SCHEDULE 14A
(RULE 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE
SECURITIES EXCHANGE ACT OF 1934 (AMENDMENT NO. )
Filed by the registrant [X]
Filed by a party other than the registrant [ ]
Check the appropriate box:
[X] Preliminary proxy statement
[ ] Definitive proxy statement
[ ] Definitive additional materials
[ ] Soliciting material pursuant to Rule 14a-11(c) or Rule 14a-12
[ ] Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
WINNEBAGO INDUSTRIES, INC.
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(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 transactions 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:
NOTICE OF ANNUAL MEETING
OF SHAREHOLDERS
TO BE HELD JANUARY 11, 2000
To the Shareholders of
WINNEBAGO INDUSTRIES, INC.
The Annual Meeting of Shareholders of Winnebago Industries, Inc. will
be held on Tuesday, January 11, 2000, at 7:30 p.m., Central Standard Time, at
Friendship Hall, Highway 69 South, Forest City, Iowa, for the following
purposes:
1. To elect eight people to the Board of Directors of the
Company;
2. To approve amendments to the Company's Articles of
Incorporation to (a) provide for the classification of the Board of
Directors into three classes, (b) provide that the number of directors
constituting the Board of Directors shall be not more than fifteen (15)
and not less than three (3), the precise number to be determined by
resolution of the Board of Directors from time to time, (c) provide
that directors may be removed only for cause and (d) require a vote of
75% of the outstanding shares of the Company to amend these provisions;
3. To approve an amendment to the Company's Articles of
Incorporation to authorize the issuance of Preferred Stock;
4. To vote on a shareholder proposal concerning cumulative
voting, if the proposal is presented at the meeting; and
5. To transact such other business as may properly come before
the meeting or any adjournment or adjournments thereof.
The Board of Directors of the Company has fixed the close of business
on November 8, 1999, as the record date for the determination of shareholders
entitled to notice of and to vote at this meeting and at any and all
adjournments thereof.
By Order of the Board of Directors
-----------------------------------------
RAYMOND M. BEEBE
SECRETARY
Forest City, Iowa
November __, 1999
YOUR VOTE IS IMPORTANT
WHETHER OR NOT YOU EXPECT TO ATTEND THE MEETING IN PERSON, PLEASE DATE,
SIGN AND RETURN THE PROXY CARD IN THE ENCLOSED ENVELOPE SO YOUR SHARES WILL BE
VOTED AT THE ANNUAL MEETING. A PROMPT RESPONSE IS HELPFUL AND YOUR COOPERATION
IS APPRECIATED.
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WINNEBAGO INDUSTRIES, INC.
PROXY STATEMENT
This Proxy Statement is furnished in connection with the solicitation
by the Board of Directors of Winnebago Industries, Inc., an Iowa corporation
(the "COMPANY"), P.O. Box 152, Forest City, Iowa 50436, of proxies to be used at
the Annual Meeting of Shareholders of the Company to be held at Friendship Hall,
Highway 69 South, Forest City, Iowa on January 11, 2000, at 7:30 p.m., Central
Standard Time, and at any and all adjournments thereof. This Proxy Statement was
first mailed to shareholders on or about November __, 1999.
Only holders of Common Stock of record at the close of business on
November 8, 1999, will be entitled to vote at the Annual Meeting of
Shareholders. At such date, the Company had outstanding 21,870,183 shares of
Common Stock, par value $.50 per share ("COMMON STOCK"). Each share of Common
Stock entitles the holder to one vote upon each matter to be voted upon at the
meeting. A majority of the outstanding shares of Common Stock will constitute a
quorum for the Annual Meeting of Shareholders. Election of each director (Item
1) and approval of any other matters to come before the Annual Meeting
(including Items 2, 3 and 4) require the affirmative vote of the holders of a
majority of the shares of the Company's Common Stock present or represented by
proxy and voted at the meeting. Abstentions and broker non-votes (i.e., shares
held by a broker for its customers that are not voted because the broker does
not receive instructions from the customer or because the broker does not have
discretionary voting power with respect to the item under consideration) will be
counted as present for purposes of determining the presence of a quorum.
Abstentions and broker non-votes will not have any effect on any matters at the
Annual Meeting of Shareholders.
A form of proxy is enclosed for use at the meeting. If the proxy is
executed and returned, it may nevertheless be revoked at any time insofar as it
has not been exercised. A person giving the enclosed proxy may revoke it by (i)
giving written notice to the Secretary, (ii) subsequently granting a later-dated
proxy or (iii) attending the annual meeting and voting in person. You may also
be represented by another person at the annual meeting by executing a proper
proxy designating that person. Unless revoked, the shares represented by validly
executed proxies will be voted at the meeting in accordance with the
instructions indicated thereon. Withholding authority to vote on a director
nominee will in effect count as a vote against the director nominee.
IF NO INSTRUCTIONS ARE INDICATED ON THE PROXY, IT WILL BE VOTED: (i)
FOR THE ELECTION OF THE EIGHT NOMINEES FOR DIRECTOR NAMED BELOW (ITEM 1); (ii)
FOR THE PROPOSAL TO APPROVE AMENDMENTS TO THE COMPANY'S ARTICLES OF
INCORPORATION TO (a) PROVIDE FOR THE CLASSIFICATION OF THE BOARD OF DIRECTORS
INTO THREE CLASSES, (b) PROVIDE THAT THE NUMBER OF DIRECTORS CONSTITUTING THE
BOARD OF DIRECTORS SHALL BE NOT MORE THAN FIFTEEN (15) AND NOT LESS THAN THREE
(3), THE PRECISE NUMBER TO BE DETERMINED BY RESOLUTION OF THE BOARD OF DIRECTORS
FROM TIME TO TIME, (c) PROVIDE THAT DIRECTORS MAY BE REMOVED ONLY FOR CAUSE, AND
(d) REQUIRE A VOTE OF 75% OF THE OUTSTANDING SHARES OF THE COMPANY TO AMEND
THESE PROVISIONS (ITEM 2); (iii) FOR THE PROPOSAL TO
APPROVE AN AMENDMENT TO THE COMPANY'S ARTICLES OF INCORPORATION TO AUTHORIZE THE
ISSUANCE OF PREFERRED STOCK (ITEM 3); (iv) AGAINST A SHAREHOLDER PROPOSAL
CONCERNING CUMULATIVE VOTING, IF THE PROPOSAL IS PRESENTED AT THE MEETING (ITEM
4); AND (v) IN THE DISCRETION OF THE NAMED PROXIES UPON SUCH OTHER MATTERS AS
MAY PROPERLY COME BEFORE THE MEETING.
VOTING SECURITIES AND PRINCIPAL HOLDERS THEREOF
At November 8, 1999, Mrs. Luise V. Hanson owned an aggregate of
7,981,306 shares 36.5 percent) of the outstanding Common Stock, owning 4,963,374
(22.7 percent) of record and beneficially, and 3,017,932 (13.8 percent)
beneficially, as executor of the Estate of John K. Hanson. By virtue of her
stock ownership, Mrs. Luise V. Hanson may be deemed to be a controlling person
of the Company. At the same date, Mary Jo Boman, daughter of Mrs. Luise V.
Hanson, owned 42,171 shares of Common Stock and her husband, Gerald E. Boman,
owned 150,471 shares of Common Stock. In addition, Mr. Boman holds options to
purchase 12,000 shares of Common Stock. John V. Hanson, son of Mrs. Luise V.
Hanson, beneficially owns 630 shares of Common Stock. In addition, Mr. Hanson
holds options to purchase 12,000 shares of Common Stock.
-2-
The following table contains information with respect to the ownership
of Common Stock by (i) each person known to the Company who is the beneficial
owner of more than five percent of the outstanding Common Stock, (ii) each
director, (iii) each nominee for election as a director, (iv) each executive
officer listed in the Summary Compensation Table and (v) the group named below.
SHARES OF COMMON STOCK
OWNED BENEFICIALLY AT PERCENT OF
NAME NOVEMBER 8, 1999(1) COMMON STOCK
Luise V. Hanson 7,981,306 (2) 36.5
Edwin F. Barker 81,657 (4) (3)
Raymond M. Beebe 70,657 (4) (3)
Gerald E. Boman 204,642 (2)(4) (3)
Ronald D. Buckmeier 15,639 (4) (3)
Jerry N. Currie 12,000 (4) (3)
Fred G. Dohrmann 4,345 (4)(5) (3)
John V. Hanson 12,630 (2)(4) (3)
Bruce D. Hertzke 83,800 (4) (3)
James P. Jaskoviak 15,325 (4) (3)
Gerald C. Kitch 17,435 (4)(5) (3)
Robert J. Olson 20,146 (4) (3)
Richard C. Scott 6,318 (4)(5) (3)
Frederick M. Zimmerman 13,594 (4)(5) (3)
Directors and officers as a 569,245 (4)(5) 2.6
group (16 persons)
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(1) Includes shares held jointly with or by spouse and shares held as
custodian, beneficial ownership of which is disclaimed.
(2) The narrative above provides further information with regard to such
ownership.
(3) Less than one percent.
(4) Includes 57,666, 57,666, 12,000, 10,999, 10,500, 2,000, 12,000, 64,416,
8,668, 12,000, 18,166, 2,000, 11,000 and 289,749 shares, respectively,
which Messrs. Barker, Beebe, Boman, Buckmeier, Currie, Dohrmann, Hanson,
Hertzke, Jaskoviak, Kitch, Olson, Scott, Zimmerman and the directors and
officers as a group have the right to acquire within 60 days of November 8,
1999, through the exercise of stock options.
