UNITED STATES
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 (Amendment No. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [_]
Check the appropriate box:
[_] Preliminary Proxy Statement [_] CONFIDENTIAL, FOR USE OF THE
COMMISSION ONLY (AS PERMITTED BY
RULE 14A-6(E)(2))
[X] Definitive Proxy Statement
[_] Definitive Additional Materials
[_] Soliciting Material Pursuant to Section 240.14a-11(c) or Section 240.14a-12
Heilig - Meyers Company
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required
[_] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
-------------------------------------------------------------------------
(2) Aggregate number of securities to which transaction applies:
-------------------------------------------------------------------------
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which
the filing fee is calculated and state how it was determined):
-------------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
-------------------------------------------------------------------------
(5) Total fee paid:
-------------------------------------------------------------------------
[_] Fee paid previously with preliminary materials.
[_] Check box if any part of the fee is offset as provided by Exchange
Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee
was paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
-------------------------------------------------------------------------
(2) Form, Schedule or Registration Statement No.:
-------------------------------------------------------------------------
(3) Filing Party:
-------------------------------------------------------------------------
(4) Date Filed:
-------------------------------------------------------------------------
Notes:
HEILIG-MEYERS COMPANY
12560 West Creek Parkway
Richmond, Virginia 23238
----------------
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
To Be Held June 21, 2000
----------------
TO THE HOLDERS OF COMMON STOCK:
The Annual Meeting of Shareholders of Heilig-Meyers Company (the "Company")
will be held at The Jefferson--Franklin and Adams Streets, Richmond, Virginia,
on Wednesday, June 21, 2000, commencing at 10:30 a.m. E.D.T., for the following
purposes:
1. To elect a board of nine directors.
2. To ratify or reject the selection of Deloitte & Touche LLP as
accountants and auditors for the Company for the current fiscal year.
3. To transact such other business as may properly come before the
meeting or any adjournments thereof.
The Board of Directors has fixed the close of business on April 24, 2000, as
the record date for the determination of shareholders entitled to notice of and
to vote at the meeting and any adjournments thereof.
Your attention is directed to the attached Proxy Statement.
By Order of the Board of Directors
PAIGE H. WILSON
Secretary
June 2, 2000
PLEASE FILL IN, SIGN, DATE AND RETURN PROMPTLY THE ACCOMPANYING PROXY. IF
YOU ATTEND THE MEETING IN PERSON, YOU MAY WITHDRAW YOUR PROXY AND VOTE
YOUR OWN SHARES.
HEILIG-MEYERS COMPANY
12560 West Creek Parkway
Richmond, Virginia 23238
----------------
PROXY STATEMENT
----------------
To Be Mailed on or about June 2, 2000
for the
Annual Meeting of Shareholders
To Be Held June 21, 2000
The accompanying proxy is solicited by and on behalf of the Board of
Directors of Heilig-Meyers Company (the "Company") for use at the Annual
Meeting of Shareholders of the Company to be held June 21, 2000, or any
adjournments thereof, for the purposes set forth in this Proxy Statement and
the attached Notice of Annual Meeting of Shareholders. Supplementary
solicitations may also be made by mail, telephone or personal interview by
directors, officers and regular employees of the Company, none of whom will
receive additional compensation for these services. It is also contemplated
that, for a fee of $5,500 plus certain expenses, additional solicitation will
be made by personal interview, telecopy and telephone under the direction of
the proxy solicitation firm of D. F. King & Co., Inc., 77 Water Street,
New York, New York 10005. Costs of solicitation of proxies will be borne by
the Company, which will also reimburse banks, brokerage firms, other
custodians, nominees and fiduciaries for reasonable out-of-pocket expenses
incurred by them in forwarding proxy materials to the beneficial owners of
shares held by them.
The shares represented by all properly executed proxies received by the
Secretary of the Company and not revoked as herein provided will be voted as
set forth herein unless the shareholder directs otherwise in the proxy, in
which event such shares will be voted in accordance with such directions. Any
proxy may be revoked at any time before the shares to which it relates are
voted either by written notice (which may be in the form of a substitute proxy
delivered to the secretary of the meeting) or by attending the meeting and
voting in person.
Presence in person or by proxy of the holders of a majority of the
outstanding shares of Common Stock entitled to vote at the meeting will
constitute a quorum. Shares for which the holder has elected to abstain or to
withhold the proxies' authority to vote on a matter will count towards a
quorum, but will have no effect on the action taken with respect to such
matter. Shares held of record by a broker or its nominee (broker non-votes)
that are not voted on any matter at the meeting will not be included in
determining whether a quorum is present at the meeting.
VOTING SECURITIES AND RECORD DATE
The Board of Directors has fixed the close of business on April 24, 2000 as
the record date for the determination of shareholders entitled to notice of
and to vote at the meeting and any adjournments thereof. Each holder of record
of the Company's Common Stock, $2.00 par value (the "Common Stock") on the
record date will be entitled to one vote for each share then registered in the
holder's name with respect to all matters to be considered at the meeting. As
of the close of business on April 24, 2000, 60,676,773 shares of Common Stock
were outstanding and entitled to vote at the meeting.
ELECTION OF DIRECTORS
Nominees
The nominees named below were elected at the 1999 Annual Meeting of
Shareholders to serve until the next Annual Meeting of Shareholders or the
election and qualification of their successors, with the exception of
1
Robert M. Freeman and Donald S. Shaffer. Mr. Freeman was elected by the Board
of Directors in December 1999 to serve as a director of the Company until the
next Annual Meeting of Shareholders. Mr. Shaffer became the President and
Chief Operating Officer of the Company in April 1999 and has been nominated by
the Board for election by the shareholders. The nine nominees for director
receiving the greatest number of votes cast for the election of directors will
be elected.
Each of the nominees has consented to being named as a nominee in this
Proxy Statement, has agreed to serve if elected, and has furnished to the
Company the information set forth in the table below with respect to his or
her age, principal occupation or employment and beneficial ownership of Common
Stock as of April 24, 2000. The table also sets forth the amount of shares
beneficially owned as of April 24, 2000, by: (i) each executive officer and
one former executive officer set forth in the Summary Compensation Table, (ii)
each director or nominee for director, and (iii) all executive officers and
directors as a group and the percentage of outstanding shares represented by
the stated beneficial ownership. To the best of the Company's information, the
persons named in the table, and all executive officers and directors as a
group, have sole voting and investment power with respect to shares shown as
owned by them, except as set forth in the notes thereto.
It is expected that each of these nominees will be able to serve, but in
the event that any such nominee is unable to serve for any reason (which event
is not now anticipated), the proxies reserve discretion to vote or refrain
from voting for a substitute nominee or nominees. Shareholders may withhold
authority to vote for any of the nominees on the accompanying proxy.
Name, Age, Positions of
Directors or Nominees with Amount of Shares
the Company or Principal Occupation Beneficially Owned
for the Past Five Years and Percent of
and Other Information Class Outstanding
- ----------------------------------- Director as of April 24,
and Other Information Since(1) 2000(2)
----------------------- -------- ------------------
WILLIAM C. DERUSHA, 50............................ 1983 878,473(3)(4)
Chairman of the Board since April 1986. 1.45%
Chief Executive Officer since April 1984.
