the mean between the closing high bid and
low asked quotations for such day of Common Stock on
such system, as reported in any newspaper of general
circulation or (iii) if neither clause (i) or (ii) is
applicable, the mean between the high bid and low asked
quotations for the Common Stock as reported by the
National Quotation Bureau, Incorporated if at least
two securities dealers have inserted both bid and asked
quotations for Common Stock on at least five of the
ten preceding days. If neither (i), (ii), or (iii)
above is applicable, then Fair Market Value shall be
determined in good faith by the Committee or the Board
in a fair and uniform manner.
(f) "Incentive Stock Option" shall mean an incentive stock
option as defined in Section 422 of the Internal Revenue
Code.
(g) "Internal Revenue Code" shall mean the Internal Revenue
Code of 1986, as amended from time to time.
(h) "Non-Qualified Stock Option" shall mean an Option which
is not an Incentive Stock Option.
(i) "Officer" shall mean the Company's Chairman of the
Board, President, Chief Executive Officer, principal
financial officer, principal accounting officer, any
vice-president of the Company in charge of a principal
business unit, division or function (such as sales,
administration or finance), any other officer who
performs a policy-making function, or any other person
who performs similar policy-making functions for the
Company. Officers of Subsidiaries shall be deemed
Officers of the Company if they perform such policy-
making functions for the Company. As used in this
paragraph, the phrase "policy-making function" does
not include policy-making functions that are not
significant. If pursuant to Item 401(b) of Regulation
S-K (17 C.F.R. 229.401(b)) the Company identifies a
person as an "executive officer," the person so
identified shall be deemed an "Officer" even though
such person may not otherwise be an "Officer" pursuant
to the foregoing provisions of this paragraph.
(j) "Option" (when capitalized) shall mean any option
granted under this Plan.
(k) "Optionee" shall mean a person to whom a stock option
is granted under this Plan or any person who succeeds
to the rights of such person under this Plan by reason
of the death of such person.
(l) "Outside Director" shall mean a member of the Board
who qualifies as an "outside director" under Section
162(m) of the Internal Revenue Code and the regulations
thereunder and as a "Non-Employee Director" under Rule
16b-3 promulgated under the Securities Exchange Act.
(m) "Plan" shall mean this 1994 Stock Option Plan for the
Company.
(n) "Securities Exchange Act" shall mean the Securities
Exchange Act of 1934, as amended from time to time.
(o)^"Share" shall mean a share of Common Stock.
(p) "Subsidiary" shall mean any corporation (other than
the Company) in any unbroken chain of corporations
beginning with the Company if, at the time of the
granting of the Option, each of the corporations other
than the last corporation in the unbroken chain owns
stock possessing 50 percent or more of the total
combined voting power of all classes of stock in one
of the other corporations in such chain.
3. Shares Available for Option Grants. The Committee or the
Board may grant to Optionees from time to time Options to
purchase an aggregate of up to One Million Five Hundred
Thousand (1,500,000) Shares from the Company's authorized
and unissued Shares. If any Option granted under the Plan
shall terminate, expire, or be canceled or surrendered as
to any Shares, new Options may thereafter be granted covering
such Shares.
4. Incentive and Non-Qualified Options.
(a) An Option granted hereunder shall be either an
Incentive Stock Option or a Non-Qualified Stock
Option as determined by the Committee or the Board
at the time of grant of such Option and shall clearly
state whether it is an Incentive Stock Option or a
Non-Qualified Stock Option. All Incentive Stock
Options shall be granted within 10 years from the
effective date of this Plan. Incentive Stock Options
may not be granted to any person who is not an employee
of the Company or any Subsidiary.
(b) Options otherwise qualifying as Incentive Stock Options
hereunder will not be treated as Incentive Stock
Options to the extent that the aggregate fair market
value (determined at the time the Option is granted)
of the Shares, with respect to which Options meeting
the requirements of Section 422(b) of the Internal
Revenue Code ^ are exercisable for the first time by
any individual during any calendar year (under all
plans of the Company and its parent and subsidiary
corporations ^ as defined in Section 424 of the
Internal Revenue Code), exceeds $100,000.
