SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
___________________
Form 10-K
_X__ Annual Report Pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934
For the fiscal year ended January 1, 1994
____ Transition Report Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
For the transition period from ____________________ to
____________________
Commission File Number: 1-6024
WOLVERINE WORLD WIDE, INC.
(Exact name of registrant as specified in its charter)
Delaware 38-1185150
(State or other jurisdiction of (I.R.S. employer
incorporation or organization) identification no.)
9341 Courtland Drive, Rockford, Michigan 49351
(Address of principal executive offices) (Zip code)
Registrant's telephone number, including area code: (616) 866-5500
Securities registered pursuant to Section 12(b) of the Securities Exchange
Act:
(Title of class) (Name of each exchange on which registered)
Common Stock, $1 Par Value New York Stock Exchange/Pacific Stock Exchange
Securities registered pursuant to Section 12(g) of the Act: None
Indicate by check mark whether the registrant: (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act
of 1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to
such filing requirements for the past 90 days.
Yes X No ______
Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained,
to the best of registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-K or any
amendment to this Form 10-K. ____
Number of shares outstanding of the registrant's Common Stock, $1 par value
(excluding shares of treasury stock) as of March 1, 1994: 6,858,469
The aggregate market value of the registrant's voting stock held by non-
affiliates of the registrant based on the closing price on the New York
Stock Exchange on March 1, 1994: $227,201,578
DOCUMENTS INCORPORATED BY REFERENCE
Portions of the definitive proxy statement for the registrant's annual
stockholders' meeting to be held April 21, 1994, are incorporated by
reference into Part III of this report.
PART I
Item 1. Business
Wolverine World Wide, Inc. (the "Company"), designs,
manufactures, distributes and markets various brands and styles of
footwear. The wide variety of footwear sold by the Company includes casual
shoes, slippers, moccasins, dress shoes, boots, uniform shoes and work
boots and shoes. The Company is also the largest domestic tanner of
pigskin. The Company, a Delaware corporation, is the successor of a 1969
reorganization of a Michigan corporation of the same name, originally
organized in 1906, which in turn was the successor of a business
established in Grand Rapids, Michigan, in 1883.
The Company is a leading provider of branded, comfort footwear
for the entire family, supplying more than 17 million pairs annually to
consumers in 80 countries. Footwear has accounted for 90% or more of the
consolidated revenues of the Company for each of the last three years. For
further financial information regarding the Company, see the consolidated
financial statements of the Company, which are attached as Appendix A to
this Form 10-K.
Footwear manufactured by the Company is sold under many
recognizable brand names. The Company's HUSH PUPPIES (Registered) brand
is a world leader in affordable, comfortable, casual and functional
footwear for men, women and children. The Company's WOLVERINE (Registered)
brand of work and sport boots ranks as the number two brand of work and
sport boots. The Company's BATES (Registered) brand is the number one
brand of uniform footwear in the United States. The Tru-Stitch Footwear
Division is the foremost supplier of constructed slippers in the United
States. The Company has also introduced a line of rugged outdoor and sport
footwear under the WOLVERINE WILDERNESS (Registered) brand. Through these,
and several other footwear brands, the Company expects to continue to
manufacture quality footwear for its customers.
The Company also manufactures and sources shoes for sale through
world wide licensing arrangements under the COLEMAN (Registered),
CATERPILLAR (Registered) and CAT (Registered) trademarks.
The Wolverine Leathers Division is one of the premier tanners of
quality pigskin leather for the shoe, automotive and leather goods
industries. The pigskin leather tanned by the Company is used in a
significant portion of the footwear manufactured and sold by the Company,
and is also sold to other domestic and foreign manufacturers of shoes.
The Company's products are sold by Company salespersons and
agents and through Company-owned stores. Sales are made directly to
various retail sellers, including independent shoe stores, footwear chains
and department stores. Most customers also sell shoes bought from
competing manufacturers.
Company products are sold directly to more than 10,000 accounts,
operating more than 20,000 retail locations. Sales are also made to large
footwear chains, including those owned or operated by other companies in
the shoe industry, catalog houses, and to the retail operations referenced
below.
In addition to its wholesale activities, the Company operated 124
domestic retail shoe stores, leased shoe departments and Company-owned HUSH
PUPPIES (Registered) Specialty Stores as of March 25, 1994. A fiscal 1990
decision to downsize the factory outlet business will result in closing
approximately 9 outlet retail locations during 1994. Eleven outlet retail
locations were closed in fiscal 1993.
Of the 124 retail locations, approximately 66 are factory outlet
stores located in strip centers or in free-standing buildings.
Approximately 36 of these stores operate under the LITTLE RED SHOE HOUSE
(Service Mark) format. These stores primarily handle closeouts and factory
rejects from the Company's own factories and those of other manufacturers.
Of the approximately 66 factory outlet stores, 30 are currently
operating under the HUSH PUPPIES (Registered) FACTORY DIRECT (Service Mark)
name in major manufacturer outlet malls. These stores carry a large
selection of first quality company branded footwear. The Company has and
may continue to selectively convert LITTLE RED SHOE HOUSE (Service Mark)
locations to this retail and merchandising format.
The 124 retail locations include 20 regional mall full service,
full price HUSH PUPPIES (Registered) Specialty Stores which feature
exclusively a broad selection of men's and women's HUSH PUPPIES
(Registered) brand footwear. The Company also licenses independent
retailers who operate HUSH PUPPIES (Registered) Specialty Stores at
another 81 locations.
In addition to retail shoe stores and HUSH PUPPIES (Registered)
Specialty Stores, the Company operates 38 full price, full service family
leased shoe departments in the Pacific Northwest and Alaska, which feature
the Company's wholesale brands.
The Company derives royalty income from licensing the HUSH
PUPPIES (Registered), WOLVERINE (Registered), WILDERNESS (Registered) and
other trademarks to domestic and foreign licensees for use on footwear and
related products. In addition, the Company sells its own pigskin leather
to certain of its licensees. In fiscal 1993, the Company's foreign
licensees and distributors sold an estimated 8.3 million pairs of
footwear, an increase from approximately 7.4 million pairs sold in fiscal
1992.
The Company continues to develop a global network of licensees to
market its footwear brands. The licensees purchase goods from the Company
and third-party manufacturers and these purchases are generally supported
by letters of credit. Each licensee is responsible for the marketing and
distribution of the Company's products, and generally purchases
substantially all marketing, advertising materials and products from the
Company.
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The Company operates a pigskin tannery as a part of its Wolverine
Leathers Division, from which the Company receives virtually all of its
pigskin requirements. The tannery is one of the most modern pigskin
tanneries in the world. The quality pigskin leather utilized in the
Company's products which incorporate this material is a significant element
of product cost, and is generally only available at comparable cost and
delivery terms from the Company's tannery. Therefore, the continued
operation of this tannery is important to the Company's competitive
position in the footwear industry. In addition, the Company owns a minority
interest in Wan Hau Enterprise Co., Ltd. ("Wan Hau"), a principal tanner of
pigskin in Taiwan. The Company provides semi-finished pigskin leather to
Wan Hau for finishing in Taiwan.
The Company's principal required raw material is quality
leather, which it purchases primarily from a select group of domestic
suppliers, including the Company's tannery. The Company has traditionally
purchased the vast majority of the shearling used extensively in the
manufacture of constructed slippers and related products by its Tru-Stitch
Footwear Division from a single source, which has been a reliable and
consistent supplier. The Company purchases all of its other raw materials,
including man-made materials and fabrics for uppers, and leather, rubber
and plastics for soles and heels, from a variety of sources, none of which
is believed by the Company to be a dominant supplier.
The Company is the holder of many trademarks which identify its
products. The trademarks which are most widely used by the Company include
HUSH PUPPIES (Registered), WOLVERINE (Registered), WILDERNESS (Registered),
WOLVERINE WILDERNESS (Registered), BATES (Registered), FLOATERS (Trademark),
BATES FLOATAWAYS (Registered), HARBOR TOWN (Trademark), TOWN & COUNTRY
(Trademark), TRU-STITCH (Registered), WIMZEES (Registered), and SIOUX MOX
(Registered). The Company is also licensed to market footwear in the
United States under the COLEMAN (Registered) trademark and throughout the
world under the CATERPILLAR (Registered) and CAT (Registered) trademarks.
Pigskin leather produced by the Company is sold under the trademarks
BREATHIN' BRUSHED PIGSKIN (Registered), SILKEE (Registered) and WEATHER
TIGHT (Registered).
The Company believes that its products are identified by its
trademarks and thus its trademarks are a valuable asset. It is the policy
of the Company to vigorously defend its trademarks against infringement to
the greatest extent practicable under the laws of the United States and
other countries. The Company is also the holder of several patents,
copyrights and various other proprietary rights. The Company protects all
of its proprietary rights to the greatest extent practicable under
applicable law.
The Company does not have a significant backlog of non-cancelable
orders. On March 1, 1994, the Company had a backlog of orders believed to
be firm of approximately $69 million compared with a backlog of
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approximately $66 million on March 20, 1993. Historically, the Company has
not experienced significant cancellation of orders. While orders in
backlog are subject to cancellation by customers, the Company expects that
substantially all of these orders will be shipped in fiscal 1994.
Retail footwear sales are seasonal with significant increases in
sales experienced during the Christmas, Easter and back-to-school periods.
Due to this seasonal nature of footwear sales, the Company experiences some
fluctuation in the levels of working capital. The Company provides working
capital for such fluctuation through internal financing and a revolving
credit agreement which the Company has in place. The Company expects the
seasonal sales pattern to continue in future years.
A broad distribution base insulates the Company from dependence
on any one customer. No customer of the Company accounted for more than
10% of the Company's consolidated revenues in fiscal year 1993.
The Company's footwear lines are manufactured and marketed in a
highly competitive environment. The Company competes with numerous other
manufacturers (domestic and foreign) and importers, many of which are
larger and have greater resources than the Company. The Company's major
competitors for its brands of footwear are generally located in the United
States. The Company has at least six major competitors in connection with
the sale of its work shoes and boots, at least eight major competitors in
connection with the sale of its sport boots, and at least fifteen major
competitors in connection with the sale of its casual and dress shoes.
Virtually all domestic and foreign manufacturers of footwear compete, or
plan to compete, with the Company in the rugged casual and outdoor footwear
market. Many of these competitors are established in the footwear
industry, and have strong market identities.
Product performance and quality, including technological
improvements, product identity, competitive pricing, and the ability to
adapt to style changes are all important elements of competition in the
footwear markets served by the Company. The Company attempts to meet
competition and maintain its competitive position through promotion of
brand awareness, manufacturing efficiencies, its tannery operations and the
style, comfort and value of its products. Future sales of the Company will
be affected by its continued ability to sell its products at competitive
prices and to meet shifts in customer preference.
Because of the lack of reliable published statistics, the Company
is unable to state with certainty its position in the shoe industry,
however, the Company believes it is one of the ten largest domestic
manufacturers of footwear.
Foreign footwear manufacturers and importers also provide a
source of competition for the Company. In order to remain competitive with
these foreign entities, the Company continues to improve and expand its
manufacturing facilities in Michigan, the Caribbean basin and Mexico. In
addition, the Company is continuing to pursue lower cost manufacturing
alternatives in the Far East and Latin America.
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Although a significant portion of the Company's product line is
purchased or sourced overseas, the majority of its products are produced
in the United States. The Company's footwear is manufactured in several
domestic facilities and certain related foreign facilities, including
facilities located in Michigan, Arkansas, New York, Mexico, Puerto Rico,
Costa Rica, the Dominican Republic and Canada. The Company includes, as
an integral part of its domestic manufacturing operations, five factories
located in the Caribbean basin and Mexico that produce footwear uppers for
final assembly in the Company's domestic factories.
The Company sources certain footwear from a variety of foreign
manufacturing facilities in the Far East, Latin America and the Caribbean.
The Company also maintains a small office in Taiwan to facilitate the
sourcing and import of footwear from the Far East.
The Company is subject to the normal risks of doing business abroad
due to its international operations, including the risks of expropriation,
acts of war, political disturbances and similar events, and loss of most
favored nations trading status. With respect to its international sourcing
activities, management believes that over a period of time, it could arrange
adequate alternative sources of supply for the products obtained from its
foreign suppliers. A sustained disruption of such sources of supply could,
particularly on a short-term basis, have an adverse impact on the Company's
operations.
At the end of the third quarter of fiscal 1992, the Company
announced its intent to dispose of its Brooks athletic footwear and sports
apparel business. The Brooks business consisted of sales and distribution
operations in the United States, France, Germany and the United Kingdom,
sourcing activities, primarily in the Far East, and worldwide licensing of
the rights to the brand name. The Brooks distributors in Europe were
33%-owned equity investees from April 3, 1990 until July 1, 1991 when the
remaining equity interests were acquired.
During 1993, the Company sold the Brooks businesses in
separate transactions in exchange for cash and notes totaling
approximately $24 million. Notes receivable of $7,700,000 were
outstanding as of January 1, 1994, and are collateralized by substantially
all of the assets sold. Payments of $2,300,000, $4,324,000, and $361,000,
representing the noncurrent portion of the notes receivable, are due in
1995, 1996 and 1997, respectively.
In addition to normal and recurring product development, design
and styling activities, the Company engages in research and development
related to new and improved materials for use in its footwear and other
products and in the development and adaptation of new production
techniques. The Company's continuing relationship with the Biomechanics
Evaluation Laboratory at Michigan State University, which is funded in part
by a grant from the Company, has led to specific biomechanical design
concepts which have been incorporated in the Company's footwear. The
Company also maintains a footwear design center in Italy to develop
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contemporary styling for the Company and its international licensees.
While the Company continues to be a leading developer of footwear
innovations, research and development costs do not represent a material
portion of operating expenses.
Compliance with federal, state and local regulations with respect
to the environment has not had, nor is it expected to have, any material
effect on the capital expenditures, earnings or competitive position of the
Company. The Company uses and generates, and in the past has used and
generated, certain substances and wastes that are regulated or may be
deemed hazardous under certain federal, state and local regulations with
respect to the environment. The Company from time to time works with
federal, state and local agencies to resolve cleanup issues at various
waste sites. The Company recently received notice from the Michigan
Department of Natural Resources ("MDNR") that it is one of the 14 currently
named potentially responsible parties for cleanup of the Sunrise Landfill
Site in Allegan County, Michigan. The Sunrise Landfill Site is related to
another cleanup site in Allegan County, Michigan for which the MDNR has
identified 556 potentially responsible parties, including the Company.
The MDNR currently estimates that the total cost of cleanup of the Sunrise
Landfill Site is approximately $17 million, but actual costs could exceed
this amount. The Company is currently conducting an investigation into its
responsibility with respect to the Sunrise Landfill Site. The Company
currently anticipates that a substantial number of the 556 potentially
responsible parties for the related cleanup site in Allegan County,
Michigan, will eventually be identified as potentially responsible parties
for the cleanup of the Sunrise Landfill Site.
As of December 31, 1993, the Company had approximately 5,088
domestic and foreign production, office and sales employees. Approximately
1,218 employees are covered by seven union contracts expiring at various
dates through 1996. The Company has experienced four isolated work
stoppages since 1975, none of which materially affected operations. The
Company presently considers its employee relations to be good.
Item 2. Properties.
The principal executive, sales and administration offices of the
Company are located in Rockford, Michigan and consist of administration and
office buildings of approximately 123,300 square feet. The Company also
has additional administrative and sales offices in Arkansas, New York,
Italy, the United Kingdom, Canada and Taiwan totaling approximately 32,400
square feet, the majority of which is leased.
The Company owns and operates one pigskin tannery from which it
receives virtually all of its pigskin requirements. The tannery is located
in Rockford, Michigan and encompasses approximately 160,000 square feet.
The Company's footwear manufacturing operations are carried out
at 15 separate facilities, totaling approximately 713,500 square feet of
manufacturing space. These facilities are located primarily in smaller
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towns in Arkansas, Michigan, and New York and in Mexico, Puerto Rico, the
Dominican Republic and Canada. Approximately 370,400 square feet of
manufacturing space is under lease at seven locations and the remaining
eight facilities are Company-owned. The Company's current aggregate
footwear manufacturing capacity is in excess of 12.0 million pairs of
shoes per year. The Company believes its footwear manufacturing facilities
are generally among the most modern in the industry.
The Company maintains twelve warehouses, located in four states
and Canada, containing approximately 804,100 square feet. The vast
majority of these warehouses are Company-owned, with approximately 63,500
square feet at three locations under lease.
In addition, the Company's retail operations are conducted
throughout the United States and as of March 25, 1994, consisted of
approximately 124 locations, including 38 leased shoe departments. All
retail locations, except three factory outlet stores in Company-owned
facilities, are subject to operating leases.
The Company believes that all properties and facilities of the
Company are suitable, adequate and fit for their intended purposes.
Item 3. Legal Proceedings.
The Company is involved in litigation and various legal matters
arising in the normal course of business. The Company is also involved in
several proceedings involving cleanup issues associated with various waste
disposal sites, as more fully described in Item 1 of this Annual Report on
Form 10-K. Having considered facts that have been ascertained and opinions
of counsel handling these matters, the Company does not believe the
ultimate resolution of such litigation will have a material adverse effect
on the Company's financial position.
Item 4. Submission of Matters to a Vote of Security Holders.
No matter was submitted during the fourth quarter of the fiscal
year covered by this report to a vote of security holders, through the
solicitation of proxies or otherwise.
Supplemental Item. Executive Officers of the Registrant.
The following table lists the names and ages of the Executive
Officers of the Company as of the date of this Annual Report on Form 10-K,
and the positions presently held with the Company. The information
provided below the table lists the business experience of each such
Executive Officer during the past five years. All Executive Officers serve
at the pleasure of the Board of Directors of the Company, or if not
appointed by the Board of Directors, they serve at the pleasure of
management.
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Name Age Positions held with the Company
Geoffrey B. Bloom 52 President and Chief Executive Officer
Steven M. Duffy 41 Vice President
Stephen L. Gulis, Jr. 36 Vice President and Chief Financial Officer
Blake W. Krueger 40 General Counsel and Secretary
L. James Lovejoy 61 Vice President of Corporate
Communications
Charles F. Morgo 57 Senior Vice President
Thomas P. Mundt 44 Vice President of Strategic Planning and
Treasurer
Timothy J. O'Donovan 48 Executive Vice President
Robert J. Sedrowski 44 Vice President of Human Resources
Geoffrey B. Bloom has served the Company as President and Chief
Executive Officer since April 1993. From 1987 to 1993 he served the
Company as President and Chief Operating Officer.
Steven M. Duffy has served the Company as a Vice President since
April 1993. From 1989 to April 1993 he served the Company in various senior
manufacturing positions. Prior to 1989, he served as the Head of
Manufacturing for Florsheim Shoes.
Stephen L. Gulis, Jr., has served the Company as Vice President
and Chief Financial Officer since February 1994. From April 1993 to
February 1994 he served the Company as Vice President of Finance and
Corporate Controller, and from 1986 to 1993 he was the Vice President of
Administration and Control for the Hush Puppies Company.
Blake W. Krueger has served the Company as General Counsel and
Secretary since April 1993. He has been a partner of the law firm of
Warner, Norcross & Judd since 1985.
L. James Lovejoy has served the Company as Vice President of
Corporate Communications since 1991. From 1984 to 1991 he was the Director
of Corporate Communications for Gerber Products Company, a manufacturer of
baby food and related products.
Charles F. Morgo has served the Company as Senior Executive Vice
President since 1984.
Thomas P. Mundt has served the Company as Vice President of
Strategic Planning and Treasurer since December 1993. From 1988 to 1993 he
served in various financial and planning positions at Sears Roebuck & Co.
including Vice President Planning, Coldwell Banker's Real Estate Group and
Director of Corporate Planning for Sears Roebuck & Co.
Timothy J. O'Donovan has served the Company as Executive Vice
President since 1982.
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Robert J. Sedrowski has served the Company as Vice President of
Human Resources since October 1993. From 1990 to 1993 he served as
Director of Human Resources for the Company, and from 1989 to 1990 he
served as Director of Human Resources of Rospatch Corporation (now
Ameriwood International, Inc.), a manufacturer.
PART II
Item 5. Market for the Registrant's Common Equity and Related Stockholder
Matters.
Wolverine World Wide, Inc. common stock is traded on the New York
and Pacific Stock Exchanges. The following table shows the high and low
transaction prices by calendar quarter for 1993 and 1992. The number of
holders of record of common stock on March 1, 1994 was 2,144.
1993 1992
High Low High Low
January-March $19 3/4 $13 3/4 $14 $10
April-June 20 7/8 16 3/4 13 3/4 8 3/4
July-September 29 16 5/8 10 1/8 7 3/4
October-December 33 1/2 28 15 1/8 9 1/2
Dividends Per Share Declared:
1993 1992
1st quarter $.04 $.04
2nd quarter $.04 $.04
3rd quarter $.04 $.04
4th quarter $.04 $.04
Dividends of $.04 per share were declared for the first quarter of
fiscal 1994. Future dividends are restricted as more fully described in
Note E of the consolidated financial statements, which are attached as
Appendix A to this Form 10-K.
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Item 6. Selected Financial Data.
Five-Year Operating and Financial Summary (Superscript (1)(2))
(Thousands of Dollars, Except Per Share Data)
1993 1992 1991 1990 1989
Summary of Operations
Net sales and other
operating income $333,143 $293,136 $282,749 $295,418 $290,486
Earnings (loss) from
continuing operations 11,492 4,620 4,422 (4,649) 8,256
Per share of common stock:
Earnings (loss) from
continuing operations(3):
Primary $ 1.65 $ 0.70 $ 0.68 $ (0.70) $ 1.23
Fully diluted $ 1.60 --- --- --- ---
Cash dividends(4) 0.16 0.16 0.16 0.16 0.16
Financial Position at Year End
Total assets 205,716 204,496 205,078 188,522 188,033
Long-term debt, less
current maturities 44,913 42,656 31,596 34,267 36,263
Notes to Five-Year Operating and Financial Summary
1. This summary should be read in conjunction with the consolidated financial statements of the Company and the notes thereto,
which are attached as Appendix A to this Form 10-K.
2. The earnings (loss) from continuing operations exclude the discontinued athletic footwear businesses and are before the
cumulative effect of accounting changes. Balance sheet amounts for the athletic footwear businesses have been reclassified
separately as current and noncurrent assets. Refer to Note C to the consolidated financial statements for a description of
the Company's discontinued operations and Notes H and I for a description of the cumulative effect of accounting changes.
3. Primary earnings per share are computed based on the weighted average shares of common stock outstanding during each year
and, for fiscal 1993, the assumed exercise of dilutive stock options. Stock options are not included in the computation of
earnings per share in prior years since they were not materially dilutive. Fully diluted earnings per share for fiscal 1993
also includes the effect of converting subordinated notes into common stock. Fully diluted earnings per share are not
presented for prior years since the effect of exercising stock options and converting subordinated notes was not material.
4. Cash dividends per share represent the rates paid by the Company on the shares outstanding at dates of declaration.
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Item 7. Management's Discussion and Analysis of Financial Condition and
Results of Operations.
Operations
Results of Operations - 1993 Compared to 1992
Net sales for fiscal 1993 were $333.1 million compared to $293.1
million for fiscal 1992. This 13.6% increase was driven by record sales in
the Wolverine Work & Outdoor Footwear Group, the Bates Uniform Footwear
Division and the Tru-Stitch Footwear Division. The Hush Puppies Company
also recorded a healthy sales increase during the year. These increases
were partially offset by a decrease in the Wolverine Leathers Division
sales.
The Wolverine Work & Outdoor Footwear Group posted a sales increase of
33.8% which was the second year in which the sales gain exceeded 30%. The
continued success of Wolverine DURASHOCK (Registered) boots and the
introduction of WOLVERINE WILDERNESS (Registered) products to the market
place were the primary factors contributing to the sales gain. Increased
marketing efforts to promote the Wolverine Work Boot products also
contributed to the sales gains.
A 16.2% increase in sales was realized by the Bates Uniform Footwear
Division. While the U.S. military continues to contract, the comfort
characteristics of BATES (Registered) footwear continues to gain acceptance
and the durability of the product makes Bates number one in this category.
The Tru-Stitch Footwear Division reached record sales with a 20.7%
increase for the year. Their prominent position in the market through all
distribution channels and the addition of B & B Shoe Company which produces
generally lower priced products continues to allow the Tru-Stitch Division
to grow its business.
While the Hush Puppies Company did not reach record sales volumes, it
did post an increase of 5.3%. The repositioning and revitalization of the
brand which began in 1992 is beginning to have a positive impact. Retail
and consumer acceptance for the product is apparent as the division's
reorder business for the year was strong.
The Wolverine Leathers Division began resizing during the third
quarter of 1993. The primary focus is to retract the business into high
margin areas where the business can perform profitability. The volume was
reduced and this, combined with other actions, is expected to allow the
division to regain its profitability as it focuses on the higher value
added product in its offerings.
Gross margins as a percentage of net sales decreased to 30.0% from
30.2% in 1992. The emphasis of value priced product in the market place
continues to place pressures on wholesale and retail price points. The
Company is maximizing its pricing positions when superior products are
available, such as WOLVERINE (Registered) DURASHOCKS (Registered) and
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TRU-STITCH (Registered) slippers, but is very cautious in raising prices
in order to increase gross margin levels. A significant benefit, which
improved the Company's gross margin levels, is the manufacturing
efficiencies being produced in the domestic facilities. This, combined
with the Company's low cost import operations, should continue to provide
the Company with product which can be priced attractively.
Selling and administrative expenses for 1993 were 24.1% of net sales
compared to 26.0% of net sales in 1992. While the expenses were reduced as
a percentage of net sales, the expenses increased $4.2 million. The
increase was primarily a result of increased commissions due to higher
volume, the impact of intensified marketing and promotional campaigns, and
employee profit sharing programs. The overhead reduction plan which was
announced in the fourth quarter of 1992 was successful and the initial
target of $3.0 million of savings was exceeded by over $1.0 million.
Interest expense of $5.1 million for 1993 reflects a $1.4 million
increase over 1992. However, 1992 interest expense did not include
interest expense of $2.3 million associated with discontinued operations.
Overall, interest expense was reduced by $0.9 million as a result of the
reduction in debt levels.
Other expenses in 1992 included a restructuring charge of $2.7 million
associated with the reduction in corporate staff and the write-down of
certain intangible assets.
The 1993 effective tax rate of 27.9% compared to 28.7% in 1992. The
decrease from the statutory federal rate of 35% was principally a result of
non-taxable earnings of Puerto Rican and foreign subsidiaries.
Earnings from continuing operations of $11.5 million for fiscal 1993
reflect a 149% increase over fiscal 1992 earnings of $4.6 million.
During 1992 the corporation incurred costs associated with the
operating losses of the Brooks Athletic Footwear Division and the loss
associated with the disposal of this operation, which totaled $14.8
million. Additionally, the corporation elected to adopt SFAS No. 109
("Accounting for Income Taxes") and SFAS No. 106 ("Employers Accounting for
Post-retirement Benefits Other Than Pensions") which resulted in a net
charge to earnings of $0.8 million. There were no additional charges
associated with either the discontinued operations or accounting changes
for 1993.
Net earnings of $11.5 million ($1.65 per share) for 1993 compares to a
loss of $10.9 million ($1.65 per share) for fiscal year end 1992. The
change reflects the significant progress made in the core business units of
the Company and the improvements resulting from the divestiture of the
Brooks athletic business.
Results of Operations - 1992 Compared to 1991
Net sales of continuing operations totaling $293.1 million for fiscal
1992 were $10.4 million, or 3.7% higher than 1991. Sales gains were
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realized in the Wolverine Work and Outdoor Footwear Group, the Bates
Uniform Footwear Division, the Tru-Stitch Footwear Division, and the
Wolverine Leather Division. Partially offsetting these gains was a sales
decline in the Hush Puppies Company.
The Wolverine Work and Outdoor Footwear Group posted sales gains of
38.0% over 1991, resulting primarily from the success of the WOLVERINE
(Registered) DURASHOCKS (Registered) boots which feature a rugged
adaptation of the patented BOUNCE (Registered) comfort sole. Improved
styling coupled with an aggressive advertising campaign also contributed to
the product's success.
A sales increase of 10.0% was realized by the Bates Uniform Footwear
Division despite a shrinking military market place. The majority of the
growth in 1992 was attributable to the penetration of the newly introduced
HUSH PUPPIES (Registered) PROFESSIONALS (Trademark) line into the civilian
uniform market.
The Tru-Stitch Footwear Division, the market leader of constructed
slippers, generated a 10.0% sales increase compared to 1991 as a result of
expanding its product offering to meet a broader range of retail price
points.
During 1992, the Hush Puppies Company experienced a sales decline of
8.0% from 1991 primarily due to the continued weakness in the retail sector
caused by the worldwide recession. The narrowing of the TOWN & COUNTRY
(Trademark) brand product offerings also contributed to the sales decrease.