DONALD S. SHAFFER, 57............................. 130,000(3)
President and Chief Operating Officer
since April 1999. Chairman and Chief
Executive Officer, Western Auto Supply
Company, December 1996 - December
1998. President and Chief Executive
Officer, Sears Canada, Inc., January 1993 -
November 1996.
ROBERT L. BURRUS, JR., 65......................... 1973 47,824(3)
Chairman and partner of McGuire,
Woods, Battle & Boothe LLP (law firm).
Director, CSX Corporation, Concepts
Direct, Inc., S&K Famous Brands, Inc.
and Smithfield Foods, Inc.
BEVERLEY E. DALTON, 51............................ 1996 15,843(3)(5)
Owner, W.C. English, Inc. (general
construction firm).
BENJAMIN F. EDWARDS III, 68....................... 1983 65,093(3)(6)
Chairman of the Board, President, Chief
Executive Officer, and Director, A.G.
Edwards, Inc., the parent of A.G.
Edwards & Sons, Inc. (securities
brokerage and investment banking).
Director, National Life Insurance
Company of Vermont.
2
Name, Age, Positions of Amount of Shares
Directors or Nominees Beneficially Owned
with the Company and Percent of
or Principal Occupation Class Outstanding
for the Past Five Years Director as of April 24,
and Other Information Since(1) 2000(2)
----------------------- -------- ------------------
ROBERT M. FREEMAN, 58........................... 1999 53,000(3)
Chairman of the Board, Signet Banking
Corporation, 1990 - 1996.
Director, Trigon Healthcare, Inc.
LAWRENCE N. SMITH, 62........................... 1975 62,774(3)(7)
President and Chief Executive Officer,
Resource Bankshares Corp.
EUGENE P. TRANI, Ph.D., 60...................... 1996 13,000(3)
President, Virginia Commonwealth
University. Director, LandAmerica
Financial Group, Inc., SunTrust Mid-
Atlantic Bank and Universal Corporation.
L. DOUGLAS WILDER, 69........................... 1997 8,843(3)
Partner, law firm of
Wilder & Gregory since January 1994,
Governor, Commonwealth of Virginia,
January 1990 - January 1994.
ALEXANDER ALEXANDER(8).......................... 42,343(3)
Certain Current and Former Executive Officers
JAMES F. CERZA, JR. ............................ 383,750(3)(9)
Executive Vice President
ROY B. GOODMAN.................................. 95,765(3)
Executive Vice President and Chief
Financial Officer
CURTIS C. KIMBRELL.............................. 319,088(3)(10)
Executive Vice President
PATRICK D. STERN................................ 38,000(3)
Former Executive Vice President
All current executive officers and directors as
a group (14 persons) .......................... 2,149,586(3)(11)
3.5%
- --------
(1) Year in which the nominee was first elected a director of the Company.
(2) Unless otherwise indicated, less than one percent of the outstanding
Common Stock.
(3) Includes shares that could be acquired through the exercise of stock
options within 60 days after April 24, 2000.
(4) Excludes 150 shares owned of record by Mr. DeRusha's wife.
(5) Includes 4,000 shares held by Ms. Dalton as trustee of trusts for the
benefit of her children.
(6) Excludes 2,070 shares owned of record by Mr. Edwards' wife.
3
(7) Includes 3,000 shares held in trust of which Mr. Smith is trustee, as to
which shares Mr. Smith may be deemed to have voting and investment
powers.
(8) In April 1998, the Board of Directors adopted a mandatory retirement age
of 72 for directors. As a result, Mr. Alexander will retire from the
Board of Directors at the 2000 Annual Meeting of Shareholders.
(9) Excludes 16,855 shares owned of record by Mr. Cerza's wife.
(10) Excludes 2,867 shares owned of record by Mr. Kimbrell's wife.
(11) Excludes a total of 450 shares owned of record by the wives of executive
officers not named above. Also, see notes 4 through 10 above.
Mr. Burrus is the Chairman of the law firm of McGuire, Woods, Battle &
Boothe LLP which was retained as general counsel by the Company during the
fiscal year ended February 29, 2000, and has been so retained during the
current fiscal year. The securities brokerage and investment banking firm of
A. G. Edwards & Sons, Inc. has performed investment banking services for the
Company in the past, and may perform such services for the Company during the
current fiscal year. Mr. Edwards is Chairman of the Board, President, Chief
Executive Officer and Director of the parent company of A. G. Edwards & Sons,
Inc.
Nominations for Director
The By-laws of the Company provide that the only persons who may be
nominated for Directors are (i) those persons nominated by the Company's Board
of Directors; (ii) those persons nominated by the Corporate Organization and
Responsibility Committee of the Company's Board of Directors and (iii) those
persons whose names were personally delivered to the Secretary of the Company
not later than the close of business on the tenth day following the mailing
date of the Company's Proxy Statement for an annual meeting or delivered to
the Secretary of the Company by United States mail, postage prepaid,
postmarked no later than ten days after the mailing date of the Proxy
Statement for an annual meeting. Any shareholder wishing to nominate a person
other than those listed in this Proxy Statement must submit the following
information in writing to the Office of the Secretary, Heilig-Meyers Company,
12560 West Creek Parkway, Richmond, Virginia 23238: (i) the name and address
of the shareholder who intends to make the nomination; (ii) the name, address,
and principal occupation of each proposed nominee; (iii) a representation that
the shareholder is entitled to vote at such meeting and intends to appear in
person or by proxy at the meeting to nominate the person or persons specified
in the notice; and (iv) the written consent of each proposed nominee to serve
as a director of the Company if so elected. The Chairman of the meeting may
refuse to acknowledge the nomination of any person not made in compliance with
the foregoing procedure.
By requiring advance notice of shareholder nominations, this By-law affords
the Board of Directors the opportunity to consider the qualifications of the
proposed nominees and, to the extent deemed necessary or desirable by the
Board, to inform shareholders about such qualifications. The By-law does not
give the Board of Directors any power to approve or disapprove of shareholder
nominations for election of directors. However, it may have the effect of
precluding a contest for the election of directors if its procedures are not
followed, and therefore may discourage or deter a shareholder from conducting
a solicitation of proxies to elect his own slate of directors.
Attendance
The Board of Directors held nine meetings during the fiscal year ended
February 29, 2000. Each director attended 75 percent or more of these
meetings, including regularly scheduled and special meetings, and the meetings
of all committees of the Board on which he or she served that were held in the
past fiscal year during the periods in which he or she was a director or
served on such committees, with the exception of Mr. Freeman who was absent
from one meeting after he was elected to the Board.
Section 16(a) Beneficial Ownership Reporting Compliance
The Securities Exchange Act of 1934 requires the Company's executive
officers and directors, and any persons owning more than 10% of the Common
Stock, to file certain reports of ownership and changes in
4
ownership with the Securities and Exchange Commission. With respect to the
fiscal year ended February 29, 2000, and based solely on its review of the
copies of the Forms 3, 4 and 5 received by it, the Company believes that all
executive officers and directors complied with such filing requirements, with
the exception of Curtis C. Kimbrell, Executive Vice President; William E.