5. Conditions for Grant of Options.
(a) Each Option shall be evidenced by an option agreement
that may contain any term deemed necessary or desirable
by the Committee or the Board, provided such terms are
not inconsistent with this Plan or any applicable law.
optionees shall be (i) those persons selected by the
Committee or the Board from the class of all regular
employees of , or persons who provide consulting or
other services as independent contractors to, the
Company or its Subsidiaries, including Directors and
Officers who are regular employees, and (ii) ^
Directors or Officers who are not employees of the
Company ^ or of any Subsidiaries. Any person who files
with the Committee or the Board, in a form satisfactory
to the Committee or the Board, a written waiver of
eligibility to receive any Option under this Plan shall
not be eligible to receive any Option under this Plan
for the duration of such waiver.
(b) In granting Options, the Committee or the Board shall
take into consideration the contribution the person has
made to the success of the Company or its Subsidiaries
and such other factors as the Committee or the Board
shall determine. The Committee or the Board shall also
have the authority to consult with and receive
recommendations from officers and other personnel of
the Company and its Subsidiaries with regard to these
matters. The Committee or the Board may from time to
time in granting Options under the Plan prescribe such
other terms and conditions concerning such Options as
it deems appropriate, including, without limitation,
(i) prescribing the date or dates on which the Option
becomes exercisable, (ii) providing that the Option
rights accrue or become exercisable in installments
over a period of years, or upon the attainment of
stated goals or both, or (iii) relating an Option to
the continued employment of the Optionee for a
specified period of time, provided that such terms and
conditions are not more favorable to an Optionee than
those expressly permitted herein.
(c) The Options granted to employees under this Plan shall
be in addition to regular salaries, pension, life
insurance or other benefits related to their employment
with the Company or its Subsidiaries. Neither the Plan
nor any Option granted under the Plan shall confer upon
any person any right to employment or continuance of
employment by the Company or its Subsidiaries.
(d) Notwithstanding any other provision of this Plan, an
Incentive Stock Option shall not be granted to any
person owning directly or indirectly (through
attribution under Section 424(d) of the Internal
Revenue Code) at the date of grant, stock possessing
more than 10% of the total combined voting power of all
classes of stock of the Company (or of its parent or
subsidiary corporation [as defined in Section 424 of
the Internal Revenue Code] at the date of grant) unless
the option price of such Option is at least 110% of the
Fair Market Value of the Shares subject to such Option
on the date the Option is granted, and such Option by
its terms is not exercisable after the expiration of
five years from the date such Option is granted.
(e) Notwithstanding any other provision of this Plan, and
in addition to any other requirements of this Plan, the
aggregate number of Options granted to any one ^
Optionee may not exceed ^ 450,000, subject to
adjustment as provided in Section 10 hereof.
6. Option Price. The option price per Share of any Option shall
be any price determined by the Committee or the Board but shall
not be less than the par value per Share; provided, however,
that in no event shall the option price per Share of any
Incentive Stock Option be less than the Fair Market Value of
the Shares underlying such Option on the date such Option is
granted.
7. Exercise of Options. An Option shall be deemed exercised when
(i) the Company has received written notice of such exercise in
accordance with the terms of the Option, (ii) full payment of
the aggregate option price of the Shares as to which the Option
is exercised has been made, and (iii) arrangements that are
satisfactory to the Committee or the Board in its sole
discretion have been made for the Optionee's payment to the
Company of the amount that is necessary for the Company or
Subsidiary employing the Optionee to withhold in accordance
with applicable Federal or state tax withholding requirements.
Unless further limited by the Committee or the Board in any
Option, and subject to such guidelines as the Committee or the
Board may establish, the option price of any Shares purchased
shall be paid (1) in cash, (2) by certified or official bank
check, (3) by money order, (4) with Shares, (5) by the
withholding of Shares issuable upon exercise of the Option or
by any other form of cashless exercise procedure approved by the
Committee or the Board , or (6) in such other consideration as
the Committee or the Board deems appropriate, or by a
combination of the above^. The Committee or the Board in its
sole discretion may accept a personal check in full or
partial payment of any Shares. If the exercise price is paid
in whole or in part with Shares, or through the withholding
of Shares issuable upon exercise of the Option, the value of
the Shares surrendered or withheld shall be their Fair Market
Value on the date the Option is exercised. The Company in
its sole discretion may, on an individual basis or pursuant
to a general program established in connection with this Plan,
lend money to an Optionee, guarantee a loan to an Optionee, or
otherwise assist an Optionee to obtain the cash necessary to
exercise all or a portion of an Option granted hereunder or to
pay any tax liability of the Optionee attributable to such
exercise. If the exercise price is paid in whole or part
with Optionee's promissory note, such note shall (i) provide
for full recourse to the maker, (ii) be collateralized by the
pledge of the Shares that the Optionee purchases upon exercise
of such Option, (iii) bear interest at the prime rate of the
Company's principal lender, and (iv) contain such other terms
as the Board in its sole discretion shall reasonably require.
