SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14A
(RULE 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF
THE SECURITIES EXCHANGE ACT OF 1934
Filed by the registrant [ X ]
Filed by a party other than the registrant [ ]
Check the appropriate box:
[ ] Preliminary proxy statement
[ X ] Definitive proxy statement
[ X ] Definitive additional materials
[ ] Soliciting material pursuant to Rule 14a-11(c) or Rule 14a-12
AMERIWOOD INDUSTRIES INTERNATIONAL CORPORATION
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(Name of registrant as specified in its charter)
AMERIWOOD INDUSTRIES INTERNATIONAL CORPORATION
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(Name of person(s) filing Proxy Statement)
Payment of filing fee (Check the appropriate box):
[ X ] No fee required.
[ ] $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), or 14a-6(i)(2).
[ ] $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3)
[ ] 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:
[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number, or
the form or schedule and the date of its filing.
(1) Amount previously paid:
(2) Form, schedule, or registration statement no.:
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[Logo]
AMERIWOOD INDUSTRIES
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
MAY 20, 1997
The 1997 annual meeting of shareholders of Ameriwood Industries
International Corporation will be held on May 20, 1997 at 9:00 AM, local
time, in the Continental Room at the Amway Grand Plaza Hotel, 187 Monroe
Avenue, NW, Grand Rapids, Michigan, for the purpose of considering and voting
upon the following matters:
1. Election of two directors.
2. Such other matters as may properly come before the meeting.
The close of business on March 31, 1997 has been fixed by the Board of
Directors as the record date for the determination of shareholders entitled
to notice of, and to vote at, the annual meeting and any adjournment thereof.
By order of the Board of Directors,
/s/ CRAIG G. WASSENAAR
------------------
CRAIG G. WASSENAAR
Secretary
171 Monroe Avenue, NW, Suite 600
Grand Rapids, MI 49503
April 14, 1997
_______________________________________________________________________________
IMPORTANT
Whether or not you plan to attend the annual meeting in person, to
assure your representation and a quorum for the transaction of business at
the meeting, PLEASE DATE, SIGN AND RETURN THE ENCLOSED PROXY in the envelope
provided. If you do attend the annual meeting, you may revoke your proxy and
vote your shares in person, if you so choose.
_______________________________________________________________________________
PROXY STATEMENT
This Proxy Statement is furnished in connection with the solicitation of
proxies by the Board of Directors of Ameriwood Industries International
Corporation ("Ameriwood" or the "Company"), 171 Monroe Avenue, NW, Suite 600,
Grand Rapids, Michigan, 49503, to be voted at the annual meeting of
shareholders to be held Tuesday, May 20, 1997, in the Continental Room at the
Amway Grand Plaza Hotel, 187 Monroe Avenue, NW, Grand Rapids, Michigan, at
9:00 AM, local time, and at any adjournment thereof. This Proxy Statement
and the accompanying form of proxy, together with the 1996 Annual Report to
Shareholders are being sent beginning on April 14, 1997.
Each proxy in the accompanying form which is properly executed and
returned, and not revoked, will be voted in accordance with the
specifications on that proxy. If no specification is made, the shares
represented by the proxy will be voted FOR the election of the directors
listed as nominees in this Proxy Statement. If any other business should
properly come before the annual meeting (which is not anticipated), the
proxyholders will have discretionary authority to vote thereon in accordance
with their best judgment.
A shareholder who returns a proxy may revoke it at any time before it is
voted at the annual meeting by delivering written notice of revocation to the
Company's Secretary, or by submitting a proxy bearing a later date, or by
attending the annual meeting and voting in person.
Proxies will be solicited initially by mail. They may also be solicited
personally and/or by use of telecommunications equipment. Ameriwood
directors, executive officers, and employees may solicit proxies without
additional compensation. Ameriwood has retained D. F. King & Co., Inc., 77
Water Street, New York, New York, 10005, at an estimated cost of $4,000, plus
expenses, to advise the Company and to assist in distribution of proxy
materials to brokers and other nominee shareholders. Ameriwood will
reimburse banks, brokers or other similar agents or fiduciaries for
forwarding proxy material to the beneficial owners of the Company's stock.
All other expenses in connection with the solicitation of proxies, including
clerical work and printing, will be paid by Ameriwood.
VOTING SECURITIES AND PRINCIPAL OWNERS
At the close of business on March 31, 1997, the record date for the
annual meeting, Ameriwood had 4,217,902 shares of its common stock, $1.00 par
value, issued and outstanding. Shareholders are entitled to one vote for
each share of Ameriwood stock registered in their names at the close of
business on the record date.
1
The following table shows, as of March 31, 1997, the beneficial
ownership of shares of Ameriwood's common stock by the only shareholders, to
the best of the Company's knowledge, to be beneficial owners of more than 5%
of its common stock.
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Name and Address Number of Shares % of Class Issued
of Beneficial Owner Beneficially Owned and Outstanding
===============================================================================
Ameriwood Industries Employee Stock
Ownership and Savings Plan (1) 796,972 18.74%
c/o FMB Trust, Trustee
101 E. Main St., Zeeland, MI 49464
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Neil L. Diver (2)
1988 Jackson St., San Francisco, CA 94109 225,000 5.29%
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Dimensional Fund Advisors, Inc. (3)
1299 Ocean Ave., Santa Monica, CA 90401 215,564 5.07%
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(1) Based on information set forth in Schedule 13G dated February 14, 1997.