Helms, Executive Vice President; and Thomas F. Crump, Senior Vice President,
each of whom filed late his Form 3; and James F. Cerza, Jr., Executive Vice
President, who filed late two Forms 4 reporting two purchases of Common Stock.
Committees of the Board of Directors
The standing committees of the Board of Directors of the Company include
the Audit Committee, Compensation Committee and Corporate Organization and
Responsibility Committee.
Messrs. Smith and Edwards and Ms. Dalton are the members of the Audit
Committee, which met two times during the fiscal year ended February 29, 2000.
The primary functions of the Committee are to monitor and review on behalf of
the Board of Directors, the Company's financial reporting structure, including
internal control structure regarding finance, accounting and financial
reporting. The Committee and the Board have the ultimate authority and
responsibility to select, evaluate and where appropriate replace the
independent auditors or to nominate the independent auditors to be proposed
for shareholder ratification.
Messrs. Burrus, Alexander and Smith and Dr. Trani are the members of the
Compensation Committee, which met five times during the fiscal year ended
February 29, 2000. Charles A. Davis served as the Chairman of the Committee
until his resignation from the Board of Directors in February 1999. The
primary functions of the Committee are to review and make recommendations
concerning the direct and indirect compensation of officers elected by the
Board; to administer and make awards under the Company's stock option
programs; to review and evaluate the performance of the Chief Executive
Officer; to review and determine the salary level for the Company's Chief
Executive Officer; to review and report to the Board concerning annual
salaries and year-end bonuses recommended by management for other officers and
certain other executives; to recommend special benefits and perquisites for
management and to generally consult with management regarding employee
benefits and personnel policies.
Messrs. Edwards, Burrus and Wilder are the members of the Corporate
Organization and Responsibility Committee, which met one time during the
fiscal year ended February 29, 2000. The primary functions of the Committee
are to recommend persons for membership on the Board and for membership on
committees established by the Board and to consider nominees recommended by
shareholders. The Committee is also responsible for assessing the Board's
performance, succession planning and assisting the Chairman and Chief
Executive Officer on matters of broad corporate significance.
5
Executive Compensation
Summary Compensation Table. The table below sets forth for the years ended
February 29, 2000 and February 28, 1999 and 1998, the annual and long-term
compensation for services in all capacities to the Company and its
subsidiaries of those persons who at February 29, 2000, were the Company's
Chief Executive Officer; the next four highest compensated executive officers
of the Company whose salary and bonus exceeded $100,000 for the year ended
February 29, 2000 and one former executive officer (the "Named Executive
Officers").
Long-Term
Compensation
Awards
Annual Compensation ---------------
------------------------ Securities
Name and Principal Fiscal Other Annual Underlying All Other
Position Year Salary Bonus Compensation Options/SARs(#) Compensation
------------------ ------ -------- -------- ------------ --------------- ------------
William C. DeRusha...... 2000 $709,212 $500,000(1) (2) 70,000 $24,930(3)
Chairman of the Board 1999 700,000 -- (2) 70,000 14,678
and Chief Executive 1998 684,015 -- (2) -- 18,157
Officer
Donald S. Shaffer....... 2000 442,308 -- $58,334 (4) 90,000 3,017(3)
President and Chief 1999 -- -- -- -- --
Operating Officer 1998 -- -- -- --
James F. Cerza, Jr...... 2000 404,862 30,000 (2) 24,000 9,340(3)
Executive Vice 1999 380,000 30,000 (2) 22,800 8,068
President 1998 378,077 -- (2) -- 9,981
Roy B. Goodman.......... 2000 292,200 330,000(1) (2) 18,000 13,035(3)
Executive Vice 1999 190,770 30,000 (2) 18,000 3,992
President and Chief 1998 152,212 -- (2) -- 4,004
Financial Officer
Curtis C. Kimbrell...... 2000 260,815 15,000 (2) 16,800 5,769(3)
Executive Vice 1999 216,000 -- (2) -- 4,810
President 1998 219,385 50,000 (2) -- 5,868
Patrick D. Stern(5)..... 2000 289,477 30,000 (2) -- 8,303(3)
Former Executive Vice 1999 300,000 30,000 (2) 18,000 491
President 1998 215,385 75,000 (2) 20,000 452
- --------
(1) Messrs. DeRusha and Goodman received bonuses during fiscal year 2000 in
connection with the divestitures by the Company of Mattress Discounters
Corporation and Rhodes, Inc. See "Compensation Committee Report on
Executive Compensation."
(2) Other Annual Compensation received did not exceed the lesser of $50,000
or 10% of combined salary and bonus for fiscal years 2000, 1999 or 1998.
(3) Consists of Company contributions to the Employees' Profit Sharing and
Retirement Savings Plan ("Savings Plan"), the Employees' Supplemental
Profit Sharing and Retirement Savings Plan ("Supplemental Plan") and the
dollar value of split dollar life insurance premiums paid on behalf of
the Named Executive Officers. Company contributions to the Savings Plan,
Company contributions to the Supplemental Plan and the dollar value of
split dollar life insurance premiums paid, respectively, during fiscal
2000, for the Named Executive Officers were: Mr. DeRusha, $3,200,
$21,203, $527; Mr. Shaffer, $1,952, $1,065, $0; Mr. Cerza, $3,200,
$5,576, $564; Mr. Goodman, $3,200, $9,386, $449; Mr. Kimbrell, $3,200,
$2,225, $344 and Mr. Stern, $3,200, $4,628, $475.
(4) The Company paid moving expenses for Mr. Shaffer equal to $58,334.
(5) Mr. Stern became Executive Vice President in 1997 and retired from the
Company during fiscal year 2000. Pursuant to the terms on which Mr. Stern
was employed, he received a bonus of $75,000 in fiscal 1998.
6
Option Grant Table. The following table sets forth information concerning
individual grants of stock options made during the year ended February 29,
2000, to the Company's Named Executive Officers.
Option/SAR Grants in Last Fiscal Year
Potential
Realizable Value
Individual Grants at Assumed Annual
--------------------- Rates of Stock
Securities % of Total Price
Underlying Options/SARs Exercise Appreciation for
Options/ Granted to or Base Option Term(1)
SARs Employees in Price Expiration -----------------
Name Granted(#) Fiscal Year ($/Sh) Date 5% ($) 10% ($)
---- ---------- ------------ -------- ---------- -------- --------
William C. DeRusha...... 70,000 20.15% $3.06 2/28/10 $141,560 $375,824
Donald S. Shaffer....... 40,000 11.51% $5.13 4/1/09 $135,370 $359,389
50,000 14.39% $3.06 2/28/10 $101,114 $268,446
James F. Cerza, Jr...... 24,000 6.91% $3.06 2/28/10 $ 48,535 $128,854
Roy B. Goodman.......... 18,000 5.18% $3.06 2/28/10 $ 36,401 $ 96,641
Curtis C. Kimbrell...... 16,800 4.84% $3.06 2/28/10 $ 33,974 $ 90,198
Patrick D. Stern........ -- -- -- -- -- --
- --------
(1) Stock appreciation values calculated by annually compounding the exercise
price until expiration at the growth rate noted.