Gross margin as a percentage of net sales for 1992 was 30.2%, a
decrease from 31.7% for 1991. Margin declines were realized in the Hush
Puppies Company, due primarily to manufacturing volume reductions, and the
Tru-Stitch Footwear Division, resulting from an increase in sales of lower
margin merchandise. Partially offsetting these declines were increases in
gross margins for the Wolverine Work and Outdoor Footwear Group and Bates
Uniform Division resulting from favorable manufacturing efficiencies and
improved pricing margins. The liquidation of lower cost LIFO inventories
contributed .4% to the gross margin in 1991 and was not repeated in 1992.
Selling and administrative expenses for 1992 of $76.2 million
increased by $1.3 million or 1.7% over 1991. Increases in variable selling
costs were partially offset by expense reductions related to a corporate
overhead cost reduction program initiated in the fourth quarter of 1992.
Interest expense of $3.6 million decreased by $0.1 million from 1991
as a result of a decline in interest rates partially offset by increased
borrowings. Reported interest expense for 1992 does not include $2.3
million of interest which was classified as discontinued operations.
Other expenses include restructuring costs in 1992 amounting to $2.7
million related to corporate staff reductions and asset write-offs compared
to a charge in 1991 of $7.5 million for litigation settlement and related
costs as described in Notes J and K to the Consolidated Financial
Statements.
-13-
The effective income tax rate for 1992 of 28.7% of earnings from
continuing operations is below the statutory rate of 34.0% primarily due to
nontaxable earnings of foreign subsidiaries and affiliates.
Earnings from continuing operations of $4.6 million or $0.70 per share
in 1992 compared favorably to $4.4 million or $0.68 per share in 1991.
The loss from discontinued operations in 1992 of $14.8 million is the
result of operating losses and the Company's disposition of its Brooks
athletic footwear and sports apparel businesses. The disposition includes
the sales and distribution operations in the United States, France, Germany
and the United Kingdom and the worldwide distribution and licensing rights
to the brand name as described in Note C to the Consolidated Financial
Statements.
During 1992, the Company adopted SFAS No. 109 "Accounting for Income
Taxes." The cumulative effect of adopting this change in accounting for
income taxes decreased the 1992 net loss by $0.8 million.
The Company also adopted the provisions of SFAS No. 106 "Employers'
Accounting for Post-retirement Benefits Other than Pensions" in 1992. The
cumulative effect of adopting this accounting change increased the 1992 net
loss by $1.6 million.
The net loss of $10.9 million or $1.65 per share compared unfavorably
to fiscal 1991 net earnings of $3.3 million or $0.50 per share due to the
cumulative effect of accounting changes and the loss from discontinued
operations recognized in fiscal 1992.
Liquidity and Capital Resources
Earnings from continuing operations after adjusting for non-cash items
increased cash by $18.9 million in 1993 compared to $10.9 million in 1992.
Of these amounts $12.9 million and $11.8 million were used to fund
increases in working capital. The most significant changes in working
capital were increases in accounts receivables and inventories during 1993
which were required in order to fund the growth of the business. In fiscal
1992, a significant reduction in other current liabilities was reported as
the litigation settlement was paid.
Additions to property, plant and equipment of $6.6 million in 1993 was
higher than the $4.1 million reported in 1992, but relatively flat with the
$6.3 million in 1991. The majority of this expenditure was related to
purchases of manufacturing equipment in order to continue to upgrade our
manufacturing facilities.
In 1993, cash of $12.2 million was provided from the divestiture of
the Brooks athletic business.
Payments on short-term debt of $15.2 million were made during 1993
which was principally a reduction of debt related to the discontinued
operations of Brooks.
-14-
Long-term debt of $49.6 million in 1993 remains relatively flat
compared to $48.4 million in 1992. While the senior notes were reduced by
$4.3 million, the Company recognized an increase in the revolving credit
obligations of $7.0 million.
The Company paid dividends of $1.1 million, or $.16 per share, which
was consistent with 1992 and 1991. Additionally, shares issued under
employee stock plans provided cash of $2.2 million compared to $1.2 million
during 1992. The Company expects to increase its dividend payout beginning
the second quarter of 1994 by 50%.
The Company continues to strengthen its financial position as the
current ratio improved to 3.9 : 1 in 1993 versus 2.8 : 1 in 1992.
Additionally, total interest bearing debt to equity was .46 : 1 in 1993
compared to .65 : 1 at year end 1992.
The Company's credit facilities and banking relationships combined
with cash flow from future operations are expected to be sufficient to meet
the cash requirements of the Company. The revolving credit facility which
expires in 1995 will be renegotiated during 1994 to assure that proper
financing remains in place for the Company. The Company is also evaluating
the refinancing of its senior notes to determine the benefits of lower
interest rates. Additionally, the Company maintains short-term credit
facilities of $41.0 million of which $13.4 million were used at year end
1993.
Inflation
Inflation has not had a significant impact on the Company over the
past three years nor is it expected to have a significant impact in the
foreseeable future. The Company continuously attempts to minimize the
effect of inflation through cost reductions and improved productivity.
Recent Development
The number of shares and the amount per share data included in this
Form 10-K have not been adjusted to reflect the three-for-two stock split
which was approved by the Board of Directors of the Company on March 10,
1994, and which will be payable on April 14, 1994, to stockholders of
record of the Company as of March 21, 1994.
Item 8. Financial Statements and Supplementary Data.
The response to this Item is set forth in Appendix A of this
Annual Report on Form 10-K and is here incorporated by reference.
Item 9. Changes in and Disagreements with Accountants on Accounting
and Financial Disclosure.
None.
-15-
PART III
Item 10. Directors and Executive Officers of the Registrant.
The information regarding directors of the Company contained
under the captions "Board of Directors" and "Compliance with Section 16(a)
of the Exchange Act" in the definitive Proxy Statement of the Company dated
March 22, 1994, is incorporated herein by reference. The information
regarding Executive Officers is provided in the Supplemental Item following
Item 4 of Part I above.
Item 11. Executive Compensation.
The information contained under the captions "Compensation of
Directors", "Executive Compensation," "Employment Agreements,
Termination of Employment and Change of Control Arrangements" and
"Compensation Committee Interlocks and Insider Participation" in the
definitive Proxy Statement of the Company dated March 22, 1994, is
incorporated herein by reference.
Item 12. Security Ownership of Certain Beneficial Owners and Management.
The information contained under the captions "Ownership of Common
Stock" and "Securities Ownership of Management" contained in the definitive
Proxy Statement of the Company dated March 22, 1994, is incorporated herein
by reference.
Item 13. Certain Relationships and Related Transactions.
The information regarding certain employee loans following the
caption "Executive Compensation," under the subheading "Stock Options," and
the information contained under the caption "Compensation Committee Interlocks
and Insider Participation" contained in the definitive Proxy Statement of the
Company dated March 22, 1994, are incorporated herein by reference.
PART IV
Item 14. Exhibits, Financial Statements, Schedules, and Reports on Form 8-
K.
Item 14(a)(1). List of Financial Statements. Attached as Appendix
A.
The following consolidated financial statements of Wolverine
World Wide, Inc. and subsidiaries are filed as a part of this report:
- Consolidated Balance Sheets as of January 1, 1994, and
January 2, 1993.
-16-
- Consolidated Statements of Stockholders' Equity for the
Fiscal Years Ended January 1, 1994, January 2, 1993 and
December 28, 1991.
- Consolidated Statements of Operations for the Fiscal Years
Ended January 1, 1994, January 2, 1993 and December 28,
1991.
- Consolidated Statements of Cash Flows for Fiscal Years Ended
January 1, 1994, January 2, 1993 and December 28, 1991.
- Notes to Consolidated Financial Statements for January 1,
1994.
Item 14(a)(2). Financial Statement Schedules. Attached as Appendix
B.
The following consolidated financial statement schedules of
Wolverine World Wide, Inc. and subsidiaries are filed as a part of this
report:
- Schedule II--Amounts receivable from related parties and
underwriters, promoters and employees other than related
parties.
- Schedule VIII--Valuation and qualifying accounts of
continuing operations.
- Schedule IX--Short-term borrowings of continuing operations.
- Schedule X--Supplementary income statement information of
continuing operations.
All other schedules (I, III, IV, V, VI, VII, XI, XII, XIII, XIV)
for which provision is made in the applicable accounting regulations of the
Securities and Exchange Commission are not required under the related
instructions or are inapplicable and, therefore, have been omitted.
Item 14(a)(3). List of Exhibits.
Exhibit
Number
3(a) Articles of Incorporation, as amended. Incorporated by
reference from Exhibit 3(a) of the Company's Annual Report
on Form 10-K for the fiscal year ended January 2, 1988.
3(b) Amended and Restated Bylaws.
4(a) The Articles of Incorporation. See Exhibit 3(a) above.
-17-
4(b) Preferred Stock Purchase Rights. Incorporated by reference
from Amendment No. 1 to the Form 8-A filed with the
Securities Exchange Commission on November 13, 1990.
4(c) Credit Agreement dated as of March 11, 1993 with NBD Bank,
N.A. as Agent. Incorporated by reference from Exhibit 4(c)
of the Company's Annual Report on Form 10-K for the fiscal
year ended January 2, 1993.
4(d) Note Purchase Agreement dated as of August 29, 1988 relating
to 10.40% Senior Notes. Incorporated by reference from
Exhibit 4(d) of the Company's Annual Report on Form 10-K for
the fiscal year ended December 31, 1988.
4(e) First, Second, Third and Fourth Amendments to Note Purchase
Agreement. Incorporated by reference from Exhibit 4(e) of
the Company's Annual Report on Form 10-K for the fiscal
year ended January 2, 1993.
4(f) The Registrant has several classes of long-term debt
instruments outstanding in addition to that described in
exhibit 4(d) above. The amount of none of these classes of
debt outstanding on March 1, 1994 exceeds 10% of the
Registrant's total consolidated assets. The Registrant
agrees to furnish copies of any agreement defining the
rights of holders of any such long-term indebtedness to the
Securities and Exchange Commission upon request.
10(a) Stock Option Plan of 1979, and amendment.* Incorporated by
reference from Exhibit 10(a) of the Company's Annual Report
on Form 10-K for the fiscal year ended January 2, 1988.
10(b) 1993 Stock Incentive Plan.*
10(c) 1988 Stock Option Plan.* Incorporated by reference from the
Company's registration statement on Form S-8, filed July 21,
1988, Registration No. 33-23196.
10(d) Amended and Restated Directors Stock Option Plan.*
10(e) Agreement dated as of July 24, 1992, between
the Registrant and Thomas D. Gleason.* Incorporated by
reference from Exhibit 10(e) of the Company's Annual Report
on Form 10-K for the fiscal year ended January 2, 1993. The
Company also incorporates by reference the description of
Mr. Gleason's agreement under the caption "Employment
Agreements, Termination Agreements and Change of Control
Arrangements" contained in the definitive Proxy Statement of
the Company dated March 22, 1994.
10(f) Employment Agreement dated April 27, 1993, between the
Registrant and Geoffrey B. Bloom.*
-18-
10(g) Executive Short-Term Incentive Plan for 1994.*
10(h) Management Short-Term Incentive Plan for 1994.*
10(i) Stock Option Loan Program.* Incorporated by reference from
Exhibit 10(h) of the Company's Annual Report on Form 10-K
for the fiscal year ended December 28, 1991.
10(j) Deferred Compensation Agreements with Disability Benefits.*
The form of agreement is incorporated by reference from
Exhibit 10(i) of the Company's Annual Report on Form 10-K
for the fiscal year ended January 2, 1993. An updated
participant schedule is attached as Exhibit 10(j).
10(k) Deferred Compensation Agreements without Disability
Benefits.* The form of agreement is incorporated by
reference from Exhibit 10(j) of the Company's Annual Report
on Form 10-K for the fiscal year ended January 2, 1993. An
updated participant schedule is attached as Exhibit 10(k).
10(l) Executive Long-Term Incentive (Three Year) Plans for the years
1991 to 1993 and 1992 to 1994.* Incorporated by reference from
Exhibit 10(l) of the Company's Annual Report on Form 10-K
for the fiscal year ended December 28, 1991.
10(m) Executive Long-Term Incentive (Three Year) Plan for the
three year period 1993-1995.* Incorporated by reference
from Exhibit 10(l) of the Company's Annual Report on Form
10-K for the fiscal year ended January 2, 1993.
10(n) Executive Long-Term Incentive (Three Year) Plan for the three
year period 1994-1996.*
10(o) Termination of Employment and Change of Control Agreements.*
The form of agreement is incorporated by reference from
Exhibit 10(m) of the Company's Annual Report on Form 10-K
for the fiscal year ended January 2, 1993. An updated
participant schedule is attached as Exhibit 10(o).
10(p) Indemnification Agreements.* The form of agreement is
incorporated by reference from Exhibit 10(n) of the
Company's Annual Report on Form 10-K for the fiscal year
ended January 2, 1993. An updated participant schedule is
attached as Exhibit 10(p).
10(q) Supplemental Retirement Benefits.* Incorporated by reference
from Exhibit 10(l) of the Company's Annual Report on Form
10-K for the fiscal year ended December 31, 1988.
-19-
10(r) Benefit Trust Agreement dated May 19, 1987, and Amendments
Number 1, 2 and 3 thereto.* Incorporated by reference from
Exhibit 10(p) of the Company's Annual Report on Form 10-K
for the fiscal year ended January 2, 1993.
10(s) Supplemental Director's Fee Arrangement dated April 27,
1993, between the Company and Phillip D. Matthews.*
10(t) Retirement Agreement effective December 31, 1993, between
the Company and Peter D. Panter.*
10(u) 1984 Executive Stock Incentive Purchase Plan, and amendment.*
Incorporated by reference form Exhibit 10(b) of the Company's
Annual Report on Form 10-K for the fiscal year ended January
2, 1988.
10(v) Asset Purchase Agreement dated January 29, 1993, concerning
the sale of the Brooks Business. Incorporated by reference
from Exhibit No. 2 from the Company's Form 8-K filed February
1, 1993.
10(w) Agreements relating to the sale of the assets of the three
European Subsidiaries associated with the Brooks Business.
Incorporated by reference from Exhibits 2(a), 2(b) and 2(c)
from the Company's Form 8-K filed July 8, 1993.
11 Computation of Per Share Earnings.
21 Subsidiaries of Registrant.
23 Consent of Independent Auditors.
24 Powers of Attorney
____________________________
*Management contract or compensatory plan or arrangement.
Item 14(b). Reports on Form 8-K.
No reports on Form 8-K were filed in the fourth
quarter of the fiscal year ended January 1, 1994.
-20-
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the
Securities Exchange Act of 1934, the Registrant has duly caused this report
to be signed on its behalf by the undersigned, thereunto duly authorized.
WOLVERINE WORLD WIDE,INC.
Dated: March 31, 1994 By:/s/Geoffrey B. Bloom
Geoffrey B. Bloom
President, Chief Executive
Officer and Director
Pursuant to the requirements of the Securities Exchange Act of
1934, this report has been signed below by the following persons on behalf
of the Registrant and in the capacities and on the dates indicated.
Signature Title Date
*/s/Phillip D. Matthews Chairman of the Board of March 31, 1994
Phillip D. Matthews Directors
/s/Geoffrey B. Bloom President, Chief Executive March 31, 1994
Geoffrey B. Bloom Officer and Director
*/s/Thomas D. Gleason Vice Chairman of the Board March 31, 1994
Thomas D. Gleason of Directors
*/s/Timothy J. O'Donovan Executive Vice President March 31, 1994
Timothy J. O'Donovan and Director
*/s/Stephen L. Gulis, Jr. Vice President and Chief March 31, 1994
Stephen L. Gulis, Jr. Financial Officer (Principal
Financial and Accounting
Officer)
*/s/Daniel T. Carroll Director March 31, 1994
Daniel T. Carroll
-21-
*/s/David T. Kollat Director March 31, 1994
David T. Kollat
*/s/David P. Mehney Director March 31, 1994
David P. Mehney
*/s/Stuart J. Northrop Director March 31, 1994
Stuart J. Northrop
*/s/Joseph A. Parini Director March 31, 1994
Joseph A. Parini
*/s/Joan Parker Director March 31, 1994
Joan Parker
*/s/Elmer L. Ward, Jr. Director March 31, 1994
Elmer L. Ward, Jr.
*by/s/Geoffrey B. Bloom
Geoffrey B. Bloom
Attorney-in-Fact
-22-
APPENDIX A
Wolverine World Wide, Inc. and Subsidiaries
Consolidated Balance Sheets
As of Fiscal Year End
1993 1992
(Thousands of Dollars)
Assets
Current assets:
Cash and cash equivalents $ 3,730 $ 2,375
Accounts receivable, less allowances
(1993--$3,411; 1992--$2,716) 62,362 51,510
Inventories:
Finished products 39,169 36,164
Raw materials and work-in-process 31,387 28,100
70,556 64,264
Refundable income taxes 1,594 3,798
Deferred income taxes 8,716 12,312
Net current assets of discontinued operations --- 10,994
Other current assets 2,554 2,960
Total current assets 149,512 148,213
Property, plant and equipment:
Land 1,269 1,283
Buildings and improvements 28,241 27,071
Machinery and equipment 61,098 57,908
90,608 86,262
Less allowances for depreciation 58,985 55,755
31,623 30,507
Other assets 24,581 25,776
Total assets $205,716 $204,496
-1-
Wolverine World Wide, Inc. and Subsidiaries
Consolidated Balance Sheets (Continued)
As of Fiscal Year End
1993 1992
(Thousands of Dollars)
Liabilities and Stockholders' Equity
Current liabilities:
Notes payable to banks $ 1,948 $16,377
Accounts payable 12,658 14,407
Salaries, wages and other compensation 8,998 4,748
Other accrued expenses 9,970 11,058
Current maturities of long-term debt 4,732 5,766
Total current liabilities 38,306 52,356
Long-term debt, less current maturities 44,913 42,656
Other liabilities:
Unfunded retirement benefits 8,214 7,526
Deferred income taxes 1,533 1,830
9,747 9,356
Stockholders' equity:
Common stock, $1 par value:
Authorized 15,000,000 shares:
Issued, including treasury shares:
1993 - 7,622,012 shares;
1992 - 7,466,929 shares 7,622 7,467
Additional paid-in capital 26,469 24,438
Retained earnings 86,986 76,580
Accumulated translation adjustments 398 351
Cost of shares in treasury (deduct):
1993 - 781,788 shares;
1992 - 781,252 shares (8,725) (8,708)
Total stockholders' equity 112,750 100,128
Total liabilities and stockholders' equity $205,716 $204,496
See accompanying notes to consolidated financial statements.
-2-
Wolverine World Wide, Inc. and Subsidiaries
Consolidated Statements of Operations
Fiscal Year
1993 1992 1991
(Thousands of Dollars, Except Per Share Data)
Net sales and other operating income $333,143 $293,136 $282,749
Cost and expenses:
Cost of products sold 233,115 204,481 193,005
Selling and administrative expenses 80,354 76,156 74,884
Interest expense 5,070 3,637 3,764
Interest income (859) (420) (460)
Other expenses (income) - net (469) 2,804 5,867
317,211 286,658 277,060
Earnings from continuing
operations before income taxes 15,932 6,478 5,689
Income taxes 4,440 1,858 1,267
Earnings from continuing operations 11,492 4,620 4,422
Discontinued operations, net of income taxes:
Operating loss (5,476) (1,172)
Loss on disposal (9,335)
Loss from discontinued operations (14,811) (1,172)
Cumulative effect of accounting changes:
Income taxes 800
Retirement benefits, net of income taxes (1,550)
(750)
Net earnings (loss) $11,492 $(10,941) $ 3,250
Primary earnings (loss) per share:
Continuing operations $ 1.65 $ .70 $ .68
Discontinued operations (2.24) (.18)
Cumulative effect of accounting changes (.11)
Net earnings (loss) $ 1.65 $ (1.65) $ .50
Fully diluted net earnings per share $ 1.60
See accompanying notes to consolidated financial statements.
-3-
Wolverine World Wide, Inc. and Subsidiaries
Consolidated Statements of Cash Flows
Fiscal Year
1993 1992 1991
(Thousands of Dollars)
Operating activities
Net earnings (loss) $11,492 $(10,941) $ 3,250
Adjustments necessary to reconcile net
earnings (loss) to cash provided by (used in)
operating activities:
Depreciation and amortization 5,182 5,176 4,851
Deferred income taxes (credit) 3,299 1,911 (1,715)
Pension income (541) (673) (1,069)
Loss from discontinued operations 14,811 1,172
Provision for litigation and
restructuring charges 1,000 7,500
Cumulative effect of changes in
accounting principles 750
Other (537) (1,107) (1,087)
Changes in operating assets and liabilities:
Accounts receivable (10,852) 2,490 881
Inventories (6,292) (2,266) 1,602
Other current assets 2,348 (1,816) 367
Accounts payable (1,749) 205 (2,833)
Other current liabilities 3,641 (10,376) (3,218)
(12,904) (11,763) (3,201)
5,991 (836) 9,701
Investing activities
Additions to property, plant and equipment (6,605) (4,061) (6,264)
Purchase of business, less cash acquired (2,428)
Cash from (used in) discontinued operations 12,193 (12,062) (12,725)
Other 1,899 2,261 740
7,487 (13,862) (20,677)
-4-
Wolverine World Wide, Inc. and Subsidiaries
Consolidated Statements of Cash Flows (continued)
Fiscal Year
1993 1992 1991
(Thousands of Dollars)
Financing activities
Proceeds from short-term borrowings $ 775 $ 6,077 $ 7,749
Payments on short-term debt (15,204)
Proceeds from long-term borrowings 57,000 45,000 29,068
Payments on long-term debt (55,777) (36,312) (25,202)
Cash dividends (1,086) (1,063) (1,049)
Purchase of common stock for treasury (17) (1) (244)
Shares issued under employee stock plans 2,186 1,231 323
(12,123) 14,932 10,645
Increase (decrease) in cash and cash equivalents 1,355 234 (331)
Cash and cash equivalents at beginning of year 2,375 2,141 2,472
Cash and cash equivalents at end of year $ 3,730 $ 2,375 $ 2,141
Other cash flow information
Interest paid $ 5,661 $ 6,723 $ 5,153
Income taxes paid 957 2,495 2,921
( ) Denotes reduction in cash and cash equivalents.
See accompanying notes to consolidated financial statements.
-5-
Wolverine World Wide, Inc. and Subsidiaries
Consolidated Statements of Stockholders' Equity
Fiscal Year
1993 1992 1991
(Thousands of Dollars)
Common stock
Balance at beginning of the year $ 7,467 $ 7,341 $ 7,311
Common stock issued from exercise of
stock options (1993--155,083 shares;
1992--126,082 shares; 1991--29,978 shares) 155 126 30
Balance at end of the year 7,622 7,467 7,341
Additional paid-in-capital
Balance at beginning of the year 24,438 23,333 23,040
Excess of proceeds from exercise of stock
options, including income tax benefits,
over par value of shares issued 2,031 1,105 293
Balance at end of the year 26,469 24,438 23,333
Retained earnings
Balance at beginning of the year 76,580 88,584 86,383
Net earnings (loss) 11,492 (10,941) 3,250
Cash dividends--$.16 per share (1,086) (1,063) (1,049)
Balance at end of the year 86,986 76,580 88,584
Accumulated translation adjustments
Balance at beginning of the year 351 (166) (663)
Sale of investment in foreign affiliate 985
Equity adjustments from foreign currency
translation 47 517 (488)
Balance at end of the year 398 351 (166)
Cost of shares in treasury
Balance at beginning of the year (8,708) (8,707) (8,463)
Common stock purchased for treasury
(1993--526 shares; 1992--50 shares;
1991--30,000 shares) (17) (1) (244)
Balance at end of the year (8,725) (8,708) (8,707)
Stockholders' equity at end of the year $112,750 $100,128 $110,385
( ) Denotes deduction.
See accompanying notes to consolidated financial statements.
-6-
Wolverine World Wide, Inc. and Subsidiaries
Notes to Consolidated Financial Statements
January 1, 1994
Note A - Summary of Significant Accounting Policies
Principles of Consolidation
The consolidated financial statements include the accounts of the Company
and its majority owned subsidiaries. Upon consolidation, all intercompany
accounts, transactions and profits have been eliminated. The investment in
a 35%-owned foreign affiliate is carried on the equity basis.
Fiscal Year End
The Company's fiscal year is the 52- or 53-week period that ends on the
Saturday nearest the end of December. Fiscal years presented herein
include the 52-week years ended January 1, 1994 and December 28, 1991, and
the 53-week year ended January 2, 1993.
Revenue Recognition
Revenue is recognized on the sale of Company products when the related
goods have been shipped and legal title has passed to the customer.
Cash Equivalents
All short-term investments with a maturity of less than three months when
purchased are considered cash equivalents for purposes of the consolidated
statement of cash flows. The carrying amount reported in the balance sheet
for cash and cash equivalents approximates its fair value.
Inventories
Inventories are valued at the lower of cost or market. Cost is determined
by the last-in, first-out (LIFO) method for substantially all manufacturing
inventories (see Note B). Inventories of the Company's retail operations
are valued using the retail method.
Property, Plant and Equipment
Property, plant and equipment are stated on the basis of cost and include
expenditures for new facilities, major renewals and betterments. Normal
repairs and maintenance are expensed as incurred.
Depreciation of plant and equipment is computed using the straight-line
method over the estimated useful lives of the respective assets.
-7-
Wolverine World Wide, Inc. and Subsidiaries
Notes to Consolidated Financial Statements (continued)
Note A - Summary of Significant Accounting Policies (continued)
Income Taxes
The provision for income taxes is based on the earnings or loss reported in
the financial statements. A deferred income tax asset or liability is
determined by applying currently enacted tax laws and rates to the
cumulative temporary differences between the carrying value of assets and
liabilities for financial statement and income tax purposes. Deferred
income tax expense (credit) is measured by the change in the deferred
income tax asset or liability during the year.
Earnings Per Share
Primary earnings per share are computed based on the weighted average
shares of common stock outstanding during each year and, for fiscal 1993,
the assumed exercise of dilutive stock options. Stock options are not
included in the computation of earnings per share in prior years since they
were not materially dilutive. Fully diluted earnings per share for fiscal
1993 also includes the effect of converting subordinated notes into common
stock. Fully diluted earnings per share are not presented for prior years
since the effect of exercising stock options and converting subordinated
notes was not material.
Financial Instruments
The Company's financial instruments, as defined by Statement of Financial
Accounting Standard No. 107, consist of cash and cash equivalents, notes
receivable and long-term debt. The Company's estimate of the fair value of
these financial instruments approximates the carrying amounts at January 1,
1994, except for certain long-term debt arrangements as discussed in Note
E.
Reclassifications
Certain amounts in 1992 and 1991 have been reclassified to conform with the
presentation used in 1993.
Note B - Inventories
Inventories in the amount of $47,686,000 at January 1, 1994 and $38,950,000
at January 2, 1993 have been valued using the LIFO method. If the FIFO
method had been used, the amounts would have been $19,903,000 and
$20,082,000 higher than reported at January 1, 1994 and January 2, 1993,
respectively.
Reductions in certain inventory quantities during 1991 resulted in the
liquidation of LIFO inventory layers carried at costs prevailing in prior
-8-
Wolverine World Wide, Inc. and Subsidiaries
Notes to Consolidated Financial Statements (continued)
years that were lower than current costs. The effect of these reductions
was to increase 1991 earnings from continuing operations before income
taxes by $1,080,000 and net earnings by $702,000 ($.11 per share). There
were no similar liquidations of LIFO inventories in 1993 or 1992.
Note C - Discontinued Operations
At the end of the third quarter of fiscal 1992, the Company announced its
intent to dispose of its Brooks athletic footwear and sports apparel
business. The Brooks business consisted of sales and distribution
operations in the United States, France, Germany and the United Kingdom,
sourcing activities, primarily in the Far East, and worldwide licensing of
the rights to the brand name. The Brooks distributors in Europe were 33%-
owned equity investees from April 3, 1990 until July 1, 1991 when the
remaining equity interests were acquired.
During 1993, the Company sold the Brooks businesses in separate
transactions in exchange for cash and notes totaling approximately $24
million. Notes receivable of $7,700,000 were outstanding at January 1,
1994 and are collateralized by substantially all of the assets sold. The
noncurrent portion of the notes receivable representing payments of
$2,300,000, $4,324,000, and $361,000, due in 1995, 1996 and 1997,
respectively, are included in other assets.
The results of these businesses, which are classified separately as
discontinued operations in the accompanying consolidated statements of
operations, are summarized as follows:
1992 1991
(Thousands of Dollars)
Net sales $39,819 $32,696
Loss from operations before income taxes $(6,711) $(1,152)
Income taxes (credit) (1,235) 20
Loss from operations $(5,476) $(1,172)
The above results for 1992 are through the third quarter when the decision
was made to dispose of the Brooks business. Operating results of
discontinued operations for 1992 and 1991 include allocations of overhead
and interest expense. Overhead expense of $370,000 and $556,000,
respectively, was allocated based upon a determination of those costs which
were not expected to be incurred by continuing operations. Interest
-9-
Wolverine World Wide, Inc. and Subsidiaries
Notes to Consolidated Financial Statements (continued)
expense of $2,268,000 and $1,442,000, respectively, was allocated based on
debt incurred to finance the discontinued operations since acquisition.