(5) Includes 738, 4,435, 4,318 and 1,844 Winnebago Stock Units, respectively,
held by Messrs. Dohrmann, Kitch, Scott and Zimmerman, respectively, under
the Company's Directors' Deferred Compensation Plan. The Winnebago Stock
Units are payable in an equal number of shares of Common Stock upon the
respective directors' termination of service as a director.
-3-
ITEM 1
ELECTION OF DIRECTORS
All current directors are standing for reelection. Each nominee is
being elected to serve until the next Annual Meeting of Shareholders at which
their class stands for election, if Item 2 is adopted, or until the next Annual
Meeting of Shareholders if Item 2 is not adopted, and in either case until their
respective successors are duly elected and qualified. Discretionary authority is
solicited to vote for the election of a substitute for any of said nominees who,
for any reason currently unknown, cannot be a candidate for election. THE SHARES
REPRESENTED BY THE ENCLOSED PROXY WILL BE VOTED FOR THE ELECTION AS DIRECTORS OF
THE NOMINEES NAMED BELOW IF NO DIRECTION IS MADE OTHERWISE.
The following table sets forth information concerning the nominees and
the classes for which they will be elected if Item 2 is adopted:
Class I Directors to be Elected to Serve until the 2001 Annual
Meeting
Fred G. Dohrmann
Richard C. Scott
Class II Directors to be Elected to Serve until the 2002 Annual
Meeting
Gerald E. Boman
Jerry N. Currie
Frederick M. Zimmerman
Class III Directors to be Elected to Serve until the 2003 Annual
Meeting
John V. Hanson
Bruce D. Hertzke
Gerald C. Kitch
YEAR FIRST
BECAME A
NAME (AGE) (1) PRINCIPAL OCCUPATION DIRECTOR
Gerald E. Boman (64) Retired; former Senior Vice President, 1962
Winnebago Industries, Inc.
Jerry N. Currie (54) President & Chief Executive Officer of both 1996
CURRIES Company, manufacturer of steel
doors and frames for nonresidential
construction and GRAHAM Manufacturing,
manufacturer of wood doors for
nonresidential construction
Fred G. Dohrmann (67) Retired; former Chairman of the Board of 1989
Directors and Chief Executive Officer,
Winnebago Industries, Inc.
John V. Hanson (57) Retired; former President and Deputy 1996(2)
Chairman of the Board of Directors of
Winnebago Industries, Inc.
-4-
YEAR FIRST
BECAME A
NAME (AGE) (1) PRINCIPAL OCCUPATION DIRECTOR
Bruce D. Hertzke (48) Chairman of the Board, Chief Executive 1997
Officer and President, Winnebago
Industries, Inc.
Gerald C. Kitch (61) Retired; former Executive Vice President, 1996
Pentair, Inc., diversified manufacturer of
tools, equipment and ammunition
Richard C. Scott (65) Vice President of University Development at 1997
Baylor University, Waco, Texas
Frederick M. Professor of Manufacturing Systems 1992
Zimmerman (63) Engineering at The University of St.
Thomas, St. Paul, Minnesota
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(1) Reference is made to "Voting Securities and Principal Holders Thereof."
(2) Also served as a director from 1967 to 1979 and from 1985 to 1989.
All of the foregoing have been employed in their principal occupation
or other responsible positions with the same organization for at least the last
five years or are currently retired after having served in responsible positions
with the organization indicated.
John V. Hanson and Gerald E. Boman are brothers-in-law.
BOARD OF DIRECTORS AND COMMITTEES OF THE BOARD
The Board has established Audit, Human Resources and Nominating
Committees to assist it in the discharge of its responsibilities. The principal
responsibilities of each of these committees are described below.
The members of the Audit Committee are Messrs. Currie, Scott and
Zimmerman. Each year, the committee recommends to the Board the appointment of
independent public accountants to examine the books of the Company. It reviews
with representatives of the independent public accountants the auditing
arrangements and scope of the independent public accountants' examination of the
books, results of those audits, their fees and any problems identified by and
recommendations of the independent public accountants regarding internal
controls. The committee is also prepared to meet privately at any time at the
request of the independent public accountants or members of management to review
any special situation arising on any of the above subjects. The committee met
three times in fiscal 1999.
The Human Resources Committee, consisting of Messrs. Kitch, Scott and
Zimmerman, met four times in fiscal 1999. This committee makes recommendations
to the Board of Directors as to the salary of the Chief Executive Officer (CEO)
and sets the salaries and bonus payments, if any, of all other
employee-directors and elected officers. It also has responsibility for
administration of the Officers Incentive Compensation Plan and certain other
employee incentive plans.
-5-
The members of the Nominating Committee are Messrs. Hanson, Hertzke and
Scott. This committee recommended to the Board the director-nominees proposed in
this Proxy Statement for election by the shareholders. It reviews the
qualifications of, and recommends to the Board, candidates to fill Board
vacancies as they may occur during the year. The Nominating Committee will
consider suggestions from all sources, including shareholders, regarding
possible candidates for director. Such suggestions, together with appropriate
biographical information, should be submitted to the Secretary of the Company.
See "2001 SHAREHOLDER PROPOSALS" for a summary of the procedures that
shareholders must follow. The committee met twice in fiscal 1999.
The Board of Directors of the Company held six meetings during fiscal
1999. Actions taken by any committee of the Board are reported to the Board of
Directors, usually at its next meeting. During fiscal 1999, all of the directors
attended more than 75 percent of the aggregate of Board of Directors' meetings
and meetings of committees of the Board on which they served (while such
directors were members of the Board of Directors), except for Mr. Currie who
attended approximately 67% of such meetings.
Employee directors receive no additional compensation for serving on
the Board or its Committees. Non-employee directors receive a retainer of $1,600
per month and a $500 per day attendance fee for Board and Committee meetings.
Committee Chairmen receive a $750 per day attendance fee. In addition, each
year, commencing in fiscal 1999, each Outside Director under the 1997 Stock
Option Plan (as those terms are defined below) will receive options for 2,000
shares. Directors are also reimbursed for customary and usual travel expenses.
Effective April 1, 1997, the Board of Directors adopted the Winnebago
Industries, Inc. Directors' Deferred Compensation Plan (the "DIRECTORS' DEFERRED
COMPENSATION PLAN"). The purpose of the Directors' Deferred Compensation Plan is
to enable non-employee directors (the "PARTICIPANTS") to receive their fees and
retainers as members of the Board of Directors and Committees of the Board (the
"DEFERRED COMPENSATION") in a form other than as direct payments. A Participant
may elect to apply 100% of his or her Deferred Compensation to either but not
both of the following forms: "Money Credits" or "Winnebago Stock Units." Money
Credits are units credited in the form of dollars in accordance with the
Participant's election to such Participant's account established by the Company.
The Money Credits accrue interest from the credit date. The interest rate to be
applied to the Participant's Money Credits is the 30 year Treasury bond yield as
of the first business day of the plan year. The Board of Directors may from time
to time prescribe additional methods for the accrual of interest on Money
Credits with respect to Deferred Compensation. "Winnebago Stock Units" are units
credited in the form of Common Stock of the Company in accordance with the
Participant's election to such Participant's account established by the Company.
The Common Stock utilized for purposes of the Directors' Deferred Compensation
Plan will be treasury shares of the Company. Winnebago Stock Units will be
recorded in such Participant's account on the basis of the mean between the high
and the low prices of the Common Stock of the Company on the date upon which the
account is to be credited, as officially reported by the New York Stock
Exchange. Any Participant investing Deferred Compensation in Winnebago Stock
Units will receive a matching contribution from the Company equal to 25% of the
Deferred Compensation so invested.
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A Participant's Winnebago Stock Unit account will vest at the rate of
33-1/3% for each complete 12 month period of service as a Director following
April 1, 1997. Notwithstanding the above, the Participant's Winnebago Stock Unit
account will become fully vested upon his or her attainment of age 69-1/2 while
serving as a Director. In the event that a Participant terminates his or her
service as a Director, any unvested Winnebago Stock Units will be forfeited by
the Director and applied to future Company matching contributions. The Winnebago
Stock Units credited to Participant's accounts are included in the Common Stock
ownership table under "VOTING SECURITIES AND PRINCIPAL HOLDERS THEREOF."
In the event of any change in the outstanding shares of Common Stock of
the Company by reason of any stock dividend or split, recapitalization, merger,
consolidation, spin-off, reorganization, combination or exchange of shares or
other similar corporate change, then if the Directors' Deferred Compensation
Plan administrator determines, in its sole discretion, that such change
equitably requires an adjustment in the number of Winnebago Stock Units then
held in the Participant's Winnebago Stock Unit account, such adjustments will be
made by the Directors' Deferred Compensation Plan administrator and will be
conclusive and binding for all purposes of said plan.
In the event of a "change in the control of the Company," as defined in
the Directors' Deferred Compensation Plan, the Participant will receive a lump
sum distribution of his or her accounts within 30 days following his or her
termination of service as a Director after such change in control.
Notwithstanding the above, in no event will a Participant's receipt of a
distribution of Winnebago Stock Units from his or her accounts precede the
six-month anniversary of his or her election to convert Deferred Compensation
into Winnebago Stock Units.