No Optionee shall be deemed to be a holder of any Shares
subject to an Option unless and until a stock certificate
or certificates for such Shares are issued to such person(s)
under the terms of this Plan. No adjustment shall be made
for dividends (ordinary or extraordinary, whether in cash,
securities or other property) or distributions or other rights
for which the record date is prior to the date such stock
certificate is issued, except as expressly provided in Section
10 hereof.
8. Exercisability of Options. Any Option shall become exercisable
in such amounts, at such intervals and upon such terms as the
Committee or the Board shall provide in such Option, except as
otherwise provided in this Section 8.
(a) The expiration date of an Option shall be determined
by the Committee at the time of grant, but in no event
shall an Option be exercisable after the expiration of
10 years from the date ^ on which the Option is granted.
(b) The Committee or the Board may in its sole discretion
accelerate the date on which any Option may be exercised
and may accelerate the vesting of any Shares subject to
any Option or previously acquired by the exercise of any
Option.
9. Termination of Option Period. The ^ unexercised portion of any
Option shall automatically and without notice terminate and
become null and void at ^ those times determined by the
Committee or the Board and set forth in the option agreement
that evident the Option.
10. ^ Adjustment of Shares.
If at any time while the Plan is in effect or unexercised Options
are outstanding, there shall be any increase or decrease in the
number of issued and outstanding Shares through the declaration
of a stock dividend or through any recapitalization resulting in
a stock split-up, combination or exchange of Shares, then and in
such event: (i) appropriate adjustment shall be made in the
maximum number of Shares available for grant
under the Plan, or available for grant to any
person under the Plan, so that the same
percentage of the Company's issued and
outstanding Shares shall continue to be subject
to being so optioned; and (ii) appropriate adjustment shall be
made in the number of Shares and the exercise price per
Share thereof then subject to any outstanding
Option, so that the same percentage of the
Company's issued and outstanding Shares shall
remain subject to purchase at the same
aggregate exercise price.
(b) Unless otherwise provided in any Option, the Committee
or the Board may change the terms of Options
outstanding under this Plan, with respect to the option
price or the number of Shares subject to the Options,
or both, when, in the Committee's or Board's sole
discretion, such adjustments become appropriate ^ so as
to preserve but not increase benefits under the Plan.
(c) Except as otherwise expressly provided herein, the
issuance by the Company of shares of its capital stock
of any class, or securities convertible into shares of
capital stock of any class, either in connection with
a direct sale or upon the exercise of rights or
warrants to subscribe therefor, or upon conversion of
shares or obligations of the Company convertible
into such shares or other securities, shall not affect,
and no adjustment by reason thereof shall be made to,
the number of or exercise price for Shares then subject
to outstanding Options granted under the Plan.
(d) Without limiting the generality of the foregoing, the
existence of outstanding Options granted under the Plan
shall not affect in any manner the right or power of the
Company to make, authorize or consummate (i) any or all
adjustments, recapitalizations, reorganizations or other
changes in the Company's capital structure or its
business; (ii) any merger or consolidation of the
Company; (iii) any issue by the Company of debt
securities, or preferred or preference stock that
would rank above the Shares subject to outstanding
Options; (iv) the dissolution or liquidation of the
Company; (v) any sale, transfer or assignment of all
or any part of the assets or business of the Company;
or (vi) any other corporate act or proceeding, whether
of a similar character or otherwise.