Aggregated Option Exercises and Year-end Option Values. The following table
sets forth the number of shares acquired on exercise of stock options and the
aggregate gains realized on exercise in fiscal 2000 by the Company's Named
Executive Officers. The table also sets forth the number of shares covered by
exercisable and unexercisable options held by such executives on February 29,
2000, and the aggregate gains that would have been realized had these options
been exercised on February 29, 2000, even though these options were not
exercised, and the unexercisable options could not have been exercised, on
February 29, 2000.
Aggregated Option/SAR Exercises in Last Fiscal Year
and FY-End Option/SAR Values
Number of Securities Value of Unexercised
Underlying Unexercised In-The-Money Options at
Shares Options/SARs at FY-End FY-End(1)
Acquired on Value ------------------------- -------------------------
Name Exercise(#) Realized($) Exercisable Unexercisable Exercisable Unexercisable
---- ----------- ----------- ----------- ------------- ----------- -------------
William C. DeRusha...... -- $ -- 766,023 -- 13,125 --
Donald S. Shaffer....... -- -- 50,000 40,000 9,375 --
James F. Cerza, Jr...... -- -- 378,050 -- 4,500 --
Roy B. Goodman.......... -- -- 95,765 -- 3,375 --
Curtis C. Kimbrell...... -- -- 67,020 -- 3,150 --
Patrick D. Stern........ -- -- 38,000 -- -- --
- --------
(1) Based on the closing sales price of the Common Stock of $ 3.25 on
February 29, 2000.
7
Compensation Committee Report on Executive Compensation
The Compensation Committee (the "Committee") of the Board of Directors
(comprised of directors who are not employees of the Company) has provided the
following report on executive compensation:
Compensation Philosophy. The Committee believes that corporate performance
and, in turn, shareholder value will be enhanced by a compensation system
which supports and reinforces the Company's key operating and strategic goals
while aligning the financial interests of the Company's executive officers
with those of the shareholders. The Company utilizes both annual and long-term
incentive compensation programs to achieve these objectives. The incentive
programs are tied to Company-wide business goals, as well as individual goals
for certain officers. For executive officers, the Company relies on an annual
performance-based bonus program and a stock option program to align the
executives' financial interests with those of its shareholders. As
appropriate, special incentives for achievement of particular strategic goals
are used.
During the fiscal year ended February 29, 2000 (the "2000 fiscal year"),
the Committee implemented this compensation philosophy as it acted on various
matters. The Committee's actions were taken against a backdrop of the
Company's significant efforts in making structural changes to enhance the
prospects of achieving its long-term goals while continuing to compete in a
difficult retailing environment. The Committee participated in some of these
efforts. One significant Company change involved the hiring of a new President
and Chief Operating Officer. Committee members met with the Company's new
President and Chief Operating Officer, Donald S. Shaffer, prior to his
employment. The Committee approved the employment contract for Mr. Shaffer
described in this Proxy Statement. Another significant Company effort was the
divestitures of Mattress Discounters Corporation and Rhodes, Inc. The
Committee took account of these events with respect to bonuses as noted below.
Administration Of Compensation Programs. The Committee oversees all
compensation programs for senior management and reviews and approves certain
plans and programs for other employees. The Committee or a subcommittee of the
Committee reviews management recommendations and ultimately determines levels
of base salary, annual performance-based bonus payments and stock option
grants for all executives. The Committee or a subcommittee of the Committee
also reviews and determines the same elements of compensation of the CEO as
reported in this Proxy Statement.
The Committee considers annually the effect of Internal Revenue Code
Section 162(m), which imposes a $1 million limit per year on the corporate tax
deduction for compensation paid or accrued with respect to the five most
highly compensated executives of a publicly held corporation. Performance-
based compensation that meets certain requirements is not subject to this
deduction limit. The Company's 1998 Stock Incentive Plan and Annual
Performance-Based Bonus Plan meet these requirements for performance-based
compensation. The Committee believes that it is in the best interest of the
Company to minimize any loss of tax deduction from its ongoing compensation
programs, to the extent that action is consistent with the objectives of the
Company's overall executive compensation program. In the 2000 fiscal year, the
Committee created a subcommittee of the Compensation Committee (the
"Subcommittee") to administer the annual incentive bonus program and the stock
option program. This was done to ensure compliance with legal requirements,
including Section 162(m). The members of the Subcommittee are identified
below.
Components Of The Compensation Program. The Company's compensation program
for executive officers is composed of base salary, an annual incentive bonus
program, and a stock option program, elements of which are tied to the
Company's success in achieving financial and strategic performance goals. The
Committee or Subcommittee approves the Company's performance goals as they
relate to the compensation program. These goals are proposed by management to
be consistent with the Company's budgeting process and the Board of Directors
ratifies the goals.
During the 2000 fiscal year, the Committee retained the services of a
nationally recognized compensation consultant. The Committee requested that
the consultant perform a comprehensive review of the Company's compensation
practices and programs. In particular, the Committee at the request of
management directed the
8
consultant to consider approaches to reduce the Company's costs while
providing competitive benefits. The Committee expects to receive the report
during the 2001 fiscal year and to implement recommendations as appropriate.
Salary Each year, the Committee reviews proposals submitted by the
------
Company's Chief Executive Officer ("CEO") for annual salary for the executive
officers other than the CEO. In evaluating the CEO's proposals, the Committee
considers (1) the individual executive officer's performance, including
evaluations provided by the CEO, and (2) the Company's performance in relation
to its performance goals, which include pre-tax earnings, earnings per share,
and return on equity. Under employment agreements covering most of the highly
compensated executive officers, the Committee may increase, but not decrease,
executive salaries on an annual basis. For the 2000 fiscal year, the Committee
approved average salary increases of 4.1% for the executives as a whole.
Bonus The Company's Annual Performance-Based Bonus Plan ("Bonus Plan")
-----
provides executives with the potential to receive cash bonus awards based upon
the achievement of Company performance goals. For the 2000 fiscal year, the
Subcommittee designated the performance goals for the Bonus Plan. If the
performance goals are not met, no bonus is payable under the Bonus Plan. The
Bonus Plan includes only objective performance goals that preclude individual
discretion, and does not include personal performance as one of the criteria
for the five most highly compensated officers (the "Named Executive
Officers").
For the 2000 fiscal year, the Company did not achieve the minimum
performance necessary under the Bonus Plan for bonus payment based on company-
wide goals. Two of the Company's divisions did exceed the minimum targets and
bonuses were paid with respect to these divisions to executives other than the
Named Executive Officers. In consultation with the CEO, the Committee noted
the additional work required by many officers during the year resulting from
the Company's competitive situation and the assumption of additional duties by
many executives due to reduction in personnel. The Committee also noted that,
while beneficial in the long term, the divestitures of Mattress Discounters
Corporation and Rhodes, Inc. had a negative impact on the 2000 fiscal year
performance under the pre-established goals. For these reasons, the Committee
approved small discretionary bonuses for most executive vice presidents,
senior vice presidents and vice presidents for the 2000 fiscal year.