This plan is a combined ESOP and 401(k) plan. An administrative
committee of officers and employees has shared investment power over
Ameriwood stock held in trust under the ESOP portion of the plan. Each
participant for whom Ameriwood stock is held in the 401(k) portion has
sole investment power with respect to the shares allocated to his/her
account. Under both portions of the plan, voting power is passed through
to individual participants with respect to the number of shares allocated
to their accounts. The current members of the administrative committee,
Richard Compton, Leon Dodd, Charles Foley, Gregory Horvath, Mary K
Miller, John Steeb, and Craig Wassenaar, and each disclaims beneficial
ownership of the shares shown above, except for shares allocated to
his/her plan account.
(2) Mr. Diver is chairman of Ameriwood's Board of Directors. The shares
listed include options exercisable within 60 days to purchase 40,000
shares.
(3) Based on information set forth in a Schedule 13G dated February 5, 1997,
Dimensional Fund Advisors, Inc. ("Dimensional") has sole voting and
investment power with respect to all such shares. The shares are held in
portfolios of which Dimensional serves as investment manager.
Dimensional disclaims beneficial ownership of all such shares.
ELECTION OF DIRECTORS
Ameriwood's Board of Directors currently consists of five persons and is
divided into three classes. One class of directors is elected each year for
a term of three years and until their successors have been elected. Two
directors are to be elected at the 1997 annual meeting for terms expiring in
2000. Assuming the presence of a quorum, directors will be elected at the
annual meeting from among those nominated, by a plurality of the votes cast
by holders of common stock present in person or by proxy and entitled to vote
at the meeting. Thus, the two nominees receiving the largest number of votes
cast will be elected. Abstentions, broker non-votes or withholding of
authority will contribute toward establishment of a quorum, but will have no
effect on the outcome of the election of such nominees.
2
The Board of Directors has nominated Charles R. Foley and Richard
Pigott, the two incumbent directors whose terms are scheduled to expire at
the 1997 annual meeting, for reelection to a three year term. Mr. Foley was
appointed to the Board at the January 17, 1997 Board of Directors' meeting to
fill the position that was vacant as a result of the resignation of Joseph J.
Miglore from the Board of Directors in March 1996. Mr. Pigott and Mr. Foley
are willing to serve if elected. If either of the nominees should become
unable or unwilling to serve, which is not anticipated, the proxies hereby
solicited will be voted for the election of such other person(s) as may be
nominated by the Board of Directors. Information concerning the business
experience and Ameriwood stock ownership of the nominees is included below.
The Board of Directors recommends a vote FOR the election of all the
persons nominated by the Board.
DIRECTORS AND EXECUTIVE OFFICERS
Background information concerning each nominee for election as a director
at the annual meeting and all other directors and executive officers of
Ameriwood is presented below, based on the most recent information provided
by such person. Unless otherwise indicated, the principal occupation
reported for each person has been the same for at least the past five years.
NOMINEES FOR TERMS EXPIRING IN 2000
Charles R. Foley (age 50) was named President and Chief Executive Officer
of Ameriwood in January 1997, after serving as Interim President and CEO
since January 1996. Prior to that, Mr. Foley was Vice President of Finance
and Chief Financial Officer from August 1995 until January 1996, and was
Corporate Vice President of Planning and Control from June 1993 until August
1995. Before joining Ameriwood, he was a consultant with Arthur Andersen &
Co. L.L.P., a public accounting firm, from June 1990 to June 1993.
Richard Pigott (age 56) has been an Ameriwood director since February
1995. He is a consultant, private investor and attorney. He currently
serves as a director of Rodman & Renshaw Capital Group, Inc. He was formerly
Executive Vice President and Chief Financial Officer of Beatrice Companies,
Inc.
DIRECTORS WITH TERMS EXPIRING IN 1999
Kevin K. Coyne (age 48) has been an Ameriwood director since September
1990. Mr. Coyne is a private investor. He was President of CMB Industries
Corp., a manufacturer of water valves, from February 1992 until December 1995.
Neil L. Diver (age 59) has been an Ameriwood director and its chairman of
the Board since September 1990. He is an administrator of private
investments and a director of several privately held companies. He has also
been a trustee of SIFE, a mutual fund, since October 1996.
DIRECTOR WITH TERM EXPIRING IN 1998
Edwin Wachtel (age 65) has been an Ameriwood director since May 1990.
Mr. Wachtel, who is retired, was chairman and chief executive officer of
Europe Craft Imports, Inc., an apparel marketer from February 1992 until
September 1995. From October 1987 to January 1992, he was chairman of GW
Investors Corporation, a private investment firm.
3
NON-DIRECTOR EXECUTIVE OFFICERS
Gary W. Buckley (age 51) became Vice President of Materials and Logistics
in November 1996 after serving as Director of Corporate Logistics since
August 1993. Prior to joining Ameriwood, he was Corporate Materials Manager
at Gruman Olson, a supplier to the automotive industry.
Leon J. Dodd (age 59) was named Vice President of Manufacturing in April
1996. Prior to that, he was Furniture Division Vice President of Operations
from June 1985 until April 1996, and has been with the Company since 1973.
T. Scott Kearney (age 36) was named Vice President of Sales and
Marketing, Furniture Division in July 1996. He joined Ameriwood in November
1993 as Director of Marketing, Furniture. Prior to that, he was Sales
Manager for Schmidt Industrial Services, Inc., a woodworking machinery sales
and consulting company from January to November 1993. From 1984 until 1993,
he was President and Owner of Metro East Sales, Inc., a furniture importer.
Ronald J. Myers (age 45) became Vice President of Sales and Marketing,
Custom Solutions in December 1984 and has been with Ameriwood since 1972.