The Company also made charges of $16,300,000 ($9,335,000 after income
taxes) during fiscal 1992 to provide for estimated losses on the disposal
of the Brooks businesses including anticipated operating losses from the
end of the third quarter to the expected dates of sale.
Note D - Notes Payable to Banks
Notes payable to banks at January 1, 1994 consist primarily of unsecured
short-term borrowings of the Company's Canadian subsidiary. The notes bear
interest at Canadian prime (5.5% at January 1, 1994) plus 2%. Notes
payable to banks in 1992 also included unsecured short-term borrowings of
the Company's Brooks Europe subsidiaries which were substantially repaid
in 1993 in connection with the disposal of the Brooks business.
The Company also has $41,000,000 of short-term borrowing and commercial
letter-of-credit facilities. There were no outstanding borrowings at the
end of fiscal 1993; however, outstanding letters-of-credit amounted to
approximately $13,400,000.
Note E - Long-Term Debt
Long-term debt consists of the following obligations at the end of fiscal
1993 and 1992:
1992 1991
(Thousands of Dollars)
10.4% senior notes to insurance companies $21,429 $25,714
Revolving credit obligations 25,000 18,000
Subordinated convertible notes 2,500 2,500
Other 716 2,208
49,645 48,422
Less current maturities 4,732 5,766
$44,913 $42,656
The 10.4% senior notes to insurance companies were issued on September 1,
1988. The note agreement requires equal annual principal payments of
$4,286,000 on August 15, 1994 through 1998.
-10-
Wolverine World Wide, Inc. and Subsidiaries
Notes to Consolidated Financial Statements (continued)
Note E - Long-Term Debt (continued)
The revolving credit agreement allows for borrowings of up to the lesser of
$50,000,000 or amounts determined in accordance with certain asset-based
debt limitation formulas. The agreement also requires the outstanding
balance to be no more than $30,000,000 during the period December 1 through
May 31 each year. Interest is payable at variable rates based on both
LIBOR and prime (6% at January 1, 1994). The agreement expires on June 30,
1995, but can be renewed with the mutual consent of the Company and the
participating lenders. As of January 1, 1994, the available unused credit
under the agreement was $5,000,000. Maximum borrowings under the agreement
during 1993 and 1992 were $46,000,000 and $45,000,000, respectively.
The subordinated convertible notes are payable in two installments of
$1,250,000 each in 1995 and 1996 with interest payable semiannually at
6.5%. The notes are subordinated to all insurance company and bank debt
and are convertible into common stock at a price of $12.50 per share at any
time prior to maturity.
The revolving credit and insurance company loan agreements contain
restrictive covenants which, among other things, require the Company to
maintain certain financial ratios and minimum levels of working capital and
tangible net worth. The agreements also impose restrictions on the
occurrence of additional debt, sale and merger transactions, acquisition by
the Company of its common stock and the payment of dividends. At January
1, 1994, retained earnings of $2,873,000 are available for dividends or
other restricted payments under the most restrictive of these provisions.
Principal maturities of long-term debt during the four years subsequent to
1994 are as follows: 1995--$30,705,000; 1996--$5,586,000; 1997--$4,336,000;
1998--$4,286,000.
The carrying value of the Company's long-term debt approximates fair market
value except for the 10.4% senior notes and the convertible notes. The
fair market value of the senior notes is estimated to be $24,300,000. This
was determined using discounted cash flow analysis and the Company's
incremental borrowing rate for similar financing arrangements. The fair
market value of the subordinated convertible notes is $6,000,000 based on
the quoted market price of the Company's common stock at January 1, 1994.
Note F - Leases
The Company leases machinery, transportation equipment and certain
warehouse and retail store space under agreements which expire at various
dates through 2002. At January 1, 1994, minimum rental payments due under
all noncancelable leases are as follows (thousands of dollars):
-11-
Wolverine World Wide, Inc. and Subsidiaries
Notes to Consolidated Financial Statements (continued)
Note F - Leases (continued)
1994 $ 3,364
1995 2,958
1996 2,295
1997 1,731
1998 868
Thereafter 185
Total minimum lease payments $11,401
Rental expense under all operating leases is summarized as follows:
1993 1992 1991
(Thousands of Dollars)
Minimum rentals $5,210 $5,441 $5,546
Contingent rentals 1,138 1,098 1,233
$6,348 $6,539 $6,779
Contingent rentals are based on retail store sales volume or usage of
equipment.
Note G - Capital Stock
The Company's authorized capital includes 2,000,000 shares of preferred
stock with a par value of $1 per share. No preferred stock has been
issued; however, the Company has designated 880,000 shares of preferred
stock as Series A junior participating preferred stock for possible future
issuance under the Company's stock rights plan described below. Each share
of Series A junior preferred stock will have 100 votes upon issuance and a
preferential quarterly dividend equal to the greater of $6.00 per share or
100 times the dividend declared on the Company's common stock.
The Company's stock rights plan is designed to protect stockholder
interests in the event the Company is confronted with coercive or unfair
takeover tactics. Under its terms, each stockholder received one right for
each share of common stock owned. The rights will trade separately from
common stock and will become exercisable only upon the occurrence of
certain triggering events, including a person, group or company acquiring
15% or more of the Company's outstanding common stock, tendering for a 15%
or greater interest in the Company, or acquiring 10% or more of the
outstanding common stock and being determined by the Company's Board of
Directors to be an adverse person, as defined.
-12-
Wolverine World Wide, Inc. and Subsidiaries
Notes to Consolidated Financial Statements (continued)
Note G - Capital Stock (continued)
Each right, when exercisable, will entitle the holder to purchase one one-
hundredth of a share of Series A junior participating preferred stock for
$40. Alternatively, in the event the Company is a party to a merger or
other business combination, regardless of whether the Company is the
surviving corporation, rights holders, other than the party to the merger,
will be entitled to receive common stock of the surviving corporation worth
twice the exercise price of the rights. The plan also provides for
protection against self-dealing transactions by a 15% stockholder or the
activities of an adverse person. The Company may redeem the rights for
$.01 each at any time prior to fifteen days after a triggering event.
Unless redeemed earlier, all rights will expire on May 8, 1997.
The Company has stock incentive plans under which options to purchase
shares of common stock may be granted to officers, other key employees and
nonemployee directors. Under the plans, which were adopted in 1979, 1988
and 1993, options are exercisable in equal annual installments of 25% over
three years beginning on the date the options are granted. All unexercised
options under the 1988 and 1993 plans are available for future grants upon
their cancellation. The 1979 plan expired during 1989 and no additional
options are available for future grants under this plan.
A summary of the transactions under the plans follows:
Number of
Shares Under
Options Option Price
Outstanding at December 29, 1990 413,625 $ 8.75 to $13.31
Granted in 1991 142,500 9.38 to 10.00
Exercised (7,853) 8.75 to 10.00
Canceled (21,270) 8.75 to 11.56
Outstanding at December 28, 1991 527,002 8.75 to 13.31
Granted in 1992 116,150 10.00 to 11.63
Exercised (108,295) 8.75 to 11.63
Canceled (62,575) 8.75 to 11.63
Outstanding at January 2, 1993 472,282 8.75 to 13.31
Granted in 1993 97,900 17.31 to 30.88
Exercised (134,883) 8.75 to 18.00
Canceled (825) 8.75 to 10.00
Outstanding at January 1, 1994 434,474 8.75 to 30.88
Exercisable at January 1, 1994 292,178 $ 8.75 to $30.88
Available for future grants:
At January 1, 1994 311,316
At January 2, 1993 73,875
-13-
Wolverine World Wide, Inc. and Subsidiaries
Notes to Consolidated Financial Statements (continued)
Note G - Capital Stock (continued)
A provision in the 1993 stock incentive plan allows the Company to make
stock awards to officers and key employees as consideration for future
services. The intent of this provision is to provide a continuation of the
provisions of the executive incentive stock purchase plan adopted in 1984
and expiring on December 31, 1994, which awarded rights to purchase shares
of the Company's common stock at a nominal price of $1.00 per share.
Common stock acquired under the provisions of either plan is subject to
certain restrictions, including prohibition against any sale, transfer or
other disposition by the officer or employee, and a requirement to forfeit
the award upon termination of employment. These restrictions lapse over a
three- to five-year period from the date of the award. During 1993, 15,484
shares were issued under provisions of the current plan and 4,716 shares
were issued under the predecessor plan. Rights to purchase 19,700 and
26,500 shares of common stock under the 1984 plan for $1.00 per share were
granted in 1992 and 1991, respectively, and rights to 2,913 and 3,375
shares were canceled in 1992 and 1991. The maximum of 150,000 shares have
been granted under the 1984 plan. Additional shares may be awarded under
the 1993 stock incentive plan. Such awards will reduce the number of
shares effected above as available for grant under the stock option
provisions of the plan.
Note H - Retirement Plans
The Company has noncontributory, defined benefit pension plans covering a
majority of domestic employees. The Company's principal defined benefit
pension plan provides benefits based on the employee's years of service and
final average earnings (as defined), while the other plans provide benefits
at a fixed rate per year of service. The Company intends to annually
contribute amounts deemed necessary, if any, to maintain the plans on a
sound actuarial basis.
The Company also has individual deferred compensation agreements with
certain key employees which entitles them to receive payments from the
Company for a period of fifteen to eighteen years following retirement.
Under the terms of the individual contracts, the employees are eligible for
reduced benefits upon early retirement generally at age 58. Prior to 1992,
the Company's policy was to recognize the deferred compensation cost over
the expected employment period of the individual employees.
In addition, the Company sponsors a noncontributory defined benefit plan
that provides postretirement life insurance benefits to full-time employees
who have worked ten or more consecutive years and attained age 60 while
employed by the Company. Prior to 1992, the Company's policy was to
recognize expense when claims were paid.
The Company does not provide postretirement medical benefits.
-14-
Wolverine World Wide, Inc. and Subsidiaries
Notes to Consolidated Financial Statements (continued)
Note H - Retirement Plans (continued)
The Company also has a defined contribution plan covering substantially all
employees which provides for Company contributions based on the Company's
earnings. Contributions to the plan were $760,000 in 1993, $69,000 in 1992
and $267,000 in 1991.
The Company adopted the provisions of Statement of Financial Accounting
Standard (SFAS) No. 106, "Employers' Accounting for Postretirement Benefits
Other Than Pensions" in 1992. SFAS No. 106 requires the estimated cost of
life insurance benefits and deferred compensation contracts to be
recognized over the period of employment to the date that employees are
fully eligible to receive future benefits.
The cumulative prior year effect of adopting SFAS No. 106 was recorded in
fiscal 1992 and amounted to $2,400,000 ($1,550,000 after related deferred
income taxes). If the revised accounting principle had been applied
retroactively, net earnings for fiscal 1991 would not have changed
significantly.
The following summarizes the status of the Company's pension assets and
related obligations:
September 30
1992 1991
(Thousands of Dollars)
Pension assets at fair value $72,865 $54,403
Actuarial present value of accumulated plan benefits:
Vested 36,223 31,419
Nonvested 1,969 1,215
38,192 32,634
Effect of estimated future increases in compensation 6,793 5,481
Projected benefit obligation for service rendered
to date 44,985 38,115
Excess pension assets $27,880 $16,288
Components of excess pension assets:
Prepaid pension costs recognized in the Company's
balance sheet in other assets $ 4,879 $ 4,338
Unrecognized amounts, net of amortization:
Transition asset 5,634 6,567
Prior service costs (2,348) (2,234)
Experience gains 19,715 7,617
$27,880 $16,288
-15-
Wolverine World Wide, Inc. and Subsidiaries
Notes to Consolidated Financial Statements (continued)
Note H - Retirement Plans (continued)
The discount rate and rate of increase in future compensation levels used
in determining the actuarial present value of the projected benefit
obligation were 7.5% and 4% in 1993 and 8.5% and 5% in 1992. These
assumption changes increased the projected benefit obligation at September
30, 1993 by approximately $3,300,000.
At September 30, 1993, plan assets were invested in listed equity
securities (69%), fixed income funds (20%), guaranteed investment contracts
(6%) and short-term investments (5%). Equity securities at September 30,
1993 include 200,200 shares of the Company's common stock with a fair value
of $5,756,000.
The following is a summary of the pension income recognized by the Company:
1993 1992 1991
(Thousands of Dollars)
Service cost pertaining to benefits earned
during the year $ (1,398) $ (1,258) $ (1,188)
Interest cost on projected benefit
obligation (3,247) (3,052) (2,723)
Actual net investment income 20,354 5,638 11,614
Amortization of net transition asset 933 933 933
Amortization of prior service cost from
plan amendments and net experience gains (284) (267) (113)
Deferral of actual net investment income
in excess of expected (15,855) (1,418) (7,559)
Net pension income $ 503 $ 576 $ 964
The expected long-term return on plan assets was 9.0% in 1993 and 1992, and
9.5% in 1991.
The Company's accumulated postretirement life insurance benefit obligation
is as follows:
1992 1991
(Thousands of Dollars)
Retirees $ 731 $ 576
Active plan participants 202 224
Accumulated postretirement benefit obligation 933 800
Unrecognized experience losses (151)
Amount accrued in other liabilities $ 782 $ 800
-16-
Wolverine World Wide, Inc. and Subsidiaries
Notes to Consolidated Financial Statements (continued)
Note H - Retirement Plans (continued)
The weighted-average discount rate used in determining the accumulated
postretirement benefit obligation was 7.5% in 1993 and 8.5% in 1992. The
Company's expense for postretirement life insurance benefits was $70,000 in
1993 and $50,000 in 1992 and 1991.
Note I - Income Taxes
Effective the beginning of fiscal 1992, the Company adopted SFAS No. 109,
"Accounting for Income Taxes". The new standard requires that an asset and
liability approach be applied in accounting for income taxes and provides
revised criteria for the recognition of deferred tax assets. As permitted
under the new rules, prior years financial statements were not restated.
The cumulative prior year effect of adopting SFAS No. 109 was recorded in
fiscal 1992 and decreased the net loss by $800,000.
The provisions (credit) for income taxes consists of the following:
1993 1992 1991
(Thousands of Dollars)
Currently payable (refundable):
Federal $ (310) $(1,429) $ 1,729
State and foreign 1,451 1,376 1,253
Deferred (credit) 3,299 1,911 (1,715)
$ 4,440 $ 1,858 $ 1,267
A reconciliation of the Company's total income tax expense (benefit) and
the amount computed by applying the statutory federal tax rate of 35% (34%
for fiscal 1992 and 1991) to earnings from continuing operations before
income taxes is as follows:
1993 1992 1991
(Thousands of Dollars)
Income taxes at statutory rate $ 5,576 $2,203 $1,934
State income and foreign taxes, net of federal
tax reduction 340 65 301
Nontaxable earnings of Puerto Rican
subsidiaries and foreign affiliates (1,202) (292) (82)
Gain on sale of foreign affiliate 690
Utilization of foreign tax credit carryovers (896)
Investment tax and other credits utilized (241)
Other (274) (118) (439)
$ 4,440 $1,858 $1,267
-17-
Wolverine World Wide, Inc. and Subsidiaries
Notes to Consolidated Financial Statements (continued)
Note I - Income Taxes (continued)
Deferred income taxes reflect the net tax effects of temporary differences
between the carrying amounts of assets and liabilities for financial
reporting purposes and the amounts used for income tax purposes.
Significant components of the Company's deferred tax assets and liabilities
as of the end of fiscal 1993 and 1992 are as follows:
1992 1991
(Thousands of Dollars)
Deferred tax assets:
Accounts receivable and inventory
valuation allowances $ 3,861 $ 3,122
Deferred compensation accruals 2,841 2,287
Restructuring and litigation accruals 1,416 1,641
Provision for losses on disposal of discontinued operations 454 5,675
Credit carryforwards 1,038
Other 4,349 4,021
13,959 16,746
Valuation allowance (deduct) (1,000) (1,000)
Total deferred tax assets 12,959 15,746
Deferred tax liabilities:
Excess tax depreciation 2,773 2,826
Prepaid pension costs 1,766 1,495
Unremitted earnings of Puerto Rican subsidiary 705 485
Other 532 458
Total deferred tax liabilities 5,776 5,264
Net deferred tax asset $ 7,183 $10,482
The valuation allowance has been provided to recognize the uncertainty of
realizing a portion of the deferred tax assets which are dependent upon
future taxable income.
The Company has provided for substantially all taxes that would be payable
if accumulated earnings of its Puerto Rico subsidiary were distributed.
Similar taxes on the unremitted earnings of the Company's foreign
affiliates have not been provided because such earnings are considered
permanently invested. The additional taxes that would be payable if
unremitted earnings of its foreign affiliates were distributed are not
significant.
-18-
Wolverine World Wide, Inc. and Subsidiaries
Notes to Consolidated Financial Statements (continued)
Note J - Restructuring
A restructuring charge of $2,700,000 in fiscal 1992 is included in other
expense - net. The charge consisted principally of costs associated with a
reduction in the corporate staff and the write-off of certain intangible
and other assets. After related income taxes, the charge reduced 1992
earnings from continuing operations and net earnings by $1,730,000 ($.26
per share).
Note K - Litigation
On March 2, 1992, the Company settled lawsuits which were filed in 1989 and
1990 by Southwest Hide Company and First Security Bank of Utah under an
agreement requiring the payment of cash and notes. To provide for the
settlement, the Company recognized a charge of $7,500,000 in its 1991
financial statements which is included in other expenses - net. After
related income taxes, the provision reduced 1991 earnings from continuing
operations and net earnings by $6,100,000 ($.93 per share).
The Company is involved in various other legal actions arising in the
normal course of business. After taking into consideration legal counsel's
evaluation of such actions, management is of the opinion that their outcome
will not have a significant effect on the Company's consolidated financial
position or results of operations.
Note L - Industry Information
The Company is principally engaged in the manufacture and sale of footwear,
primarily casual shoes, slippers, moccasins, dress shoes, boots, uniform
shoes and work shoes. The Company is also the largest domestic tanner of
pigskin which is used in a significant portion of shoes manufactured and
sold by the Company, and is also sold to other domestic and foreign
manufacturers of shoes and other products and to the Company's foreign
trademark licensees. Royalty income is derived from licensing its
trademarks to domestic and foreign licensees for use on non-footwear and
footwear products. As part of its footwear business, the Company operates
a number of domestic retail shoe stores that sell Company-manufactured
products as well as footwear manufactured by unaffiliated companies.
Foreign operations consist of factories in the Dominican Republic and
Mexico which produce shoe uppers for Company operations in the United
States and a 75%-owned subsidiary which manufactures and markets branded
footwear in Canada. Export sales, foreign operations and related assets,
excluding the discontinued Brooks European operations (see Note C), are not
significant.
The Company markets its products primarily to customers in the retail
sector. Although the Company closely monitors the credit worthiness of its
customers and adjusts its credit policies and limits as needed, a
substantial portion of its debtors' ability to discharge amounts owed is
-19-
Wolverine World Wide, Inc. and Subsidiaries
Notes to Consolidated Financial Statements (continued)
dependent upon the retail economic environment. The Company does not
believe that it is dependent upon any single customer, since none account
for more than 10% of consolidated net sales.
Note M - Quarterly Results of Operations (Unaudited)
The Company reports its quarterly results of operations on the basis of
12-week periods for each of the first three quarters and a 16-week period
for the fourth quarter. The fourth quarter of fiscal 1992 included 17
weeks.
The following tabulation presents the Company's unaudited quarterly results
of operations for fiscal 1993 and 1992. Certain reclassifications have
been made to the amounts originally reported in the Company's quarterly
reports on Form 10-Q to conform with the presentation used in the annual
financial statements.
Fiscal 1993
First Second Third Fourth
Quarter Quarter Quarter Quarter
(Thousands of Dollars, Except Per Share Data)
Net sales and other operating income $65,859 $65,902 $81,314 $120,068
Gross margin 18,799 19,956 22,192 39,081
Net earnings $ 700 $ 1,084 $ 2,048 $ 7,660
Net earnings per share:
Primary $ .10 $ .17 $ .30 $ 1.08
Fully diluted $ .10 $ .15 $ .29 $ 1.05
Fiscal 1992
First Second Third Fourth
Quarter Quarter Quarter Quarter
(Thousands of Dollars, Except Per Share Data)
Net sales and other operating income $53,681 $60,104 $73,051 $106,300
Gross margin 16,403 17,809 20,871 33,572
Earnings (loss) from continuing operations (202) (472) (1,062) 6,356
Loss from discontinued operations (337) (1,262) (6,285) (6,927)
Cumulative effect of changes in
accounting principles (750)
Net loss $(1,289) $(1,734) $(7,347) ($571)
-20-
Wolverine World Wide, Inc. and Subsidiaries
Notes to Consolidated Financial Statements (continued)
Note M - Quarterly Results of Operations (Unaudited) (continued)
Fiscal 1992
First Second Third Fourth
Quarter Quarter Quarter Quarter
(Thousands of Dollars, Except Per Share Data)
Primary earnings (loss) per share:
Continuing operations $ (.03) $ (.07) $ (.16) $ .96
Discontinued operations (.06) (.19) (.95) (1.04)
Cumulative effect of changes
in accounting principles (.11)
Net loss $ (.20) $ (.26) $ (1.11) $ (.08)
Adjustments recorded in the fourth quarter of fiscal 1993 and 1992 relating
principally to inventories increased net earnings by $1,910,000 ($0.27 per
share) in 1993 and earnings from continuing operations in 1992 by
$1,030,000 ($0.16 per share). In addition, an after tax provision of
$6,900,000 ($1.04 per share) related to discontinued operations was
recorded in the fourth quarter of 1992 (see Note C).
-21-
Report of Independent Auditors
The Board of Directors
Wolverine World Wide, Inc.
We have audited the accompanying consolidated balance sheets of Wolverine
World Wide, Inc. and subsidiaries as of January 1, 1994 and January 2,
1993, and the related consolidated statements of stockholders' equity,
operations and cash flows for each of the three fiscal years in the period
ended January 1, 1994. Our audits also included the financial statement
schedules listed in the Index at Item 14(a). These financial statements and
schedules are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements and
schedules based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free
of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used
and significant estimates made by management, as well as evaluating the
overall financial statement presentation. We believe that our audits
provide a reasonable basis for our opinion.
In our opinion, the consolidated financial statements referred to above
present fairly, in all material respects, the consolidated financial
position of Wolverine World Wide, Inc. and subsidiaries at January 1, 1994
and January 2, 1993, and the consolidated results of their operations and
their cash flows for each of the three fiscal years in the period ended
January 1, 1994, in conformity with generally accepted accounting
principles. Also, in our opinion, the related financial statement
schedules, when considered in relation to the basic financial statements
taken as a whole, present fairly in all material respects the information
set forth therein.
Ernst & Young
Grand Rapids, Michigan
February 14, 1994
APPENDIX B
Schedule II--Amounts Receivable from Related Parties and Underwriters,
Promoters and Other Employees Other than Related Parties
Wolverine World Wide, Inc. and Subsidiaries
Fiscal year ended January 1, 1994
Column A Column B Column C Column D Column E
Deductions Balance at End of Period
Balance at (1) (2)
Beginning of Amounts Amounts (1) (2)
Name of Debtor Period Additions Collected Written Off Current Not Current
Geoffrey B. Bloom(A) $210,930 $105,465 $105,465
Thomas D. Gleason(B) 106,813 106,813
(A) The note receivable from Mr. Bloom bears interest at 7.83% and is due in installments from 1997 through 2004.
(B) The notes receivable from Mr. Gleason bear interest at rates ranging from 7.33% to 7.72% and are due in installments from
1994 to 2004.
-1-
Schedule VIII--Valuation and Qualifying Accounts from Continuing Operations
Wolverine World Wide, Inc. and Subsidiaries
Column A Column B Column C Column D Column E
Additions
(1) (2)
Balance at Charged to Charged to
Beginning Costs and Other Accounts-- Deductions-- Balance at
Description of Period Expenses Describe Describe End of Period
Fiscal year ended January 1, 1994
Deducted from asset
accounts:
Allowance for doubtful
accounts $2,454,000 $2,208,000 $1,521,000(A) $3,141,000
Allowance for cash
discounts 262,000 1,770,000 1,762,000(B) 270,000
$2,716,000 $3,978,000 $3,283,000 $3,411,000
Fiscal year ended January 2, 1993
Deducted from asset
accounts:
Allowance for doubtful
accounts $2,454,000 $1,615,000 $1,615,000(A) $2,454,000
Allowance for cash
discounts 396,000 1,636,000 1,770,000(B) 262,000
$2,850,000 $3,251,000 $3,385,000 $2,716,000
Fiscal year ended December 28, 1991
Deducted from asset
accounts:
Allowance for doubtful
accounts $2,732,000 $1,965,000 $2,243,000(A) $2,454,000
Allowance for cash
discounts 347,000 1,758,000 1,709,000(B) 396,000
$3,079,000 $3,723,000 $3,952,000 $2,850,000
(A) Accounts charged off, net of recoveries.
(B) Discounts given to customers
-2-
Schedule IX--Short-Term Borrowings of Continuing Operations
Wolverine World Wide, Inc. and Subsidiaries
Column A Column B Column C Column D Column E Column F
Maximum Average Weighted
Amount Amount Average
Weighted Outstanding Outstanding Interest Rate
Category of Aggregate Balance at Average During the During the During the
Short-Term Borrowings End of Period Interest Rate Period Period(B) Period(C)
Fiscal year ended January 1, 1994
Foreign notes payable
to banks(A) $1,948,000 7.5% $16,377,000 $ 7,250,000 8.48%
Fiscal year ended January 2, 1993
Notes payable to banks(A):
Domestic 0 8,000,000 827,000 6.53
Foreign 16,377,000 9.3 20,799,000 14,613,000 10.78
Fiscal year ended December 28, 1991
Foreign notes payable
to banks(A) 10,300,000 10.5 10,300,000 3,817,000 10.04
(A) Notes payable to banks represent borrowings under various short-term line-of-credit arrangements.
(B) The average amount outstanding during the period was computed by dividing the total daily outstanding principal balances by
the number of days in the fiscal year.
(C) The weighted average interest rate during the period was computed by dividing the actual interest expense, excluding
commitment fees, by average short-term debt outstanding during the period.
-3-
Schedule X--Supplementary Income Statement Information
of Continuing Operations
Wolverine World Wide, Inc. and Subsidiaries
Column A Column B
Item Charged to Costs and Expenses
Fiscal year ended
January 1, January 2, December 28,
1994 1993 1991
Maintenance and repairs $ 3,579,000 $ 3,437,000 $ 3,409,000
Advertising costs 13,725,000 12,886,000 11,972,000
Amounts for amortization of intangible assets, taxes other than payroll and
income taxes and royalties are not presented, as such amounts are less than
one percent of total net sales and other operating income in each of the
three fiscal years.
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Commission File No. 1-6024
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
EXHIBITS
TO
FORM 10-K
For the Fiscal Year
January 1, 1994
Wolverine World Wide, Inc.
9341 Courtland Drive
Rockford, Michigan 49351
EXHIBIT INDEX
Exhibit
Number
3(a) Articles of Incorporation, as amended. Incorporated by
reference from Exhibit 3(a) of the Company's Annual Report
on Form 10-K for the fiscal year ended January 2, 1988.
3(b) Amended and Restated Bylaws.
4(a) The Articles of Incorporation. See Exhibit 3(a) above.
4(b) Preferred Stock Purchase Rights. Incorporated by reference
from Amendment No. 1 to the Form 8-A filed with the
Securities Exchange Commission on November 13, 1990.
4(c) Credit Agreement dated as of March 11, 1993 with NBD Bank,
N.A. as Agent. Incorporated by reference from Exhibit 4(c)
of the Company's Annual Report on Form 10-K for the fiscal
year ended January 2, 1993.
4(d) Note Purchase Agreement dated as of August 29, 1988 relating
to 10.40% Senior Notes. Incorporated by reference from
Exhibit 4(d) of the Company's Annual Report on Form 10-K for
the fiscal year ended December 31, 1988.
4(e) First, Second, Third and Fourth Amendments to Note Purchase
Agreement. Incorporated by reference from Exhibit 4(e) of
the Company's Annual Report on Form 10-K for the fiscal year
ended January 2, 1993.
4(f) The Registrant has several classes of long-term debt
instruments outstanding in addition to that described in
exhibit 4(d) above. The amount of none of these classes of
debt outstanding on March 1, 1994 exceeds 10% of the
Registrant's total consolidated assets. The Registrant
agrees to furnish copies of any agreement defining the
rights of holders of any such long-term indebtedness to the
Securities and Exchange Commission upon request.
10(a) Stock Option Plan of 1979, and amendment. Incorporated by
reference from Exhibit 10(a) of the Company's Annual Report
on Form 10-K for the fiscal year ended January 2, 1988.*
10(b) 1993 Stock Incentive Plan.*
10(c) 1988 Stock Option Plan.* Incorporated by reference from the
Company's registration statement on Form S-8, filed July 21,
1988, Registration No. 33-23196.
-1-
10(d) Amended and Restated Directors Stock Option Plan.*
10(e) Agreement dated as of July 24, 1992, between the Registrant
and Thomas D. Gleason.* Incorporated by reference from
Exhibit 10(e) of the Company's Annual Report on Form 10-K
for the fiscal year ended January 2, 1993. The Company also
incorporates by reference the description of Mr. Gleason's
agreement under the caption "Employment Agreements,
Termination Agreements and Change of Control Arrangements"
contained in the definitive Proxy Statement of the Company
dated March 22, 1994.