The Company in the 2000 fiscal year paid special bonuses to nine executives
in connection with the successful divestitures of Mattress Discounters
Corporation and Rhodes, Inc. The divestitures were instrumental in placing the
Company in a position to achieve its long-term goals. The Committee approved
the bonuses after careful consideration of the matter. These bonuses were
contingent on the successful completion of the transactions under financial
terms favorable to the Company. The Committee's evaluation focused on the
transactions as unusual events requiring close attention and serious
involvement from top management. The transactions were consistent with the
Board of Director's mandate to position the Company for achieving its long-
term goals, however, the transactions made it difficult for the Company to
achieve its short-term goals on which the Bonus Plan was measured. The
Committee believed it was important to recognize work towards the long-term
goals that would not be reflected in payments under the Bonus Plan. In
particular, the bonuses were granted to executives who contributed to the
transactions in the area of financing. The bonuses, which totaled less than
$1,000,000, represented 0.3% of the total amount received by the Company from
the divestitures.
Long-Term Incentives. The Company's long-term incentive program is a stock
option program under which long-term incentive compensation is provided in the
form of stock options. The Committee considers stock options to be an
important means of insuring that senior executives maintain their incentive to
increase the profitability of the Company and the value of the Company's
stock. Because the value of stock options is entirely a function of the value
of the Company's stock, the Committee believes that this component of the
Company's compensation arrangement strongly aligns the interests of senior
executives with those of the Company's shareholders.
9
For the 2000 fiscal year, the Subcommittee continued the use of an
objective formula award procedure for granting options. Under this formula,
the option grant size is based on the individual executive's job
classification and salary level. A fixed number of options is established for
certain increments of salary for each job classification. The Subcommittee
retains the latitude to adjust the formula awards up or down based on business
conditions and individual responsibilities and contributions to the Company.
Options are granted with an exercise price equal to the fair market value of
the Company's stock on the date of grant. The Company granted options for the
fiscal year 2000 under the Company's 1998 Stock Incentive Plan. Option grants
were made to the Named Executive Officers and other executives of the Company.
As part of his employment package, Mr. Shaffer received a grant of stock
options.
The Committee assisted the Board in its adoption of the Heilig-Meyers
Company Director Stock Ownership Plan during the 2000 fiscal year. Under the
plan, retainer fees for directors are paid 50% in cash and 50% in Company
stock. Directors may elect to receive more than 50% of the retainer fees in
stock. The Committee views this plan as further aligning the Board with the
interests of shareholders.
Chief Executive Officer's Compensation. The Committee determined the
compensation of William C. DeRusha, Chief Executive Officer, for the 2000
fiscal year, in a manner consistent with the guidelines described above. The
Committee determined that Mr. DeRusha's base salary should be maintained at
the same level for the 2000 fiscal year as it had been for the 1999 fiscal
year. This decision reflects the Committee's intent that Mr. DeRusha have a
significant portion of his compensation based on the Company's implementation
of its business plans and that the Company had not performed up to
expectations during the 1999 fiscal year.
For the 2000 fiscal year, Mr. DeRusha's bonus opportunity under the Bonus
Plan was maintained at the same level as for the 1999 fiscal year. No bonus
was payable to Mr. DeRusha under the Bonus Plan because the Company as a whole
failed to achieve the minimum targets for a bonus payment. Mr. DeRusha
participated in the special bonus grant described above with regard to the
divestiture of Mattress Discounters Corporation and Rhodes, Inc. The Committee
was advised that it is common for the CEO of a company to participate in this
type of special bonus grant when the CEO is actively involved in the
transactions. With respect to the divestitures, Mr. DeRusha provided hands-on
leadership and critical work on financing issues. The Committee also evaluated
that Mr. DeRusha's main objectives for the 2000 fiscal year had included the
divestitures of certain operations and the improvement of the Company's
liquidity. The divestitures were complimentary to these objectives. Therefore,
the Committee determined that a bonus grant of $500,000 to Mr. DeRusha was
appropriate.
Mr. DeRusha also received a grant of stock options for the 2000 fiscal year
that was determined under the formula process described above.
COMPENSATION COMMITTEE SUBCOMMITTEE
Robert L. Burrus, Jr., Chair Alexander Alexander
Alexander Alexander Lawrence N. Smith
Lawrence N. Smith Eugene P. Trani
Eugene P. Trani
10
Performance Graph
The following graph compares the cumulative total return on the Company's
Common Stock ("HMY") with the cumulative total return of the companies
included in the S&P 500 and the S&P Retail Stores Composite for the last five
fiscal years.
[GRAPH]
Total Return
---------------------------------
FYE February 28, S&P 500 S&P Retail HMY
- ---------------- ------- ---------- ---
1995 100.0% 100.0% 100.0%
1996 132.3% 109.2% 59.3%
1997 162.3% 132.3% 59.8%
1998 215.3% 200.3% 65.6%
1999 253.6% 291.7% 25.7%
2000 276.6% 270.9% 13.0%
Employment and Severance Agreements
The Company entered into an employment contract with William C. DeRusha,
effective November 1, 1996, which provides for a constant rolling three-year
employment period. The contract provides that Mr. DeRusha's position will be
at least commensurate in all material respects with the most significant of
those held by him during the 90 days before November 1, 1996. The contract
also provides that Mr. DeRusha will be nominated for election to the Board of
Directors during the employment period and will serve as Chairman of the
Board. Under the contract, Mr. DeRusha is entitled to receive an annual base
salary at least equal to that in effect on November 1, 1996. The contract
provides for annual review of Mr. DeRusha's base salary and permits the annual
base salary to be increased, but not decreased. The contract also provides
that Mr. DeRusha is entitled to an annual bonus in accordance with the terms
of the Company's annual performance-based bonus plan or, if more favorable, a
bonus under other plans in effect generally with respect to other peer
executives of the Company. The contract provides further that the Company may
terminate Mr. DeRusha's employment for cause as such term is defined in the
contract. In the event of such termination, the contract terminates without
further obligation to Mr. DeRusha except for payment of annual base salary to
the date of termination plus any previously deferred and unpaid compensation.
If the Company terminates Mr. DeRusha's employment other than for cause or
death, or if Mr. DeRusha terminates his employment for any reason, he is
entitled to receive a lump sum cash payment equal to the sum of (i) unpaid
annual base salary through the date of termination, (ii) the greater of the
annual bonus paid or payable for the most recently completed fiscal year or
the average annualized bonus paid or payable in respect of the three fiscal
years immediately preceding the fiscal year in which termination occurs (the
"Highest Annual Bonus") for the portion of the then current fiscal year
through Mr. DeRusha's termination of employment, (iii) previously deferred and
unpaid compensation, (iv) accrued vacation pay, and (v) annual base salary
plus the Highest Annual Bonus payable for the remainder of the three-year
employment period. Mr. DeRusha is also entitled to a continuation of medical
and other benefits for three years following termination of his employment or
such longer period as the applicable benefit program may provide. Mr. DeRusha
has also agreed not to compete with the Company in the United States for a
period of 36 months following termination
11
of his employment. This non-competition covenant may be terminated by Mr.