The Winnebago Industries, Inc. Stock Option Plan for Outside Directors
(the "OUTSIDE DIRECTORS OPTION PLAN") provided that each director who was not a
current or former full-time employee of the Company or a subsidiary (for
purposes of the Outside Directors Option Plan, an "OUTSIDE DIRECTOR") received
an option to purchase 10,000 shares of Common Stock. Pursuant to the Outside
Directors Option Plan, each Outside Director as of May 7, 1992 (consisting of
three former Directors) automatically received an option to purchase 10,000
shares of Common Stock at a price of $5.50 per share. In addition, each person
who first became a member of the Board of Directors as an Outside Director after
May 7, 1992 automatically received an option to purchase 10,000 shares of Common
Stock as of the date on which such person first became an Outside Director.
Under this provision, Frederick M. Zimmerman received an option to purchase
10,000 shares of Common Stock on December 16, 1992 at a price of $9.00 per
share, Jerry Currie received an option to purchase 10,000 shares of Common Stock
on December 19, 1996 at a price of $7.1875 per share, Gerald Kitch received an
option to purchase 10,000 shares of Common Stock on December 19, 1996 at a price
of $7.1875 per share and Richard C. Scott received an option to purchase 10,000
shares of Common Stock on March 20, 1997 at a price of $7.25 per share. No
option is exercisable during the first year after the date such option is
granted. Thereafter, the options are exercisable for a period of ten years from
the date each such option is granted. Notwithstanding the foregoing, in the
event of a merger, consolidation, dissolution or liquidation of the Company, the
expiration dates of any outstanding options may be accelerated and the dates on
which outstanding options may be exercised may be accelerated,
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but the effectiveness of such acceleration and any exercise of options pursuant
thereto with respect to shares in excess of the number of shares that could have
been exercised in the absence of such acceleration, is conditioned upon, among
other requirements, the consummation of the merger, consolidation, dissolution
or liquidation. The purchase price of options granted under the plan is equal to
100 percent of the fair market value per share of the Common Stock at the time
the option is granted. At August 29, 1999, options for 27,500 shares were
outstanding under the Outside Directors Option Plan, options for 62,500 shares
were exercised and options for 10,000 shares were available for grant
thereunder. The Board of Directors intends to terminate the Outside Directors
Option Plan as to future grants. Future grants of options to outside directors
will be made under the 1997 Stock Option Plan described below.
The Winnebago Industries, Inc. 1997 Stock Option Plan (the "1997 STOCK
OPTION PLAN") provides that directors who do not hold a position of employment
with the Company or a subsidiary (for purposes of the 1997 Stock Option Plan
"OUTSIDE DIRECTORS") shall receive nonqualified stock options and may not be
granted incentive stock options. Outside Directors are now granted nonqualified
stock options under the 1997 Stock Option Plan and not under the Outside
Directors Option Plan. The exercise price per share of options granted to
Outside Directors shall be the mean between the high and low prices for a share
of the Company's Common Stock on the New York Stock Exchange on the date of
grant. Except for vesting upon the occurrence of certain events which result in
a change in control, unless otherwise set forth in an agreement granting options
under the 1997 Stock Option Plan, no option is exercisable for six months after
the date such option is granted. Thereafter, nonqualified stock options are
exercisable for a period of not to exceed ten years from the date each such
option is granted. Each Outside Director of the Company on the effective date of
the 1997 Stock Option Plan who was not granted an option to purchase 10,000
shares under the Outside Directors Option Plan was automatically granted
nonqualified options to purchase 10,000 shares. Each Outside Director who, after
the effective date of the 1997 Stock Option Plan is elected or appointed to the
Board of Directors for the first time and who is not granted an option to
purchase 10,000 shares under the Outside Directors Option Plan will, at the time
such Director is so elected or appointed and duly qualified, be granted
automatically a nonqualified stock option to purchase 10,000 shares at a per
share price equal to the fair market value of a share on the date of grant.
On August 14, 1997, pursuant to the terms of the 1997 Stock Option
Plan, each of Gerald E. Boman and John V. Hanson were granted nonqualified stock
options for 10,000 shares at a price of $8.5625 per share (which was the mean
between the high and low prices for a share of the Company's Common Stock on the
New York Stock Exchange on August 14, 1997). On January 20, 1999, all current
directors (except for Mr. Hertzke) were granted nonqualified stock options for
2,000 shares each at a price of $15.375 per share (which was the mean between
the high and low prices for a share of the Company's Common Stock on the New
York Stock Exchange on January 20, 1999) in accordance with the 1997 Stock
Option Plan.
EXECUTIVE COMPENSATION
The following table contains certain information with respect to
compensation for services in all capacities paid by the Company and its
subsidiaries for the past three fiscal years, to or on behalf of (i) the Chief
Executive Officer of the Company at August 28, 1999, and
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(ii) each of the five other most highly compensated executive officers of the
Company serving at August 28, 1999.
-9-
SUMMARY COMPENSATION TABLE
ANNUAL COMPENSATION(1) LONG TERM COMPENSATION
----------------------------------- -----------------------------------------
RESTRICTED ALL OTHER
NAME AND FISCAL STOCK AWARDS COMPENSATION
PRINCIPAL POSITION YEAR SALARY($) BONUS($)(2) ($)(3) OPTIONS(4) ($)(5)
- --------------------------------------- -------- --------- ----------- ------------ ---------- ------------
Bruce D. Hertzke 1999 286,154 380,563 240,282 41,250 18,000
Chairman, Chief Executive Officer and 1998 230,769 161,538 52,000 -- 18,000
President(6) 1997 210,000 123,600 -- 20,000 18,000
Edwin F. Barker 1999 159,801 145,739 72,869 10,000 15,064
Vice President and Chief Financial 1998 142,495 99,747 30,000 -- 15,064
Officer 1997 140,000 82,400 -- 16,000 15,064
Raymond M. Beebe 1999 159,801 145,739 72,869 10,000 18,830
Vice President, General Counsel and 1998 142,495 99,747 30,000 -- 18,830
Secretary 1997 140,000 82,400 -- 16,000 18,830
Ronald D. Buckmeier 1999 159,801 145,739 72,869 10,000 6,019
Vice President, Product Development(7) 1998 142,495 99,747 30,000 -- 6,019
1997 103,678 45,826 -- 13,000 6,019
James P. Jaskoviak 1999 159,801 145,739 72,869 10,000 12,516
Vice President, Sales and Marketing 1998 142,495 99,747 30,000 -- 12,516
1997 140,000 82,400 -- 16,000 12,516
Robert J. Olson 1999 159,801 145,739 72,869 10,000 4,712
Vice President, Manufacturing 1998 142,495 99,747 30,000 -- 4,712
1997 120,051 66,016 -- 16,000 4,712
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(1) No executive officer received personal benefits in excess of the lesser
of 10% of cash compensation or $50,000.
(2) The bonus amounts include bonuses paid pursuant to the Company's
Officers Incentive Compensation Plan as well as bonuses paid in the
discretion of the Board of Directors, all as described under the
caption "Report of the Human Resources Committee on Executive
Compensation."
(3) Awards in fiscal 1999 consisted of restricted Common Stock and are
valued at the aggregate market value of the Common Stock as of the
respective determination dates. The awards in fiscal 1999 were made
pursuant to the Officers Incentive Compensation Plan. Awards in fiscal
1998 consisted of restricted Common Stock and are valued at the
aggregate market value of the Common Stock as of the respective
determination dates (the last business day of each calendar quarter)
equal to 20% of such officer's quarterly salary during fiscal 1998. The
awards in fiscal 1998 were made in the discretion of the Board of
Directors in lieu of cash bonuses. All awards of the restricted Common
Stock vested immediately.
(4) The numbers in the table above represent options for the purchase of
shares of the Company's Common Stock granted to the named persons under
the Company's 1987 Nonqualified Stock Option Plan and the Company's
1997 Stock Option Plan. All of the options for each named executive
officer in fiscal 1999 were granted under the Company's 1997 Stock
Option Plan. Half of the options for each named executive officer in
fiscal 1997 were granted under the Company's 1987 Nonqualified Stock
Option Plan and the other half were granted under the Company's 1997
Stock Option Plan.
(5) Amounts of All Other Compensation are premiums paid by the Company
pursuant to the Company's Executive Split-Dollar Life Insurance Plan.
The Plan provides for preretirement death benefits for the named
executives and certain other executive officers and annual or lump sum
payment upon retirement at age 65.
(6) Elected Chairman and Chief Executive Officer effective April 1, 1998
upon Mr. Dohrmann's retirement.
(7) Elected an executive officer on June 26, 1997.
-10-
STOCK OPTIONS GRANTED IN FISCAL 1999
The following table provides information on options to purchase shares
of the Company's Common Stock granted to the executive officers named in the
Summary Compensation Table.
POTENTIAL
INDIVIDUAL GRANTS REALIZABLE VALUE
------------------------------------------------------ AT ASSUMED ANNUAL
PERCENT OF RATES OF STOCK
TOTAL OPTIONS PRICE APPRECIATION
GRANTED TO EXERCISE FOR OPTION TERM
OPTIONS EMPLOYEES IN PRICE PER EXPIRATION --------------------
NAME GRANTED FISCAL 1999 SHARE($) DATE 5%($) 10%($)
- ------------------- --------- ------------- ---------- ---------- ------- -------
Bruce D. Hertzke 41,250(1) 16.8(2) 10.1875(3) 10/15/2008 264,283 669,745
Edwin F. Barker 10,000(1) 4.1(2) 10.1875(3) 10/15/2008 64,069 162,362
Raymond M. Beebe 10,000(1) 4.1(2) 10.1875(3) 10/15/2008 64,069 162,362
Ronald D. Buckmeier 10,000(1) 4.1(2) 10.1875(3) 10/15/2008 64,069 162,362
James P. Jaskoviak 10,000(1) 4.1(2) 10.1875(3) 10/15/2008 64,069 162,362
Robert J. Olson 10,000(1) 4.1(2) 10.1875(3) 10/15/2008 64,069 162,362
- -------------------------------
(1) Stock options granted on October 15, 1998, under the Company's 1997
Stock Option Plan. One-third of the options become exercisable on
October 15, 1999, an additional one-third on October 15, 2000, and the
final one-third on October 15, 2001.