10(f) Employment Agreement dated April 27, 1993, between the Registrant
and Geoffrey B. Bloom.*
10(g) Executive Short-Term Incentive Plan for 1994.*
10(h) Management Short-Term Incentive Plan for 1994.*
10(i) Stock Option Loan Program.* Incorporated by reference from
Exhibit 10(h) of the Company's Annual Report on Form 10-K
for the fiscal year ended December 28, 1991.
10(j) Deferred Compensation Agreements with Disability Benefits.*
The form of agreement is incorporated by reference from
Exhibit 10(i) of the Company's Annual Report on Form 10-K
for the fiscal year ended January 2, 1993. An updated
participant schedule is attached as Exhibit 10(j).
10(k) Deferred Compensation Agreements without Disability Benefits.*
The form of agreement is incorporated by reference from Exhibit
10(j) of the Company's Annual Report on Form 10-K for the fiscal
year ended January 2, 1993. An updated participant schedule is
attached as Exhibit 10(k).
10(l) Executive Long-Term Incentive (Three Year) Plans for the years
1991 to 1993 and 1992 to 1994.* Incorporated by reference from
Exhibit 10(l) of the Company's Annual Report on Form 10-K for the
fiscal year ended December 28, 1991.
10(m) Executive Long-Term Incentive (Three Year) Plan for the three
year period 1993-1995.* Incorporated by reference from Exhibit
10(l) of the Company's Annual Report on Form 10-K for the fiscal
year ended January 2, 1993.
10(n) Executive Long-Term Incentive (Three Year) Plan for the three year
period 1994-1996.*
10(o) Termination of Employment and Change of Control Agreements.*
The form of agreement is incorporated by reference from Exhibit
10(m) of the Company's Annual Report on Form 10-K for the fiscal
year ended January 2, 1993. An updated participant schedule is
attached as Exhibit 10(o).
-2-
10(p) Indemnification Agreements.* The form of agreement is
incorporated by reference from Exhibit 10(n) of the Company's
Annual Report on Form 10-K for the fiscal year ended January 2,
1993. An updated participant schedule is attached as Exhibit
10(p).
10(q) Supplemental Retirement Benefits.* Incorporated by reference
from Exhibit 10(l) of the Company's Annual Report on Form
10-K for the fiscal year ended December 31, 1988.
10(r) Benefit Trust Agreement dated May 19, 1987, and Amendments
Number 1, 2 and 3 thereto.* Incorporated by reference from
Exhibit 10(p) of the Company's Annual Report on Form 10-K
for the fiscal year ended January 2, 1993.
10(s) Supplemental Director's Fee Arrangement dated April 27,
1993, between the Company and Phillip D. Matthews.*
10(t) Retirement Agreement effective December 31, 1993, between
the Company and Peter D. Panter.*
10(u) 1984 Executive Stock Incentive Purchase Plan, and amendment.*
Incorporated by reference form Exhibit 10(b) of the Company's
Annual Report on Form 10-K for the fiscal year ended January
2, 1988.
10(v) Asset Purchase Agreement dated January 29, 1993, concerning
the sale of the Brooks Business. Incorporated by reference
from Exhibit No. 2 from the Company's Form 8-K filed February
1, 1993.
10(w) Agreements relating to the sale of the assets of the three
European Subsidiaries associated with the Brooks Business.
Incorporated by reference from Exhibits 2(a), 2(b) and 2(c)
from the Company's Form 8-K filed July 8, 1993.
11 Computation of Per Share Earnings.
21 Subsidiaries of Registrant.
23 Consent of Independent Auditors.
24 Powers of Attorney
___________________________
*Management contract or compensatory plan or arrangement.
-3-
Exhibit 3(b)
AMENDED AND RESTATED
BY-LAWS
OF
WOLVERINE WORLD WIDE, INC.
ARTICLE I
OFFICES
Section 1. The corporation's principal office shall be in the City
of Rockford, County of Kent, State of Michigan.
Section 2. The corporation's principal office and place of business
in Delaware shall be its registered office in Delaware as set forth in the
Certificate of Incorporation.
Section 3. The corporation may also have offices at such other
places, both within and without the States of Michigan and Delaware as the
Board of Directors may from time to time determine or the business of the
corporation may require.
ARTICLE II
MEETING OF STOCKHOLDERS
Section 1. All meetings of the stockholders shall be held, except
as otherwise provided by statute or these By-Laws, at such time and place
as may be fixed from time to time by the Board of Directors. Meetings of
stockholders may be held within or without the State of Delaware as shall
be stated in the notice of the meeting or in a duly executed waiver of
notice thereof.
Section 2. Annual meetings of the stockholders shall be held each
year at such time and on such business day in the month of April as may be
designated by the Board of Directors, or if no such designation is made, at
10:00 a.m. local time on the last Thursday in April, or if that day is a
legal holiday, then on the next succeeding business day at such time as
shall be stated in the notice of the meeting. Annual meetings shall be
held to elect by a plurality vote successors to those members of the Board
of Directors whose terms expire at the meeting and to transact only such
other business as may be properly brought before the meeting in accordance
with these By-Laws.
To be properly brought before the meeting, business must be either
(a) specified in the notice of meeting (or any supplement thereto) given
by or at the direction of the Board, (b) otherwise properly brought before
the meeting by or at the direction of the Board, or (c) otherwise properly
brought before the meeting by a stockholder. In addition to any other
applicable requirements, for business to be properly brought before an
annual meeting by a stockholder, the stockholder must have given timely
notice thereof in writing to the Secretary of the corporation. To be
timely, a stockholder's notice must be delivered to or mailed and received
at the principal executive offices of the corporation, not less than 50
days nor more than 75 days prior to the meeting; provided, however, that in
the event that less than 65 days' notice or prior public disclosure of the
date of the meeting is given or made to stockholders, notice by the
stockholder to be timely must be so received not later than the close of
business on the 15th day following the day on which such notice of the date
of the annual meeting was mailed or such public disclosure was made,
whichever first occurs. A stockholder's notice to the Secretary shall set
forth as to each matter the stockholder proposes to bring before the annual
meeting (i) a brief description of the business desired to be brought
before the annual meeting, (ii) the name and record address of the
stockholder proposing such business, (iii) the class and number of shares
of the corporation which are beneficially owned by the stockholder, and
(iv) any material interest of the stockholder in such business.
Notwithstanding anything in the By-Laws to the contrary, no business
shall be conducted at the annual meeting except in accordance with the
procedures set forth in this Section 2 of Article II, provided, however,
that nothing in this Section 2 of Article II shall be deemed to preclude
discussion by any stockholder of any business properly brought before the
annual meeting.
The Chairman of an annual meeting shall, if the facts warrant,
determine and declare to the meeting that business was not properly brought
before the meeting in accordance with the provisions of this Section 2 of
Article II, and if he should so determine, he shall so declare to the
meeting and any such business not properly brought before the meeting shall
not be transacted.
Section 3. Special meetings of the stockholders may be called by the
Board of Directors, or by the Chief Executive Officer, or upon the written
request of stockholders holding in the aggregate at least forty (40)
percentum of the issued and outstanding capital stock of the corporation
entitled to vote on the business to be transacted at such meeting,
delivered to such officer. Such stockholder request shall state the
purpose or purposes of the proposed meeting. The meetings shall be held on
a date fixed by the Board of Directors or the Chief Executive Officer, or
-2-
in the case of a stockholder request, on a date determined by the
Secretary. In the event the Secretary questions the propriety of any
meeting requested by stockholders, such request shall be submitted to the
Board of Directors at its next meeting, and the determination of the Board
as to such propriety shall be final. No special meeting of stockholders
shall be called for the purpose of removing a director or directors, for
electing directors, or for amending the By-Laws of the corporation, such
matters to be considered only at the annual meeting of stockholder,
PROVIDED, HOWEVER, that a special meeting of stockholders may be called for
the purpose of removing a director for cause, such term to be as defined
under Delaware law, provided further that such cause is set forth in the
request for meeting.
Section 4. Written notice of all meetings of stockholders, stating
the time, place and in the case of special meetings, the purpose or
purposes thereof, shall be given to each stockholder entitled to vote
thereat, at least ten (10) days before the date fixed for the meeting.
Section 5. The officer who has charge of the stock ledger of the
corporation shall prepare and make, at least ten (10) days before every
meeting of stockholders, a complete list of the stockholders entitled to
vote at the meeting, arranged in alphabetical order, showing the address of
and the number of shares registered in the name of each stockholder. Such
list shall be open to the examination of any stockholder, for any purpose
germane to the meeting, during ordinary business hours, for a period of at
least ten (10) days prior to the meeting, either at a place within the city
where the meeting is to be held and which place shall be specified in the
notice of the meeting, or, if not so specified, at the place where said
meeting is to be held, and the list shall be produced and kept at the time
and place of the meeting during the whole time thereof, and may be
inspected by any stockholder who is present.
Section 6. The holders of a majority of the stock issued and
outstanding and entitled to vote thereat, present in person or represented
by proxy, shall constitute a quorum at all meetings of the stockholders for
the transaction of business, except as otherwise provide by statute or by
the Certificate of Incorporation. If, however, such quorum shall not be
present or represented at any meeting of the stockholders, the officer of
the corporation presiding as chairman of the meeting shall have the power
to adjourn the meeting from time to time, without notice other than
announcement at the meeting, until a quorum shall be present or
represented. At such adjourned meetings at which a quorum shall be present
or represented, any business may be transacted which might have been
transacted at the meeting as originally notified.
Section 7. Except as otherwise set forth in Section 1(f) of Article
III hereunder, when a quorum is present at any meeting, the vote of the
holders of a majority of the stock having voting power present in person or
represented by proxy shall decide any question brought before such meeting,
unless the question is one upon which by express provision of the statutes
-3-
or of the Certificate of Incorporation, a different vote is required, in
which case such express provision shall govern and control the decision of
such question.
Section 8. Except as otherwise provided by the Certificate of
Incorporation or the resolution or resolutions of the Board of Directors
creating any class of stock, each stockholder shall at every meeting of the
stockholders be entitled to one vote in person or by proxy for each share
of the capital stock having voting power held by such stockholder.
Section 9. Meetings of stockholders generally shall follow accepted
rules of parliamentary procedure, subject to the following:
(a) The chairman of the meeting shall have absolute authority
over matters of procedure, and there shall be no appeal from the
ruling of the chairman. If, in his absolute discretion, the chairman
deems it advisable to dispense with the rules of parliamentary
procedure as to any one meeting of stockholders or part thereof, he
shall so state and shall clearly state the rules under which the
meeting or appropriate part thereof shall be conducted.
(b) If disorder should arise which prevents the continuation
of the legitimate business of the meeting, the chairman may quit the
chair and announce the adjournment of the meeting; and upon his so
doing, the meeting is immediately adjourned.
(c) The chairman may ask or require that anyone not a bona
fide stockholder or proxy leave the meeting.
(d) A resolution or motion shall be considered for vote only
if proposed by a stockholder or a duly authorized proxy and
seconded by a stockholder or a duly authorized proxy other than the
individual who proposed the resolution or motion.
Section 10. At or prior to any meeting of stockholders, the Board
of Directors, or, if the Board of Directors shall have taken no action with
respect thereto, the chairman of the meeting, may appoint one or more
inspectors to act at the meeting or any adjournment thereof. In case any
person appointed as inspector fails to appear or act, the vacancy may be
filled by appointment made by the person presiding at the meeting or
entitled to preside at the adjourned meeting. Each inspector, before
entering upon the discharge of his duties, shall take and sign an oath
faithfully to execute the duties of inspector at such meeting with strict
impartiality and according to the best of his ability.
Section 11. The Secretary of the corporation shall furnish the
inspectors with a certificate setting forth the number of shares
outstanding and entitled to vote, the voting power of each, the number of
shares required to make a quorum and the number of shares required to be
voted on any issue presented to the meeting if more than a simple majority
-4-
of the quorum present. The inspectors shall determine the shares
represented at the meeting, the existence of a quorum, the validity and
effect of proxies, and shall receive votes, ballots or consents, hear and
determine all challenges and questions arising in connection with the right
to vote, count and tabulate all votes, ballots or consents, determine the
results and do such acts as are proper to conduct the election or vote with
fairness to all shareholders. On request of the person presiding at the
meeting or any shareholder entitled to vote thereat, the inspectors shall
make a report in writing of any challenge, question or matter determined by
them. The inspectors shall execute a certificate of the results of the
election or vote found by them. Any report or certificate made by them
shall be prima facie evidence of the facts stated and of the vote as
certified by them. In their determination of the validity and effect of
proxies, the inspectors shall make such determination, to the extent
possible, so as not to disenfranchise any stockholder.
Section 12. The inspectors may employ agents or other persons to
assist in their duties. The meetings of the inspectors shall be closed
to all persons except as may be requested by the inspectors, provided that
the inspectors shall permit a reasonable time after their initial
tabulations for the presentation and determination of challenges to the
validity and effect of proxies and ballots. In the case of an election
contest, whenever the representative of one or more sides is present
during the course of the inspectors' duties, a representative of all
other sides shall be afforded the opportunity to attend.
Section 13. In the tabulation of votes cast by proxies, it shall
not be necessary for proxies to execute a ballot on matters, voting
instructions (including no vote) for which are contained on the form of
proxy itself, and in the absence of a ballot executed on such proxies, the
proxy itself will be deemed a written ballot and tabulated in accordance
with the directions contained thereon.
Section 14. The person presiding at a meeting of the stockholders
may close the polls after the request for submission of proxies and ballots,
upon the temporary adjournment of the meeting called to tabulate the
proxies and ballots, or within a reasonable time thereafter. After the
polls are closed, no proxy, revocation of proxy or ballot shall be accepted
by or considered in the tabulation of proxies and ballots.
Section 15. In the event it becomes necessary to adjourn a meeting
of stockholders beyond the day of the scheduled meeting in order to
determine the results of any election or vote, said meeting may be
adjourned from time to time by the person presiding or entitled to preside,
with such meeting to be reconvened at the principal offices of the
corporation in Rockford, Michigan. The only matter to be acted upon at
such reconvened meeting shall be the acceptance and filing of the report
from the inspectors of election.
-5-
ARTICLE III
DIRECTORS
Section 1. Directors of the corporation shall be elected,
replaced and removed as follows:
(a) Number and Qualification of Directors. The number of
directors which shall constitute the whole Board of Directors shall be
not less than five (5) persons. Subject to the limit above specified,
the number of directors shall be determined from time to time by
resolution of the Board of Directors, provided that a vacancy in the
Board of Directors need not be filled immediately, and until filled,
such lesser number shall constitute the entire Board of Directors.
Except as otherwise provided in this Section, directors shall be
elected at the annual meeting of the stockholders, and each such
director elected shall hold office until the annual meeting for the
year in which his or her term expires and until his or her successor
is elected. A director need not be a stockholder, a citizen of the
United States or a resident of the State of Delaware.
(b) Classification. The Board of Directors shall be divided
into three classes, Class I, Class II and Class III. Each class shall
consist, as nearly as may be possible, of one-third of the total
number of directors constituting the entire Board of Directors. At
the 1990 annual meeting of stockholders, Class I directors shall be
elected for a one- year term, Class II directors for a two-year term
and Class III directors for a three-year term. At each succeeding
annual meeting of stockholders, the successors of the class of
directors whose term expires at that meeting shall be elected to hold
office for a term expiring at the annual meeting of stockholders held
in the third year following the year of their election.
Notwithstanding the foregoing, whenever the holders of any one or more
classes or series of preferred stock shall have the right, voting
separately as a class, to elect directors at an annual or special
meeting of stockholders, the election, term of office, filling of
vacancies and other features of such directorships shall be governed
by the terms of the Certificate of Incorporation applicable thereto,
and such directors shall not be divided into classes pursuant to this
Section 1(b) of ARTICLE III, and the number of such directors shall
not be counted in determining the maximum number of directors
permitted under Section 1(a) of ARTICLE III hereof, in each case
unless expressly provided by the Certificate of Incorporation.
(c) Vacancies and Newly Created Directorships. Subject to
the right of the holders of any series of preferred stock then
outstanding, any vacancy occurring in the Board of Directors caused
by resignation, removal, death, disqualification or other incapacity,
and any newly created directorships resulting from an increase in the
number of directors, shall be filled exclusively by a majority vote of
-6-
the directors then in office, whether or not a quorum and shall not be
filled by the stockholders. When the number of directors is changed,
any newly created or eliminated directorship shall be so apportioned
among the classes of directors as to make all classes as nearly equal
in number as possible. Each director chosen to fill a vacancy or a
newly created directorship shall hold office for the term coinciding
with the class of his or her directorship and until his successor
shall be elected and qualify. No decrease in the number of directors
constituting the Board of Directors shall shorten the term of any
incumbent director.
(d) Removal. Subject to the rights of the holders of any
series of preferred stock then outstanding, any or all of the
directors may be removed from office at any time, but only for cause.
(e) Resignation. Any director may resign at any time and such
resignation shall take effect upon receipt thereof by the Chief
Executive Officer or the Secretary unless otherwise specified in the
resignation.
(f) Amendment or Repeal. Notwithstanding any other provision
of these By-Laws to the contrary, the provisions contained in this
Section 1 shall not be amended, altered, modified or repealed, and no
provision inconsistent with this Section 1 may be adopted, except upon
either (i) the affirmative vote of the holders of not less than two-
thirds of the outstanding stock of the corporation entitled to vote in
elections of directors or (ii) the affirmative vote of a majority of
the whole Board of Directors and the affirmative vote of the holders
of a majority of such outstanding stock present in person or
represented by proxy at any meeting of stockholders.
(g) Nomination of Directors. Subject to the rights of
holders of any classes or series of preferred stock then outstanding,
only persons who are nominated in accordance with the following
procedures shall be eligible for election as Directors. Nomination
of persons for election to the Board of the corporation at an annual
meeting may be made at the annual meeting of stockholders by or at
the direction of the Board of Directors by any nominating committee
or person appointed by the Board or by any stockholder of the
corporation entitled to vote for the election of Directors at the
annual meeting who complies with the notice procedures set forth in
this Section 1(g) of Article III. Such nominations, other than those
made by or at the direction of the Board, shall be made pursuant to
timely notice in writing to the Secretary of the corporation. To be
timely, a stockholder's notice shall be delivered to or mailed and
received at the principal executive offices of the corporation not
less than 50 days nor more than 75 days; provided, however, that in
the event that less than 65 days' notice or prior public disclosure
of the date of an annual meeting is given or made to stockholders,
notice by the stockholder to be timely must be so received not later
-7-
than the close of business on the 15th day following the day on which
such notice of the date of the meeting was mailed or such public
disclosure was made, whichever first occurs. Such stockholder's notice
to the Secretary shall set forth (a) as to each person whom the
stockholder proposes to nominate for election or re-election as a
Director, (i) the name, age, business address and residence address of
the person, (ii) the principal occupation or employment of the person,
(iii) the class and number of shares of capital stock of the corporation
which are beneficially owned by the person and (iv) any other
information relating to the person that is required to be disclosed
in solicitations for proxies for election of Directors pursuant to Rule
14a under the Securities Exchange Act of 1934, as amended; and (b) as
to the stockholder giving the notice (i) the name and record address
of stockholder and (ii) the class and number of shares of capital
stock of the corporation which are beneficially owned by the
stockholder. The corporation may require any proposed nominee to
furnish such other information as may reasonably be required by the
corporation to determine the eligibility of such proposed nominee to
serve as Director of the corporation. No person shall be eligible for
election as a Director of the corporation unless nominated in
accordance with the procedures set forth herein.
The Chairman of the meeting shall, if the facts warrant,
determine and declare to the meeting that a nomination was not made
in accordance with the foregoing procedure, and if he should so
determine, he shall so declare to the meeting and the defective
nomination shall be disregarded.
Section 2. The business of the corporation shall be managed by its
Board of Directors, which may exercise all such powers of the corporation
and do all such lawful acts and things as are not by statute or by the
Certificate of Incorporation or by these By- Laws directed or required to
be exercised or done by the stockholders.
MEETINGS OF THE BOARD OF DIRECTORS
Section 3. The Board of Directors of the corporation may hold
meetings, both regular and special, either within or without the State of
Delaware.
Section 4. The first meeting of each newly elected Board of Directors
shall be held following the annual meeting of stockholders, and no notice
of such meeting shall be necessary to the newly elected directors in order
legally to constitute the meeting, provided a quorum shall be present. In
the event such meeting is not held immediately following the annual meeting
of stockholders, the meeting may be held at such time and place as shall be
specified in a notice given as hereinafter provided for special meetings of
the Board of Directors, or as shall be specified in a written waiver signed
by all of the directors.
-8-
Section 5. Regular meetings of the Board of Directors may be held
without notice at such time and at such place as shall from time to time be
determined by the Board.
Section 6. Special meetings of the Board may be called by the Chief
Executive Officer or Secretary or by any two (2) directors on two (2) days'
notice to each director. Neither the business to be transacted at nor the
purpose of any regular or special meeting of the Board of Directors need be
specified in the notice of such meeting.
Section 7. At all meetings of the Board a majority of the directors
(other than directors elected at that meeting) shall constitute a quorum
for the transaction of business, and the act of a majority of the directors
present at any meeting at which there is a quorum shall be the act of the
Board of Directors, except as may be otherwise specifically provided by
statute, the Certificate of Incorporation or these By-Laws. If a quorum
shall not be present at any meeting of the Board of Directors, the
directors present thereat may adjourn the meeting from time to time,
without notice other than announcement at the meeting, until a quorum shall
be present.
Section 8. Unless otherwise restricted by the Certificate of
Incorporation or these By-Laws, any action required or permitted to be
taken at any meeting of the Board of Directors or of any committee thereof
may be taken without a meeting, if a written consent thereto is signed by
all members of the Board or of such committee as the case may be, and such
written consent is filed with the minutes of proceedings of the Board or
committee.
Section 9. The Board of Directors or any committee designated by the
Board of Directors may participate in a meeting of such Board, or
committee, by means of conference telephone or similar communications
equipment by means of which all persons participating in the meeting can
hear each other, and participation in a meeting pursuant to this section
shall constitute presence in person at such meeting.
COMMITTEES OF DIRECTORS
Section 10. The Board of Directors may appoint an Executive Committee
whose membership shall consist of such members of the Board of Directors
as it may deem advisable from time to time to serve during the pleasure of
the Board. The Board of Directors may also appoint directors to serve as
alternates for members of the committee in the absence or disability of
regular members. The Board of Directors may fill any vacancies as they
occur. The Executive Committee shall have and may exercise the powers of
the Board of Directors in the management of the business affairs and
property of the corporation during the intervals between meetings of the
Board of Directors, subject to law and to such limitations and control as
the Board of Directors may impose from time to time, except that the
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Executive Committee shall not, without the express authorization of the
Board of Directors:
(a) Alter or amend the Certificate of Incorporation or the
By-Laws;
(b) Fill vacancies in the membership of the Board of Directors
or the Executive Committee;
(c) Declare dividends;
(d) Authorize the issuance of stock.
Section 11. The Board of Directors may designate such other
committees as it may deem appropriate, and such committees shall exercise
the authority delegated to them.
Section 12. Each committee provided for above shall meet as often as
its business may require and may fix a day and time each week or at other
intervals for regular meetings, notice of which shall not be required.
Whenever the day fixed for a meeting shall fall on a holiday, the meeting
shall be held on the business day following or on such other day as the
committee may determine. Special meetings of the committees may be called
by the chairman, and notice thereof may be given to the members by
telephone, telegram or letter. A majority of its members shall constitute
a quorum for the transaction of the business of any of the committees. A
record of the proceedings of each committee shall be kept and presented to
the Board of Directors.
COMPENSATION OF DIRECTORS
Section 13. The directors may be paid their expenses, if any, of
attendance at each meeting of the Board of Directors and may be paid a
fixed sum for attendance at each meeting of the Board of Directors and a
stated salary as director. No such payment shall preclude any director
from serving the corporation in any other capacity and receiving
compensation therefor. Members of special or standing committees may be
allowed like compensation for attending committee meetings.
CONSENT OF STOCKHOLDERS IN LIEU OF MEETING
Section 14. In order that the corporation may determine the
stockholders entitled to consent to corporate action in writing without a
meeting, the Board of Directors may fix a record date, which record date
shall not precede the date upon which the resolution fixing the record date
is adopted by the Board of Directors, and which date shall not be more than
ten (10) days after the date upon which the resolution fixing the record
date is adopted by the Board of Directors. Any stockholders of record
seeking to have the stockholders authorize or take corporate action by
written consent shall, by written notice to the Secretary, request the
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Board of Directors to fix a record date. The Board of Directors shall
promptly, but in all events within ten (10) days after the date on which
such a request is received, adopt a resolution fixing the record date. If
no record date has been fixed by the Board of Directors within ten (10)
days following the receipt of such a request, the record date for
determining stockholders entitled to consent to corporate action in writing
without a meeting, when no prior action by the Board of Directors is
required by applicable law, shall be the first date on which a signed
written consent setting forth the action taken or proposed to be taken is
delivered to the corporation by delivery to its registered office in the
State of Delaware, its principal place of business, or an officer or agent
of the corporation having custody of the book in which proceedings of
stockholders meetings are recorded, to the attention of the Secretary of
the corporation. Delivery shall be by hand or by certified or registered
mail, return receipt requested. If no record date has been fixed by the
Board of Directors and prior action by the Board of Directors is required
by applicable law, the record date for determining stockholders entitled to
consent to corporate action in writing without a meeting shall be at the
close of business on the date on which the Board of Directors adopts the
resolution taking such prior action.
ARTICLE IV
NOTICES
Section 1. Notices to directors and stockholders shall be in writing
and delivered personally or mailed to the directors or stockholders at
their addresses appearing on the books of the corporation. Notice by mail
shall be deemed to be given at the time when the same shall be mailed.
Notice to directors may also be given by telegram, which shall be deemed
given at the time when the same shall be sent.
Section 2. Whenever any notice is required to be given under the
provisions of the statutes or of the Certificate of Incorporation or by
these By-Laws, a waiver thereof in writing, signed by the person or persons
entitled to said notice, whether before or after the time stated therein,
shall be deemed equivalent thereto. The attendance of a director at a
meeting shall constitute a waiver of notice of such meeting, except where a
director attends a meeting for the express purpose of objecting to the
transaction of any business because the meeting has not been lawfully
called or convened.
ARTICLE V
OFFICERS
Section 1. The officers of the corporation shall be chosen by the
Board of Directors at its first meeting after the annual meeting of
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stockholders, or as soon as practicable after the annual election of
directors in each year, and shall include a Chairman of the Board of
Directors, a Chief Executive Officer, a President, a Secretary and a
Treasurer. The Board of Directors may also choose one or more Vice
Presidents, one or more Assistant Secretaries and Assistant Treasurers, and
such other officers as the Board of Directors may from time to time
determine. Any two or more offices, except those of Chief Executive
Officer and Vice President, or Chief Executive Officer and Secretary, may
be held by the same person.
Section 2. The Chairman of the Board of Directors, the Chief
Executive Officer and the President shall be selected from among the
members of the Board of Directors. No other officer need be a member of
the Board of Directors.
TERM OF OFFICE
Section 3. Each officer shall hold office at the pleasure of the
Board. The Board of Directors may remove any officer for cause or without
cause. Any officer may resign his or her office at any time, such
resignation to take effect upon receipt of written notice thereof by the
corporation unless otherwise specified in the resignation. If the office
of any officer becomes vacant for any reason, the vacancy may be filled by
the Board.
THE CHAIRMAN OF THE BOARD
Section 4. The Chairman of the Board shall, when present, preside at
all meetings of the directors and stockholders. He or she shall have such
other duties and powers as may be imposed or given by the Board.
THE CHIEF EXECUTIVE OFFICER
Section 5. The Chief Executive Officer of the corporation shall have
general and active management of the business of the corporation, and shall
see that all orders and resolutions of the Board of Directors are carried
into effect.
Section 6. In the event of the absence of the Chairman of the Board,
the Chief Executive Officer shall preside at all meetings of the
stockholders and of the directors. Except as otherwise herein provided,
the Chief Executive Officer shall have the power, subject to the control of
the Board of Directors, to appoint or discharge and to prescribe the duties
and to fix the compensation of such agents and employees of the corporation
as he may deem necessary, including the power to make temporary suspensions
or appointments as officers of the corporation, such suspensions or
appointments to be made effective only until the next meeting of the Board
of Directors or the Executive Committee thereof. The Chief Executive
Officer shall be the medium of communication to the Board of all matters
presented for their consideration by persons other than the directors
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themselves. He or she shall be the direct representative of the Board of
Directors and, subject to the Board of Directors, shall have the final
control of the affairs and policy of the corporation. He or she shall be
the arbiter of all differences between officers of the corporation, and his
decision shall be final and binding, subject only to review by the Board of
Directors of the corporation. He or she shall do and perform such other
duties as may be assigned to him by the Board of Directors.