Craig G. Wassenaar (age 41) was named Vice President, Chief Financial
Officer and Secretary in May 1996. He joined Ameriwood in January 1996 as
Corporate Controller/Treasurer and Assistant Secretary. Mr. Wassenaar was
formerly Vice President of Finance for the Baby Care Division of Gerber
Products Company from January 1995 to October 1995 and Corporate Controller
and Chief Accounting Officer of Gerber Products Company from May 1992 until
January 1995. Prior to that, he was a Senior Manager in the accounting firm
of Ernst & Young L.L.P.
BOARD COMMITTEES AND MEETING ATTENDANCE
Ameriwood's Board of Directors has three standing committees: the Audit
Committee, the Human Resources Committee, and the Finance and Strategy
Committee. The full Board is responsible for the nomination of individuals
for election or reelection to the Board of Directors; there is not a
nominating committee as such.
The Audit Committee reviews audit plans and activities, reviews the
Company's financial controls, and recommends the annual selection of auditors
to the Board of Directors. It reviews with representatives of the Company's
independent public accounting firm the audit fees, the scope of the
accountants' examination of accounting records, results of those audits, and
any problems the auditors may have identified regarding internal accounting
controls, together with their recommendations. Mr. Coyne (chairman), Mr.
Diver, and Mr. Pigott currently serve on this committee. The Audit Committee
met two times during 1996.
The Human Resources Committee met five times during 1996. Information
concerning the functions of this committee is included in the "Report on
Executive Compensation" later in this Proxy Statement. Mr. Pigott
(chairman), Mr. Diver, and Mr. Wachtel are currently serving on this
committee.
4
The Finance and Strategy Committee considers and makes recommendations to
the Board of Directors concerning issues such as long-term strategic growth
(including mergers and acquisitions, capital requirements, and enhancement of
shareholder value), international expansion, and new products. Members of
this committee are Mr. Wachtel (chairman), Mr. Coyne, and Mr. Diver. This
committee met one time in 1996.
The Board of Directors of the Company met 13 times during 1996. Each
director attended 90% or more of the aggregate number of meetings of the
Board of Directors and committees of the Board on which they served during
the year.
COMPENSATION OF DIRECTORS
Ameriwood pays its chairman of the Board an annual retainer of $14,000,
and each of its other non-employee directors an annual retainer of $10,000.
Each committee chairman receives an annual retainer of $5,000. In addition,
the Company pays each director a fee of $500 for each Board or Committee
meeting in which the director participates.
Under the 1995 Non-Employee Director Stock Option Plan, each newly
elected non-employee director is granted an option to purchase 5,000 shares
at the time of election. In addition, annual options to acquire 5,000 shares
are granted to all non-employee directors on each anniversary date of the
plan. All options are Non-Qualified Stock Options at exercise prices equal
to the "fair market value" (as defined by the Plan) at the date of grant and
may not be exercised for a period of three years after the date of grant.
SECURITY OWNERSHIP OF MANAGEMENT
The following table provides information as of March 31, 1997 concerning
beneficial ownership of Ameriwood common stock by each director and executive
officer of the Company, and by all directors and executive officers as a
group. The information is to the best of the Company's knowledge and is
based on information provided to Ameriwood by or on behalf of such persons.
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Amount and Nature of Beneficial Ownership
-------------------------------------------
Sole Shared
Voting and Voting or Stock Percent of Class
Investment Investment Options Issued and
Name Power Power (1) (2) Total Outstanding (3)
==================================================================================================
Kevin K. Coyne (4) 71,281 31,038 20,000 122,319 2.88%
Neil L. Diver 168,000 17,000 40,000 225,000 5.29%
Richard Pigott 11,600 1,600 0 13,200 0.31%
Edwin Wachtel 75,436 0 20,000 95,436 2.24%
Leon J. Dodd 1,852 5,940 7,250 15,042 0.35%
Charles R. Foley 3,600 5,208 14,000 22,808 0.54%
Joseph J. Miglore 54,000 7,057 0 61,057 1.44%
Craig G. Wassenaar 12,000 126 10,000 22,126 0.52%
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All Directors and
Executive Officers
as a group 421,784 74,901 128,300 624,985 14.70%
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5
(1) Includes shares which the indicated person has shared voting or
investment power by reason of joint ownership, trust or other contract or
property right, and shares held by spouses and children as to which the
indicated person may have substantial influence by reason of
relationship. This total also includes, for executive officers, shares
held by the ESOP/401(k) Plan allocated to the accounts of such officers
as of December 31, 1996.
(2) Shares may be acquired via options exercisable within 60 days.
(3) For purposes of computing the percentage of beneficial ownership, any
exercisable options on shares shown under "Stock Options", regardless of
exercise price, are treated as issued and outstanding.
(4) Of the shares listed for Mr. Coyne under "Shared Voting or Investment
Power," 16,702 are owned of record by his minor children and 14,336 are
held in a trust for his brother's children to which Mr. Coyne is the
trustee, but as to which he has no monetary interest. Mr. Coyne
disclaims beneficial ownership of all of these shares.
EXECUTIVE COMPENSATION
The following table provides, for the last three fiscal years,
information concerning the compensation of the Chief Executive Officer and
each of the other individuals who were serving as executive officers at the
end of fiscal 1996 whose total salary and incentive bonus for that year
exceeded $100,000 (the "named executives").