DeRusha if his employment was terminated by the Company other than for cause
and if he desires to accept employment with a competitor, provided that he
agrees to repay the Company the portion of the amount paid to him for salary
and bonus with respect to the year in which termination took place equal to
the amount of salary and pro rata bonus payable to him by the competitor
during the three-year period following termination of employment with the
Company.
The Company entered into an employment contract with Donald S. Shaffer,
effective September 22, 1999, which provides for a constant rolling three-year
employment period. The contract provides that Mr. Shaffer's position will be
at least commensurate in all material respects with the most significant of
those held by him during the 90 days before September 22, 1999. Under the
contract, Mr. Shaffer is entitled to receive an annual base salary at least
equal to that in effect on September 22, 1999. The contract provides for
annual review of Mr. Shaffer's base salary and permits the annual base salary
to be increased, but not decreased. The contract also provides that Mr.
Shaffer is entitled to an annual bonus in accordance with the terms of the
Company's annual performance-based bonus plan or, if more favorable, a bonus
under other plans in effect generally with respect to other peer executives of
the Company. The contract provides further that the Company may terminate
Mr. Shaffer's employment for cause as such term is defined in the contract. In
the event of such termination, the contract terminates without further
obligation to Mr. Shaffer except for payment of annual base salary to the date
of termination plus any previously deferred and unpaid compensation.
If the Company terminates Mr. Shaffer's employment other than for cause or
death, or if Mr. Shaffer terminates his employment for any reason, he is
entitled to receive a lump sum cash payment equal to the sum of (i) unpaid
annual base salary through the date of termination, (ii) the greater of the
annual bonus paid or payable for the most recently completed fiscal year or
the average annualized bonus paid or payable in respect of the three fiscal
years immediately preceding the fiscal year in which termination occurs (the
"Highest Annual Bonus") for the portion of the then current fiscal year
through Mr. Shaffer's termination of employment, (iii) previously deferred and
unpaid compensation, (iv) accrued vacation pay, and (v) annual base salary
plus the Highest Annual Bonus payable for the remainder of the three-year
employment period. Mr. Shaffer is also entitled to a continuation of medical
and other benefits for three years following termination of his employment or
such longer period as the applicable benefit program may provide. Mr. Shaffer
has also agreed not to compete with the Company in the United States for a
period of 36 months following termination of his employment. This non-
competition covenant may be terminated by Mr. Shaffer if his employment was
terminated by the Company other than for cause and if he desires to accept
employment with a competitor, provided that he agrees to repay the Company the
portion of the amount paid to him for salary and bonus with respect to the
year in which termination took place equal to the amount of salary and pro
rata bonus payable to him by the competitor during the three-year period
following termination of employment with the Company.
The Company has also entered into an employment contract with James F.
Cerza, Jr. effective March 1, 1991. This contract provided for an initial two-
year term that ended February 28, 1993, with automatic annual one-year
extensions, unless either party notifies the other at least one year in
advance that it does not wish to extend the term. The contract also provides
that Mr. Cerza will receive an annual salary established by the Compensation
Committee of the Board of Directors of the Company (or the Board of Directors
of the Company), which may be increased, but not decreased, on an annual
basis. The contract provides that Mr. Cerza is entitled to an annual bonus in
accordance with the terms of the Company's annual performance bonus plan,
provided that in the event of a change of control, such payment shall be not
less than the average bonus paid to him during the three fiscal years
immediately preceding the year for which the bonus is currently payable. The
contract provides further that the Company may terminate Mr. Cerza's
employment immediately for cause as defined in the contract. In the event of
such a termination before the expiration of the employment term, Mr. Cerza
will forfeit the right to receive any further salary or benefits to which he
is entitled under the employment contract. Should Mr. Cerza voluntarily
terminate employment and become employed with another employer before the
expiration of the employment term, he will also forfeit the right to receive
any further salary or benefits to which he is entitled under the employment
contract. The contract also provides that if (a) Mr. Cerza's employment is
terminated by the Company for any reason other than cause or (b) Mr. Cerza
voluntarily terminates employment
12
within 60 days after there has been a material reduction in his compensation,
benefits or other material change in his employment status, he will be
entitled to a lump sum payment equal to the aggregate compensation he would
have received during the remainder of the employment term. If a change of
control event occurs, the bonus to which Mr. Cerza is entitled during the
change of control year will be computed on the assumption that the financial
results achieved before the change of control will continue at levels not less
favorable than those before the change of control.
Executive Supplemental Retirement Plan
The Company has executive supplemental retirement agreements with Messrs.
DeRusha, Shaffer and Cerza that entitle them to receive death benefits or
supplemental retirement income. If the executive officer dies before age 65 in
the employment of the Company, the executive's beneficiary will receive annual
benefits of 100% of the executive officer's salary for a period of two years
in the case of Messrs. DeRusha and Shaffer and one year in the case of Mr.
Cerza. Thereafter, the executive's beneficiary will receive annual benefits of
50% of the executive officer's salary for a period of eight years. The
agreements define salary as the executive's highest final compensation payable
over the three year fiscal period preceding retirement or termination. Final
compensation means the executive's base salary established by the Compensation
Committee for each of the three fiscal year periods, including any bonus paid
or payable to the executive on account of each of the fiscal years. If the
executive officer retires at age 65, he will receive an annual retirement
benefit equal to a designated percentage of his salary (25% in the case of
Messrs. DeRusha and Shaffer and 22.5% in the case of Mr. Cerza) at the time of
retirement increased four percent annually for a period of 15 years. In the
event an executive officer dies after retirement, but before he has received
all of his retirement income, the executive officer's beneficiary will receive
annual benefits equal to a percentage of such executive officer's salary for
the balance of the 15-year period. The Company owns and is the beneficiary
under life insurance contracts intended to provide the Company with funds to
meet its obligations under all executive supplemental retirement agreements.
Executive Severance Plan
The Company has an executive severance plan under which executives (other
than Messrs. DeRusha, Shaffer and Cerza) designated by the Compensation
Committee are covered. The executive severance plan is triggered by a change
of control and, once triggered, provides certain employment and compensation
guarantees for a two-year period. During the two-year period, eligible
executives are guaranteed salary and bonuses at levels not less than those
paid during the one-month period before the change of control. If an executive
is terminated or voluntarily terminates his employment within 60 days because
the executive's working conditions have materially changed, the executive will
be entitled to receive 200% of salary and bonuses received for the preceding
twelve-month period. If a change of control does not occur the plan has no
effect. The severance plan covers, in general, all officers of the Company
(other than Messrs. DeRusha, Shaffer and Cerza), certain categories of key
administrative people designated by the Chairman and all full-time employees
with ten or more years of service.