(2) Based on total grants during fiscal 1999 of 245,250 shares.
(3) The exercise price per share represents the mean between the high and
low prices for a share of the Company's Common Stock on the New York
Stock Exchange on October 15, 1998.
-11-
AGGREGATED OPTION SHARES EXERCISED IN LAST FISCAL YEAR AND FISCAL YEAR-END
OPTION VALUES
The following table provides information related to the stock options
exercised during fiscal 1999 and the number and value of unexercised options at
August 28, 1999, by the named executive officers.
NUMBER OF UNEXERCISED VALUE OF UNEXERCISED,
NUMBER OF OPTIONS HELD AT IN-THE-MONEY OPTIONS AT
SHARES AUGUST 28, 1999 AUGUST 28, 1999(2)
ACQUIRED ON VALUE ----------------------------- -----------------------------
NAME EXERCISE REALIZED(1) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- ------------------- ----------- ----------- ----------- ------------- ----------- -------------
Bruce D. Hertzke 10,000 $ 90,000 64,416 30,834 $1,087,130 $435,167
Edwin F. Barker 10,000 $ 85,625 57,666 9,334 1,027,136 134,427
Raymond M. Beebe 10,000 $ 63,750 57,666 9,334 1,027,136 134,427
Ronald D. Buckmeier 7,166 $121,792 10,999 9,334 169,818 134,427
James P. Jaskoviak 8,998 $121,679 8,668 9,334 131,647 134,427
Robert J. Olson -- -- 18,166 9,334 288,105 134,427
- --------------------
(1) The value realized is the difference between the closing price of the
Company's Common Stock on the respective dates such options were
exercised and the exercise prices.
(2) Represents the amount by which $24.125 (the closing price of the
Company's Common Stock on August 27, 1999 (August 28, 1999 being a
non-business day)) exceeded the exercise prices of unexercised options.
There is no guarantee that, if and when these options are exercised,
they will have this value.
PENSION PLANS
The Company does not provide pension benefits for its employees,
including executive officers.
REPORT OF THE HUMAN RESOURCES COMMITTEE ON EXECUTIVE COMPENSATION
NOTWITHSTANDING ANYTHING TO THE CONTRARY SET FORTH IN ANY OF THE
COMPANY'S PREVIOUS OR FUTURE FILINGS UNDER THE SECURITIES ACT OF 1933 OR THE
SECURITIES EXCHANGE ACT OF 1934 THAT MIGHT INCORPORATE THIS PROXY STATEMENT IN
WHOLE OR IN PART, THE FOLLOWING REPORT AND THE PERFORMANCE GRAPH WHICH FOLLOWS
SHALL NOT BE DEEMED TO BE INCORPORATED BY REFERENCE INTO ANY SUCH FILINGS.
The Human Resources Committee of the Board is the compensation
committee of the Company. This Committee reviews and approves compensation plans
for all corporate officers, including salaries, profit sharing awards and stock
option grants.
-12-
In designing its compensation programs, the Company follows its belief
that compensation should reflect the value created for shareholders while
furthering the Company's strategic goals. In doing so, the compensation programs
reflect the following goals:
* Align the interests of management with those of shareholders;
* Provide fair and competitive compensation;
* Integrate compensation with the Company's business plans;
* Reward both business and individual performance; and
* Attract and retain key executives critical to the success of
the Company.
The Company's executive compensation is primarily based on three
components, each of which is intended to help achieve the overall compensation
philosophy; these are base salary, quarterly incentive awards and long-term
incentives.
Base salary levels for the Company's executive officers are set by the
Committee and approved by the Board of Directors. In determining base salary
levels and annual salary adjustments for executive officers, including the Chief
Executive Officer (CEO), the Committee considers market compensation levels of
similarly sized manufacturing companies as well as individual performance and
contributions.
Mr. Hertzke was elected to the offices of Chairman of the Board and CEO
effective April 1, 1998 upon the retirement of Mr. Dohrmann. The base salary of
Mr. Hertzke as the CEO was $260,000 from April 1, 1998 to January 1, 1999 and
$300,000 after January 1, 1999 and $260,000 in fiscal 1998. The CEO participates
in the quarterly incentive award program for officers and other key management
personnel described below. The Committee has not found it practicable to, and
has not attempted to, assign relative weights to the specific factors considered
in determining the CEO's compensation.
The Company's officers (including the CEO) are eligible for quarterly
incentive awards under the Company's Officers Incentive Compensation Plan (the
"INCENTIVE COMPENSATION PLAN"). Under the Incentive Compensation Plan, the
incentive awards are based upon financial performance of the Company, as
established by the Board of Directors. The Compensation Plan is an annual
program that provides for quarterly cumulative measurements of financial
performance and an opportunity for quarterly incentive payments based on
financial results measured against the management plan adopted by the Board of
Directors (the "MANAGEMENT PLAN").
The financial performance measurements for the Incentive Compensation
Plan are earnings per share (EPS) and return on equity (ROE) of the Company. The
Board of Directors believes that these financial performance measurements
provide an appropriate balance between quantity and quality of earnings.
Stockholders' equity at the start of the Company's fiscal year is used as the
base figure for the calculation of ROE. The Committee believes that the
Incentive Compensation Plan provides an excellent link between the value created
for shareholders and incentives paid to participants.
Under the Incentive Compensation Plan, the amount of the participants'
incentive compensation for the quarter shall be in direct proportion to the
Company's financial
-13-
performance expressed as a percentage (Financial Factor) against the base salary
for each participant as determined by the Board of Directors prior to the
commencement of the fiscal year compensation targets for each participant.
The Incentive Compensation Plan provides for a bonus (Target) of 60% of
base salary, comprised of (2/3) cash and (1/3) stock at 100% achievement of the
financial objectives of EPS and ROE for participating officers, except the CEO.
The Incentive Compensation Plan provides for a bonus (Target) of 87.5% of base
salary, comprised of (2/3) cash and (1/3) stock at 100% achievement of the
financial objectives of EPS and ROE for the CEO.
The Committee reserves the right to modify the Financial Factor used in
determining the incentive compensation by plus or minus 20% based upon strategic
organizational priorities. Strategic performance is measured only at the end of
the fiscal year. Strategic measurements may focus on one or more of the
following strategic factors, but are not limited to those stated.
* Revenue Growth * Customer Satisfaction
* Market Share * Inventory Management
* Product Quality * Technical Innovation
* Product Introductions * Ethical Business Practices
Under the Incentive Compensation Plan, 50% of the total cash incentives
earned for the year are matched annually and paid in restricted stock to
encourage stock ownership and promote the long-term growth and profitability of
the Company.
In the event of a "Change in Control" (as defined in the Incentive
Compensation Plan) participants are entitled to receive awards (including the
annual stock match payment) within 15 days of the Effective Date (as defined in
the Incentive Compensation Plan) based on the Committee's estimate of the
Company's financial performance through the end of the fiscal year in which such
Change in Control occurs.
Financial performance of less than 80% of the Management Plan for both
EPS and ROE results in no bonus and the maximum bonus will be paid at attainment
of 125% of the Management Plan for both elements.
The Company's officers (including the CEO) are eligible for incentive
awards under the Company's Officers Long-Term Incentive Plan (the "LONG-TERM
INCENTIVE PLAN"). The purpose of the Long-Term Incentive Plan is to promote the
long-term growth and profitability of the Company and to attract and retain
officers by providing the officers of the Company an opportunity for an
incentive award consisting of stock grants made in restricted shares of the
Company's Common Stock based on the achievement of long-term performance results
as measured at the end of a three year fiscal period.
The awards under the Long-Term Incentive Plan are based upon the
Company's financial performance as measured against the three year management
plan approved by the Board of Directors. The financial performance measurements
for the Long-Term Incentive Plan are EPS and ROE of the Company. Stockholders'
equity at the start of the Company's first fiscal year of the applicable plan
period is used as the base figure for the calculation of ROE.
Under the Long-Term Incentive Plan, the amount of the participants'
long-term incentive award for the three year fiscal period is in direct
proportion to the Company's financial performance expressed as a percentage
(Financial Factor) against award targets for each participant determined by the
Board of Directors prior to the commencement of the three fiscal year period.
The Company's financial results for the three fiscal year period are used in
determining the Financial Factor to be used for that plan period when
calculating the participants long-term incentive awards.
The long-term incentive for the officers provides for an opportunity of
25% of the annualized base salary (Target) to be awarded in restricted stock at
100% achievement of the financial long-term objectives of EPS and ROE. The
annualized base salary figure used is the salary in place for each participant
as of January 2000. The stock target opportunity is established by dividing the
base salary target by the mean stock price as of the first business day of the
three fiscal year period. The share opportunity (at 100% of the three fiscal
year management plan) will be adjusted up or down as determined by actual
financial performance expressed as a percentage (Financial Factor) at the end of
the three fiscal year period.