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SUMMARY COMPENSATION TABLE
===============================================================================================================
Long-Term
Annual Compensation (1) Compen-
sation
----------------------------------------------------------
Other
Annual Options All Other
Compen- /SARs Compen-
Name and Principal Position Year Salary Bonus sation (2) (# shares) sation (3)
- ----------------------------------------------------------------------------------------------------------------
Leon J. Dodd 1996 $ 99,100 $27,750 (5) * 5,000 $ 8,246
Vice President of
Manufacturing (4)
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Charles R. Foley 1996 150,000 74,500 (6) * 20,000 14,953
President, Chief 1995 122,800 0 $16,414 7,000 11,785
Executive Officer 1994 122,800 0 14,848 7,000 18,096
- ----------------------------------------------------------------------------------------------------------------
Joseph J. Miglore 1996 21,800 0 * 20,000 451,965
President, Chief 1995 227,000 0 24,737 20,000 31,783
Executive Officer (7) 1994 227,000 0 26,030 20,000 36,384
- ----------------------------------------------------------------------------------------------------------------
Craig G. Wassenaar 1996 137,400 0 * 10,000 10,044
Vice President,
Chief Financial Officer
& Secretary (4)
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(1) Includes amounts deferred under the 401(k) portion of the ESOP/401(k) Plan.
6
(2) A "*" indicates that the dollar value of perquisites provided to the
named executive did not exceed 10% of the executive's aggregate salary
and bonus. Where the amount did exceed 10%, the cost to lease an
automobile for the named executive represented more than 25% of total
perquisites and other personal benefits.
(3) Includes Company 401(k) matching contributions for the ESOP/401(k) Plan,
contributions under the ESOP portion of the Plan, and, annual premiums
under the Supplemental Executive Retirement Program (SERP) described
later in this Proxy Statement.
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Year Description Dodd Foley Miglore Wassenaar
==========================================================================
1996 401(k) match $4,440 $6,650 n/a $3,259
ESOP contribution 3,806 4,500 n/a 3,522
SERP premium n/a 3,803 n/a 3,263
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1995 401(k) match n/a 4,298 6,468 n/a
ESOP contribution n/a 3,684 4,500 n/a
SERP premium n/a 3,803 20,815 n/a
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1994 401(k) match n/a 5,229 6,468 n/a
ESOP contribution n/a 9,064 9,101 n/a
SERP premium n/a 3,803 20,815 n/a
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(4) Mr. Dodd was promoted to Corporate Vice President of Manufacturing in
April 1996 after serving as Furniture Division Vice President of
Operations since June 1985. Mr. Wassenaar joined Ameriwood in January
1996 as Corporate Controller and was appointed Vice President and Chief
Financial Officer in May 1996.
(5) Bonus amounts paid to Mr. Dodd were in recognition of meeting certain
operating objectives and for his assumption of additional
responsibilities for managing both of the Company's manufacturing
facilities.
(6) Represents bonus paid to Mr. Foley for successfully meeting certain
established performance objectives after assuming the role of Interim
President and CEO in January 1996.
(7) On January 29, 1996, Mr. Miglore's employment arrangement with the
Company was terminated and the parties entered into a "Mutual Termination
and Benefits Agreement." Under the terms of this agreement, Mr. Miglore
received a lump sum settlement of $402,000 and certain health and life
insurance benefits for one year. In addition, he received stock
appreciation rights on 20,000 shares of the Company's common stock, which
were exercised on April 3, 1996.
MANAGEMENT RETENTION AGREEMENTS
Ameriwood has entered into Management Retention Agreements with certain
key executives to reinforce and encourage their continued attention and
dedication when faced with potentially disturbing circumstances which could
arise from the possibility of a change in control of the Company. Each
agreement remains in force for the term of the pertinent person's employment,
however, no benefits are payable under any agreement unless a "change in
control" should occur (as therein defined).
7
Under each agreement, if a change in control occurred, and within 24
months thereafter the employee terminates his employment for "good reason,"
or employment is terminated for reasons other than death, "disability,"
voluntary "retirement" or "cause" (as defined therein), he would become
entitled to (1) continuation of fringe benefits for one year and (2) lump-sum
cash severance payments in the following amounts: (a) the total of annual
salary, target annual incentive bonus, and 9.5% of salary and target
incentive; (b) the full amount of any unvested employer contributions
allocated to his account under the ESOP/401(k) Plan; (c) for each share
covered by an outstanding option on Ameriwood stock then owned, the excess of
market price (or, if higher, the highest price paid in connection with any
change in control) over the pertinent option exercise price, whereupon such
options would be canceled; and (d) reasonable legal fees and expenses
incurred as a result of termination.
These payments and benefits are subject to the signing and delivery of a
release, and to potential payment reductions related to provisions of the
Internal Revenue Code. If the Company terminates the executive other than
for cause or he terminates employment for good reason prior to a change in
control, should a change in control occur within nine months thereafter, he
would be entitled to the benefits and payments described above as if
termination had occurred on the first business day following the change in
control.
SUPPLEMENTAL EXECUTIVE RETIREMENT PROGRAM
The Company believes that competitive retirement benefits are an integral
part of attracting and retaining key executives. Based on an independent
consulting firm's study, Ameriwood executive officers were up to 22% below
the average retirement target replacement rate (the percentage of salary
available at retirement) of ending salary of the 300+ companies in its study,
primarily because of government regulations that limit contributions to
Ameriwood's ESOP/401(k) Plan Therefore, in January 1994, Ameriwood
instituted a Supplemental Executive Retirement Program (SERP) for certain
executive officers.
Under the SERP, Ameriwood purchased variable life insurance policies for
certain executive officers. Each policy is subject to a Split-Dollar Life
Insurance Agreement and a Severance Compensation Agreement, under which
ownership of the insurance policy lies with each respective executive
officer. Since Ameriwood is obligated to pay the policy premiums, each
executive officer has assigned to the Company a collateral security interest
in his policy. Executive officers also have the option to make after-tax
deposits to investment accounts established under the policies.