VICE PRESIDENTS
Section 7. Each Vice President shall have such title and powers and
perform such duties as may be assigned to him from time to time by the
Chief Executive Officer or the Board of Directors.
THE SECRETARY
Section 8. The Secretary shall attend all meetings of the Board and
of the stockholders and record all votes and the minutes of all proceedings
in a book to be kept for that purpose, and shall perform like duties for
committees when required. He or she shall give, or cause to be given,
notice of all meetings of the stockholders and meetings of the Board of
Directors, and shall perform such other duties as may be prescribed by the
Board of Directors or the Chief Executive Officer. He or she shall keep in
safe custody the seal of the corporation and shall have authority to affix
the same to all instruments where its use is required or appropriate.
THE TREASURER
Section 9. The Treasurer shall have the custody of the corporate
funds and securities, except as otherwise provided by the Board, and shall
cause to be kept full and accurate accounts of receipts and disbursements
in books belonging to the corporation and shall deposit all moneys and
other valuable effects in the name and to the credit of the corporation in
such depositories as may be designated by the Board of Directors. He or
she shall disburse the funds of the corporation as may be ordered by the
Board, taking proper vouchers for such disbursements, and shall render to
the Chief Executive Officer and the directors, at the regular meetings of
the Board, or whenever they may require it, an account of all his
transactions as Treasurer and of the financial condition of the
corporation.
OTHER OFFICERS
Section 10. There may be elected one or more Assistant Secretaries
and Assistant Treasurers who may, in the absence, disability or nonfeasance
of the Secretary or Treasurer, perform the duties and exercise the powers
of such persons respectively.
Section 11. All other officers, as may from time to time be appointed
by the Board of Directors pursuant to this Article shall perform such
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duties and exercise such authority as the Board of Directors shall
prescribe.
Section 12. In the case of the absence of any officer, or for any
other reason that the Board may deem sufficient, the Chief Executive
Officer or the Board may delegate for the time being the powers or duties
of such officer to any other person.
EXECUTIVE OFFICERS
Section 13. The Chairman of the Board, Chief Executive Officer,
President, Vice President(s), Secretary and Treasurer shall be known as
executive officers and shall have all the usual powers and shall perform
all the usual duties incident to their respective offices, and shall in
addition perform such other duties as shall be assigned to them from time
to time by the Board of Directors.
OFFICER SALARIES
Section 14. The salaries of all corporate officers appointed by the
Board of Directors shall be fixed by the Compensation Committee of the
Board of Directors.
ARTICLE VI
SUBSIDIARIES AND DIVISIONS
Section 1. The Board of Directors or the Chief Executive Officer may,
as they shall deem necessary, designate certain individuals as divisional
officers. Any titles given to divisional officers may be withdrawn at any
time, with or without cause, by the Board of Directors or the Chief
Executive Officer. A divisional officer may, but need not be, a director
or an executive officer of the corporation. All divisional officers shall
perform such duties and exercise such authority as the Board of Directors
or the Chief Executive Officer shall prescribe.
Section 2. The Board of Directors or the Chief Executive Officer may
vote the shares of stock owned by the corporation in any subsidiary,
whether wholly or partly owned by the corporation, in such manner as they
may deem in the best interests of the corporation, including, without
limitation, for the election of directors of any such subsidiary
corporation, or for any amendments to the charter or by-laws of any such
subsidiary corporation, or for the liquidation, merger, or sale of assets
of any such subsidiary corporation. The Board of Directors or the Chief
Executive Officer may cause to be elected to the board of directors of any
such subsidiary corporation such persons as they shall designate, any of
whom may, but need not be, directors, executive officers, or other
employees or agents of the corporation. The Board of Directors or the
Chief Executive Officer may instruct the directors of any such subsidiary
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corporation as to the manner in which they are to vote upon any issue
properly coming before them as the directors of such subsidiary
corporation, and such directors shall have no liability to the corporation
as the result of any action taken in accordance with such instructions.
Section 3. Divisional officers, and the officers of any subsidiary
corporation, shall not, by virtue of holding such title and position, be
deemed to be officers of the corporation, nor shall any such divisional
officer or officer of a subsidiary corporation, unless he shall also be a
director or officer of the corporation, be entitled to have access to any
files, records or other information relating or pertaining to the
corporation, its business and finances, or to attend or receive the minutes
of any meetings of the Board of Directors or any committee of the
corporation, except as and to the extent authorized and permitted by the
Board of Directors or the Chief Executive Officer.
ARTICLE VII
CERTIFICATES OF STOCK
Section 1. Every holder of stock in the corporation shall be entitled
to have a certificate, signed by, or in the name of the corporation by, the
Chief Executive Officer, President or a Vice President and the Treasurer or
an Assistant Treasurer, or the Secretary or an Assistant Secretary of the
corporation, certifying the number of shares owned by such stockholder in
the corporation.
Section 2. Where a certificate is signed (1) by a transfer agent or
an assistant transfer agent, or (2) by a transfer clerk acting on behalf of
the corporation and a registrar, the signature of any such Chief Executive
Officer, President, Vice President, Treasurer, Assistant Treasurer,
Secretary or Assistant Secretary may be facsimile. In case any officer,
transfer agent or registrar who has signed, or whose facsimile signature
has been placed upon a certificate, shall have ceased to be such officer,
transfer agent or registrar before such certificate is issued, it may be
issued by the corporation with the same effect as if he were such officer,
transfer agent or registrar at the date of issue.
LOST CERTIFICATES
Section 3. The Board of Directors may direct a new certificate or
certificates to be issued in place of any certificate or certificates
theretofore issued by the corporation alleged to have been lost or
destroyed, upon the making of an affidavit of that fact by the person
claiming the certificate of stock to be lost or destroyed. When
authorizing such issue of a new certificate or certificates, the Board of
Directors may, in its discretion and as a condition precedent to the
issuance thereof, require the owner of such lost or destroyed certificate
or certificates, or his legal representative, to give the corporation a
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bond in such sum as it may direct as indemnity against any claim that may
be made against the corporation with respect to the certificate alleged to
have been lost or destroyed.
TRANSFERS OF STOCK
Section 4. Upon surrender to the corporation or the transfer agent of
the corporation of a certificate for shares duly endorsed or accompanied by
proper evidence of succession, assignment or authority to transfer, it
shall be the duty of the corporation to issue a new certificate to the
person entitled thereto, cancel the old certificate and record the
transaction upon its books.
RECORD DATES
Section 5. The Board of Directors may fix in advance a date, not
exceeding sixty (60) days, but not less than ten (10) days preceding the
date of any meeting of stockholders, or the date for the payment of any
dividend, or the date for the allotment of rights, or the date when any
change or conversion or exchange of capital stock shall go into effect, or
a date in connection with obtaining such consent, as a record date for the
determination of the stockholders entitled to notice of, and to vote at,
any such meeting, and any adjournment thereof, or entitled to receive
payment of any such dividend, or to any such allotment of rights, or to
exercise the rights in respect of any such change, conversion or exchange
of capital stock, or to give such consent, and in such case such
stockholders and only such stockholders as shall be stockholders of record
on the date so fixed shall be entitled to such notice of, and to vote at,
such meeting, and any adjournment thereof, or to receive payment of such
dividend, or to receive such allotment of rights, or to exercise such
rights, or to give such consent, as the case may be, notwithstanding any
transfer of any stock on the books of the corporation after any such record
date fixed as aforesaid.
REGISTERED STOCKHOLDERS
Section 6. The corporation shall be entitled to recognize the
exclusive rights of a person registered on its books as the owner of shares
to receive dividends, and to vote as such owner, and shall not be bound to
recognize any equitable or other claim to or interest in such share or
shares on the part of any other person, whether or not it shall have
express or other notice thereof, except as otherwise provided by the laws
of the State of Delaware.
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ARTICLE VIII
GENERAL PROVISIONS
DIVIDENDS
Section 1. Dividends upon the capital stock of the corporation,
subject to the provisions of the Certificate of Incorporation, if any, may
be declared by the Board of Directors at any regular or special meeting,
pursuant to law. Dividends may be paid in cash, in property, or in shares
of the capital stock, subject to the provisions of the Certificate of
Incorporation.
Section 2. Before payment of any dividend, there may be set aside out
of any funds in the corporation, available for dividends such sum or sums
as the directors from time to time, in their absolute discretion, think
proper as a reserve or reserves to meet contingencies, or for equalizing
dividends, or for repairing or maintaining any property of the corporation,
or for such other purpose as the directors shall think conducive to the
interest of the corporation, and the directors may modify or abolish any
such reserve in the manner in which it was created.
CHECKS
Section 3. All checks or demands for money and notes of the
corporation shall be signed by such officer or officers or such other
person or persons as the Board of Directors may from time to time
designate.
FISCAL YEAR
Section 4. The fiscal year of the corporation shall be fixed by
resolution of the Board of Directors.
SEAL
Section 5. The corporate seal shall have inscribed thereon the name
of the corporation, and the words "Corporate Seal, Delaware." The seal may
be used by causing it or a facsimile thereof to be impressed or affixed or
reproduced or otherwise.
VOTING SECURITIES
Section 6. Unless otherwise directed by the Board, the Chief
Executive Officer shall have full power and authority on behalf of the
corporation to attend and to act and to vote, or to execute in the name or
on behalf of the corporation a proxy authorizing an agent or attorney-in-
fact for the corporation to attend and vote at any meetings of security
holders of corporations in which the corporation may hold securities, and
at such meetings the Chief Executive Officer or his or her duly authorized
agent or attorney-in-fact shall possess and may exercise any and all rights
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and powers incident to the ownership of such securities and which, as the
owner thereof, the corporation might have possessed and exercised if
present. The Board by resolution from time to time may confer like power
upon any other person or persons.
ARTICLE IX
AMENDMENTS
Section 1. These By-Laws may be amended, altered, changed, added to
or repealed at any regular meeting of the stockholders or of the Board of
Directors or at any special meeting of the Board of Directors.
ARTICLE X
INDEMNIFICATION
The Corporation shall, to the fullest extent permitted by Section 145
of the General Corporation Law of Delaware, as the same may be amended and
supplemented, indemnify any and all persons whom it shall have power to
indemnify under said section from and against any and all of the expenses,
liabilities or other matters referred to in or covered by said section, and
the indemnification provided for herein shall not be deemed exclusive of
any other rights to which those indemnified may be entitled under any By-
Law, agreement, vote of stockholders or disinterested directors or
otherwise, both as to action in his official capacity and as to action in
another capacity while holding such office, and shall continue as to a
person who has ceased to be a director, officer, employee or agent and
shall inure to the benefit of the heirs, executors and administrators of
such a person.
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Exhibit 10(b)
WOLVERINE WORLD WIDE, INC.
1993 STOCK INCENTIVE PLAN
SECTION 1
Establishment of Plan; Purpose of Plan
1.1 Establishment of Plan. The Company hereby establishes the 1993
STOCK INCENTIVE PLAN (the "Plan") for its corporate, divisional, and
Subsidiary officers and other key employees. The Plan permits the grant
and award of Stock Options, Restricted Stock, Stock Awards, and Tax Benefit
Rights.
1.2 Purpose of Plan. The purpose of the Plan is to provide officers
and key management employees of the Company, its divisions, and its
Subsidiaries with an increased incentive to make significant and
extraordinary contributions to the long-term performance and growth of the
Company and its Subsidiaries, to join the interests of officers and key
employees with the interests of the Company's stockholders through the
opportunity for increased stock ownership, and to attract and retain
officers and key employees of exceptional ability. The Plan is further
intended to provide flexibility to the Company in structuring long-term
incentive compensation to best promote the foregoing objectives.
SECTION 2
Definitions
The following words have the following meanings unless a
different meaning is plainly required by the context:
2.1 "Act" means the Securities Exchange Act of 1934, as amended.
2.2 "Board" means the Board of Directors of the Company.
2.3 "Change in Control" means (a) the sale, lease, exchange, or other
transfer of substantially all of the Company's assets (in one
transaction or in a series of related transactions) to, or the
merger or consolidation of the Company with, a corporation that
is not controlled by the Company; or (b) a change in control of
the Company of a nature that would be required to be reported in
response to Item 6(e) of Schedule 14A of Regulation 14A
promulgated under the Act; provided that, without limitation,
such a change in control shall be deemed to have occurred if (i)
any "person" (as such term is used in Sections 13(d) and 14(d)(2)
of the Act), other than a Subsidiary or any employee benefit plan
of the Company or a Subsidiary or any entity holding Common Stock
pursuant to the terms of any such employee benefit plan, is or
becomes the beneficial owner (as defined in Rule 13(d)-3 under
the Act), directly or indirectly, of securities of the Company
representing twenty percent (20%) or more of the combined voting
power of the Company's then outstanding securities; or (ii)
during any period of two consecutive years, individuals who at
the beginning of such period constitute the Board cease for any
reason to constitute at least a majority of the Board, unless the
election, or nomination for election by the Company's
stockholders, of each new director was approved by a vote of at
least two-thirds (2/3) of the directors then still in office who
were directors at the beginning of the period.
2.4 "Code" means the Internal Revenue Code of 1986, as amended.
2.5 "Committee" means the Compensation Committee of the Board or such
other committee as the Board shall designate to administer the
Plan. The Committee shall consist of at least two members of the
Board, and all of its members shall be "disinterested persons" as
defined in Rule 16b-3 under the Act.
2.6 "Common Stock" means the Common Stock of the Company, par value
$1 per share.
2.7 "Company" means Wolverine World Wide, Inc., a Delaware
corporation, and its successors and assigns.
2.8 "Incentive Award" means the award or grant of a Stock Option,
Restricted Stock, Stock Award, or Tax Benefit Right to a
Participant pursuant to the Plan.
2.9 "Market Value" shall equal the mean of the highest and lowest
sales prices of shares of Common Stock on the New York Stock
Exchange (or any successor exchange that is the primary stock
exchange for trading of Common Stock) on the date of grant, or if
the New York Stock Exchange (or any such successor) is closed on
that date, the last preceding date on which the New York Stock
Exchange (or any such successor) was open for trading and on
which shares of Common Stock were traded.
2.10 "Participant" means a corporate officer, divisional officer, or
other key employee of the Company, its divisions, or its
Subsidiaries who the Committee determines is eligible to
participate in the Plan and who is designated to be granted an
Incentive Award under the Plan.
2.11 "Restricted Period" means the period of time during which
Restricted Stock awarded under the Plan is subject to
restrictions. The Restricted Period may differ among
Participants and may have different expiration dates with respect
to shares of Common Stock covered by the same Incentive Award.
2.12 "Restricted Stock" means Common Stock awarded to a Participant
pursuant to Section 6 of the Plan.
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2.13 "Retirement" means the voluntary termination of all employment by
a Participant after the Participant has attained 60 years of age,
or such other age as shall be determined by the Committee in its
sole discretion or as otherwise may be set forth in the Incentive
Award agreement or other grant document with respect to a
Participant and a particular Incentive Award.
2.14 "Stock Award" means an award of Common Stock awarded to a
Participant pursuant to Section 7 of the Plan.
2.15 "Stock Option" means the right to purchase Common Stock at a
stated price for a specified period of time. For purposes of the
Plan, a Stock Option may be either an incentive stock option
within the meaning of Section 422(b) of the Code or a
nonqualified stock option.
2.16 "Subsidiary" means any corporation or other entity of which fifty
percent (50%) or more of the outstanding voting stock or voting
ownership interest is directly or indirectly owned or controlled
by the Company or by one or more Subsidiaries of the Company.
2.17 "Tax Benefit Right" means any right granted to a Participant
pursuant to Section 8 of the Plan.
SECTION 3
Administration
3.1 Power and Authority. The Committee shall administer the Plan,
shall have full power and authority to interpret the provisions of the
Plan, and shall have full power and authority to supervise the
administration of the Plan. All determinations, interpretations, and
selections made by the Committee regarding the Plan shall be final and
conclusive. The Committee shall hold its meetings at such times and places
as it deems advisable. Action may be taken by a written instrument signed
by a majority of the members of the Committee, and any action so taken
shall be fully as effective as if it had been taken at a meeting duly
called and held. The Committee shall make such rules and regulations for
the conduct of its business as it deems advisable. The members of the
Committee shall not be paid any additional fees for their services.
3.2 Grants or Awards to Participants. In accordance with and subject
to the provisions of the Plan, the Committee shall have the authority to
determine all provisions of Incentive Awards as the Committee may deem
necessary or desirable and as are consistent with the terms of the Plan,
including, without limitation, the following: (a) the persons who shall be
selected as Participants; (b) the nature and extent of the Incentive Awards
to be made to each Participant (including the number of shares of Common
Stock to be subject to each Incentive Award, any exercise price, the manner
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in which an Incentive Award will vest or become exercisable, and the form
of payment for the Incentive Award); (c) the time or times when Incentive
Awards will be granted; (d) the duration of each Incentive Award; and (e)
the restrictions and other conditions to which payment or vesting of
Incentive Awards may be subject.
3.3 Amendments or Modifications of Awards. The Committee shall have
the authority to amend or modify the terms of any outstanding Incentive
Award in any manner, provided that the amended or modified terms are not
prohibited by the Plan as then in effect, including, without limitation,
the authority to: (a) modify the number of shares or other terms and
conditions of an Incentive Award; (b) extend the term of an Incentive
Award; (c) accelerate the exercisability or vesting or otherwise terminate
any restrictions relating to an Incentive Award; (d) accept the surrender
of any outstanding Incentive Award; or (e) to the extent not previously
exercised or vested, authorize the grant of new Incentive Awards in
substitution for surrendered Incentive Awards.
3.4 Indemnification of Committee Members. Each person who is or
shall have been a member of the Committee shall be indemnified and held
harmless by the Company from and against any cost, liability, or expense
imposed or incurred in connection with such person's or the Committee's
taking or failing to take any action under the Plan. Each such person
shall be justified in relying on information furnished in connection with
the Plan's administration by any appropriate person or persons.
SECTION 4
Shares Subject to the Plan
4.1 Number of Shares. Subject to adjustment as provided in
subsection 4.2 of the Plan, a maximum of 350,000 shares of Common Stock
shall be available for Incentive Awards under the Plan. Such shares shall
be authorized and may be either unissued or treasury shares.
4.2 Adjustments. If the number of shares of Common Stock outstanding
changes by reason of a stock dividend, stock split, recapitalization,
merger, consolidation, combination, exchange of shares, or any other change
in the corporate structure or shares of the Company, the number and kind of
securities subject to and reserved under the Plan, together with applicable
exercise prices, shall be appropriately adjusted. No fractional shares
shall be issued pursuant to the Plan, and any fractional shares resulting
from adjustments shall be eliminated from the respective Incentive Awards,
with an appropriate cash adjustment for the value of any Incentive Awards
eliminated. If an Incentive Award is cancelled, surrendered, modified,
exchanged for a substitute Incentive Award, or expires or terminates during
the term of the Plan but prior to the exercise or vesting of the Incentive
Award in full, the shares subject to but not delivered under such Incentive
Award shall be available for other Incentive Awards.
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SECTION 5
Stock Options
5.1 Grant. A Participant may be granted one or more Stock Options
under the Plan. Stock Options shall be subject to such terms and
conditions, consistent with the other provisions of the Plan, as may be
determined by the Committee in its sole discretion. In addition, the
Committee may vary, among Participants and among Stock Options granted to
the same Participant, any and all of the terms and conditions of the Stock
Options granted under the Plan. The Committee shall have complete
discretion in determining the number of Stock Options granted to each
Participant. The Committee may designate whether or not a Stock Option is
to be considered an incentive stock option as defined in Section 422(b) of
the Code.
5.2 Stock Option Agreements. Stock Options shall be evidenced by
Stock Option agreements containing such terms and conditions, consistent
with the provisions of the Plan, as the Committee shall from time to time
determine. Unless a Stock Option agreement provides otherwise, Stock
Options shall be subject to the terms and conditions set forth in this
Section 5.
5.3 Stock Option Price. The per share Stock Option price shall be
determined by the Committee, but shall be a price that is equal to or
higher than the par value of the Company's Common Stock; provided, however,
that the per share Stock Option price for any shares designated as
incentive stock options shall be equal to or greater than one hundred
percent (100%) of the Market Value on the date of grant.
5.4 Medium and Time of Payment. The exercise price for each share
purchased pursuant to a Stock Option granted under the Plan shall be
payable in cash or, if the Committee consents, in shares of Common Stock
(including Common Stock to be received upon a simultaneous exercise) or
other consideration substantially equivalent to cash. The time and terms
of payment may be amended with the consent of a Participant before or after
exercise of a Stock Option, but such amendment shall not reduce the Stock
Option price. The Committee may from time to time authorize payment of all
or a portion of the Stock Option price in the form of a promissory note or
installments according to such terms as the Committee may approve. The
Board may restrict or suspend the power of the Committee to permit such
loans and may require that adequate security be provided.
5.5 Stock Options Granted to Ten Percent Stockholders. No Stock
Option granted to any Participant who at the time of such grant owns,
together with stock attributed to such Participant under Section 424(d) of
the Code, more than ten percent (10%) of the total combined voting power of
all classes of stock of the Company or any of its Subsidiaries may be
designated as an incentive stock option, unless such Stock Option provides
an exercise price equal to at least one hundred ten percent (110%) of the
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Market Value of the Common Stock and the exercise of the Stock Option after
the expiration of five years from the date of grant of the Stock Option is
prohibited by its terms.
5.6 Limits on Exercisability. Stock Options shall be exercisable for
such periods as may be fixed by the Committee, not to exceed 10 years from
the date of grant. At the time of the exercise of a Stock Option, the
holder of the Stock Option, if requested by the Committee, must represent
to the Company that the shares are being acquired for investment and not
with a view to the distribution thereof. The Committee may in its
discretion require a Participant to continue the Participant's service with
the Company and its Subsidiaries for a certain length of time prior to a
Stock Option becoming exercisable and may eliminate such delayed vesting
provisions. No Stock Option issued to officers and employees subject to
Section 16 of the Act shall be exercisable during the first six months of
its term.
5.7 Restrictions on Transferability.
(a) General. Unless the Committee otherwise consents or
unless the Stock Option agreement or grant provide otherwise:
(i) no Stock Options granted under the Plan may be sold,
exchanged, transferred, pledged, assigned, or otherwise alienated
or hypothecated except by will or the laws of descent and
distribution; and (ii) all Stock Options granted to a Participant
shall be exercisable during the Participant's lifetime only by
such Participant, his guardian, or legal representative.
(b) Other Restrictions. The Committee may impose other
restrictions on any shares of Common Stock acquired pursuant to
the exercise of a Stock Option under the Plan as the Committee
deems advisable, including, without limitation, restrictions
under applicable federal or state securities laws.
5.8 Termination of Employment or Officer Status.
(a) General. If a Participant ceases to be employed by or
an officer of the Company or one of its Subsidiaries for any
reason other than the Participant's death, disability,
Retirement, or termination for cause, the Participant may
exercise his Stock Options only for a period of three months
after such termination of employment or officer status, but only
to the extent the Participant was entitled to exercise the Stock
Options on the date of termination, unless the Committee
otherwise consents or the terms of the Stock Option agreement or
grant provide otherwise. For purposes of the Plan, the following
shall not be deemed a termination of employment or officer
status: (i) a transfer of an employee from the Company to any
Subsidiary; (ii) a leave of absence, duly authorized in writing
by the Company, for military service or for any other purpose
approved by the Company if the period of such leave does not
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exceed 90 days; (iii) a leave of absence in excess of 90 days,
duly authorized in writing by the Company, provided that the
employee's right to reemployment is guaranteed either by statute
or contract; or (iv) a termination of employment with continued
service as an officer.
(b) Death. If a Participant dies either while an employee
or officer of the Company or one of its Subsidiaries or after the
termination of employment other than for cause but during the
time when the Participant could have exercised a Stock Option
under the Plan, the Stock Option issued to such Participant shall
be exercisable by the personal representative of such Participant
or other successor to the interest of the Participant for one
year after the Participant's death, but only to the extent that
the Participant was entitled to exercise the Stock Option on the
date of death or termination of employment, whichever first
occurred, unless the Committee otherwise consents or the terms of
the Stock Option agreement or grant provide otherwise.
(c) Disability. If a Participant ceases to be an employee
or officer of the Company or one of its Subsidiaries due to the
Participant's disability, the Participant may exercise a Stock
Option for a period of one year following such termination of
employment, but only to the extent that the Participant was
entitled to exercise the Stock Option on the date of such event,
unless the Committee otherwise consents or the terms of the Stock
Option agreement or grant provide otherwise.
(d) Participant Retirement. If a Participant Retires as an
employee or officer of the Company or one of its Subsidiaries,
any Stock Option granted under the Plan may be exercised during
the remaining term of the Stock Option, unless the terms of the
Stock Option agreement or grant provide otherwise.
(e) Termination for Cause. If a Participant is terminated
for cause, the Participant shall have no further right to
exercise any Stock Option previously granted.
SECTION 6
Restricted Stock
6.1 Grant. A Participant may be granted Restricted Stock under the
Plan. Restricted Stock shall be subject to such terms and conditions,
consistent with the other provisions of the Plan, as shall be determined by
the Committee in its sole discretion. The Committee may impose such
restrictions or conditions, consistent with the provisions of the Plan, to
the vesting of Restricted Stock as it deems appropriate.
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6.2 Restricted Stock Agreements. Awards of Restricted Stock shall be
evidenced by Restricted Stock agreements containing such terms and
conditions, consistent with the provisions of the Plan, as the Committee
shall from time to time determine. Unless a Restricted Stock agreement
provides otherwise, Restricted Stock Awards shall be subject to the terms
and conditions set forth in this Section 6.
6.3 Termination of Employment or Officer Status.
(a) General. In the event of termination of employment or
officer status during the Restricted Period for any reason other
than death, disability, Retirement, or termination for cause,
then any shares of Restricted Stock still subject to restrictions
at the date of such termination shall automatically be forfeited
and returned to the Company; provided, however, that in the event
of a voluntary or involuntary termination of the employment or
officer status of a Participant by the Company, the Committee
may, in its sole discretion, waive the automatic forfeiture of
any or all such shares of Restricted Stock and/or may add such
new restrictions to such shares of Restricted Stock as it deems
appropriate. For purposes of the Plan, the following shall not
be deemed a termination of employment or officer status: (i) a
transfer of an employee from the Company to any Subsidiary; (ii)
a leave of absence, duly authorized in writing by the Company,
for military service or for any other purpose approved by the
Company if the period of such leave does not exceed 90 days;
(iii) a leave of absence in excess of 90 days, duly authorized in
writing by the Company, provided that the employee's right to
reemployment is guaranteed either by statute or contract; and
(iv) a termination of employment with continued service as an
officer.
(b) Death, Retirement, or Disability. Unless the Committee
otherwise consents or unless the terms of the Restricted Stock
agreement or grant provide otherwise, in the event a Participant
terminates his employment with the Company because of death,
disability, or Retirement during the Restricted Period, the
restrictions applicable to the shares of Restricted Stock shall
terminate automatically with respect to that number of shares
(rounded to the nearest whole number) equal to the total number
of shares of Restricted Stock granted to such Participant
multiplied by the number of full months that have elapsed since
the date of grant divided by the maximum number of full months of
the Restricted Period. All remaining shares shall be forfeited
and returned to the Company; provided, however, that the
Committee may, in its sole discretion, waive the restrictions
remaining on any or all such remaining shares of Restricted Stock
either before or after the death, disability, or Retirement of
the Participant.
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(c) Termination for Cause. If a Participant's employment
is terminated for cause, the Participant shall have no further
right to exercise or receive any Restricted Stock, and all
Restricted Stock still subject to restrictions at the date of
such termination shall automatically be forfeited and returned to
the Company.
6.4 Restrictions on Transferability.
(a) General. Unless the Committee otherwise consents or
unless the terms of the Restricted Stock agreement or grant
provide otherwise: (i) shares of Restricted Stock shall not be
sold, exchanged, transferred, pledged, assigned, or otherwise
alienated or hypothecated during the Restricted Period except by
will or the laws of descent and distribution; and (ii) all rights
with respect to Restricted Stock granted to a Participant under
the Plan shall be exercisable during the Participant's lifetime
only by such Participant, his guardian, or legal representative.
(b) Other Restrictions. The Committee may impose other
restrictions on any shares of Common Stock acquired pursuant to
an award of Restricted Stock under the Plan as the Committee
deems advisable, including, without limitation, restrictions
under applicable federal or state securities laws.
6.5 Legending of Restricted Stock. Any certificates evidencing
shares of Restricted Stock awarded pursuant to the Plan shall bear the
following legend:
The shares represented by this certificate were issued
subject to certain restrictions under the Wolverine World Wide,
Inc. 1993 Stock Incentive Plan (the "Plan"). A copy of the Plan
is on file in the office of the Secretary of the Company. This
certificate is held subject to the terms and conditions contained
in a restricted stock agreement that includes a prohibition
against the sale or transfer of the stock represented by this
certificate except in compliance with that agreement, and that
provides for forfeiture upon certain events.
6.6 Representations and Warranties. A Participant who is awarded
Restricted Stock shall represent and warrant that the Participant is
acquiring the Restricted Stock for the Participant's own account and
investment and without any intention to resell or redistribute the
Restricted Stock. The Participant shall agree not to resell or distribute
such Restricted Stock after the Restricted Period except upon such
conditions as the Company may reasonably specify to ensure compliance with
federal and state securities laws.