In the event of a "Change in Control" (as defined in the Long-Term
Incentive Plan) participants are entitled to receive awards within 15 days of
the Effective Date (as defined in the Long-Term Incentive Plan) based on the
Committee's estimate of the Company's financial performance through the end of
the Long-Term Incentive Plan three fiscal year period in which such Change in
Control occurs.
A participant must be employed by the Company at the end of the three
fiscal year period to be eligible for any long-term incentive award except as
waived by the Committee for normal retirement and disability.
Mr. Hertzke received $380,563 in fiscal 1999 and $161,538 in fiscal
1998 pursuant to the Incentive Compensation Plan. In addition, Mr. Hertzke was
awarded discretionary bonuses of $50,000 in fiscal 1999 and $52,000 in fiscal
1998 in restricted Common Stock based on the Committee's positive assessment of
his performance and contributions as CEO.
Other long-term incentives, provided through grants of stock options to
the named executives and others, are intended to retain and motivate executives
to seek to improve long-term stock market performance. Stock options are granted
at the prevailing market price and will only have value if the Company's stock
price increases. No option is exercisable until six months after the date such
option is granted. Thereafter, options are exercisable during the period thereof
at such time or times and in such amount or amounts as determined by the
Committee. No option may be exercised more than ten years from the date of its
grant. Executives must be employed by the Company at the time of vesting in
order to exercise options. During fiscal 1999, the Committee awarded Mr. Hertzke
stock options for 41,250 shares of the
-14-
Company's Common Stock under the 1997 Stock Option Plan. There were no stock
options awarded during fiscal 1998 to Mr. Hertzke or any other executive
officers.
Since all options are granted at the then-current market price, the
value of an option bears a direct relationship to the Company's stock price and
is an effective incentive for executives to create value for shareholders. The
Committee, therefore, views stock options as an important component of its
long-term performance-based compensation philosophy, but does not believe that
granting options every year is necessary to achieve such goals.
No member of the Human Resources Committee is a current or former
officer or employee of the Company or any of its subsidiaries.
Gerald C. Kitch Richard C. Scott Fredrick M. Zimmerman
Members of the Human Resources Committee
of the Board of Directors
PERFORMANCE GRAPH
The following graph compares the five-year cumulative total shareholder
return (including reinvestment of dividends) of the Company with the cumulative
total return on the Standard & Poor's 500 Index and a peer group1 of companies
over the period indicated. It is assumed in the graph that $100 was invested in
the Company's Common Stock, in the stock of the companies in the Standard &
Poor's 500 Index and in the stocks of the peer group companies on August 26,
1994 and that all dividends received within a quarter were reinvested in that
quarter. In accordance with the guidelines of the SEC, the shareholder return
for each entity in the peer group index have been weighted on the basis of
market capitalization as of each annual measurement date set forth in the graph.
COMPARISON OF 5 YEAR CUMULATIVE TOTAL RETURN
[PLOT POINTS CHART]
TOTAL SHAREHOLDER RETURNS
Years Ending
COMPANY NAME/INDEX 8/26/94 8/25/95 8/30/96 8/29/97 8/28/98 8/27/99
- --------------------------------------------------------------------------------
Winnebago Industries, Inc. $100.00 $ 84.35 $ 84.71 $ 89.77 $121.83 $237.05
S&P 500 Index 100.00 121.66 145.15 204.63 237.83 290.23
Peer Group(1) 100.00 83.58 121.56 135.49 151.73 89.61
- --------------------------
(1) The peer group companies are Coachmen Industries, Inc., Fleetwood
Enterprises, Inc., Thor Industries, Inc. and Winnebago Industries, Inc.
The Company selected Coachmen Industries, Inc., Fleetwood Enterprises,
Inc., and Thor Industries, Inc. on the basis of the similarity of their
business to that of the Company.
-15-
CHANGE IN CONTROL ARRANGEMENTS
In June 1997, the Board of Directors adopted a plan to provide
protection to the Company's executives in the event of a change in control. If
the employment of any of the named executive officers is terminated following a
change in control, each of such officers will receive severance pay in an amount
equal to three weeks of pay for every full year of continuous service.
CERTAIN TRANSACTIONS WITH MANAGEMENT
The Company maintains normal banking relations on customary terms with
Manufacturer's Bank & Trust Company, Forest City and Crystal Lake, Iowa.
Manufacturer's Bank & Trust Company is a wholly owned subsidiary of MBT Corp.
Mrs. Luise V. Hanson is a director of the Bank and MBT Corp. and owns
approximately 37 percent of record and beneficially and Mr. John V. Hanson owns
approximately 21 percent of record and beneficially of MBT Corp.'s outstanding
stock. Mr. John V. Hanson is also a director of the Bank and MBT Corp. In
addition, Mary Jo Boman, the wife of Gerald E. Boman, owns approximately 21
percent of record and beneficially of MBT Corp.'s outstanding stock and is a
director of the Bank and MBT Corp.
ITEM 2
AMENDMENTS TO THE COMPANY'S ARTICLES OF INCORPORATION
RELATING TO THE BOARD OF DIRECTORS
The Board has unanimously determined that certain amendments to the
Company's Amended and Restated Articles of Incorporation (the "ARTICLES OF
INCORPORATION") are advisable and has voted to recommend such amendments to the
Company's shareholders for approval. The proposed amendments to the Articles of
Incorporation (i) classify the Board of Directors into three classes, as nearly
equal in number as possible, each of which, after an interim arrangement, will
serve for three years, with one class being elected each year, (ii) provide that
the number of directors constituting the Board of Directors shall be not more
than fifteen (15) and not less than three (3), the precise number to be
determined by resolution of the Board of Directors from time to time, (iii)
provide that Directors may be removed only for cause, and (iv) provide that the
shareholder vote required to amend, repeal or adopt a provision inconsistent
with the amendments described in (i), (ii) and (iii) above be increased from a
majority of the votes cast by
-16-
all shareholders entitled to vote thereon to seventy-five percent (75%) of the
outstanding shares of the Company entitled to vote thereon (collectively, the
"DIRECTOR AMENDMENTS").
The Board believes that the Director Amendments would, if adopted,
enhance the likelihood of continuity and stability in the composition of the
Company's Board of Directors and in the policies formulated by the Board, and,
at the same time, effectively reduce the possibility that a third party could
effect a sudden or surprise change in majority control of the Company's Board of
Directors without the support of the incumbent Board of Directors. However,
adoption of the Director Amendments may have significant effects on the ability
of shareholders of the Company to benefit from certain transactions which are
opposed by the incumbent Board of Directors. Accordingly, shareholders are urged
to read carefully the following section of this Proxy Statement, which describes
the Director Amendments and their purpose and effect, and Appendix A hereto,
which sets forth the full text of the Director Amendments.
The Director Amendments are not being recommended in response to any
specific effort of which the Company is aware to accumulate the Company's Common
Stock or to effect control of the Company. The Director Amendments and the
Preferred Stock Authorization Amendment described in Item 3 below, however, are
part of a plan by the Board to adopt a series of anti-takeover amendments to the
Articles of Incorporation. The Company's Articles of Incorporation and By-Laws
(the "BY-LAWS") do not currently contain any specific provisions to deter
non-negotiated takeovers of the Company (other than provisions in the By-Laws
requiring the advance notice of nomination of candidates for election to the
Board of Directors). The Board has observed the relatively common use of certain
coercive takeover tactics, including the accumulation of substantial voting
stock positions as a prelude to threatened takeovers or corporate
restructurings, proxy fights and partial tender offers and the related use of
"two-tier" pricing. The Board of Directors believes that the use of these
tactics can place undue pressure on a corporation's board of directors and
shareholders to act hastily and on incomplete information and, therefore, can be
highly disruptive to a corporation and result in unfair differences in treatment
of shareholders who act immediately in response to an announcement of takeover
activity and those who choose to act later, if at all.
The Director Amendments are intended to encourage persons seeking to
acquire control of the Company to initiate such an acquisition through
arm's-length negotiations with the Company's management and Board of Directors.
The Director Amendments, if adopted, may also have the effect of discouraging a
third party from making a tender offer or otherwise attempting to obtain control
of the Company, even though such an attempt might be beneficial to the Company
and its shareholders. In addition, since the Director Amendments may discourage
accumulations of large blocks of the Company's stock by purchasers whose
objective is to have such stock repurchased by the Company at a premium,
adoption of the Director Amendments could tend to reduce temporary fluctuations
in the market price of the Company's stock which might be caused by such
accumulations. Accordingly, shareholders could be deprived of certain
opportunities to sell stock at a temporarily higher market price.
Takeovers or changes in control in management of the Company which are
proposed and effected without prior consultation and negotiation with the
Company's management may not
-17-
always be detrimental to the Company and its shareholders. However, the Board of
Directors feels that the benefits of seeking to protect its ability to negotiate
with the proponent of an unfriendly or unsolicited proposal to take over or
restructure the Company outweigh the disadvantages of discouraging such
proposals.
The adoption of the Director Amendments would make more difficult or
discourage a proxy contest or the assumption of control by a holder of a
substantial block of the Company's Common Stock or the removal of the incumbent
Board of Directors and thus may tend to continue the Company's incumbent Board
of Directors in office. At the same time, the Director Amendments would help
ensure that the Board, if confronted by a surprise proposal from a third party,
will have sufficient time to review the proposal and appropriate alternatives to
the proposal and to seek a premium price for the shareholders.