If an executive remains continuously employed with Ameriwood until age
55, and employment is subsequently terminated for any reason other than
"cause" (as defined in the management retention agreement described above),
the Company will release to the executive officer its collateral security
interest. The executive officer would receive the cash surrender value of
the policy, which would be taxable to the executive officer and tax
deductible to the Company. Should employment with Ameriwood be terminated for
any reason prior to attaining age 55, the Company would receive the lesser of
the cash surrender value of the policy or the amount of its collateral
security interest on that executive officer's policy; the executive officer
would not be eligible for any benefit in these circumstances.
8
If the Company terminates the executive officer for cause, no benefit
will be payable. In the event of disability, the officer would be entitled
to the benefits described above. Should an executive officer die while
employed by Ameriwood, the Company would be reimbursed for its security
interest from the death benefit paid out on the policy, with the remainder of
the benefit issued to the named beneficiary; no other benefit would be
payable under the program.
Ameriwood agrees that it will not merge or consolidate with any other
organization, or permit its business activities to be taken over by any other
organization, unless that organization agrees to assume the obligations under
this program.
STOCK OPTIONS
The following tables provide information concerning options to purchase
Ameriwood common stock and stock appreciation rights (SARs) granted to the
named executives during 1996 and unexercised options held by the named
executives at year-end.
- -------------------------------------------------------------------------------
OPTION/SAR GRANTS IN LAST FISCAL YEAR
===================================================================================
Individual Grants
--------------------------------------------------
Potential
Realizable Value
% of at Assumed Annual
# of Options/ Rates of Stock
Options SARs Granted Appreciation for
/SARs to Employees Exercise Option Term (2)
Granted in Fiscal Price Expiration ----------------
Name (1) Year ($/Share) Date 5% 10%
- -------------------------------------------------------------------------------------
Dodd 5,000 5.6% $4.00 2/16/06 $12,578 $ 31,875
Foley 20,000 22.2% 4.00 (3) 50,312 127,499
Miglore 20,000 22.2% 4.50 (4)
Wassenaar 10,000 11.1% 4.00 2/16/06 25,156 63,750
- -------------------------------------------------------------------------------------
(1) Options and SARs were granted under Ameriwood's 1993 Stock Incentive Plan,
and allow the exercise price to be paid in cash, shares of common stock, or
any combination thereof. All options were granted for maximum ten-year terms
and were immediately exercisable. In the case of voluntary separation, stock
options expire 90 days after termination.
(2) Potential realizable values are based on arbitrarily assumed rates of
appreciation in the market value of Ameriwood common stock above the
exercise price and over the entire option term without any discount to
present value. On February 28, 1997, the closing price of Ameriwood' stock
was $8.50.
(3) Per an agreement dated February 19, 1996, Mr. Foley was granted 20,000 SARs
upon accepting the position of Interim President and CEO. The amount
realizable would be determined by the spread between the closing price on
the day the SARs are exercised and $4.00. The SARs became exercisable when
he was named of President and CEO in January 1997 and will expire 90 days
after his termination of employment with the Company.
9
(4) Mr. Miglore was granted 20,000 SARs as a result of the termination of his
employment arrangement with the Company. The SARs were exercised on April
3, 1996 and the amount realized was determined by the spread between
$5.625 (the closing price on April 3, 1996) and $4.50.
- ---------------------------------------------------------------------------------
FISCAL YEAR-END OPTION/SAR VALUES
=================================================================================
Number of Unexercised Value of Unexercised In-the-Money
Options/SARs at Year-End Options/SARs at Year-End(1)
--------------------------- ----------------------------------
Name Exercisable/Unexercisable Exercisable/Unexercisable
- ---------------------------------------------------------------------------------
Dodd 7,250/0 $ 26,250/0
Foley 34,000/0 107,625/0
Miglore 0/0 0/0
Wassenaar 10,000/0 52,500/0
- ---------------------------------------------------------------------------------
(1) In-the-Money options are those for which, at year-end, the fair market value
of the underlying security exceeded the exercise price.
REPORT ON EXECUTIVE COMPENSATION
The following report is presented to shareholders by the members of the
Human Resources Committee of the Board of Directors.
GENERAL ORGANIZATION AND FUNCTIONS
The Human Resources Committee has been a standing committee of
Ameriwood's Board of Directors for many years, and pursuant to Board policy,
only non-employee directors serve on this committee. In general, the
Committee is charged with overseeing the operation of the Company's
compensation and incentive programs for executive officers and other key
personnel. The members of this committee also review existing programs and
recommend to the Board programs they consider advisable in light of
Ameriwood's overall compensation objectives and strategies. As part of its
functions, the Committee annually reviews the salaries of all executive
officers and recommends to the Board such salary adjustments as it considers
appropriate. It also administers Ameriwood's incentive plans, under which
executive officers and other key employees may earn cash and/or equity-based
incentives.
OVERVIEW OF EXECUTIVE OFFICER COMPENSATION PROGRAMS
Ameriwood's compensation programs for executive officers attempt to
relate the overall pay levels of these officers to the attainment of
company-wide and individual performance objectives, as well as to
improvements in shareholder returns. These programs attempt at the same time
to further the Company's ability to attract and retain the best possible
executive talent by providing compensation opportunities competitive with
those of executives possessing similar experience and responsibilities at
similar companies. In order to motivate executives to achieve the goals
inherent in Ameriwood's business strategy, as well as to attain individual
performance objectives, a potentially substantial portion of executive annual
compensation is dependent upon achievement of such goals and objectives,
through the Annual Incentive Plan. In addition, a significant portion of
executive compensation over the longer-term is linked to increases in market
value of Ameriwood stock, through equity-based plans.