11. Transferability of Options and Shares.
^(a) No Incentive Stock Option, and unless the prior
written consent of the Committee or the Board
is obtained and the transaction does not violate
the requirements of Rule 16b-3 promulgated under
the Securities Exchange Act^ no Non-Qualified
Stock Option, shall be subject to alienation,
assignment, pledge, charge or other transfer
other than by the Optionee by will or the laws
of descent and distribution, and any attempt
to make any such prohibited transfer shall be
void. Each Option shall be exercisable during
the Optionee's lifetime only by the Optionee,
or in the case of a Non-Qualified Stock Option
that has been assigned or transferred with
the prior written consent of the Committee or
the Board, only by the permitted assignee.
(b) ^ Unless the ^ prior written consent of the Committee
or the Board is obtained and the transaction does not
violate the requirements of Rule 16b-3 promulgated
under the Securities Exchange Act, no Shares acquired
by an Officer or Director pursuant to the exercise of
an Option may be sold, assigned, pledged or otherwise
transferred prior to the expiration of the six-month
period following the date on which the Option was
granted.
12. Issuance of Shares.
(a) Notwithstanding any other provision of this Plan, the
Company shall not be obligated to issue any Shares
unless it is advised by counsel of its selection that
it may do so without violation of the applicable
Federal and State laws pertaining to the issuance of
securities, and may require any stock so issued to bear
a legend, may give its transfer agent instructions, and
may take such other steps, as in its judgment are
reasonably required to prevent any such violation.
(b) As a condition to any sale or issuance of Shares upon
exercise of any Option, the Committee or the Board may
require such agreements or undertakings as the
Committee or the Board may deem necessary or advisable
to facilitate compliance with any applicable law or
regulation including, but not limited to, the following:
(i) a representation and warranty by the Optionee
to the Company, at the time any Option is
exercised, that he is acquiring the Shares to
be issued to him for investment and not with a
view to, or for sale in connection with, the
distribution of any such Shares; and
(ii) a representation, warranty and/or agreement to
be bound by any legends endorsed upon the
certificate(s) for such Shares that are, in
the opinion of the Committee or the Board,
necessary or appropriate to facilitate
compliance with the provisions of any
securities laws deemed by the Committee or the
Board to be applicable to the issuance and
transfer of such Shares.
13. Administration of the Plan.
(a) The Plan shall be administered by a committee appointed
by the Board (the "Committee") which shall be composed
of two or more Directors all of whom shall be ^ Outside
Directors. The membership of the Committee shall be
constituted so as to comply at all times with the
applicable requirements of Rule 16b-3 promulgated under
the Securities Exchange Act and Section 162(m) of the
Internal Revenue Code. The Committee shall serve at
the pleasure of the Board and shall have the powers
designated herein and such other powers as the Board
may from time to time confer upon it.
(b) The Board may grant Options pursuant to this Plan to
Directors who are not employees of the Company or any
Subsidiary and/or other persons to whom Options may be
granted under Section 5(a) hereof.
(c) The ^ Committee or the Board, from time to time, may
adopt rules and regulations for carrying out the
purposes of the Plan. The ^ determinations ^ by the
Committee or the Board, and the interpretation and
construction of any provision of the Plan or any
Option by the Committee or the Board, shall be final
and conclusive.
(d) Any and all decisions or determinations of the
Committee shall be made either (i) by a majority vote
of the members of the Committee at a meeting or (ii)
without a meeting by the unanimous written approval of
the members of the Committee.
^ 14. Withholding or Deduction for Taxes. If at any time specified
herein for the making of any issuance or delivery of any Option
or Common Stock to any Optionee or beneficiary, any law or
regulation of any governmental authority having jurisdiction
in the premises shall require the Company to withhold, or to
make any deduction for, any taxes or take any other action in
connection with the issuance or delivery then to be made, such
issuance or delivery shall be deferred until such withholding
or deduction shall have been provided for by the Optionee or
beneficiary, or other appropriate action shall have been taken.
15. Interpretation.
(a) As it is the intent of the Company that the Plan comply
in all respects with Rule 16b-3 promulgated under the
Securities Exchange Act ("Rule16b-3"), any ambiguities
or inconsistencies in construction of the Plan shall
be interpreted to give effect to such intention, and
if any provision of the Plan is found not to be in
compliance with Rule 16b-3, such provision shall be
deemed null and void to the extent required to permit
the Plan to comply with Rule 16b-3. The Committee or
the Board may from time to time adopt rules and
regulations under, and amend, the Plan in furtherance
of the intent of the foregoing.