The Company's By-Laws currently provide that all directors are to be
elected to the Board of Directors annually and shall hold office until the
annual meeting of shareholders next following their election and until their
successors have been elected and qualified. The proposed new Article VI of the
Articles of Incorporation (as set forth in Appendix A) provides that the Board
of Directors shall be divided into three classes of directors, each class to be
as nearly equal in number as possible. As indicated elsewhere in this Proxy
Statement, if Item 2 is adopted, the Company's Directors will be divided into
three classes, one class to hold office initially until the annual meeting of
shareholders to be held in 2001, a second class to hold office initially until
the annual meeting of shareholders to be held in 2002 and a third class to hold
office initially until the annual meeting of shareholders to be held in 2003 (in
each case, until their respective successors are duly elected and qualified). At
each annual meeting of shareholders commencing with the annual meeting to be
held in 2001, the successors to the class of directors whose term then expires
shall be elected to serve a three-year term (and until their respective
successors are duly elected and qualified). If the Director Amendments to the
Articles of Incorporation are adopted, the By-Laws will be amended to be
consistent with the amendments to the Articles of Incorporation relating to the
classification of the Board of Directors.
The Articles of Incorporation do not permit cumulative voting in the
election of directors. Accordingly, the holders of a majority of the voting
power of the outstanding shares of the Company's voting stock could now elect
all of the directors being elected at any annual or special meeting of the
Company's shareholders. However, the classification of the Board of Directors
pursuant to the Director Amendments will apply to every election of directors,
whether or not a change in control of the Company has occurred or the holders of
a majority of the voting stock of the Company desire to change the Board of
Directors. The classification of the Board of Directors will have the effect of
making it more difficult to change the composition of the Board of Directors. At
least two shareholder meetings, instead of one, will be required to effect a
change in control of the Board of Directors. The Board believes that the longer
time required to elect a majority of a classified Board of Directors will help
to assure the continuity and stability of the Company's management and policies
in the future, since a majority of the directors at any given time will have
prior experience as directors of the Company.
The Articles of Incorporation currently provide that the number of
directors constituting the Board of Directors of the Company shall be not more
than fifteen (15) and not less than three
-18-
(3), the precise number to be specified in the Company's By-Laws. Iowa law
provides that shareholders may amend a corporation's by-laws at any time. The
purpose of this change is to prevent the holder of a majority of the voting
stock of the Company present at a shareholder meeting from amending the
Company's By-Laws to increase the number of directors and then electing a
majority of the directors. Consequently, in order to protect the Board's ability
to negotiate with the proponent of an unfriendly or unsolicited proposal to take
over or restructure the Company, the Articles of Incorporation should be amended
to provide that the Directors shall determine the number of Directors
constituting the Board of Directors by resolution and NOT pursuant to the
By-Laws. If the Director Amendments to the Articles of Incorporation are
approved, the By-Laws will be amended to be consistent with the amendments to
the Articles of Incorporation relating to the Board of Director's determination
by resolution of the number of directors constituting the Board of Directors.
Iowa law provides that shareholders may remove one or more directors
with or without cause unless the articles of incorporation provide that
directors may be removed only for cause. The proposed Director Amendments
provide that shareholders may remove directors only for cause. The purpose of
this change is to prevent a shareholder with a majority of the voting stock of
the Company present at a shareholder meeting from negating the effect of a
staggered board by simply voting to remove without cause previously elected
directors whose terms have not yet expired. Consequently, in order for a
staggered board to be effective in protecting the Board's ability to negotiate
with the proponent of an unfriendly or unsolicited proposal to take over or
restructure the Company, the Articles of Incorporation should be amended to
provide that directors may be removed only for cause.
The proposed requirements of a super-majority vote of the shareholders
to alter, amend, repeal or adopt any provision inconsistent with the proposed
Article VI of the Articles of Incorporation is also designed to prevent a
shareholder with a majority of the voting stock of the Company present at a
shareholder meeting from avoiding the provisions relating to the classification,
number and removal of members of the Board of Directors simply by voting to
repeal or amend them.
The affirmative vote of a majority of the votes cast by all
shareholders entitled to vote thereon is required to approve this Item 2.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE FOR THE DIRECTOR
AMENDMENTS TO THE COMPANY'S ARTICLES OF INCORPORATION, ITEM 2. PROXIES SOLICITED
BY THE BOARD OF DIRECTORS WILL BE SO VOTED UNLESS SHAREHOLDERS SPECIFY A
DIFFERENT CHOICE.
-19-
ITEM 3
AMENDMENTS OF THE COMPANY'S AMENDED AND
RESTATED ARTICLES OF INCORPORATION TO AUTHORIZE
A CLASS OF BLANK CHECK PREFERRED STOCK
The Board of Directors has unanimously determined that an amendment
(the "PREFERRED STOCK AUTHORIZATION AMENDMENT") to the Company's Articles of
Incorporation to authorize a class of preferred stock commonly known as "blank
check" preferred stock (the "PREFERRED STOCK") is advisable and has voted to
recommend such amendment to the Company's shareholders for approval. If the
Preferred Stock Authorization Amendment is adopted, Article IV of the Company's
Articles of Incorporation would be amended as provided in Appendix B hereto,
which sets forth the full text of the Preferred Stock Authorization Amendment.
The Board believes that the creation of the Preferred Stock is in the best
interests of the Company and its shareholders and believes it is advisable to
authorize such shares to have them available for, among other things, the Rights
Plan described below or the related use of such shares as a means to make more
difficult or discourage an attempt to obtain control of the Company by means of
a merger, tender offer, proxy contest or other means as well as in connection
with such activities as public or private offerings of shares for cash. However,
adoption of the Preferred Stock Authorization Amendment may have significant
effects on the ability of shareholders of the Company to benefit from certain
transactions which are opposed by the incumbent Board of Directors. Accordingly,
shareholders are urged to read carefully the following section of this Proxy
Statement, which describes the Preferred Stock Authorization Amendment and its
purpose and effect and Appendix B.
The Board of Directors further believes that the ability of the Board
to issue one or more series of Preferred Stock will provide the Company with
increased flexibility in structuring possible future financings, acquisitions
and strategic alliances and in meeting other corporate needs. The Company does
not have any present plans, commitments, agreements or understandings involving
the issuance of shares of Preferred Stock, except as described below with
respect to the Rights.
As amended, Article IV of the Company's Articles of Incorporation would
grant to the Board of Directors the power to authorize the issuance of one or
more series of Preferred Stock and to determine with respect to any series of
Preferred Stock the preferences, rights and other terms of such series.
Accordingly, by resolution of the Board of Directors, the Board would establish
the voting powers, designations, preferences, limitations and relative rights of
each series of Preferred Stock. The authorized Preferred Stock would be
available for issuance without further action by the Company's shareholders,
unless such action is required by applicable law or the rules of any stock
exchange or automated quotation system on which any shares of Preferred Stock
may be listed or traded at the time of issuance or proposed issuance.
The Company's Articles of Incorporation presently authorize 60,000,000
shares of Common Stock and no change to that number of shares is requested.
-20-
In the event the Preferred Stock Authorization Amendment is approved by
the Company's shareholders, the Board of Directors expects to adopt a Rights
Plan (the "RIGHTS PLAN") which may involve the issuance of Preferred Stock.
Shareholder approval is not required in order to adopt the Rights Plan. A Rights
Plan is intended to protect the interests of shareholders in the event the
Company is confronted with coercive or unfair takeover tactics, including (a) a
partial or two-tiered tender offer that does not treat all shareholders equally,
(b) the acquisition in the open market or otherwise of shares constituting
control without offering fair value to all shareholders or (c) other abusive
takeover or disruptive tactics. Adoption of the Rights Plan may discourage or
make more difficult or expensive certain mergers, tender offers or other
purchases of the Company's Common Stock and might discourage potential takeover
attempts.
If a Rights Plan is adopted, the Company will send notice of its
adoption (including a description of the Rights Plan) to each shareholder as of
the record date established for purposes of determining shareholders entitled to
receive Rights.
As stated in the description of the Director Amendments, the Preferred
Stock Authorization Amendment and the Director Amendments are not being
recommended in response to any specific effort of which the Company is aware to
accumulate the Company's Common Stock or to effect control of the Company. The
Preferred Stock Authorization Amendment and the Director Amendments described in
Item 2 above, however, are part of a plan by the Board to adopt a series of
anti-takeover amendments to the Articles of Incorporation. The Board believes
that the Preferred Stock Authorization Amendment is in the best interests of the
Company and its shareholders for the same reasons described in Item 2 above as
well as for the reasons described in this section.
It is not possible to determine the actual effect of the Preferred
Stock on the rights of the holders of Common Stock until the Board of Directors
determines the rights of the holders of a series of the Preferred Stock.
However, such effects might include (i) restrictions on the payments of
dividends to holders of the Common Stock; (ii) dilution of voting power to the
extent that the holders of the Preferred Stock are given voting rights; (iii)
dilution of the equity interests and voting power if the Preferred Stock is
convertible into Common Stock; and (iv) restrictions upon any distribution of
assets to the holders of the Common Stock upon liquidation or dissolution and
until the satisfaction of any liquidation preference granted to the holders of
Preferred Stock.
The Board of Directors is required by Iowa law to make any
determination to issue shares of Preferred Stock based upon its judgment as
advisable and in the best interests of the shareholders and the Company.