10
SALARIES
Initial salaries for new executive officers are negotiated between the
prospective executive and management, subject to Human Resources Committee
and full Board approval. In reviewing such salaries and making
recommendations to the Board, the Committee evaluates the responsibilities of
the position and the experience of the individual by reference to the
competitive marketplace for executive talent. This is accomplished through a
comparison of salaries for comparable positions at other companies. The
Committee also considers the potential availability of additional
compensation for the prospective executive through the Annual Incentive Plan
and through equity-based awards.
Likewise, in reviewing and formulating recommendations concerning annual
salary adjustments for executive officers, the Human Resources Committee
considers comparative executive salary survey data, along with the potential
availability of compensation other than salary. Other factors are also
considered, including Ameriwood's financial performance during the prior year
in relation to its business plans and objectives; Company performance
measures such as increases in market share, manufacturing efficiency gains,
or improvements in product quality and relations with customers, suppliers or
employees; any new responsibilities assigned or to be assigned to an
executive; and Committee members' assessments (supplemented by those of the
CEO, with respect to other executive officers) of each executive's past
individual performance and consequent anticipated future contributions.
Extraordinary developments bearing on Company and individual executive
performance are also taken into account during the salary review process.
ANNUAL INCENTIVE PLAN
Each year under the Annual Incentive Plan maintained for executives and
other key employees, the Human Resources Committee establishes a specified
annual target for net earnings and/or "Return on Net Assets Employed"
("RONAE"). RONAE is determined by dividing annual pretax income by the
difference between average monthly total assets and current liabilities for
the year. The Committee also approves individual performance objectives for
each plan participant. The amount of the cash incentive bonus that any
participant can earn for the year is entirely dependent upon actual results
and the extent to which the participant's individual performance objectives
are achieved. If the 80% minimum threshold is exceeded, each plan
participant will earn a percentage of his or her salary, from 6.75% to 47.5%.
In addition, all participants may earn a percentage of salary for attainment
of individual goals-from 2.5% for attainment of at least 70% of goals to
17.5% for attainment of all such goals, provided that the Company has
achieved 80% of target (25% beginning in 1997 for the individual objective
only). As the Company did not attain 80% of target for 1996, no cash
incentives were paid to any executive officers or other management personnel
under this plan for 1996.
STOCK OPTIONS
Stock options entitle management to buy shares of Ameriwood common stock
at a specified price for a specified period of time. By encouraging equity
ownership in the Company, the interests of shareholders and management become
more closely aligned. Stock options provide incentive to increase the stock
value over the long-term by rewarding management for appreciation in the
stock price.
11
Stock options are awarded to executives and other key employees who, in
the judgment of the Committee, are expected to contribute materially to the
Company's future success. The employees' contributions toward Ameriwood's
business plans and strategic goals and the improvement in Ameriwood's stock
price during the year are considered in the award of stock options.
Options are typically granted annually. The size of grants are initially
recommended to the Committee by the CEO (with the exception of his own
grant). In February 1996, the Committee approved the grant of 20,000 Stock
Appreciation Rights to Mr. Foley and stock options to certain key employees
under the 1993 Stock Incentive Plan. All stock options granted in 1996 were
Incentive Stock Options at exercise prices equal to the fair market value of
the common stock on the date of grant and were fully exercisable at the date
of grant. In February 1997, the Committee approved the grant of 20,000
stock options to Mr. Foley and stock options to certain other executives
under the 1993 Stock Incentive Plan. All options granted in 1997 were
Non-Qualified Stock Options at exercise prices equal to the fair market value
of the common stock on the date of grant and vest at the rate of 50% on the
first anniversary of the grant date and 50% on the second anniversary.
Respectfully submitted,
Richard Pigott, Chairman Neil L. Diver Edwin Wachtel
STOCK PERFORMANCE
The following graph compares the cumulative total shareholder return on a
investment in Ameriwood common stock with The Nasdaq Stock Market for U. S.
Companies (a performance indicator of the overall stock market) and with the
Wood Household Furniture Index--SIC Code 2511 (an index more specific to the
nature of Ameriwood's business). The comparison assumes a $100 investment on
December 31, 1991 and cumulative reinvestment of any dividends paid.
STOCK PERFORMANCE GRAPH
1991 1992 1993 1994 1995 1996
- -------------------------------------------------------------------------------
Ameriwood Industries 100.00 210.00 320.00 145.00 77.50 187.50
Wood Household Furniture Index 100.00 133.21 167.92 112.28 140.54 177.46
The NASDAQ Stock Market (US) 100.00 100.98 121.13 127.17 164.96 204.98
The Wood Household Furniture Index--SIC Code 2511, prepared by Media General
Financial Services, includes Bassett Furniture, Bush Industries, Chromcraft
Revington, DMI Furniture, Ethan Allen Interiors, Furniture Brands, Interco,
LADD Furniture, Masco Corp., O'Sullivan Industries, Pulaski Furniture,
Stanley Furniture, and Ameriwood.
12
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
As previously noted, Neil Diver, who served on the Human Resources
Committee throughout 1996, is the chairman of the Board of Ameriwood.
However, neither Mr. Diver, nor any other director serving on the Human
Resources Committee during 1996, is, or has ever been, an employee or officer
of Ameriwood or any of its subsidiaries.
Ameriwood compensates non-employee directors for consulting services
provided to the Company, as well as for reimbursement of documented expenses
incurred in rendering such services. With respect to this arrangement, Mr.