(b) The Plan shall be administered and interpreted so that
all Incentive Stock Options granted under the Plan
will qualify as Incentive Stock Options under section
422 of the Internal Revenue Code. If any provision of
the Plan should be held invalid for the granting of
Incentive Stock Options or illegal for any reason,
such determination shall not affect the remaining
provisions hereof, but instead the Plan shall be
construed and enforced as if such provision had never
been included in the Plan.
(c) This Plan shall be governed by the laws of the State
of Florida.
(d) Headings contained in this Plan are for convenience
only and shall in no manner be construed as part of
this Plan. Any reference to the masculine, feminine, or neuter gender
shall be a reference to such other gender as is appropriate.
16. Amendment and Discontinuation of the Plan. The Committee or the
Board may from time to time amend, suspend or terminate the Plan
or any Option; provided, however, that, ^ any amendment to the
Plan shall be subject to the approval of the Company's
shareholders if such shareholder approval is required by any
federal or state law or regulation (including, without
limitation, Rule 16b-3 or to comply with Section 162(m) of the
Internal Revenue Code) or the rules of any Stock exchange or
automated quotation system on which the Common Stock may then
be listed or traded. Except to the extent provided in ^
Sections 9 and 10 hereof, no ^ amendment, suspension or
termination of the Plan or any Option issued hereunder shall
substantially impair the rights or benefits of any Optionee
pursuant to any Option previously granted without the consent
of the Optionee.
17. Effective Date and Termination Date. The effective date of the
Plan is October 19, 1994, the date on which the Board ^ adopted
this Plan, and the Plan shall terminate on ^ October 19, 2004.
COMMON STOCK PROXY FOR 1997 ANNUAL MEETING OF SHAREHOLDERS
WINSLOEW FURNITURE, INC.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned holder of shares of Common Stock of WINSLOEW
FURNITURE, INC., a Florida corporation (the "Company"), hereby
appoints Earl W. Powell and Phillip T. George, M.D., and each
of them, as proxies for the undersigned, with full power of
substitution, to act for the undersigned and to vote, as
designated below, all shares of Common Stock of the Company
which the undersigned is entitled to vote at the Annual Meeting
of Shareholders of the Company to be held at The Grand Bay Hotel,
2699 South Bayshore Drive, Miami, Florida 33133 at 9:00 A.M.,
local time, on Wednesday June 11, 1997, and at all adjournments
and postponements thereof.
The Board of Directors recommends a vote FOR each proposal.
1. ELECTION OF DIRECTORS.
Election of: Peter C. Brockway
Henry C. Cheek
M. Miller Gorrie
VOTE FOR all nominees listed above, except that vote is withheld with
respect to each nominee, if any, whose name is marked through above.
VOTE WITHHELD with respect to all nominees listed above.
2. VOTE FOR the approval of the adoption of the Company's Amended and
Restated 1994 Stock Option Plan.
3. The proxies are authorized to vote, in their discretion, upon such
other business as may properly come before the Annual Meeting and
any adjournments or postponements thereof.
(see reverse side)
(continued from other side)
THIS PROXY, WHEN PROPERLY EXECUTED, WILL BE VOTED IN THE MANNER
DIRECTED HEREIN BY THE UNDERSIGNED. IF NO DIRECTION IS MADE,
THIS PROXY WILL BE VOTED "FOR" THE ELECTION OF ALL DIRECTOR
NOMINEES LISTED IN PROPOSAL 1. ABOVE.
The undersigned hereby acknowledges receipt of (i) the Notice of
Annual Meeting and related Proxy Statement, and (ii) the Company's
1996 Annual Report to Shareholders.
Dated:_________________________________, 1997
---------------------------------
(Signature)
---------------------------------
(Signature if held jointly)
IMPORTANT: Please sign exactly as your name appears hereon and mail it
promptly even though you now plan to attend the meeting. When shares
are held by joint tenants, both should sign. When signing as attorney,
executor, administrator, trustee or guardian, please give full title
as such. If a corporation, please sign in full corporate name by
president or other authorized officer. If a partnership, please sign
in partnership name by authorized person.
PLEASE MARK, SIGN AND DATE THIS PROXY CARD AND PROMPTLY RETURN
IT IN THE ENVELOPE PROVIDED. NO POSTAGE IS NECESSARY IF MAILED
IN THE UNITED STATES.