Although the Board of Directors has no present intention of doing so, as noted
above, it could, in the future, issue a series of Preferred Stock which, due to
its terms, could impede or discourage an attempt to obtain control of the
Company by means of a merger, tender offer, proxy contest or other transaction.
Consequently, the Board of Directors may be able to effectively block a
transaction that some or a majority of the Company's shareholders might believe
to be in their best interests or in which the shareholders might receive a
premium over then-prevailing market prices for the Common Stock. For example, if
in the due exercise of its fiduciary obligations, the Board of Directors were to
determine that a takeover
-21-
proposal is not in the Company's best interests, the Board of Directors could
cause shares of Preferred Stock to be issued without shareholder approval in one
or more private offerings or other transactions that might dilute the voting or
other rights of the proposed acquirer or insurgent shareholder or shareholder
group or create a substantial voting block in institutional or other hands that
might undertake to support the position of the incumbent Board of Directors.
Under Iowa law, the shareholders will not have any dissenters' or
appraisal rights in connection with the proposed amendment of the Articles of
Incorporation.
The affirmative vote of a majority of the votes cast by all
shareholders entitled to vote thereon is required to approve this Item 3.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE FOR THE PREFERRED
STOCK AUTHORIZATION AMENDMENT TO THE COMPANY'S ARTICLES OF INCORPORATION, ITEM
3. PROXIES SOLICITED BY THE BOARD OF DIRECTORS WILL BE SO VOTED UNLESS
SHAREHOLDERS SPECIFY A DIFFERENT CHOICE.
ITEM 4
SHAREHOLDER PROPOSAL ON CUMULATIVE VOTING
Mr. Donald K. Hedeen, 218 Sherwood Forest, Williamsburg, Virginia
23188, who holds 251 shares of Common Stock, has informed the Company that he
intends to present the following resolution at the Annual Meeting. In accordance
with applicable proxy regulations, the proposed resolution and supporting
statement, for which the Board of Directors and the Company accept no
responsibility, are set forth below. Approval of this proposal would require the
affirmative vote of a majority of the outstanding shares of Common Stock present
in person or by proxy and entitled to vote at the Annual Meeting.
SHAREHOLDER RESOLUTION
Resolved: That the shareholders of Winnebago Industries, Inc.,
assembled in annual meeting in person and by proxy, hereby request the Board of
Directors to take the steps necessary to provide for cumulative voting in the
annual election of Directors; this means that each such shareholder shall be
entitled to as many votes as shall equal the number of shares owned multiplied
by the number of Directors to be elected, and the shareholder may cast all of
such votes for a single candidate, or any two or more of them as the shareholder
may see fit."
PROPONENT'S SUPPORTING STATEMENT
"A California law provides that all State pension holdings and State college
funds invested in stock shares must be voted in favor of cumulative voting
proposals. This underscores the recognition of the importance of this democratic
means of electing directors."
"The National Bank Act provides for cumulative voting."
-22-
"Many successful corporations have cumulative voting. For example: Pennzoil,
Ingersoll-Rand and American Premier have cumulative voting. Ingersoll has been
cited by FORTUNE magazine and by the Wall Street Transcript as having excellent
management."
"Lockheed Martin and VWR Corporation now have provisions that if any entity
acquires 40% of their shares, cumulative voting applies for all shareholders. As
an example of shareholders' struggle to obtain independent, non-self
perpetuating Boards of Directors, The Association of BellTel Retirees in 1999
proposed to Bell Atlantic that the Board of Directors take the steps necessary
to provide ".........that the Board of Directors shall consist of a MAJORITY OF
INDEPENDENT DIRECTORS and that no more than two directors shall be current or
former senior executive officers ("insiders")."
"Earlier this year, the Winnebago Board approved an amendment to the "Winnebago
Industries, Inc. Executive Share Option Plan." Neither the original Plan nor the
Amendment were submitted to the Shareholders for approval, which is customary
with most responsible companies."
"Winnebago Shareholders should well note that according to the latest data shown
by Market Guide, Inc., Luise V. Hanson - widow of the founder - owns about 35%
of the outstanding stock of Winnebago and insiders own 3%. Winnebago may have
the Shareholder interests always in mind, but then again they may not. In
passing, it should be noted that the stock price has dropped from a high of 28
3/4 to its current price of 17 3/8, as of this writing. (10-08-99)."
"Cumulative Voting is a MUST to provide a vehicle for the occasion when
Shareholders wish to elect a director of THEIR choice."
"If you agree, please mark your proxy FOR this resolution; otherwise it is
automatically cast against it, unless you have marked it to abstain."
"Thank you for your attention to this important matter."
THE COMPANY'S STATEMENT IN OPPOSITION
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE AGAINST THE ADOPTION OF
THIS PROPOSAL FOR THE FOLLOWING REASONS:
The Board of Directors believes that cumulative voting would threaten to
undermine effective Board functioning in at least two important respects. First,
each Board member has a duty to represent all shareholders. To do so, each
Director must feel a responsibility toward all the shareholders, without any
special loyalty to any one group. From this perspective, cumulative voting is
undesirable since Directors so elected might be principally concerned about
representing and acting in the interest of special groups of shareholders rather
than in the interest of all shareholders. We do not believe that a narrow
constituency of shareholders should have an advantage over the interests of the
Company's shareholders as a whole. Second, cumulative voting introduces the
possibility of partisanship among Board members that could impair their ability
to work together, a requirement essential to the effective functioning of any
board of
-23-
directors. It is important that the Board of Directors be comprised of a
cohesive group of experienced, knowledgeable and talented individuals who
clearly are working for the benefit of all of the Company's shareholders.
ACCORDINGLY, THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE AGAINST THIS
SHAREHOLDER PROPOSAL, ITEM 4. PROXIES SOLICITED BY THE BOARD OF DIRECTORS WILL
BE SO VOTED UNLESS SHAREHOLDERS SPECIFY A DIFFERENT CHOICE.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934, as amended (the
"EXCHANGE ACT") requires the Company's officers and directors and persons who
own more than ten percent of the Company's Common Stock (collectively "REPORTING
PERSONS") to file reports of ownership and changes in ownership with the
Securities and Exchange Commission (the "SEC") and the New York Stock Exchange.
Reporting Persons are required by the SEC regulations to furnish the Company
with copies of all Section 16(a) forms they file. Based solely on its review of
the copies of such forms received or written representations from certain
Reporting Persons that no Forms 5 were required for those persons, the Company
believes that, during fiscal year 1999, all the Reporting Persons complied with
all applicable filing requirements, except that Mr. John V. Hanson inadvertently
omitted to file a Form 4 reporting the purchase by his wife of 100 shares of the
Company's Common Stock.
2001 SHAREHOLDER PROPOSALS
If a shareholder intends to present a proposal at the Company's January
2001 Annual Meeting of Shareholders and desires that the proposal be included in
the Company's proxy statement and form of proxy for that meeting, the proposal
must be in compliance with Rule 14a-8 under the Exchange Act and received at the
Company's principal executive offices no earlier than September 22, 2000 and no
later than October 22, 2000.
The Company's bylaws require that in order to nominate persons to the
Company's Board of Directors, a shareholder must provide advance written notice
to the secretary of the Company, which notice must be delivered to or mailed and
received at the Company's principal executive offices not less than 90 days nor
more than 120 days before the scheduled date of the shareholder meeting at which
directors are to be elected. The Company's bylaws also require that in order to
present a proposal for action by shareholders at an annual meeting of
shareholders, a shareholder must provide advance written notice to the secretary
of the Company, which notice must contain detailed information specified in the
Company's bylaws. This notice must be delivered to or mailed and received at the
Company's principal executive offices not less than 90 days nor more than 120
days before the scheduled date of the annual shareholder meeting at which the
proposal is to be presented. As to any proposal that a shareholder intends to
present to shareholders without inclusion in the Company's proxy statement for
the Company's January 2001 Annual Meeting of Shareholders, the proxies named in
management's proxy for that meeting will be entitled to exercise their
discretionary authority on that proposal by advising shareholders of such
proposal and how they intend to exercise their discretion to
-24-
vote on such matter, unless the shareholder making the proposal solicits proxies
with respect to the proposal to the extent required by Rule 14a-4(c)(2) under
the Exchange Act.
GENERAL
Deloitte & Touche LLP has been selected as the Company's accountants
for the current fiscal year upon the recommendation of the Audit Committee.
Deloitte & Touche LLP have been the Company's accountants for 14 years.
Representatives of that firm are expected to be present at the Annual Meeting
with the opportunity to make a statement if they desire to do so and to be
available to respond to appropriate questions.
The cost of this proxy solicitation will be borne by the Company.
Solicitation will be made primarily through the use of the mail, but officers,
directors or regular employees of the Company may solicit proxies personally or
by telephone or telegraph without additional remuneration for such activity. In
addition, the Company will reimburse brokerage houses and other custodians,
nominees or fiduciaries for their reasonable expenses in forwarding proxies and
proxy material to the beneficial owners of such shares.
A copy of the Company's Annual Report for the fiscal year ended August
28, 1999, which includes audited financial statements, has accompanied this
proxy statement. The financial statements contained therein are not deemed
material to the exercise of prudent judgment in regard to any matter to be acted
upon at the Annual Meeting and, therefore, such financial statements are not
incorporated in this Proxy Statement by reference.
-25-
As of the date of this Proxy Statement, management knows of no other
matters to be brought before the Annual Meeting. However, if any other matters
should properly come before the meeting, it is the intention of the persons
named in the enclosed proxy to vote thereon in accordance with their best
judgment.