Diver received consulting fees of $88,000 and reimbursement of expenses of
$6,000 incurred in connection with litigation support, investor relations,
and strategic planning issues. Also in 1996, two other non-employee
directors received payment for consulting services and reimbursement of
expenses incurred in rendering such services related to the search for a new
President; Mr. Wachtel received $4,300 and Mr. Pigott received $1,700.
SECTION 16(A) BENEFICIAL OWNERSHIP COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934 requires the
Company's directors and executive officers ("Reporting Persons") to file with
the Securities and Exchange Commission initial reports of ownership and
reports of changes in ownership of the Company's equity securities. To the
Company's knowledge, based solely on its review of the copies of such reports
furnished to the Company with respect to the most recent fiscal year, and
written representations that no other reports were required, all Section
16(a) filing requirements applicable to Reporting Persons were complied with
except for the following. Craig G. Wassenaar, Corporate Controller/Treasurer
inadvertently failed to file a Form 3 stating that he had no ownership of the
Company's securities within ten days of the commencement of his employment on
January 1, 1996. This form was filed in March 1996. A Form 4 reporting
change in ownership in April 1996 for Edwin Wachtel, director, was
unintentionally filed late and was filed in May 1996.
INDEPENDENT AUDITORS
The Company's independent public accountants for the year ended December
31, 1996 were Coopers & Lybrand L.L.P. Representatives of Coopers & Lybrand
L.L.P. are expected to attend the annual meeting and will be available to
respond to appropriate questions and to make a statement if they so desire.
PROPOSALS OF SHAREHOLDERS AND SHAREHOLDER NOMINATIONS OF DIRECTORS
Any shareholder proposal intended for presentation at the 1998 annual
meeting of shareholders must be received at Ameriwood's corporate office, 171
Monroe Avenue, NW, Suite 600, Grand Rapids, Michigan, 49503, no later than
December 12, 1997, in order to be eligible for inclusion in the Company's
proxy materials relating to that meeting.
By order of the Board of Directors
/s/ CRAIG G. WASSENAAR
------------------
CRAIG G. WASSENAAR, Secretary
Grand Rapids, Michigan
April 14, 1997
13
April 14, 1997
NOTICE TO PARTICIPANTS IN THE
AMERIWOOD INDUSTRIES AFFILIATED EMPLOYEE
STOCK OWNERSHIP AND SAVINGS PLAN
IMPORTANT
Dear Plan Participant:
Enclosed is the notice of meeting and Proxy Statement that have been
prepared by Ameriwood Industries International Corporation ("Ameriwood").
These documents have been prepared in connection with the solicitation of
proxies by Ameriwood's Board of Directors for Ameriwood's annual meeting of
shareholders to be held May 20, 1997, and any adjournment thereof.
Because FMB Trust, as trustee of the Plan (the "Trustee"), is the holder
of record of all shares of Ameriwood stock held under the Plan--including
shares allocated to your Plan account(s)--the Trustee is the only person who
can directly vote or give a proxy for voting those shares. However, under
the terms of the Plan, only you have the right to direct the Trustee how to
vote your allocated shares, and those shares cannot be voted at all without
instructions from you. Therefore, enclosed is a blue voting instruction form
and a postage-paid return envelope for the purpose of instructing the Trustee
how to vote your allocated shares of Ameriwood common stock at the annual
meeting.
TO ASSURE THAT YOUR ALLOCATED SHARES WILL BE VOTED AT THE MEETING, IT IS
IMPORTANT THAT THE TRUSTEE RECEIVE YOUR VOTING INSTRUCTIONS NO LATER THAN
MAY 12, 1997.
The enclosed proxy materials describe all of the matters that Ameriwood
expects will be voted upon at the upcoming meeting. You should review those
materials carefully. In addition, the recommendations of Ameriwood's Board
concerning these matters have been indicated on the blue voting instruction
form for your information. If you want to support the recommendations of the
Board concerning the proposals to be considered at the meeting, you can do so
by signing, dating and returning the blue voting instruction form in the
postage-paid envelope provided. If you wish your allocated shares to be
voted in some other manner with respect to one or more of the proposals, you
should so indicate on the form before signing, dating and returning it to the
Trustee. The Trustee makes no recommendation with respect to your voting
decisions.
YOUR VOTE IS STRICTLY CONFIDENTIAL. Under no circumstances will the
Trustee, or any of its agents, disclose to Ameriwood or any other party how
or if you voted. You should feel free to vote in the manner YOU think is
best.
If you have any questions about your voting rights under the Plan, the
voting instruction form, or the secrecy of your vote, please contact the
Trustee between the hours of 9:00 AM and 4:00 PM, eastern standard time, at
(616) 355-9694.
FMB Trust, Trustee
PROXY PROXY
AMERIWOOD INDUSTRIES INTERNATIONAL CORPORATION
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
FOR THE ANNUAL MEETING OF SHAREHOLDERS TO BE HELD ON MAY 20, 1997
The undersigned appoints Charles L. Foley and Richard Pigott, or either
of them, proxies for the undersigned, each with full power of substitution,
to attend the Annual Meeting of Shareholders of Ameriwood Industries
International Corporation to be held on May 20, 1997 at 9:00 AM, local time,
and at any adjournments or postponements of the Annual Meeting, and to vote
as specified in this Proxy all the Common Shares of the Company which the
undersigned would be entitled to vote if personally present. This Proxy when
properly executed will be voted in accordance with the undersigned's
indicated directions. If no direction is made, this Proxy will be voted FOR
the election of Directors.
YOUR VOTE IS IMPORTANT! PLEASE MARK, SIGN AND DATE THIS PROXY ON THE
REVERSE SIDE AND RETURN IT PROMPTLY IN THE ACCOMPANYING ENVELOPE.