Directors' Compensation
During the fiscal year ended February 29, 2000, all directors who were not
employees of the Company were paid retainer fees of $25,000, plus a fee of
$1,500 for each board meeting attended in person and a fee of $750 for each
board meeting attended by telephone. At least half of the retainer fees paid
to non-employee directors were paid in Common Stock pursuant to the Company's
Director Stock Ownership Plan and each such director could elect to receive
the remaining half of the retainer fee in Common Stock. The Company maintains
deferred compensation agreements pursuant to which an outside director may
defer all or a portion of the fees paid in cash for services performed for the
Company as a director. The agreements provide deferred income to the
participating director and/or the director's family at the director's
attainment of age 70 or upon death. The Compensation Committee may, in its
sole discretion, provide for deferred income benefits in the event of a
director's permanent disability. The benefit payable under these agreements is
fixed for each outside director. Benefits are payable in monthly payments over
a 15-year period. These agreements provide for immediate
13
payment of an actuarially reduced benefit to each outside director upon the
termination of the director's relationship with the Company before age 70,
unless the relationship terminated for "due cause" as determined by the
Compensation Committee or Board of Directors of the Company. Generally, if a
director terminates his relationship with the Company following a change of
control, the director will be entitled to receive a reduced lump sum payment
equal to the actuarial equivalent of the benefit the director would have
received at age 70 (taking into account deferrals made to the date of the
director's death). The deposited amount would be subject to the claims of
creditors, but would not be otherwise available to the Company.
In addition, directors who serve on the Executive Committee of the
Company's Board of Directors and who are not full-time employees of the
Company received a fee of $1,500 for each executive committee meeting attended
in the fiscal year ending February 29, 2000. These directors were Robert L.
Burrus, Jr., Charles A. Davis, Robert M. Freeman and Lawrence N. Smith. Mr.
DeRusha also served on the Executive Committee. Directors who serve on all
other committees and who are not full-time employees of the Company received a
fee of $1,000 for each committee meeting attended in the fiscal year ending
February 29, 2000.
Compensation Committee Interlocks and Insider Participation
Mr. Davis, who retired from the Board during the fiscal year ended February
29, 2000, served as Chairman of the Compensation Committee. Mr. Davis is
President and Chief Executive Officer of Marsh & McLennan Capital Inc., which
provided insurance and reinsurance brokerage services to the Company during
the fiscal year ended February 29, 2000.
14
PRINCIPAL SHAREHOLDERS
The following table lists the only persons known by the Company to be the
beneficial owners of more than five percent of the Common Stock of the Company
as of April 24, 2000.
Amount of
Name and Address of Beneficial Percent of
Beneficial Owner Ownership Class
------------------- ---------- ----------
Mellon Financial Corporation........................... 4,630,862(1) 6.84%
One Mellon Center
Pittsburgh, PA 15258
FMR Corp............................................... 4,088,700(2) 6.828%
82 Devonshire Street
Boston, MA 02109
The Prudential Insurance Company of America............ 3,802,700(3) 6.27%
751 Broad Street
Newark, NJ 07102-3777
Merrill Lynch & Co., Inc. ............................. 3,833,400(4) 5.66%
(on behalf of Merrill Lynch Asset
Management Group)
World Financial Center, North Tower
250 Vesey Street
New York, NY 101381
Dimensional Fund Advisors.............................. 3,746,400(5) 5.54%
1299 Ocean Avenue
11th Floor
Santa Monica, CA 90401
- --------
(1) Information concerning the Common Stock beneficially owned by Mellon
Financial Corporation ("Mellon") is based on the Schedule 13G filed on
January 27, 2000. The Schedule 13G indicates that each of Boston Group
Holdings, Inc. and The Boston Company, Inc., wholly-owned subsidiaries of
Mellon (the "Boston Group" and "Boston Company, respectively) owns
3,665,611 shares, or 5.41% of the Common Stock. According to the Schedule
13G, Mellon has sole voting power with respect to 3,676,232 shares and
each of Boston Group and Boston Company has sole voting power with respect
to 2,745,111 shares. The 13G states that Mellon has sole dispositive power
with respect to 4,032,862 shares and each of Boston Group and Boston
Company has sole dispositive power with respect to 3,068,711 shares.
(2) Information concerning the Common Stock beneficially owned by FMR Corp.
("FMR") is based on the Schedule 13G/A filed on February 12, 1999. FMR is
a parent holding company and Edward C. Johnson 3d, his wife Abigail
Johnson and certain other members of the Johnson family may be deemed
members of a group that controls FMR. The Schedule 13G/A indicates that
(i) 3,738,900 shares, or 6.244% of the Common Stock, is beneficially owned
by Fidelity Management & Research Company, a registered investment adviser
and a wholly-owned subsidiary of FMR, as a result of acting as investment
adviser to various registered investment companies, including Fidelity
Value Fund ("Fidelity Fund"), which beneficially owns 3,603,300 shares, or
6.018% of the Common Stock, and (ii) 349,800 shares, or 0.584% of the
Common Stock, is beneficially owned by Fidelity Management Trust Company
("Fidelity Trust"), a bank and wholly-owned subsidiary of FMR. According
to the Schedule 13G/A, each of FMR and Mr. Johnson has sole dispositive
power with respect to 3,738,900 shares, but neither FMR nor Mr. Johnson
has sole voting power with respect to such shares because such power
resides with the Fidelity Fund's Board of Trustees. Both FMR, through its
control of Fidelity Trust, and Mr. Johnson have sole dispositive and sole
voting power with respect to the 349,800 shares beneficially owned by
Fidelity Trust.
15
(3) Information concerning the Common Stock beneficially owned by The
Prudential Insurance Company of America ("Prudential") is based on the
Schedule 13G filed on February 7, 2000. According to the Schedule 13G,
Prudential may have sole voting and sole dispositive power with respect to
3,802,700 shares or 6.27% of the Common Stock. Such shares are held for
the benefit of Prudential's clients by Prudential's separate accounts,
externally managed accounts, registered investment companies, subsidiaries
and/or other affiliates. Prudential and an affiliate hold $60 million in
aggregate principal amount of 11.99% Series A Guaranteed Senior Notes due
2002 ("Series A Notes") issued by a Company subsidiary and guaranteed by
the Company. During fiscal year 2000, a Company subsidiary paid in full
$90 million in aggregate principal amount of senior notes held by
Prudential and an affiliate, and $13.8 million in interest and fees
related to such senior notes and the Series A Notes.
(4) Information concerning the Common Stock beneficially owned by Merrill
Lynch & Co., Inc. ("Merrill Lynch") is based on the Schedule 13G/A filed
on February 7, 2000. Merrill Lynch is a parent holding company. Merrill
Lynch Asset Management Group is an operating division of Merrill Lynch
consisting of Merrill Lynch's indirectly-owned asset management
subsidiaries. The following asset management subsidiaries hold certain
shares of Common Stock: Merrill Lynch Asset Management, L.P. and Fund
Asset Management, L.P.