By Order of the Board of Directors
-----------------------------------------
RAYMOND M. BEEBE
SECRETARY
November __, 1999
-26-
APPENDIX A
AMENDMENTS TO THE
AMENDED AND RESTATED ARTICLES OF INCORPORATION
ARTICLE VI
DIRECTORS
The number of directors constituting the Board of Directors of the
Corporation shall be not more than fifteen (15) and not less than three (3), the
precise number to be determined by resolution of the Board of Directors from
time to time.
Effective with the election of the directors at the annual meeting of
shareholders to be held in 2000, the directors shall be classified, with respect
to the time for which they severally hold office, into three classes, as nearly
equal in number as possible, as shall be provided in the manner specified in the
By-laws; one class to hold office initially for a term expiring at the annual
meeting of shareholders to be held in 2001, another class to hold office
initially for a term expiring at the annual meeting of shareholders to be held
in 2002, and another class to hold office initially for a term expiring at the
annual meeting of shareholders to be held in 2003, with the respective members
of each class to hold office until their respective successors are elected and
qualified. At each annual meeting of shareholders commencing with the annual
meeting in 2001, the successors to the class of directors whose term then
expires shall be elected to serve a three-year term and until their successors
are duly elected and qualified. No decrease in the number of directors shall
have the effect of shortening the term of any incumbent director. Any increase
or decrease in the number of directors shall be apportioned among the classes so
as to make all classes as nearly equal in number as possible.
Shareholders may remove directors only for cause.
Notwithstanding anything contained herein to the contrary, the
affirmative vote of the holders of seventy-five percent (75%) of all issued and
outstanding shares of the Corporation entitled to vote thereon, voting together
as a single class, shall be required to alter, amend or adopt any provisions
inconsistent with, or repeal this Article VI or any provision hereof at any
annual or special meeting of shareholders.
A-1
APPENDIX B
AMENDMENTS TO THE AMENDED AND
RESTATED ARTICLES OF INCORPORATION
ARTICLE IV
The total number of shares of stock which the Corporation shall have
authority to issue is: seventy million (70,000,000), of which sixty million
(60,000,000) shall be shares of Common Stock, $.50 par value, and ten million
(10,000,000) shall be shares of Preferred Stock, $.01 par value ("SERIES
PREFERENCE STOCK").
A statement of the designations and the powers, preferences and rights
of such classes of stock and the qualifications, limitations or restrictions
thereof, the fixing of which by the Articles of Incorporation is desired, and
the authority of the Board of Directors to fix, by resolution or resolutions,
the designations and the powers, preferences and rights of such classes of stock
or the qualifications, limitations or restrictions thereof, which are not fixed
hereby, are as follows:
A. Provisions Applicable to All Series of Series Preference Stock.
(1) Shares of Series Preference Stock may be issued from time
to time in one or more series. The voting powers, designations,
preferences, limitations and relative rights of each series may differ
from those of any and all other series already outstanding; the terms
of each series shall be as specified in the resolution or resolutions
hereinafter referred to; and the Board of Directors of the Corporation
is hereby expressly granted authority to fix, by resolution or
resolutions adopted prior to the issuance of any shares of a particular
series of Series Preference Stock, the voting powers, designations,
preferences, limitations and relative rights of each series, including,
but without limiting the generality of the foregoing, the following:
(a) The rate and times at which, and the terms and
conditions on which, dividends on the Series Preference Stock
of such series shall be paid;
(b) The right, if any, of holders of Series
Preference Stock of such series to convert the same into, or
exchange the same for, other classes of stock of the
Corporation and the terms and conditions of such conversion or
exchange;
(c) The redemption price or prices and the time at
which, and the terms and conditions on which, Series
Preference Stock of such series may be redeemed;
(d) The rights of the holders of Series Preference
Stock of such series upon the voluntary or involuntary
liquidation, distribution or sale of assets, dissolution or
winding up of the Corporation;
B-1
(e) The voting power, if any, of the Series
Preference Stock of such series; and
(f) The terms of the sinking fund or redemption or
purchase account, if any, to be provided for the Series
Preference Stock of such series.
(2) All shares of each series shall be identical in all
respects to the other shares of such Series. The rights of the Common
Stock of the Corporation shall be subject to the preferences and
relative participating, optional and other special rights of the Series
Preference Stock of each series as fixed herein and from time to time
by the Board of Directors as aforesaid.
B. Provisions Applicable to Common Stock.
(1) After the requirements with respect to preferential
dividends upon the Series Preference Stock of all classes and series
thereof shall have been met and after the Corporation shall have
complied with all requirements, if any, with respect to the setting
aside of sums as a sinking fund or redemption or purchase account for
the benefit of any class or series thereof, then, and not otherwise,
the holders of Common Stock shall be entitled to receive such dividends
as may be declared from time to time by the Board of Directors.
(2) After distribution in full of the preferential amounts to
be distributed to the holders of all classes and series thereof of
Series Preference Stock then outstanding in the event of a voluntary or
involuntary liquidation, dissolution or winding up of the Corporation
and subject to any additional or special rights of the Series
Preference Stock as to the remaining assets of the Corporation for
distribution, the holders of the Common Stock shall be entitled to
receive the remaining assets of the Corporation available for
distribution to its shareholders ratably in proportion to the number of
shares of Common Stock held by them respectively.
(3) Each holder of Common Stock shall have one vote in respect
of each share of such stock held by such holder.
B-2
WINNEBAGO
[Logo] INDUSTRIES, INC.
FOREST CITY, IOWA 50436
NOTICE OF 2000
ANNUAL MEETING
OF SHAREHOLDERS
AND
PROXY STATEMENT
WINNEBAGO INDUSTRIES, INC. * FOREST CITY, IOWA
PROXY SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF THE COMPANY
FOR ANNUAL MEETING ON JANUARY 11, 2000
The undersigned hereby appoints Gerald E. Boman and Bruce D. Hertzke, or either
one of them, the undersigned's attorneys and proxies, with full power of
substitution, to vote all shares of Common Stock of Winnebago Industries, Inc.
which the undersigned is entitled to vote, as fully as the undersigned could do
if personally present, at the Annual Meeting of Shareholders of said corporation
to be held at Friendship Hall, Highway 69 South, Forest City, Iowa, on the 11th
day of January, 2000, at 7:30 p.m., Central Standard Time, and at any and all
adjournments thereof:
(continued, and to be signed and dated, on the other side)
(continued from reverse side)
The Board of Directors recommends a vote "For" Items 1, 2, and 3.
1. ELECTION OF 01 Bruce D. Hertzke 05 Gerald E. Boman [ ] FOR all nominees [ ] WITHHOLD AUTHORITY to vote for
DIRECTORS: 02 Jerry N. Currie 06 Fred G. Dohrmann listed at left all nominees listed at left
03 John V. Hanson 07 Gerald C. Kitch
04 Richard C. Scott 08 Frederick M. Zimmerman
---------------------------------------------------------------
[ ] FOR all nominees listed above except
---------------------------------------------------------------
(Instructions: To withhold authority to vote for any individual nominee, write the name(s) in the box
provided above.)
2. Approval of amendments to the Company's Articles of Incorporation to (a) [ ] For [ ] Against [ ] Abstain
provide for the classification of the Board of Directors into three
classes, (b) provide that the number of directors constituting the Board
of Directors shall be not more than fifteen (15) and not less than three
(3), the precise number to be determined by resolution of the Board of
Directors from time to time, (c) provide that directors may be removed
only for cause, and (d) require a vote of 75% of the outstanding shares
of the Company to amend these provisions.
3. Approval of an amendment to the Company's Articles of Incorporation to [ ] For [ ] Against [ ] Abstain
authorize the issuance of Preferred Stock.
The Board of Directors recommends a vote "Against" Item 4.
4. Approval of a shareholder proposal concerning cumulative voting, if the [ ] For [ ] Against [ ] Abstain
proposal is presented at the meeting.
This Proxy, when properly executed, will be voted in the manner directed herein by the undersigned shareholder. IF NO
DIRECTION IS GIVEN, THIS PROXY WILL BE VOTED (i) FOR THE ELECTION OF THE NOMINEES LISTED IN ITEM 1; (ii) FOR THE
PROPOSAL TO APPROVE AMENDMENTS TO THE COMPANY'S ARTICLES OF INCORPORATION DESCRIBED ABOVE (ITEM 2); (iii) FOR THE
PROPOSAL TO APPROVE AN AMENDMENT TO THE COMPANY'S ARTICLES OF INCORPORATION TO AUTHORIZE THE ISSUANCE OF PREFERRED STOCK
(ITEM 3); (iv) AGAINST A SHAREHOLDER PROPOSAL CONCERNING CUMULATIVE VOTING, IF THE PROPOSAL IS PRESENTED AT THE MEETING
(ITEM 4); AND (v) IN THE DISCRETION OF THE NAMED PROXIES UPON SUCH OTHER MATTERS AS MAY PROPERLY COME BEFORE THE
MEETING.
Address Change? Mark Box [ ] I Plan to Attend the Meeting [ ] Dated
----------------------------------------------------
---------------------------------------------------------
Indicate Changes Below:
---------------------------------------------------------
Signature(s) of Shareholder(s) in Box
Please sign exactly as name appears hereon. When shares
are held by joint tenants, both should sign. When signing
as administrator, attorney, executor, guardian or
trustee, please give full title as such. If a
corporation, authorized officer please sign full
corporate name and indicate office held.