(CONTINUED AND TO BE SIGNED ON REVERSE SIDE)
AMERIWOOD INDUSTRIES INTERNATIONAL CORPORATION
PLEASE MARK VOTE IN OVAL IN THE FOLLOWING MANNER USING DARK INK ONLY /X/
[ ]
For Withheld For All
All All Except
1. Election of Directors - / / / / / / __________
NOMINEES: Charles R. Foley, Richard Pigott
____________________________________________
(Except nominee written above.)
Record Date Shares:
The undersigned acknowledged receipt of Ameriwood's proxy
solicitation materials, including notice of meeting, and of its 1996
Annual Report to Shareholders.
Dated ________________________________________________________, 1997
____________________________________________________________________
Signature(s)
____________________________________________________________________
Please sign exactly as your name appears. Joint owners should
each sign personally. Where applicable, indicate your official
position or representation capacity.
PROXY PROXY
AMERIWOOD INDUSTRIES INTERNATIONAL CORPORATION
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
FOR THE ANNUAL MEETING OF SHAREHOLDERS TO BE HELD ON MAY 20, 1997
The undersigned appoints Neil L. Diver and Craig G. Wassenaar, or either of
them, proxies for the undersigned, each with full power of substitution, to
attend the Annual Meeting of Shareholders of Ameriwood Industries International
Corporation to be held on May 20, 1997 at 9:00 AM, local time, and at any
adjournments or postponements of the Annual Meeting, and to vote as specified in
this Proxy all the Common Shares of the Company which the undersigned would be
entitled to vote if personally present. This Proxy when properly executed will
be voted in accordance with the undersigned s indicated directions. If no
direction is made, this Proxy will be voted FOR the election of Directors.
YOUR VOTE IS IMPORTANT! PLEASE MARK, SIGN AND DATE THIS PROXY ON THE REVERSE
SIDE AND
RETURN IT PROMPTLY IN THE ACCOMPANYING ENVELOPE.
(CONTINUED AND TO BE SIGNED ON REVERSE SIDE)
AMERIWOOD INDUSTRIES INTERNATIONAL CORPORATION
PLEASE MARK VOTE IN OVAL IN THE FOLLOWING MANNER USING DARK INK ONLY /X/
1. Election of Directors --
NOMINEES: Charles R. Foley, Richard Pigott / / FOR ALL / / WITHHELD ALL / / FOR ALL EXCEPT
------------------------------------------
(Except nominee written above.)
Record Date Shares: The undersigned acknowledged receipt of
Ameriwood's proxy solicitation materials,
including notice of meeting, and of its 1996
Annual Report to Shareholders.
Dated: -----------------------------------, 1997
------------------------------------------------
(Signature)
------------------------------------------------
Please sign exactly as your name appears. Joint
owners should each sign personally. Where
applicable, indicate your official position or
representation capacity.
AMERIWOOD INDUSTRIES AFFILIATED EMPLOYEE STOCK OWNERSHIP AND SAVINGS PLAN
VOTING INSTRUCTIONS TO TRUSTEE
FOR THE ANNUAL MEETING OF SHAREHOLDERS OF
AMERIWOOD INDUSTRIES INTERNATIONAL CORPORATION
MAY 20, 1997
I, as a participant in the Ameriwood Industries Affiliated Employee Stock
Ownership and Savings Plan (the "Plan") hereby instruct FMB Trust, as trustee
under the Plan (the "Trustee"), to vote, either in person or by proxy, all
shares of common stock of Ameriwood Industries International Corporation
("Ameriwood") allocated to any of my Plan accounts in accordance with the
instructions set forth below. Such shares are to be voted at the 1997 annual
meeting of shareholders and at any adjournment thereof. I also instruct the
Trustee to act in its discretion (or to authorize its proxy or proxies to act in
his or their discretion) upon any other matters which may come before the
meeting.
I UNDERSTAND THAT THE RECOMMENDATIONS OF AMERIWOOD'S BOARD OF DIRECTORS ARE
SET FORTH BELOW FOR MY INFORMATION ONLY AND THAT THE TRUSTEE MAKES NO
RECOMMENDATIONS WITH RESPECT TO MY VOTING DECISIONS.
NOTE: This instruction form must be signed, dated and received by the
trustee by the close of business on May 12, 1997 in order for the trustee to
ensure that your voting instructions will be followed. If your voting
instructions are not timely received, the trustee will not vote the shares
allocated to your account. Your voting instructions to the trustee are
confidential, as explained in the accompanying notice to participants.
1. Election of Directors
/ / FOR both nominees / / FOR ALL EXCEPT / / WITHHOLD AUTHORITY
as to both nominees
CHARLES R. FOLEY RICHARD PIGOTT
NOTE: If you do not want your shares voted "FOR" a particular nominee, mark the
"FOR ALL EXCEPT" box and strike a line through the nominee's name you do not
wish to vote for. Your shares will be voted for the remaining nominee.
AMERIWOOD'S BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE FOR THE DIRECTOR OF
NOMINEES LISTED ABOVE.
As a participant in the Plan, I hereby acknowledge receipt of Ameriwood's
proxy solicitation materials relating to the 1997 annual meeting of
shareholders, and I hereby instruct the Trustee to vote all shares allocated to
any of my Plan accounts as I have indicated above. If I sign this instruction
form but do not specifically instruct the Trustee how to vote, the Trustee is
instructed to vote all of my allocated shares in accordance with the
recommendations of Ameriwood's board of directors.
The submission of this instruction form, if properly signed and dated,
revokes any prior voting instructions I may have given to the Trustee.
Dated:
_________________________________________________________
Signature:
_______________________________________________________