6.7 Rights as a Stockholder. A Participant shall have all voting,
dividend, liquidation, and other rights with respect to Restricted Stock
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held of record by such Participant as if the Participant held unrestricted
Common Stock; provided, however, that the unvested portion of any award of
Restricted Stock shall be subject to any restrictions on transferability or
risks of forfeiture imposed pursuant to subsections 6.1 and 6.4 of the
Plan. Unless the Committee otherwise determines or unless the terms of the
Restricted Stock agreement or grant provide otherwise, any noncash
dividends or distributions paid with respect to shares of unvested
Restricted Stock shall be subject to the same restrictions as the shares to
which such dividends or distributions relate.
SECTION 7
Stock Awards
7.1 Grant. A Participant may be granted one or more Stock Awards
under the Plan in lieu of, or as payment for, the rights of a Participant
under any other compensation plan, policy, or program of the Company or its
Subsidiaries. Stock Awards shall be subject to such terms and conditions,
consistent with the other provisions of the Plan, as may be determined by
the Committee in its sole discretion.
7.2 Rights as a Stockholder. A Participant shall have all voting,
dividend, liquidation, and other rights with respect to shares of Common
Stock issued to the Participant as a Stock Award under this Section 7 upon
the Participant becoming the holder of record of the Common Stock granted
pursuant to such Stock Awards; provided, however, that the Committee may
impose such restrictions on the assignment or transfer of Common Stock
awarded pursuant to a Stock Award as it deems appropriate.
SECTION 8
Tax Benefit Rights
8.1 Grant. A Participant may be granted Tax Benefit Rights under the
Plan to encourage a Participant to exercise Stock Options and provide
certain tax benefits to the Company. A Tax Benefit Right entitles a
Participant to receive from the Company or a Subsidiary a cash payment not
to exceed the amount calculated by multiplying the ordinary income, if any,
realized by the Participant for federal tax purposes as a result of the
exercise of a nonqualified stock option, or the disqualifying disposition
of shares acquired under an incentive stock option, by the maximum federal
income tax rate (including any surtax or similar charge or assessment) for
corporations, plus the applicable state and local tax imposed on the
exercise of the Stock Option or the disqualifying disposition.
8.2 Restrictions. A Tax Benefit Right may be granted only with
respect to a stock option issued and outstanding or to be issued under the
Plan or any other plan of the Company or its Subsidiaries that has been
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approved by the stockholders as of the date of the Plan and may be granted
concurrently with or after the grant of the stock option. Such rights with
respect to outstanding stock options shall be issued only with the consent
of the Participant if the effect would be to disqualify an incentive stock
option, change the date of grant or the exercise price, or otherwise impair
the Participant's existing stock options. A stock option to which a Tax
Benefit Right has been attached shall not be exercisable by an officer or
employee subject to Section 16 of the Act for a period of six months from
the date of the grant of the Tax Benefit Right.
8.3 Terms and Conditions. The Committee shall determine the terms
and conditions of any Tax Benefit Rights granted and the Participants to
whom such rights will be granted with respect to stock options under the
Plan or any other plan of the Company. The Committee may amend, cancel,
limit the term of, or limit the amount payable under a Tax Benefit Right at
any time prior to the exercise of the related stock option, unless
otherwise provided under the terms of the Tax Benefit Right. The net
amount of a Tax Benefit Right, subject to withholding, may be used to pay a
portion of the stock option price, unless otherwise provided by the
Committee.
SECTION 9
Change in Control
9.1 Acceleration of Vesting. If a Change in Control of the Company
shall occur, then, unless the Committee or the Board otherwise determines
with respect to one or more Incentive Awards, without action by the
Committee or the Board (a) all outstanding Stock Options shall become
immediately exercisable in full and shall remain exercisable during the
remaining term thereof, regardless of whether the Participants to whom such
Stock Options have been granted remain in the employ or service of the
Company or any Subsidiary; and (b) all other outstanding Incentive Awards
shall become immediately fully vested and nonforfeitable.
9.2 Cash Payment for Stock Options. If a Change in Control of the
Company shall occur, then the Committee, in its sole discretion, and
without the consent of any Participant affected thereby, may determine that
some or all Participants holding outstanding Stock Options shall receive,
with respect to some or all of the shares of Common Stock subject to such
Stock Options, as of the effective date of any such Change in Control of
the Company, cash in an amount equal to the greater of the excess of (a)
the highest sales price of the shares on the New York Stock Exchange on the
date immediately prior to the effective date of such Change in Control of
the Company or (b) the highest price per share actually paid in connection
with any Change in Control of the Company over the exercise price per share
of such Stock Options.
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9.3 Limitation on Change in Control Payments. Notwithstanding
anything in subsection 9.1 or 9.2 to the contrary, if, with respect to a
Participant, the acceleration of the vesting of an Incentive Award as
provided in subsection 9.1 or the payment of cash in exchange for all or
part of a Stock Option as provided in subsection 9.2 (which acceleration or
payment could be deemed a "payment" within the meaning of Section
280G(b)(2) of the Code), together with any other payments that such
Participant has the right to receive from the Company or any corporation
that is a member of an "affiliated group" (as defined in Section 1504(a) of
the Code without regard to Section 1504(b) of the Code) of which the
Company is a member, would constitute a "parachute payment" (as defined in
Section 280G(b)(2) of the Code), then the payments to such Participant
pursuant to subsection 9.1 or 9.2 shall be reduced to the largest amount as
will result in no portion of such payments being subject to the excise tax
imposed by Section 4999 of the Code.
SECTION 10
General Provisions
10.1 No Rights to Awards. No Participant or other person shall have
any claim to be granted any Incentive Award under the Plan, and there is no
obligation of uniformity of treatment of Participants or holders or
beneficiaries of Incentive Awards under the Plan. The terms and conditions
of Incentive Awards of the same type and the determination of the Committee
to grant a waiver or modification of any Incentive Award and the terms and
conditions thereof need not be the same with respect to each Participant.
10.2 Withholding. The Company or a Subsidiary shall be entitled to
(a) withhold and deduct from future wages of a Participant (or from other
amounts that may be due and owing to a Participant from the Company or a
Subsidiary), or make other arrangements for the collection of, all legally
required amounts necessary to satisfy any and all federal, state, and local
withholding and employment-related tax requirements attributable to an
Incentive Award, including, without limitation, the grant, exercise, or
vesting of, or payment of dividends with respect to, an Incentive Award or
a disqualifying disposition of Common Stock received upon exercise of an
incentive stock option; or (b) require a Participant promptly to remit the
amount of such withholding to the Company before taking any action with
respect to an Incentive Award. Unless the Committee determines otherwise,
withholding may be satisfied by withholding Common Stock to be received
upon exercise or by delivery to the Company of previously owned Common
Stock. The Company may establish such rules and procedures concerning
timing of any withholding election as it deems appropriate to comply with
Rule 16b-3 under the Act.
10.3 Compliance With Laws; Listing and Registration of Shares. All
Incentive Awards granted under the Plan (and all issuances of Common Stock
or other securities under the Plan) shall be subject to all applicable
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laws, rules, and regulations, and to the requirement that if at any time
the Committee shall determine, in its discretion, that the listing,
registration, or qualification of the shares covered thereby upon any
securities exchange or under any state or federal law, or the consent or
approval of any governmental regulatory body, is necessary or desirable as
a condition of, or in connection with, the grant of such Incentive Award or
the issue or purchase of shares thereunder, such Incentive Award may not be
exercised in whole or in part, or the restrictions on such Incentive Award
shall not lapse, unless and until such listing, registration,
qualification, consent, or approval shall have been effected or obtained
free of any conditions not acceptable to the Committee.
10.4 No Limit on Other Compensation Arrangements. Nothing contained
in the Plan shall prevent the Company or any Subsidiary from adopting or
continuing in effect other or additional compensation arrangements,
including the grant of stock options and other stock-based awards, and such
arrangements may be either generally applicable or applicable only in
specific cases.
10.5 No Right to Employment. The grant of an Incentive Award shall
not be construed as giving a Participant the right to be retained in the
employ of the Company or any Subsidiary. The Company or any Subsidiary may
at any time dismiss a Participant from employment, free from any liability
or any claim under the Plan, unless otherwise expressly provided in the
Plan or in any written agreement with a Participant.
10.6 Governing Law. The validity, construction, and effect of the
Plan and any rules and regulations relating to the Plan shall be determined
in accordance with the laws of the State of Michigan and applicable federal
law.
10.7 Severability. In the event any provision of the Plan shall be
held illegal or invalid for any reason, the illegality or invalidity shall
not affect the remaining provisions of the Plan, and the Plan shall be
construed and enforced as if the illegal or invalid provision had not been
included.
SECTION 11
Termination and Amendment
The Board may terminate the Plan at any time, or may from time to
time amend the Plan as it deems proper and in the best interests of the
Company, provided that without stockholder approval no such amendment may:
(a) materially increase either the benefits to Participants under the Plan
or the number of shares that may be issued under the Plan; (b) materially
modify the eligibility requirements; or (c) impair any outstanding
Incentive Award without the consent of the Participant, except according to
the terms of the Plan or the Incentive Award. No termination, amendment,
or modification of the Plan shall become effective with respect to any
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Incentive Award previously granted under the Plan without the prior written
consent of the Participant holding such Incentive Award unless such
amendment or modification operates solely to the benefit of the
Participant.
SECTION 12
Effective Date and Duration of the Plan
This Plan shall take effect April 27, 1993, subject to approval
by the stockholders at the 1993 Annual Meeting of Stockholders or any
adjournment thereof or at a Special Meeting of Stockholders. Unless
earlier terminated by the Board of Directors, the Plan shall terminate on
April 26, 2003. No Incentive Award shall be granted under the Plan after
such date.
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EXHIBIT 10(d)
WOLVERINE WORLD WIDE, INC.
Amended and Restated Directors Stock Option Plan
1. Establishment of Plan. Wolverine World Wide, Inc., a Delaware
corporation ("Wolverine"), proposes to grant to its directors who are not
also employees of Wolverine ("Non-Employee Directors"), options to purchase
shares of Wolverine's Common Stock, $1 par value ("Common Stock"). The
options will be granted pursuant to the plan set forth herein which shall
be known as the WOLVERINE WORLD WIDE, INC. AMENDED AND RESTATED DIRECTORS
STOCK OPTION PLAN (the "Plan").
2. Purpose of Plan. The purpose of the Plan is to advance the
interests of Wolverine and its stockholders by attracting and retaining the
services of experienced and knowledgeable Non-Employee Directors and to
provide additional incentive for such Non-Employee Directors to continue to
promote and work for the best interests of Wolverine and its stockholders
through continuing ownership of Wolverine Common Stock.
3. Shares Subject to Plan. A maximum of 50,000 shares of Common
Stock (subject to adjustment in accordance with Paragraph 13 below) may be
subject to the exercise of options granted under the Plan. Such shares
shall be authorized shares and may be unissued or treasury shares. If an
option is canceled, surrendered, modified, exchanged for a substitute
option, or expires or terminates during the term of the Plan but prior to
the exercise of the option in full, the shares subject to but not delivered
under such option shall be available for options subsequently granted.
4. Administration of the Plan. The Plan shall be administered by
the Stock Option Committee (the "Committee") consisting of three members
appointed by the Board of Directors. The Committee shall have full power
and authority to interpret the provisions of the Plan and to supervise the
administration of the Plan. All determinations made by the Committee
regarding the Plan shall be final and conclusive. The Committee shall hold
its meetings at such times and places as it shall deem advisable. Action
may be taken by a written instrument signed by all the members of the
Committee, and any action so taken shall be fully as effective as if it had
been taken at a meeting duly called and held. The Committee may designate
one of its members to sign options on behalf of the Committee and may
appoint a secretary to keep minutes of its meetings. The Committee shall
make such rules and regulations for the conduct of its business as it shall
deem advisable. The members of the Committee shall be paid reasonable fees
for their services.
5. Indemnification of Committee Members. Each person who is or
shall have been a member of the Committee shall be indemnified and held
harmless by Wolverine from and against any cost, liability, or expense
imposed or incurred in connection with such person's or the Committee's
taking or failing to take any action under the Plan. Each such person
shall be justified in relying on information furnished in connection with
the Plan's administration by any appropriate person or persons.
6. Participation. All directors who are directors on the date of
grant, who are not employees of Wolverine or any of its affiliates or
subsidiaries, and who are not eligible to participate under any other
Wolverine stock-related plan (unless in the opinion of counsel to Wolverine
such participation would not impair the status of such a Non-Employee
Director as a "disinterested person" within the meaning of Rule 16b-3
issued under the Securities Exchange Act of 1934) shall participate in the
Plan. Each Non-Employee Director shall at the time of his or her initial
election or appointment be granted a non-qualified option to purchase 3,000
shares of Common Stock. Subject to adjustment as provided in Paragraph 13,
a non-qualified option to purchase 500 shares of Common Stock shall be
granted automatically on the date of each annual meeting of stockholders
following the initial grant of 3,000 shares of Common Stock to each
director of Wolverine who is, at the close of each such annual meeting, a
Non-Employee Director.
7. Option Price. The per share option price for an option granted
under the Plan shall be the market value of the shares covered by the
option at the time the option is granted. The date of grant of the initial
options granted under the Plan shall be May 4, 1988, and the date of grant
of each option granted under the Plan from such date through April 20,
1994, shall be May 20 of the applicable year. The date of all options
granted under the Plan on or after April 21, 1994, shall be the date of the
annual meeting of stockholders of the applicable year for annual grants and
the date of the initial election or appointment of a new Non-Employee
Director for the initial 3,000 share grant to a new Non-Employee Director.
For purposes of this Plan, "market value" shall equal the mean of the
highest and lowest prices of sales of shares of Common Stock on the New
York Stock Exchange on the last date preceding the date of grant on which
the New York Stock Exchange was open for trading and on which shares of
Common Stock were traded.
8. Termination of Directorship. If a Non-Employee Director is no
longer a director of Wolverine or its subsidiaries for any reason other
than his or her death, disability, the reaching of mandatory retirement age
for a director, or termination for cause, he or she may exercise any
outstanding options for a period of three months after such termination of
director status, but only to the extent he or she was entitled to exercise
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the options on the date of termination, unless the terms of such option
provide otherwise.
If a Non-Employee Director ceases to be a director of Wolverine
or one of its subsidiaries due to his or her disability or the attainment
of mandatory retirement age, he or she may exercise an option during the
remaining term of the option, but only to the extent that he or she was
entitled to exercise the option on the date of such event, unless the terms
of such option provide otherwise.
If a Non-Employee Director dies either while a director of
Wolverine or after the termination of his or her directorship other than
for cause during the time when the participant could have exercised an
option under the Plan, the option issued to such Non-Employee Director
shall be exercisable by the personal representative of such Non-Employee
Director or other successor to the interest of the Non-Employee Director
for one year after his or her death, to the extent that the Non-Employee
Director was entitled to exercise the option on the date of death or
termination of director status, whichever first occurred, unless the terms
of such option provide otherwise.
Nothing in the Plan or in any option agreement shall confer upon
any Non-Employee Director the right to continue as a director of Wolverine.
9. Transferability of Options. Options granted under this Plan may
not be transferred except by will or the laws of descent and distribution.
During the lifetime of the Non-Employee Director, options may be exercised
only by that Non-Employee Director, or by his or her guardian or legal
representative.
10. Terms of Options. Options shall expire ten (10) years from the
date of the granting thereof, but shall be subject to earlier termination
as provided in Paragraph 8. Options shall be evidenced by written
agreements containing such terms and conditions, consistent with the
provisions of this Plan, as the Committee shall from time to time
determine. Each agreement shall comply with and shall be subject to the
terms and conditions of the Plan and shall conclusively evidence, by the
Non-Employee Director's signature thereon, that it is the intent of the
Non-Employee Director to continue to serve as a director of Wolverine for
the remainder of his or her term during which the option was granted. At
the time of the exercise of an option, the option holder, if requested by
the Committee, must represent to Wolverine that the shares are being
acquired for investment and not with a view to the distribution thereof.
11. Time and Manner of Exercise. Options are exercisable immediately
after their grant and may be exercised in full at one time or in part from
time to time. Any option may be exercised by giving written notice, signed
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by the person exercising the option, to Wolverine stating the number of
shares with respect to which the option is being exercised, accompanied by
payment in full for such shares.
12. Medium and Time of Payment. The exercise price of each share
purchased pursuant to an option granted under the Plan shall be payable in
cash or, if the Committee consents, in shares of Common Stock (including
Common Stock to be received upon a simultaneous exercise) or other
consideration equivalent to cash. The time and terms of payment may be
amended with the consent of the Non-Employee Director before or after
exercise of the option, but such amendment shall not reduce the option
price. When appropriate arrangements are made with a broker or other
institution, payment may be made by a properly executed exercise notice
directing delivery of shares to a broker together with irrevocable
instructions to the broker to promptly deliver to Wolverine the amount of
sale or loan proceeds to pay the exercise price. The Committee may from
time to time authorize payment of all or a portion of the option price in
the form of a promissory note or installments, with or without interest or
security, according to such terms as the Committee may approve. The Board
of Directors may restrict or suspend the power of the Committee to permit
such loans and may require that adequate security be provided.
13. Adjustments. If the number of shares of Common Stock outstanding
changes by reason of a stock dividend, stock split, recapitalization,
merger, reorganization, consolidation, combination or exchange of shares,
the aggregate number and class of shares available under the Plan and
subject to each option, together with the option prices, shall be
appropriately adjusted. No fractional shares shall be issued pursuant to
the Plan, and any fractional shares resulting from adjustments shall be
eliminated from the respective options.
14. Tax Withholding. Wolverine or a subsidiary shall make such
provisions as it shall deem appropriate for the withholding of any taxes
determined to be required to be withheld in connection with the grant or
exercise of options under the Plan.
15. Listing and Registration of Shares. Each option shall be subject
to the requirement that if at any time the Committee shall determine, in
its discretion, that the listing, registration or qualification of the
shares covered thereby upon any securities exchange or under any state or
federal law, or the consent or approval of any governmental regulatory
body, is necessary or desirable as a condition of, or in connection with,
the granting of such option or the issue or purchase of shares thereunder,
such option may not be exercised in whole or in part unless and until such
listing, registration, qualification, consent or approval shall have been
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effected or obtained free of any conditions not acceptable to the
Committee.
16. Effective Date of Plan. The Plan shall take effect May 4, 1988,
subject to approval by the stockholders at the 1988 Annual Meeting of
Stockholders or any adjournment thereof or at a Special Meeting of
Stockholders. Options granted hereunder shall not be exercisable prior to
such stockholder approval and shall expire should the stockholders fail to
approve the Plan by May 4, 1989. Unless earlier terminated by the Board of
Directors, the Plan shall terminate on May 4, 1998. No option shall be
granted under this Plan after such date.
17. Termination and Amendment of Plan. The Board of Directors may
terminate the Plan at any time or may from time to time amend the Plan as
it deems proper and in the best interests of Wolverine; provided, however,
that the Plan may not be amended more than once every six months, other
than to comport with changes in the Internal Revenue Code of 1986, as
amended, the Employee Retirement Income Security Act, or the rules
thereunder; and provided further, that, except as provided in Paragraph 13,
the Board may not, without the approval of the stockholders of Wolverine
obtained in the manner stated in Paragraph 16, do any of the following:
(i) materially increase the benefits accruing to participants under the
Plan; (ii) materially increase the number of securities which may be issued
under the Plan; (iii) materially modify the requirements as to eligibility
for participation in the Plan; or (iv) materially increase the number of
shares for which an option may be granted to any Non-Employee Director. No
such amendment or termination may impair any outstanding option without the
consent of the Non-Employee Director.
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Exhibit 10(f)
AMENDED AND RESTATED
EMPLOYMENT AGREEMENT
THIS AMENDED AND RESTATED EMPLOYMENT AGREEMENT (the "Agreement")
is made as of April 27, 1993, by and between WOLVERINE WORLD WIDE, INC., a
Delaware corporation (the "Employer"), and GEOFFREY B. BLOOM, an individual
(the "Executive"), and amends and restates in its entirety the Employment
Agreement between the parties dated May 8, 1992.
R E C I T A L S :
Executive has been employed by Employer in an executive,
managerial and supervisory capacity. Executive has held the offices of
President and Chief Operating Officer of Employer and currently holds the
offices of President and Chief Executive Officer of Employer.
Executive has an existing employment agreement with Employer
dated May 8, 1992. In recognition of the appointment of Executive to the
office of Chief Executive Officer and the additional responsibilities that
accompany such appointment, the parties desire to amend the existing
employment agreement and restate in a single document the agreement of the
parties which supersedes all prior employment agreements.
Employer is desirous of being assured of the continued services
of Executive for a minimum term ending on April 30, 1997. Executive is
willing to continue in the employ of Employer for such term, and desires to
have the terms and conditions of such continued employment reduced to
writing.
THEREFORE, in consideration of the foregoing and the mutual
covenants contained in this Agreement, the parties agree as follows:
1. Employment. Employer hereby agrees to continue to employ
Executive and Executive agrees to continue to serve Employer in an
executive, managerial and supervisory capacity on the terms and conditions
set forth in this Agreement.
2. Position and Duties. Executive shall serve as President and
Chief Executive Officer of Employer reporting only to Employer's Board of
Directors. Executive shall have supervision and control over, and
responsibility for, the general management and operation of Employer, and
shall have such other powers and duties as may from time to time be
prescribed by Employer's Board of Directors. Subject to the foregoing,
Executive agrees to devote his best efforts and substantially all his
working time and attention to the business of Employer and its
subsidiaries, and to the performance of such executive, managerial and
supervisory duties as may be assigned to him by Employer's Board of
Directors; provided, that Executive shall be permitted to serve on a
reasonable number of boards of directors of other companies, subject to the
prior consent of Employer's Board of Directors, and render occasional
services in connection with such service, and Executive shall be permitted
to participate in charitable and civic endeavors to the extent such service
does not interfere with Executive's obligations under this Agreement.
3. Term. Except in the case of early termination as specifically
provided in this Agreement, the term of Executive's employment shall be for
the period beginning effective as of April 27, 1993, and ending April 30,
1997.
4. Compensation. For the services to be rendered by Executive as
provided in this Agreement, Employer agrees to pay Executive during the
term hereof in thirteen (13) equal installments during each year of such
term, a base salary of not less than Three Hundred Thirty Thousand
($330,000) Dollars per annum, payable effective as of April 27, 1993.
Executive's base salary may be increased at the discretion of Employer's
Board of Directors and/or its Compensation Committee at any time and from
time to time during the term of this Agreement. Upon any such increase in
Executive's base salary, the new rate shall without further action by the
parties be deemed to be substituted for the rate set forth in this
Agreement and this Agreement shall be deemed to be amended accordingly.
5. Fringe Benefits.
(a) In addition to the compensation provided in Section 4
of this Agreement, Executive shall also be entitled to the
following fringe benefits:
(i) Executive shall participate in both the Executive
Long-Term Incentive (Three Year) Plan and the Executive
Short-Term Incentive Plan, or any successor or substitute
plans, and in such other bonus plans as may be made
available to upper echelon executives of Employer.
(ii) Executive shall be entitled to a leased automobile
of a type to be mutually agreed upon by Executive and
Employer. In addition, Employer shall pay maintenance and
all other operating expenses, including gasoline, repairs
and insurance, with respect to such automobile in accordance
with applicable regulations issued or administered by the
Internal Revenue Service.
(iii) Employer shall pay for reasonable dues,
assessments, and other non-discretionary expenses and all
business related expenses, associated with a membership in
two country clubs or similar luncheon or social
organizations in the Grand Rapids, Michigan area to be
selected by Executive.
(iv) Employer shall provide Executive with the benefits
of a term life insurance policy in the amount of Five
Hundred Thousand Dollars ($500,000) payable to his
designated beneficiaries, in addition to the benefits of all
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other life insurance plans as provided in this Agreement.
Upon termination of this Agreement (except for voluntary
resignation by Executive or termination of Executive for
Cause), such Five Hundred Thousand Dollar ($500,000) life
insurance policy shall be assigned to Executive and Employer
shall pay all premiums due after any such assignment until
the expiration of the original term of this Agreement. In
the event of voluntary resignation by Executive or
termination of Executive for Cause, at Executive's option,
such life insurance policy shall be assigned to Executive
and Executive shall pay all premiums due after such
assignment.
(v) Employer shall provide Executive with tax
preparation services and financial planning advice and
services consistent with Employer's past practice or as may
be made available to upper echelon executives of Employer.
(vi) Employer shall pay Executive's reasonable legal
expenses related to the negotiation and execution of this
Agreement.
(vii) Executive shall be entitled to four (4) weeks of
vacation per year, plus such additional vacation as may be
permitted with the concurrence of Employer's Board of
Directors. Executive shall further be entitled to all
benefits in the way of "fringes" presently available or
which may subsequently be made available to upper echelon
executives of Employer as a class or benefits substantially
equivalent thereto, so long as such benefits or plans are in
effect, including but not limited to, participation in the
Wolverine World Wide, Inc. Employees' Pension Plan; the
Wolverine World Wide, Inc. Employees' Profit-Sharing and
Savings Plan; the Wolverine World Wide, Inc. Non-Qualified
Stock Option Plan of 1979 and any amendments thereto; the
Wolverine World Wide, Inc. 1984 Executive Incentive Stock
Purchase Plan; the Wolverine World Wide, Inc. Executive
Incentive Bonus Plan; the Wolverine World Wide, Inc.
Employee Loan Program; the Wolverine World Wide, Inc. 1993
Stock Incentive Plan; and all group life, disability,
hospitalization, medical, dental and surgical benefit plans
presently or hereafter in effect and available to upper
echelon executives of Employer, or their equivalent.
(viii) Employer shall provide Executive with a Deferred
Compensation Agreement mutually agreed upon by both parties
which, assuming Executive does not voluntarily resign or is
not terminated for Cause, provides for payments to Executive
or his assigns in the amount of One Hundred Twenty Thousand
Dollars ($120,000) per year for eighteen (18) consecutive
years commencing at age fifty-eight (58) or, at Executive's
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sole discretion, at such later age or date as Executive may
elect.
(ix) In the event that Executive does not voluntarily
terminate his employment (for purposes of this Section,
Termination for Disability, Good Reason or death shall not
be considered voluntary termination) or is not terminated
for Cause prior to January 1, 1994, then Employer shall
forgive one-half of the total indebtedness, One Hundred Five
Thousand Four Hundred Sixty-four Dollars and Eighty-five
Cents ($105,464.85), plus accrued interest, of Executive to
Employer incurred in connection with the purchase of 22,500
shares of Employer's common stock. In the event that
Executive does not voluntarily terminate his employment or
is not terminated for Cause prior to May 8, 1994, then
Employer shall forgive the remainder of the total
indebtedness, plus accrued interest, of Executive to
Employer incurred in connection with the purchase of such
shares. In addition, upon forgiveness of any part of such
indebtedness, Employer shall loan to Executive an amount
equal to the federal and state income taxes resulting from
such forgiveness of indebtedness. Such loan shall bear no
interest and shall be repaid in three (3) equal annual
installments commencing on the first anniversary date of
such loan.
(b) Notwithstanding any provision or term of this Agreement
to the contrary, Employer shall not be required or obligated to
maintain, amend or adopt any particular fringe benefit plan or
policy, including those plans or policies referenced in this
Section, or to pay, credit or otherwise vest in Executive as a
participant any amount or level of award or grant under any such
plan; provided, however, that the foregoing shall not apply to
any deferred bonus, payment or other credit awarded to Executive
under any such plan.
6. Additional Benefits. The provisions of this Agreement with
respect to compensation and other benefits payable to Executive shall not
preclude or in any way affect the grant by Employer or the receipt by
Executive of increases in base salary or total compensation, or bonuses, or
additional compensation, contingent or otherwise, to be determined solely
in the discretion of Employer's Board of Directors and/or its Compensation
Committee, or by other persons or groups to whom such authority is legally
delegated.
7. Expenses. In addition to the compensation and benefits provided
in Sections 4 and 5 of this Agreement, Employer will reimburse or pay
Executive's reasonable and appropriate expenses for his business related
travel and entertainment in accordance with Employer's then current policy.
As a condition to such reimbursement or payment, Executive shall be
required to account to Employer for expenses incurred in the performance of
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his employment duties. Executive shall be entitled, if Executive deems it
appropriate, to bring his spouse with him on up to two out of town trips
involving business of Employer per year, and Employer shall reimburse
Executive or pay the reasonable and appropriate expenses incurred for her
travel and entertainment. Employer may pay the travel and entertainment
expenses of Executive's spouse incurred on more than two business trips per
year with the prior approval of Employer's Board of Directors, and/or its
Compensation Committee.
8. Renewal of Term of Employment.
(a) Unless Employer delivers written notice to Executive on
or prior to May 1, 1996, of its intention not to renew
Executive's term of employment for an additional three (3) year
term, then Executive's term of employment shall be automatically
renewed for an additional three-year term commencing May 1, 1997,
and ending on April 30, 2000, on the same terms and conditions
set forth in this Agreement.