(5) Information concerning the Common Stock beneficially owned by Dimensional
Fund Advisors, Inc. ("Dimensional Fund") is based on the Schedule 13G
filed on February 3, 2000. Dimensional Fund is an investment advisor under
the Investment Advisors Act of 1940 (the "1940 Act") , furnishes
investment advice to four investment companies (the "Investment
Companies") registered under the 1940 Act, and serves as investment
manager to certain other commingled trusts and separate accounts (together
with the Investment Companies, the "Funds"). According to the 13G,
Dimensional Fund has sole voting and sole dispositive power with respect
to 3,746,400 shares. Dimensional Fund disclaims beneficial ownership of
the 3,746,400 shares, which are all owned by the Funds.
16
RATIFICATION OF SELECTION OF AUDITORS
Deloitte & Touche LLP, independent certified public accountants, has been
selected by the Board of Directors as accountants and auditors for the Company
for the current fiscal year, subject to ratification or rejection by the
shareholders. Representatives of Deloitte & Touche LLP are expected to be
present at the Annual Meeting of Shareholders and will have an opportunity to
make a statement if they so desire and are expected to be available to respond
to appropriate questions from shareholders. In the event the shareholders do
not ratify the selection of Deloitte & Touche LLP, the selection of other
accountants and auditors will be considered by the Board of Directors.
OTHER MATTERS
The Board of Directors knows of no other matters which will be brought
before the meeting. However, if any other matters are properly presented, or
if any question arises as to whether any matter has been properly presented
and is a proper subject for shareholder action, the persons named as proxies
in the accompanying proxy intend to vote the shares represented by such proxy
in accordance with their best judgment.
SHAREHOLDER PROPOSALS FOR 2001 MEETING
Proposals of shareholders intended to be presented at the 2001 Annual
Meeting must be received by the Company at its principal executive offices on
or before February 2, 2001, for inclusion in the Company's 2001 proxy
materials. Such proposals should meet the applicable requirements of the
Securities Exchange Act of 1934, as amended, and the rules and regulations
thereunder. If the Company does not receive notice at its principal executive
offices on or before April 18, 2001, of a shareholder proposal for
consideration at the 2001 Annual Meeting, the proxies named by the Company's
Board with respect to that meeting shall have discretionary voting authority
with respect to that proposal.
FURTHER INFORMATION
The Company will provide without charge to each person from whom a proxy is
solicited by the Board of Directors, upon the written request of any such
person, a copy of the Company's annual report on Form 10-K, including the
financial statements thereto, required to be filed with the Securities and
Exchange Commission under the Securities Exchange Act of 1934, as amended, for
the Company's fiscal year ended February 29, 2000. Such written requests
should be sent to the Office of the Treasurer, Heilig-Meyers Company, 12560
West Creek Parkway, Richmond, Virginia 23238.
By Order of the Board of Directors
PAIGE H. WILSON
Secretary
June 2, 2000
PLEASE FILL IN, SIGN, DATE AND RETURN PROMPTLY THE ACCOMPANYING PROXY. IF
YOU ATTEND THE MEETING IN PERSON, YOU MAY WITHDRAW YOUR PROXY AND VOTE
YOUR OWN SHARES.
17
[x] PLEASE MARK VOTES
AS IN THIS EXAMPLE
-------------------------------------------------
HEILIG MEYERS COMPANY
-------------------------------------------------
Mark box at right if an address change or comment has been noted
on the reverse side of this card. [ ]
CONTROL NUMBER:
RECORD DATE SHARES:
Please be sure to sign and date this Proxy.
Date
---------------
- ----------------------------- ------------------------------
Shareholder sign here Co-owner sign here
1. ELECTION OF DIRECTORS:
For All With- For All
Nominees hold Except
(01) William C. DeRusha (07) Lawrence N. Smith [ ] [ ] [ ]
(02) Donald S. Shaffer (08) Eugene P. Trani
(03) Robert L. Burrus, Jr. (09) L. Douglas Wilder
(04) Beverley E. Dalton
(05) Benjamin F. Edwards III
(06) Robert M. Freeman
If you do not wish your shares voted "For" a particular nominee, mark the
"For All Except" box and strike a line through the name(s) of the nominee(s).
Your shares will be voted for the remaining nominee(s).
2. Ratification of the selection of Deloitte & Touche LLP
as accountants and auditors for the current fiscal year.
For Against Abstain
[ ] [ ] [ ]
3. In their discretion, the proxies are authorized to vote upon such other
business as may properly come before the meeting.
Please sign exactly as name(s) appear(s) on this Proxy. If shares are held by
two or more persons as joint tenants, any of such persons may sign. When signing
as attorney, executor, administrator, trustee, guardian, etc., 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.
Vote by Telephone
- -----------------
It's fast, convenient, and immediate!
Call Toll-Free on a Touch-Tone Phone
Follow these four easy steps:
1. Read the accompanying Proxy Statement and Proxy Card.
2. Call the toll-free number 1-877-PRX-VOTE
(1-877-779-8683). For shareholders residing outside the
United States call collect on a touch-tone phone 1-201-536-8073.
There is NO CHARGE for this call.
3. Enter your Control Number located on your Proxy Card.
4. Follow the recorded instructions.
Your vote is important!
Call 1-877-PRX-VOTE anytime!
Vote by Internet
- ----------------
It's fast, convenient, and your vote is immediately confirmed and posted.
Follow these four easy steps:
1. Read the accompanying Proxy Statement and Proxy Card.
2. Go to the Website http://www.exproxyvote.com/hmy.
3. Enter your Control Number located on your Proxy Card.
4. Follow the instructions provided.
Your vote is important!
Go to http://www.eproxyvote.com/hmy anytime!
Do not return your Proxy Card if you are voting by Telephone or Internet
COMMON HEILIG-MEYERS COMPANY COMMON
This Proxy is Solicited on Behalf of the Board of Directors
The shareholder named on the reverse side of this card, hereby revoking all
previous proxies, appoints Roy B. Goodman and David W. Robertson,
and each of them, proxies with full power of substitution, to represent
such shareholder at the Annual Meeting of Shareholders of Heilig-Meyers
Company (the "Company") to be held on June 21, 2000, and any adjournments
thereof, and to vote, as directed on the reverse, all the shares of Common
Stock of the Company which such shareholder would be entitled to vote if
personally present.
This proxy, when properly executed, will be voted in the manner directed herein
by the shareholder named on the reverse side of this card. If no direction is
made, this proxy will be voted FOR the election of each of the nominees
named in Proposal 1 and FOR Proposal 2.
The shareholder named on the reverse side of this card acknowledges receipt
of the Notice of Annual Meeting and of the Proxy Statement attached thereto.
PLEASE VOTE, DATE AND SIGN ON REVERSE AND RETURN PROMPTLY IN THE ENCLOSED
ENVELOPE.
HAS YOUR ADDRESS CHANGED? DO YOU HAVE ANY COMMENTS?
- -------------------------- -----------------------------
- -------------------------- -----------------------------
- -------------------------- -----------------------------
DETACH CARD DETACH CARD