(b) Except as otherwise provided in Sections 10 and 14
hereof, if Employer terminates Executive's employment during the
original or renewal term of this Agreement, or elects not to
renew Executive's term of employment following expiration of the
original term of this Agreement, then Employer shall pay to
Executive on the earlier of the date of termination or May 1,
1997, a lump sum payment equal to two hundred percent (200%) of
Executive's then current annual base salary. In addition, except
as otherwise provided in Sections 10 and 14 hereof, if Employer
terminates Executive's employment during the original or renewal
term of this Agreement, or elects not to renew Executive's term
of employment following expiration of the original term of this
Agreement, Executive shall be credited with an additional three
(3) years of continuous service at Executive's salary rate in
effect on the Date of Termination for purposes of computing
Executive's benefits under the Wolverine World Wide, Inc.
Employees' Pension Plan such that, following the termination of
Executive's employment, Executive shall receive benefits from
such plan (or such supplemental plan as may be necessary to
provide such benefits) effective at age fifty-eight (58) as if
Executive had thirteen (13) years of service with Employer.
Executive may elect to commence payments upon attaining age
fifty-eight (58) or at a later date as permitted under the
general provisions of such plan, and such payments shall be based
upon the additional three (3) years of service credited to
Executive as provided in this Section.
9. Disability and Retirement.
(a) If, as a result of Executive's incapacity due to
physical or mental illness, he shall have been absent from his
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duties with Employer on a full time basis for six (6) consecutive
months, and if he shall have not returned to the full time
performance of his duties within thirty (30) days after written
notice after such six (6) month period, Employer may terminate
this Agreement for "Disability."
(b) Termination of Executive's employment by Employer or
Executive based on "Retirement" shall mean termination in
accordance with Employer's retirement policy generally applicable
to salaried employees or in accordance with any retirement
arrangement applicable to him established with Executive's
consent.
10. Termination for Cause. Employer may terminate Executive's
employment for Cause. For purposes of this Agreement, "Cause" shall mean:
(a) the willful and continued failure by Executive to substantially perform
his duties with Employer (other than any such failure resulting from
Executive's incapacity due to physical or mental illness, or any such
actual or anticipated failure resulting from Executive's termination for
Good Reason) after a demand for substantial performance is delivered to
Executive by Employer's Board of Directors and/or its Chairman (which
demand shall specifically identify the manner in which the Board and/or its
Chairman believes that Executive has not substantially performed his
duties); or (b) the commission of a felony injurious to Employer or its
reputation, as determined by Employer's Board of Directors. For purposes
of this Section, no act or failure to act on the part of Executive shall be
considered "willful" unless done or omitted to be done by Executive not in
good faith and without reasonable belief that his action(s) or omission(s)
was in the best interests of Employer. If Executive's employment is
terminated for Cause, or if Executive voluntarily terminates his employment
other than for Good Reason, Disability or Retirement, then Employer shall
pay Executive his full base salary through the Date of Termination (as
provided in this Agreement) at the rate in effect at the time Notice of
Termination is given, and Employer shall have no further obligations to
Executive under this Agreement or under the Deferred Compensation
Agreement.
11. Termination for Good Reason. Executive may terminate his
employment at any time for Good Reason and, in such event, Employer shall
continue to be obligated to pay Executive the amounts and benefits set
forth in Section 14 of this Agreement. For purposes of this Agreement,
"Good Reason" shall, without Executive's express written consent, mean:
(a) The assignment to Executive of any duties inconsistent
with his present positions, duties, responsibilities and status
with Employer as President and Chief Executive Officer, or a
change in Executive's reporting responsibilities in such
capacities, titles or offices from those in effect as of the date
hereof, or any removal of Executive from, or failure to re-elect
him as President and Chief Executive Officer, except in
connection with the termination of his employment for Cause,
-6-
Disability or Retirement or as a result of his death or by
Executive other than for Good Reason;
(b) A reduction by Employer in Executive's annual base
salary as provided in this Agreement or as the same may be
increased from time to time, except for across-the-board salary
reductions, freezes or reduced increases similarly affecting all
executives of Employer;
(c) A failure by Employer to continue the Employer's
Executive Incentive Bonus Plan as such plan may be modified from
time to time but substantially in the form presently in effect
(the "Plan"), or a failure by Employer to continue Executive as a
participant in the Plan or to pay Executive any annual
installment of a previous award under the Plan or any Deferred
Distribution (as defined in the Plan) awarded under the Plan;
(d) The relocation of Employer's principal executive
offices to a location outside Rockford, Michigan, or any
requirement that Executive be based anywhere other than
Employer's principal executive offices, except for required
travel on Employer's business to an extent substantially
consistent with Executive's present business travel obligations,
or, in the event Executive consents to any such relocation of
Employer's principal executive offices, the failure by Employer
to pay (or reimburse Executive for) all reasonable moving
expenses incurred by Executive relating to a change of
Executive's principal residence in connection with such
relocation and to indemnify Executive against any loss (defined
as the difference between the actual sale price of such residence
and the higher of (i) Executive's aggregate investment in such
residence or (ii) the fair market value of such residence as
determined by a real estate appraiser designated by Executive and
reasonably satisfactory to Employer) realized in the sale of
Executive's principal residence in connection with any such
relocation;
(e) The failure by Employer to continue to provide
Executive with benefits substantially similar to those enjoyed by
Executive under any benefit or compensation plan (including but
not limited to Employer's 1979 Non-Qualified Stock Option Plan,
1988 Stock Option Plan and Deferred Compensation Plan), pension,
life insurance, medical, health and accident or disability plan
in which Executive is currently participating, the taking of any
action by Employer which would adversely affect Executive's
participation in or materially reduce Executive's benefits under
any of such plans or deprive Executive of any material fringe
benefit currently enjoyed by Executive, or the failure by
Employer to provide Executive with the number of paid vacation
days to which Executive is then entitled on the basis of years of
service with Employer in accordance with this Agreement and
-7-
Employer's normal vacation policy in effect on the date of this
Agreement;
(f) The failure of Employer to obtain the assumption of
Employer's obligations under this Agreement by any successor as
contemplated in Section 16 of this Agreement;
(g) Any purported termination of Executive's employment
which is not effected pursuant to a Notice of Termination which
satisfies the requirements of Section 12 below (and, if
applicable, Section 10 above); or
(h) Any other material breach by Employer of its
obligations under this Agreement.
12. Notice of Termination. Any purported termination of this
Agreement by Employer or by Executive shall be communicated by written
Notice of Termination to the other party. For purposes of this Agreement,
a "Notice of Termination" shall mean a notice which shall indicate the
specific termination provision in this Agreement relied upon (except in the
event of termination of Executive without Cause) and shall set forth in
reasonable detail the facts and circumstances claimed to provide a basis
for termination of Executive's employment under the provision so indicated
(including, if applicable, the requirements of Section 10 hereof).
13. Date of Termination. "Date of Termination" shall mean (a) if
this Agreement is terminated for Disability, the time specified in
Section 9 of this Agreement, and (b) if Executive's employment is
terminated for any reason other than Disability, the date specified in the
Notice of Termination (which, in the case of a termination pursuant to
Section 11 above shall not be more than sixty (60) days from the date such
Notice of Termination is given); provided, that, if within thirty (30) days
after any Notice of Termination is given the party receiving such Notice of
Termination notifies the other party that a dispute exists concerning the
termination, the Date of Termination shall be the date on which the dispute
is finally determined, either by mutual written agreement of the parties or
by a binding arbitration award; and provided further, that the Date of
Termination shall be extended by a notice of dispute only if such notice is
given in good faith and the party giving such notice pursues the resolution
of such dispute with reasonable diligence. Notwithstanding the pendency of
any such dispute, Employer will continue to pay Executive his full
compensation in effect when the notice giving rise to the dispute was given
(including, but not limited to, base salary) and continue Executive as a
participant in all compensation, benefit and insurance plans, subject to
the terms of this Agreement, in which Executive was participating when the
notice giving rise to the dispute was given, until the dispute is finally
resolved in accordance with this Section. Amounts paid under this
Section are in addition to all other amounts due under this Agreement and
shall not be offset against or reduce any other amounts due under this
Agreement; provided, however, in the event that the Date of Termination
shall be extended by a notice of dispute and such dispute is resolved in
-8-
favor of the Employer, than the Employer may credit and offset any
compensation paid to Executive after the date specified in the Notice of
Termination against any payments due to Executive hereunder or, at
Employer's option, such payments shall be reimbursed by the Executive to
Employer.
14. Compensation Upon Termination.
(a) If Employer shall terminate Executive's employment
other than for Cause, Retirement or Disability, or if Executive
shall terminate his employment for Good Reason, then, in lieu of
the payments provided under Sections 4, 5 and 8 of this
Agreement, Employer shall pay to Executive as severance pay (the
"Severance Payments") in a lump sum on the fifth day following
the Date of Termination, the following amounts:
(i) Executive's base salary through the Date of
Termination at the rate in effect at the time Notice of
Termination is given and an amount equal to the amount, if
any, of the deferred portion of any awards which pursuant to
the Plan have been awarded to Executive but which have not
yet been paid to Executive as well as a bonus for the year
prior to termination if not yet awarded and for the year of
termination prorated through the date of termination, both
based on 100% of any bonus awarded Executive for the
immediately preceding year, or the average of Executive's
bonus awards pursuant to the Plan for the two immediately
preceding years, whichever is greater, and including in
either case the amount of Deferred Compensation, if any,
under the Plan which has accrued to Executive's account;
(ii) In lieu of any further salary payments to
Executive for periods subsequent to the Date of Termination,
Employer shall pay Executive the present value (as computed
in Section 14(h) below), of the product of (A) the sum of
Executive's annual base salary at the rate in effect on the
Date of Termination plus the amount awarded Executive under
the Plan during the year most recently ended (whether or not
fully paid), and (B) the number of years (rounded to the
nearest hundredth) between the Date of Termination and April
30, 1997;
(iii) Employer shall also pay all relocation and
indemnity payments as set forth in Section 11(d) of this
Agreement;
(iv) All reasonable legal fees and expenses incurred by
Executive as a result of such termination if Executive
substantially prevails in enforcing his rights under this
Agreement (including all such fees and expenses, if any,
incurred in contesting or disputing any such termination or
-9-
in seeking to obtain or enforce any right or benefit
provided by this Agreement);
(v) In lieu of the $1.00 par value per share common
stock of Employer ("Company Shares") issuable upon the
exercise of options, (other than options granted after
May 8, 1992 as incentive stock options in accordance with
the provisions of Section 422A of the Internal Revenue Code
of 1986, as amended (the "Code")), under Employer's 1988
Stock Option Plan, or any other stock option plan now or
subsequently adopted by the Employer (which options shall be
canceled upon payment of the amount set forth below),
Executive shall receive an amount in cash equal to one
hundred fifty percent (150%) of the aggregate positive
spread between the exercise prices of all such options held
by Executive, whether or not then fully exercisable, and the
higher of (A) the closing price of Company Shares as
reported on the New York Stock Exchange on or nearest the
Date of Termination, or (B) the highest price per Company
share actually paid in connection with any change in control
of Employer;
(vi) In lieu of the Company Shares issuable upon the
exercise of options granted after May 8, 1992 which are then
exercisable, which options have been granted as incentive
stock options in accordance with the provisions of
Section 422A of the Code, under Employer's 1988 Stock Option
Plan, or any other stock option plan now or subsequently
adopted by Employer (which options shall be canceled upon
payment of the amount set forth below), Executive shall
receive an amount in cash equal to the aggregate positive
spread between the exercise prices of all such options held
by Executive which are then exercisable and the closing
price of Company Shares as reported on the New York Stock
Exchange on or nearest the Date of Termination. Executive
shall receive such amount for any unexpired incentive stock
options, whether or not the exercise date of such stock
options has passed, provided such options would have been
exercisable prior to April 30, 1997;
(vii) The amount set forth in Section 8(b) of this
Agreement (which shall not be subject to mitigation as
provided in Section 15 hereof); and
(viii) In the event that any restrictions against
sale, transfer or other disposition of Company Shares
provided in the 1984 Plan have not lapsed on the Date of
Termination, Employer shall declare the restrictions to have
lapsed with respect to those shares, provided such
restrictions would have lapsed prior to April 30, 1997.
-10-
(b) Unless Executive is terminated for Cause, Employer
shall maintain in full force and effect, for continued benefit
after the Date of Termination, all employee benefit plans and
programs or arrangements in which Executive was entitled to
participate immediately prior to the Date of Termination (except
for bonus and stock option plans) provided that Executive's
continued participation is possible under the general terms and
provisions of such plans and programs until the last to expire of
six months after the Date of Termination, or the date upon which
Executive is engaged in an equivalent position and entitled to
participate in such other employer's employee benefits, in no
event to exceed one (1) year following the Date of Termination.
In the event that Executive's participation in any such plan or
program is barred, Employer shall arrange to provide Executive
with benefits substantially similar to those which Executive is
entitled to receive under such plans and programs. At the end of
the period of coverage, Executive shall have the option to have
assigned to him at no cost and with no apportionment of prepaid
premiums, any assignable insurance policy owned by Employer and
relating specifically to Executive.
(c) If Employer shall terminate Executive's employment
other than for Cause, Retirement or Disability, or if Executive
shall terminate his employment for Good Reason, then in addition
to the benefits to which Executive is entitled under the
retirement plans or programs in which Executive participates or
any successor plans or programs in effect on the Date of
Termination, Employer shall pay Executive in one lump sum in cash
at Executive's normal retirement age (or earlier retirement age
should Executive so elect) as defined in the retirement plans or
programs in effect on the Date of Termination, an amount equal to
the actuarial equivalent of the retirement pension to which
Executive would have been entitled under the terms of such
retirement plans or programs without regard to any vesting
requirements of such plans or programs, had Executive accumulated
three (3) additional years of continuous service (after any
termination pursuant to Section 3) at Executive's salary rate in
effect on the Date of Termination plus the amount awarded
Executive under the plan during the year most recently ended
(whether or not fully paid) (including subsequent annual salary
adjustments) under such retirement plans or programs reduced by
the single sum actuarial equivalent of any amount to which
Executive is entitled pursuant to the provisions of such
retirement plans and programs. For purposes of this Subsection,
"actuarial equivalent" shall be determined using the same methods
and assumptions utilized under Employer's retirement plans and
programs immediately prior to any change in control.
(d) If Employer shall terminate Executive's employment
other than for Cause, Retirement or Disability, or if Executive
shall terminate his employment for Good Reason, Employer shall
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provide Executive with executive out-placement services by
entering into a contract with a company specializing in such
services.
(e) Notwithstanding any provision in this Agreement to the
contrary, if part or all of any amount to be paid to Executive by
the Employer under this Agreement constitutes a "parachute
payment" (or payments) under Section 280G or any other similar
provision of the Code, the following limitation shall apply:
If the aggregate present value of such parachute
payments (the "Parachute Amount") exceeds 2.99 times Executive's
"base amount" as defined in Section 280G of the Code, then the
amount otherwise payable to or for the benefit of Executive
subsequent to the termination of his employment and taken into
account in calculating the Parachute Amount (the "Termination
Payments"), shall be reduced and/or delayed, as further described
below, to the extent necessary so that the Parachute Amount is
equal to 2.99 times Executive's "base amount."
Any determination or calculation described in this
Section shall be made by the Employer's independent accountants.
Such determination, and any proposed reduction and/or delay in
Termination Payments shall be furnished in writing promptly by
the accountants to Executive. Executive may then elect, in his
sole discretion, which and how much of any particular Termination
Payment shall be reduced and/or delayed and shall advise Employer
in writing of his election, within thirty (30) days of the
accountant's determination of the reduction and/or delay in
Termination Payments. If no such election is made by Executive
within such thirty (30) day period, Employer may elect which and
how much of any termination payment shall be reduced or delayed
and shall notify Executive promptly of such election. As
promptly as practicable following such determination and the
elections hereunder, Employer shall pay to or distribute to or
for the benefit of Executive such amounts as are then due to
Executive.
(f) Any disagreement regarding a reduction and/or delay in
Termination Payments will be subject to arbitration under
Section 21 of this Agreement. Neither Executive's designation of
specific payments to be reduced and/or delayed, nor Executive's
acceptance of reduced and/or delayed payments, shall waive
Executive's right to contest such reduction and/or delay.
(g) It is the belief of the parties that none of the
payments provided for in this Agreement is or will be a
"parachute payment."
(h) In computing the "present value" of payments under
Section 14(b) above, each payment shall be discounted from the
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date it would have boon received had the employment continued to
the date of actual payment. The discount rate shall equal one
hundred twenty (120) percent of the applicable federal rate
(determined under Section 1274(d) of the Code, and the
regulations promulgated thereunder) compounded semiannually. The
applicable federal rate will be the federal rate in effect on the
date as of which the present value is determined.
15. Mitigation.
(a) Executive shall be required to mitigate the payments
upon termination described in Section 14 of this Agreement, in
accordance with applicable law governing mitigation of damages.
During the period Employer is obligated to make payments or
provide benefits to Executive under Section 14, Executive will
notify Employer in writing of any other employment or self-
employment in which Executive engages.
(b) The parties both believe and agree that it would not be
reasonable to expect Executive to mitigate damages during the
period covered under Section 14 by seeking or accepting
employment which is not substantially equivalent in all material
respects (including without limitation level of responsibility,
compensation, benefits and working conditions) to Executive's
position with Employer. The parties also believe and agree that
it would not be reasonable to require Executive to mitigate
damages during the period covered under Section 14 by seeking or
accepting employment outside the West Michigan Area. In addition,
nothing in this Section 15 shall be construed to require
Executive to actively seek employment to mitigate the amount of
payments due to him hereunder.
If Executive does earn income from other employment, or
net income from self-employment, during the period payments are
due under Section 14, the parties believe that the amount of any
such earnings (including the cash value of any fringe benefits)
should be deducted from the amount payable under Section 14,
subject to the following conditions. The parties believe and
agree that it would be reasonable and proper, before deducting
any other earnings from payments due under Section 14, to reduce
those other earnings by any expenses incurred by Executive in
obtaining such other earnings, including but not limited to
moving expenses, employment agency fees and, if the Executive
sells his residence in Kent County, Michigan, in order to
relocate, the amount of any loss on that residence (computed as
the difference between the sales price (net of real estate
commissions and other selling costs) and the greater of (i)
Executive's aggregate capital investment in such residence, or
(ii) the fair market value of such residence as determined by
agreement between the parties or, if the parties are unable to
-13-
agree, by an independent appraisal by a qualified real estate
appraiser reasonably acceptable to both parties).
The recitations in this Subsection are intended to set
forth the expectations, intentions and beliefs of the parties as
to what would constitute reasonable mitigation, which the parties
have each relied upon in entering into this Agreement. Nothing
in this Agreement is intended to change the allocation under
applicable law of burden of proof concerning mitigation of
damages, in the event of any dispute.
(c) If Executive receives a payment under Section 14, which
subsequently becomes subject to mitigation under this Section due
to earnings of Executive from subsequent employment or self-
employment, Executive shall repay to Employer that portion of
such payment which has been mitigated. Such repayment shall be
adjusted, however, to reflect the reduced "present value" amount
actually received by Executive under Section 14.
16. Successors; Binding Agreement.
(a) Employer will require any successor (whether direct or
indirect, by purchase, merger, consolidation or otherwise) to all
or substantially all of the business and/or assets of Employer,
to expressly assume and agree to perform this Agreement in the
same manner and to the same extent that Employer would be
required to perform this Agreement if no such succession had
occurred. Failure of Employer to obtain such assumption and
agreement prior to the effectiveness of any such succession shall
be a breach of this Agreement and shall entitle Executive to
compensation from Employer in the same amount and on the same
terms as Executive would be entitled hereunder if Executive
terminated his employment for Good Reason, except that for
purposes of implementing the foregoing, the date on which any
such succession becomes effective shall be deemed the Date of
Termination. As used in this Agreement, "Employer" shall mean
Employer as defined in this Agreement and any successor to its
business and/or assets which assumes and agrees to perform this
Agreement by operation of law or otherwise.
(b) This Agreement shall inure to the benefit of and be
enforceable by Executive's personal or legal representatives,
executors, administrators, successors, heirs, distributees,
devisees and legatees. If Executive should die while any amounts
would still be payable to him hereunder if Executive had
continued to live, all such amounts, unless otherwise provided
herein, shall be paid in accordance with the terms of this
Agreement to his devisee, legatee, or other designee or, if there
be no such designee, to his estate.
-14-
17. Noncompetition. Recognizing that his skill, experience and
knowledge are unique and are a material inducement to Employer to enter
into this Agreement, Executive agrees that during the original and any
renewal term of this Agreement, and prior to his attaining age fifty-eight
(58), Executive will not enter employment with, or, directly or indirectly,
own an interest in, or manage, operate, control or participate in the
business of, any company whose business is similar to or in competition
with that of Employer without the express authorization of Employer's Board
of Directors. This provision shall not, however, restrict the right of
Executive to own stock in any company listed on a national or regional
stock exchange, regardless of the nature of its business. The parties
hereto agree that in view of all the facts and circumstances, this
provision is neither an unreasonable restraint nor unconscionable.
18. Miscellaneous. No provision of this Agreement may be modified,
waived or discharged unless such waiver, modification or discharge is
agreed to in a writing signed by Executive and such officer as may be
specifically designated by Employer's Board of Directors. No waiver by
either party at any time of any breach by the other party of, or compliance
with, any condition or provision of this Agreement to be performed by such
other party shall be deemed a waiver of the same or similar or dissimilar
provisions or conditions at the same or at any prior or subsequent time.
No agreements or representations, oral or otherwise, express or implied,
with respect to the subject matter of this Agreement have been made by
either party which are not set forth expressly in this Agreement. The
validity, interpretation, construction and performance of this Agreement
shall be governed by the laws of the State of Michigan.
19. Validity. The invalidity or unenforceability of any provision of
this Agreement shall not affect the validity or enforceability of the other
provisions of this Agreement, which shall remain in full force and effect.
20. Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed to be an original but all of
which together shall constitute one and the same instrument.
21. Arbitration. Any dispute or controversy arising under or in
connection with this Agreement shall be settled exclusively by binding
arbitration in Rockford, Michigan, in accordance with the rules of the
American Arbitration Association then in effect. Judgment may be entered
on the arbitrator's award in any court having jurisdiction; provided,
however, that Executive shall be entitled to seek specific performance of
his right to be paid until the Date of Termination during the pendency of
any dispute or controversy arising under or in connection with this
Agreement.
22. War or National Emergency. Employer agrees that, in the event of
a war or national emergency, Executive will, at his request, be granted a
leave of absence for military or governmental service and during said
period of leave of absence shall be paid such compensation as may be fixed
by, or with the authority of Employer's Board of Directors. During any
-15-
such leave of absence, Executive shall, except with respect to his rights
to the compensation provided in this Agreement and his obligation to
perform such active duties of Employer, be deemed, for the purposes of this
Agreement, to be continuing in the employment of Employer pursuant to the
Agreement.
23. Notice. Any and all notices referred to in this Agreement shall
be sufficient if furnished in writing, sent by certified or registered
mail, to the respective parties at the following addresses:
If to Employer: Wolverine World Wide, Inc.
9341 Courtland Drive, N.E.
Rockford, MI 49351
Attn: General Counsel
If to Executive: Geoffrey B. Bloom
440 Cambridge, S.E.
East Grand Rapids, MI 49506
24. Termination of Prior Agreements. This Agreement terminates and
replaces in its entirety all prior employment agreements between the
parties, including the Employment Agreement dated July 12, 1991, as
amended.
WOLVERINE WORLD WIDE, INC.
By /s/ Daniel T. Carroll
Daniel T. Carroll
Director and Chairman of the
Compensation Committee of the
Board of Directors
WITNESS
/s/ Geoffrey B. Bloom
Geoffrey B. Bloom
-16-
EXHIBIT 10(g)
WOLVERINE WORLD WIDE, INC.
EXECUTIVE SHORT-TERM INCENTIVE PLAN
FOR 1994
ARTICLE I
ESTABLISHMENT OF THE PLAN
1.1 The Wolverine World Wide, Inc. Executive Short-Term Incentive Plan, as
described herein, is established by Wolverine World Wide, Inc.
(Company) for the fiscal year of 1994, and may be continued, intact or
as amended, from year to year, at the Company's option.
1.2 The Objectives of the Plan are to:
(a) Motivate participants to improve the Company's profitability and
growth by the attainment of carefully planned earnings, sales,
and other contributory goals.
(b) Promote initiative and cooperation with awards based on division
and corporate earnings.
(c) Encourage outstanding individuals to enter and continue in the
employ of the Company.
ARTICLE II
PARTICIPATION
2.1 Participants shall be certain senior division and corporate employees
designated from time to time by the Chief Executive Officer of the
Company and approved by the Compensation Committee of the Board.
2.2 Employees enrolled during the first two periods of the fiscal year are
eligible for all the applicable award for that year. Employees
enrolled during the third through the sixth period are eligible for
one-half of any applicable award. Employees enrolled thereafter shall
not be eligible for any award for that fiscal year.
ARTICLE III
PERFORMANCE GOALS
3.1 The units of measure in the Plan are described below:
(a) Unit Goals (operating divisions or profit centers) are measured
by the attainment of predetermined (1) Profit Before Tax (80-100%
weighting), (2) Annual Sales (0-20% weighting).
Unit (divisional) participants will generally have their bonus
comprised of unit profits of 56%, unit sales of 14%, corporate
goals (profits and sales) of 15%, and personal goals of 15%.
Note: Personal goals will be computed and paid by multiplying
the participants' percentage achievement times 150% of target
payout for the personal goal element. No credit will be given
for achieving personal goals if threshold profit goals are not
attained unless specifically approved by the Compensation
Committee.
(b) Corporate goals are measured by the attainment of predetermined
(1) Corporate-wide Profit Before Tax, Bonus, and 401(k) Plan
(PBTB4), (80% weighting) and (2) Corporate-wide Sales, (20%
weighting) objectives.
Corporate participants will generally have their bonus comprised
of corporate profits 64%, corporate sales 16% and personal goals
20%. Note: Personal goals will be computed and paid by
multiplying the participants' percentage achievement times the
maximum payout for the personal goal element. No credit will be
given for achieving personal goals if threshold profit goals are
not attained unless specifically approved by the Compensation
Committee.
3.2 This plan recognizes three Levels of Goal Attainment for profit and
sales attainment:
(a) Target attainment which qualifies for 100% of eligible bonus.
(b) Threshold attainment which qualifies for 50% of eligible bonus.
(c) Maximum attainment which qualifies for 150% of eligible bonus.
(d) Super Maximum. In addition, achievement above stated maximum
goal attainment will qualify the participant for up to an
additional 50% of target bonus payment (Super-Maximum). This
additional potential incentive will be paid on a pro-rata basis
if profits achieved are between stated maximum and super-maximum
objectives.
Target, Threshold, and Maximum and Super Maximum goals as well as
unit and corporate weightings are approved by the Compensation
Committee. These goals are attached according to your
unit(s)/corporate assignment. Personal goals have also been
communicated to each participant.
3.3 Attainment levels falling between goals (i.e. Threshold Target,
Maximum, and Super Maximum goals) will cause the award level to be
-2-
adjusted by the use straight-line interpolation between the
appropriate levels.
3.4 Each individual eligible for this Plan has been assigned a target
bonus percentage. These targets are determined based on
responsibility and/or performance levels and approved by the
Compensation Committee.
3.5 A participant's actual bonus for 1994 is determined by applying the
Target Bonus to the Level of Goal Attainment for the unit(s) and/or
corporate to which the participant has been assigned for purposes of
this Plan.
3.6 Each Plan participant has been assigned to one or more units and/or
corporate. This assignment is expressed as a percentage (0-100%) and
is based on the participant's position and responsibility in the
Company. Thus, a participant's final bonus calculation will be the
sum of each assigned unit/corporate achievement multiplied by his/her
assigned percentage in that unit(s) and/or corporate.
3.7 The formula therefore for calculating an individual's bonus is as
follows: Bonus equals base salary paid in 1994 multiplied by the
eligible Target Bonus multiplied by the Level of Goal Attainment
against target goals by the unit(s)/corporate area to which a
participant is assigned.
Bonus = Salary X Eligible Target % X Weighted Level of Goal
Attainment.
3.8 Plan Participants will have this Plan and their individual goals,
assignments, and factors explained to them. Information will be
provided quarterly showing estimated progress toward the established
goals.
ARTICLE IV
GENERAL PROVISIONS
4.1 Payout of Awards.
Bonuses earned under the Plan will be paid as soon as is practicable
after the completion of the audit of the Company's books for the
fiscal year and approval of the awards by the Compensation Committee
of the Board of Directors.
4.2 Eligibility for Payment.
Only those employees actively at work on the last day of the fiscal
year shall be eligible for any bonus earned that year. In addition,
the Compensation Committee of the Board may, at its discretion,
interpret or modify this Plan and make other awards if a termination
-3-
is due to disability, retirement or death prior to the end of the
year.
4.3 Employment Rights.
The Plan shall not be construed to give and does not give any employee
the right to be continued in the employ of the Company.
ARTICLE V
SUPPLEMENTAL PROVISIONS
5.1 Maximum Bonus.
There will be no limitation on the total maximum bonuses as long as
the payment of bonuses and dividends is not greater than corporate
PBTB4. If, however, corporate earnings were below the Threshold goal,
then bonuses in those units attaining Target goal or greater would not
be reduced below Target Bonus nor would bonuses in units earning
between Threshold and Target goals be reduced below Threshold Bonuses.
5.2 Compensation Committee Discretion.
Notwithstanding the above, the Compensation Committee of the Board
reserves the right to reduce the formula bonus of any participant
deemed not to have performed satisfactorily in his or her
position/assignment during the year.
Likewise the Compensation Committee may increase a formula bonus if
there is compelling reason to do so.
-4-
EXHIBIT 10(h)
WOLVERINE WORLD WIDE, INC.
MANAGEMENT SHORT-TERM INCENTIVE PLAN
FOR 1994
ARTICLE I
ESTABLISHMENT OF THE PLAN
1.1 The Wolverine World Wide, Inc. Management Short-Term Incentive Plan,
as described herein, is established by Wolverine World Wide, Inc.
(Company) for the fiscal year of 1994, and may be continued, intact or
as amended, from year to year, at the Company's option.
1.2 The Objectives of the Plan are to:
(a) Motivate participants to improve the Company's profitability and
growth by the attainment of carefully planned earnings, sales,
and other contributory goals.
(b) Promote initiative and cooperation with awards based on division
and corporate earnings.
(c) Encourage outstanding individuals to enter and continue in the
employ of the Company.
ARTICLE II
PARTICIPATION
2.1 Participants shall be certain key division and corporate employees
designated from time to time by the Chief Executive Officer of the
Company and approved by the Compensation Committee of the Board.
2.2 Employees enrolled during the first two periods of the fiscal year are
eligible for all the applicable award for that year. Employees
enrolled during the third through the sixth period are eligible for
one-half of any applicable award. Employees enrolled thereafter shall
not be eligible for any award for that fiscal year.
ARTICLE III
PERFORMANCE GOALS
3.1 The units of measure in the Plan are described below:
(a) Unit Goals (operating divisions or profit centers) are measured
by the attainment of predetermined (1) Profit Before Tax (80-100%
weighting), (2) Annual Sales (0-20% weighting).
(b) Corporate goals are measured by the attainment of predetermined
(1) Corporate-wide Profit Before Tax, Bonus, and 401(k) Plan
(PBTB4), (80% weighting) and (2) Corporate-wide Sales, (20%
weighting) objectives.
3.2 This plan recognizes three Levels of Goal Attainment for profit and
sales attainment:
(a) Target attainment which qualifies for 100% of eligible bonus.
(b) Threshold attainment which qualifies for 50% of eligible bonus.
(c) Maximum attainment which qualifies for 150% of eligible bonus.
Target, Threshold, and Maximum goals as well as unit and corporate
weightings are approved by the Compensation Committee. These goals
are attached according to your unit(s)/corporate assignment.
3.3 Attainment levels falling between goals (i.e. Threshold Target and
Maximum goals) will cause the award level to be adjusted by the use of
straight-line interpolation between the appropriate levels.
3.4 Each individual eligible for this Plan has been assigned a target
bonus percentage. These targets are determined based on
responsibility levels and approved by the Compensation Committee.
3.5 A participant's actual bonus for 1994 is determined by the
participant's division head and approved by the Chief Executive
Officer. To assist in this determination, the division head will
first apply the target bonus to the level of goal attainment for the
unit(s) and/or corporate to which the participant has been assigned
for purposes of this Plan. Once this dollar amount has been
determined, the division head will recommend the actual bonus to be
paid which can vary plus or minus 25% from this calculated amount.
This variation is based on the division head's evaluation of the
participant's performance during 1994 in comparison to the
participant's responsibilities and in comparison to the other
participants' performance in that division/unit.
3.6 Each Plan participant has been assigned to one or more units and/or
corporate. This assignment is expressed as a percentage (0-100%) and
is based on the participant's position and responsibility in the
Company. Thus, a participant's final bonus calculation will take into
account the sum of each assigned unit/corporate achievement multiplied
by his/her assigned percentage in that unit(s) and/or corporate.
3.7 The formula therefore for calculating an individual's bonus is as
follows: Bonus equals base salary paid in 1994 multiplied by the
eligible Target Bonus multiplied by the Level of Goal Attainment
-2-
against target goals by the unit(s)/corporate area to which a
participant is assigned.
Bonus = Salary X Eligible Target % X Weighted Level of Goal
Attainment.
3.8 Plan Participants will have this Plan explained to them. Information
will be provided quarterly showing estimated progress toward the
established goals.
ARTICLE IV
GENERAL PROVISIONS
4.1 Payout of Awards.
Bonuses earned under the Plan will be paid as soon as is practicable
after the completion of the audit of the Company's books for the
fiscal year and approval of the awards by the Compensation Committee
of the Board of Directors.
4.2 Eligibility for Payment.
Only those employees actively at work on the last day of the fiscal
year shall be eligible for any bonus earned that year. In addition,
the Compensation Committee of the Board may, at its discretion,
interpret or modify this Plan and make other awards if a termination
is due to disability, retirement or death prior to the end of the
year.
4.3 Employment Rights.
The Plan shall not be construed to give and does not give any employee
the right to be continued in the employ of the Company.
ARTICLE V
SUPPLEMENTAL PROVISIONS
5.1 Maximum Bonus.
There will be no limitation on the total maximum bonuses as long as
the payment of bonuses and dividends is not greater than corporate
PBTB4. If, however, corporate earnings were below the Threshold goal,
then bonuses in those units attaining Target goal or greater would not
be reduced below Target Bonus nor would bonuses in units earning
between Threshold and Target goals be reduced below Threshold Bonuses.
-3-
5.2 Compensation Committee Discretion.
Notwithstanding the above, the Compensation Committee of the Board
reserves the right to reduce the formula bonus of any participant
deemed not to have performed satisfactorily in his or her
position/assignment during the year.
Likewise the Compensation Committee may increase a formula bonus if
there is adequate reason to do so.
-4-
EXHIBIT 10(j)
SCHEDULE PERTAINING TO EXHIBIT 10(j)
A. The Company has entered into Deferred Compensation Agreements
(with disability benefits) with the employees listed below. Each such
agreement is identical to the blank agreement which is incorporated by
reference from Exhibit 10(i) of the Company's Annual Report on Form 10-K
for the fiscal year ended January 2, 1993, except for the name of the
employee and the dates and amounts indicated. The numbers over the columns
below correspond to the numbers in the blanks in the blank agreement
incorporated by reference.
(1) (2) (3) (4) (5) (6)
Date of Employee Retire. Death Partici- Disa.
Agmt. * Name Benefit Benefit pant Since Benefit
10-02-90 George A. Andrews $40,000 $40,000 03-01-77 $20,000
01-29-92 Michael Bohnsack 20,000 20,000 11-01-87 5,000
03-10-94 Rick DeBlasio 15,000 15,000 10-08-03 N.A.
12-10-93 Louis Dubrow 20,000 20,000 12-10-93 N.A.
02-01-92 Steve Duffy 20,000 20,000 09-01-90 6,000
04-27-93 Stephen L. Gulis, Jr. 20,000 20,000 07-22-85 -0-
10-24-90 Charles Lauer 20,000 20,000 10-24-90 9,600
10-10-90 Gordon MacKenzie 15,000 15,000 11-01-87 10,000
11-09-93 Thomas P. Mundt 15,000 15,000 11-09-93 10,000
09-27-89 Martin Neslusan 40,000 40,000 11-28-78 24,000
04-27-93 Timothy O'Donovan 55,000 55,000 03-01-76 27,100
11-01-93 Robert Sedrowski 20,000 20,000 08-20-92 9,000
01-30-92 Jim Smith 20,000 20,000 05-01-87 8,000
09-27-89 William Widdis 31,850 31,850 02-14-83 14,000
B. The Company has also entered into a Deferred Compensation
Agreement with Messrs. Thomas D. Gleason and Geoffrey B. Bloom which
differs in some respects from those listed above. These agreements are
incorporated by reference from Exhibit 10(i) of the Company's Annual Report
on Form 10-K for the fiscal year ended January 2, 1993.
* Dates shown are the dates of the Agreement or latest Amendment.
EXHIBIT 10(k)
SCHEDULE PERTAINING TO EXHIBIT 10(k)
A. The Company has entered into Deferred Compensation Agreements
(without disability benefits) with the employees listed below. Each
agreement with the following employees is identical to the agreement which
is incorporated by reference from Exhibit 10(j) of the Company's Annual
Report on Form 10-K for the fiscal year ended January 2, 1993, except for
the name of the employee and the dates and amounts indicated. The numbers
over the columns below correspond to the numbers in the blanks in the
agreement incorporated by reference.
(1) (2) (3) (4) (5)
Date of Employee Retire. Death Partici-
Agmt. * Name Benefit Benefit pant Since
12-26-89 Owen Baxter $20,000 $20,000 12-26-89
01-29-92 Dean Estes 20,000 20,000 09-27-89
10-02-90 William Legate 18,000 18,000 01-01-86
10-01-91 James Lovejoy 6,000 6,000 10-01-91
09-27-89 Lyle Sipple 25,000 25,000 11-01-87
01-01-89 Dan West 20,000 20,000 01-01-89
B. The Company has also entered into a Deferred Compensation
Agreement with Mr. Charles F. Morgo dated October 11, 1989 which differs
from those listed above and is incorporated by reference from
Exhibit 10(j) of the Company's Annual Report on Form 10-K for the fiscal
year ended January 2, 1993.
* Dates shown are the dates of the Agreement or latest Amendment.
EXHIBIT 10(n)
WOLVERINE WORLD WIDE, INC.
EXECUTIVE LONG-TERM INCENTIVE (THREE YEAR) PLAN
1994 - 1996 PERIOD
ARTICLE I
ESTABLISHMENT OF THE PLAN
1.1 The Wolverine World Wide, Inc. Executive Long-Term Incentive (Three
Year) Plan, as summarized herein is established by Wolverine World
Wide, Inc. (Company) for the three year fiscal period of 1994 - 1996
and may be continued, intact or as amended, from year to year, at the
Company's option.
1.2 The primary purpose of the plan is to:
a. Encourage longer range strategic planning and not stress
over-dependence on short-term performance which could be at the
expense of long-term increases in stockholder value and/or
achieving a strategic position/advantage in the marketplace.
b. Encourage cooperation among all the units of the Company so as to
foster a closer and more cooperative association and sense of
teamwork.
c. Encourage key management individuals to enter and continue in the
employ of the Company.
ARTICLE II
CONCEPT OF THE PLAN
2.1 a. The primary concept of the plan is to establish a financial goal
for each three year time period for the Company. These periods
are overlapping. The goal needs to be both closely identified
with the interests of the stockholders and easily understood.
b. The goals for all plans through 1996 are expressed in terms of
earnings per share (E.P.S.). The Compensation Committee has
determined that this goal meets the objectives stated above. The
definition of "earnings per share," for this purpose, is the
Company's net after tax earnings per common share of stock after
all expenses and taxes, except for the payment of the three year
bonus itself.
ARTICLE III
GOALS FOR 1994-96 PLAN
(EARNINGS PER SHARE)
YEAR THRESHOLD TARGET MAXIMUM
1994 $ 1.75 $ 2.05 $ 2.46
1995 2.00 2.35 2.83
1996 2.34 2.70 3.25
TOTAL $ 6.09 $ 7.10 $ 8.54
Note: In order to pay a bonus, E.P.S. in the third year must be at least
20% of the total E.P.S. goal for the three year period (e.g. at Threshold,
E.P.S. for 1996 must be 1.22 cents per share, 20% X $6.09).
Special Note
The Compensation Committee reserves the right to reduce any participant's
bonus if his/her performance was not satisfactory during any year of the
Plan and/or if his/her unit did not achieve 80% of the Unit Target Goal for
the three year period (as noted in the Executive Annual Bonus Plan) and/or
if the Chief Executive Officer recommends a reduction in an individual's
bonus.
Payout Against Goals
Payout under the 1994-96 Plan as a percentage of each participant's
individual target bonus will be made within thirty days of acceptance of
the fiscal year 1996 certified audit by the Board of Directors, according
to the final schedule:
GOAL PAYOUT AS % OF TARGET BONUS*
Threshold $6.09 50%
Target $7.10 100%
Maximum $8.54 150%
* For E.P.S. between the goals shown, the payout as a percentage of Target
Bonus will be determined by straight line interpretation.
-2-
ARTICLE IV
TERMINATION OF PARTICIPATION
4.1 Retirement, Death, or Total Disability.
If a participant ceases to be a participant before the end of any
performance period and more than twelve months after the beginning of
such performance period because of death, normal or early retirement
under the Company's retirement plan, as then in effect, or total
disability under the Company's long-term disability plan, an award
shall be paid to him or his estate after the end of such performance
period prorated as follows. The award, if any, for such performance
period shall be the amount that he would have received if he had been
a participant during the entire performance period, multiplied by the
ratio of his full months as a participant during that performance
period to the number of months in that performance period.
4.2 Other Termination.
If an employee ceases to be a participant during any performance
period(s), or prior to actual receipt of the award for a previous
period because of the participant's termination of employment for any
reason other than described in Section 4.1 above, the participant will
not be entitled to any award for such performance period. If a
participant continues in Wolverine's employment but no longer is
approved by the Compensation Committee of the Board of Directors to
participate in future periods, his/her eligibility for a prorated
award in current periods will be determined solely by the Compensation
Committee and communicated to the employee. Factors used in this
determination could include the employee's past and current
performance, reasons for the change in participation and other job
related factors as determined by the Compensation Committee.
ARTICLE V
SUMMARY
This communication is meant to summarize the major elements of the
Wolverine World Wide, Inc. Executive Long-Term Incentive Plan. The Plan
shall not be construed to give and does not give any employee the right to
be retained in the employ of the Company.
The Board may discontinue the Plan at any time, suspend the Plan at any
time or from time to time, and from time to time amend the Plan in any
respect, except that no amendment may be made which either would cause any
participant to be deprived of any award previously earned but not paid or
would adversely affect any award such participant might receive for any
performance period which commenced before such amendment was made. The
Board may review at any time the Plan and its administration to determine
whether the objectives of the Plan continue to be met. Where appropriate,
the Chief Executive Officer will recommend changes in the Plan for adoption
by the Board of Directors.
-3-
EXHIBIT 10(o)
The Company has entered into Termination of Employment and Change of
Control Agreements with Louis Dubrow, Steven M. Duffy, Stephen L. Gulis,
Jr., L. James Lovejoy, Charles F. Morgo, Thomas P. Mundt, Timothy J.
O'Donovan, Peter D. Panter, Robert J. Sedrowski, Lyle J. Sipple and William
J. Widdis which are identical to the form of agreement which is incorporated by
reference from Exhibit 10(m) of the Company's Annual Report on Form 10-K
for the fiscal year ended January 2, 1993.
EXHIBIT 10(p)
SCHEDULE PERTAINING TO EXHIBIT 10(p)
Each of the officers and directors of the Company listed below
have entered into an Indemnification Agreement identical to the one which
is incorporated by reference from Exhibit 10(n) of the Company's Annual
Report on Form 10-K for the fiscal year ended January 2, 1993. Each is
dated as of February 20, 1987, except where indicated otherwise.
Geoffrey B. Bloom (May 7, 1987)
Daniel T. Carroll
Steven M. Duffy (April 27, 1993)
Thomas D. Gleason
Stephen L. Gulis, Jr. (April 27, 1993)
David T. Kollat (May 7, 1992)
Blake W. Krueger (May 3, 1993)
L. James Lovejoy (October 2, 1991)
Phillip D. Matthews
David P. Mehney
Charles F. Morgo
Thomas P. Mundt (November 9, 1993)
Stuart J. Northrop (August 23, 1990)
Timothy J. O'Donovan
Joseph A. Parini (May 7, 1987)
Joan Parker
Robert J. Sedrowski (November 1, 1993)
Elmer L. Ward, Jr.
Exhibit 10(s)
SUPPLEMENTAL DIRECTOR'S FEE AGREEMENT
THIS SUPPLEMENTAL DIRECTOR'S FEE AGREEMENT (the "Agreement") is
made as of April 27, 1993 by and between PHILLIP D. MATTHEWS, an individual
("Director"), and WOLVERINE WORLD WIDE, INC., a Delaware corporation (the
"Company").
R E C I T A L S:
Director is an independent, non-employee director of the Company.
Due to his unique and substantial experience in business, the Company
desires that Director serve as Chairman of the Company's Board of Directors
for a minimum period of one year. In connection with such service, the
Company desires that Director commit a substantial amount of his time,
efforts and attention to the affairs of the Company and make himself
regularly available for consultation with the executive officers of the
Company. In performing such services, the Company recognizes and
anticipates that Director may be required to forego other business
opportunities and reduce or eliminate his participation in other ventures
with which he is currently involved. Director is willing and desires to
serve as Chairman of the Company's Board of Directors on the terms set
forth in this Agreement.
ACCORDINGLY, THE PARTIES AGREE AS FOLLOWS:
1. Service as Chairman. Director agrees to serve as Chairman
of the Company's Board of Directors during the term of this Agreement.
Director will serve in such position as an officer of the Board of
Directors and not as an executive officer or employee of the Company. In
connection with such service, Director agrees to assist with and supervise
the overall management of the Company as the Chairman of the Board, and to
perform such other services as the Board of Directors may reasonably
request. Director agrees to devote such amounts of his time, efforts and
attention to the affairs of the Company as may be required in his
reasonable judgment to perform such services to the satisfaction of the
Company's Board of Directors. Director agrees to make himself available on
a regular basis for consultation with the Company's executive officers.
Notwithstanding anything in this Agreement to the contrary, nothing in this
Agreement shall guarantee or require or compel the Company or the Board of
Directors to retain Director in the position of Chairman of the Board or
otherwise infringe upon the unfettered right of the Board of Directors to
elect or appoint any other person to the position of Chairman of the Board
of Directors.
2. Term; Renewal. The term of this Agreement shall be for a
period of one year, commencing on April 27, 1993 and ending on April 26,
1994. Unless the Company delivers written notice to the Director on or
prior to April 1, 1994, or April 1 of any succeeding year during the term
of this Agreement, of its intention not to renew the term of this Agreement
for an additional one-year period, then this Agreement shall be
automatically renewed for an additional one-year period on the same terms
and conditions set forth in this Agreement.
3. Compensation. In consideration of the extraordinary time,
effort and attention Director has agreed to commit to the Company in
connection with such service as Chairman of the Company's Board of
Directors above and beyond the time, effort and attention expected of other
directors of the Company, the Company agrees to compensate Director as
follows:
(a) Retainer; Meeting Fees. The Company shall pay to Director
the Company's standard retainer fee for service as a member of the
Board of Directors as in effect from time to time as and when payable
to all directors of the Company. The Company shall also pay to
Director the standard fee for attendance at and participation in
meetings of the Board of Directors as and when payable to all
directors of the Company. Director shall not be entitled to
compensation for attendance at meetings of committees of the Company's
Board of Directors.
(b) Additional Compensation. The Company shall pay to Director
a fee of One Hundred Thousand Dollars ($100,000) in twelve (12) equal,
monthly installments payable on the last day of each month during the
term of this Agreement, commencing May 31, 1993. The final monthly
installment for the first year of this Agreement will be paid to
Director on April 26, 1994.
(c) Business Expenses. The Company shall pay or reimburse
Director for actual and reasonable business expenses incurred by
Director in connection with his service as Chairman of the Company's
Board of Directors during the term of this Agreement and, for each
one-year term of this Agreement, will also pay directly or reimburse
Director for office, clerical and related expenses incurred by
Director in connection with such service in an amount not to exceed
Fifteen Thousand Dollars ($15,000).
(d) Stock Option. The Company shall grant to Director a non-
qualified stock option to purchase 3,000 shares of the Company's
Common Stock, $1.00 par value (the "Option Shares"). The per share
purchase price for the Option Shares shall be equal to the mean of the
highest and lowest prices of sales of shares of Common Stock on the
New York Stock Exchange on April 27, 1993. Such option shall be
evidenced by a written agreement containing such terms and conditions,
consistent with this Agreement, as the members of the Compensation
Committee of the Company's Board of Directors may determine.
4. Termination. This Agreement may be terminated by the
Company or by Director as follows:
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(a) Discretionary Termination by Director. Director may
terminate this Agreement at any time in Director's discretion, for any
reason or without reason, upon sixty (60) days' advance written notice
delivered to the Chief Executive Officer and Chairman of the
Compensation Committee of the Company's Board of Directors.
(b) Termination by Company for Cause. The Company may terminate
this Agreement immediately for Cause. "Cause" shall include, without
limitation, Director's material breach of this Agreement; the willful
and continued failure to perform his duties as provided in this
Agreement; misappropriation of Company property; activities in aid of
a competitor; dishonesty; conviction of a crime involving moral
turpitude injurious to the Company; or removal from office by the
stockholders of the Company as provided in the Delaware General
Corporation Law, as such law may be amended.
(c) Termination by Non-renewal. This Agreement will
automatically terminate at the end of any one-year Agreement term if
the Company has provided the Director with the notice of non-renewal
specified in Section 2 above.
(d) Discretionary Termination by Company. The Company may
terminate this Agreement at any time in its discretion, for any reason
or without reason. Any termination of this Agreement by the Company,
other than termination for Cause or by non-renewal, shall be deemed to
have been a termination under this subsection.
5. Compensation Upon Termination. The date on which any
termination becomes effective is referenced in this Agreement as the
"Termination Date." Upon any termination of this Agreement, Director shall
be entitled to continue to receive the standard retainer fee and regular
fees for attendance at meetings of the Board, plus additional fees for
attendance at meetings of Board committees held after the Termination Date,
if Director continues to be a director of the Company. In addition,
Director shall be entitled to receive the compensation set forth below:
(a) If the Agreement is terminated pursuant to Sections 4(a) or
4(b) above, Director shall be entitled to receive the additional
compensation provided in Section 3(b) of this Agreement earned by
Director through the Termination Date, prorated on the basis of a 365
day year, and reimbursement pursuant to Section 3(c) of all expenses
incurred through the Termination Date.
(b) If the Agreement is terminated pursuant to Section 4(d)
above, except as provided in Section 6 below, Director shall be
entitled to receive the full amount of the additional compensation
provided in Section 3(b) of this Agreement, and reimbursement pursuant
to Section 3(c) of all expenses incurred through the Termination Date.
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6. Termination Following Change in Control. If this Agreement
is terminated by the Company pursuant to Sections 4(c) or 4(d) following a
Change in Control (as hereafter defined), Director shall be entitled to
receive a lump sum payment in cash on the Termination Date of Fifty
Thousand Dollars ($50,000). Director shall be entitled to receive the
compensation provided in Section 3(b) prorated through the date he receives
the lump sum payment provided above, and shall not be entitled to any
compensation provided in Section 3(b) for the remaining term of this
Agreement from and after such date. For purposes of this Agreement, a
"Change in Control" shall mean any change in control of the Company of a
nature that would be required to be reported in response to Item 6(e) of
Schedule 14A issued under the Securities Exchange Act of 1934 (the "1934
Act"); provided, that without limitation a Change in Control shall have
occurred for purposes of this Agreement if: (i) any "person" (as such term
is defined in Sections 13(d) and 14(d)(2) of the 1934 Act) is or becomes
the beneficial owner, directly or indirectly, of securities of the Company
representing twenty-five percent (25%) or more of the combined voting power
of the Company's then-outstanding securities; or (ii) during any period of
two (2) consecutive years, individuals who at the beginning of such period
constitute the Board of Directors of the Company cease for any reason to
constitute at least a majority thereof, unless the election, or the
nomination for election by the Company's stockholders, of each new director
was approved by a vote of at least two-thirds (2/3) of the directors then
still in office who were directors at the beginning of such period.
7. Entire Agreement. No agreements or representations, oral or
otherwise, express or implied, with respect to the matters covered by this
Agreement have been made by either party which are not set forth expressly
in this Agreement, and this Agreement supersedes any other agreements on
the matters covered by this Agreement.
8. Amendment and Waiver. This Agreement has been authorized by
the Company's Board of Directors. No provisions of this Agreement may be
amended, modified, waived or discharged unless such amendment, waiver,
modification or discharge is agreed to in a writing specifically authorized
by a written Board resolution, and signed by Director and by such director
or officer as may be specifically designated by the Board of Directors of
the Company in such resolution. No waiver by either party at any time of
any breach or non-performance of this Agreement by the other party shall be
deemed a waiver of any prior or subsequent breach or non-performance.
9. Severability. The invalidity or unenforceability of any
provision of this Agreement shall not affect the validity or enforceability
of any other provision of this Agreement, which will remain in full force
and effect as if the invalid or unenforceable provision were absent from
this Agreement.
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10. Binding Effect; Assignability. All of the terms of this
Agreement shall be binding upon, inure to the benefit of, and be
enforceable by and against the successors and authorized assigns of the
Company and Director. Neither the Company nor Director shall assign any of
their respective rights or obligations under this Agreement to any other
person, firm or corporation without the prior written consent of the other
party.
11. Notices. Notices to a party under this Agreement shall be
in writing and shall be deemed to have been duly given if delivered, sent
by certified or registered mail (postage prepaid), shipped and receipted by
express courier service (charges prepaid), or mailed first class (postage
prepaid), or transmitted by telecopier or similar facsimile transmitter:
(a) If to Director:
Mr. Phillip D. Matthews
Matthews, Mullaney & Company
100 West Broadway, Suite 970
Glendale, California 91210
Fax: (818) 543-6659
(b) If to the Company:
Wolverine World Wide, Inc.
9341 Courtland Drive, N.E.
Rockford, Michigan 49351
Attn: General Counsel
Fax: (616) 866-0660
12. Counterparts. This Agreement may be executed in
counterparts, each of which when so executed shall be deemed to be an
original and the counterparts shall together constitute one and the same
instrument.
13. Governing Law. The validity, interpretation, and
construction of this Agreement shall be governed by the laws of the State
of Michigan as applicable to contracts made and to be performed in the
State of Michigan, without regard to principles of conflicts of law.
-5-
IN WITNESS WHEREOF, the parties have signed this Agreement as of
the date and year first written above.
WOLVERINE WORLD WIDE, INC.
By: /s/ Daniel T. Carroll
Daniel T. Carroll,
Director and Chairman of the
Compensation Committee of the
Board of Directors
"Company"
/s/ Phillip D. Matthews
Phillip D. Matthews
"Director"
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EXHIBIT 10(t)
RETIREMENT AGREEMENT
THIS is a RETIREMENT AGREEMENT entered into between WOLVERINE
WORLD WIDE, INC. ("Company") and PETER D. PANTER ("Panter").
RECITALS
Panter has served the Company as an executive officer for many
years and has decided to voluntarily retire from the Company to pursue
other interests. The Company desires to retain Panter as a key employee
prior to his retirement, and the parties desire to set forth their
agreement as to the terms and conditions of such retirement. In addition,
the Company desires to protect itself against any potential competitive
activities by Panter, and Panter desires to accept such restrictions upon
competitive activities, upon the terms and conditions set forth herein.
Section 1. Retirement From Employment. Panter will voluntarily
retire from the Company's employ effective 12:01 a.m., December 31, 1993
("Retirement Date"). Except as set forth elsewhere in this Agreement, all
of his employment duties, obligations, and authorities shall cease
effective that date. Panter will also resign from any and all offices
which he holds with the Company and any of its subsidiaries or other
affiliates effective on the Retirement Date.
Section 2. Termination of Prior Employment Agreements; Continued
Employment At-Will.
(a) Termination of Employment Agreements. Any and all of
Panter's prior employment agreements with the Company, including
but not limited to that agreement dated as of October 20, 1992,
and signed by him on April 22, 1993, are hereby terminated and
canceled and are of no further force or effect. Any rights
arising out said prior agreements are hereby extinguished.
(b) Employment Pending Retirement. Until the Retirement
Date and unless earlier terminated in accordance with this
Agreement, Panter shall continue to receive the same base
compensation (i.e. $175,000 per year or $14,583.33 per month) and
automobile allowance ($5,616 per year or $468 per month) which he
has been receiving prior to the effective date of this Agreement.
During such time, Panter shall continue to be extended by the
Company the same health, life, and disability insurance benefits
he received prior to July 1, 1993. Panter will be advised in
writing on or after his Retirement Date, or such earlier
termination date as may occur per this Agreement, of his right
pursuant to the federal Consolidated Omnibus Budget
Reconstruction Act, to thereafter continue certain health
insurance coverages at his expense.
(c) Employment At-Will. Panter's continued employment
prior to his Retirement Date shall be "at-will." Either Panter
or the Company may in their sole respective discretion terminate
the employment relationship at any time prior to the Retirement
Date, with or without cause, and with or without prior notice or
warning. If Panter is terminated by the Company without cause
prior to his Retirement Date, he shall continue to receive until
the Retirement Date the salary and benefits set forth in Section
2(b). If Panter's employment with the Company should be
terminated prior to the Retirement Date for any reason other than
termination by the Company without cause, including his
resignation of employment with the Company prior to the
Retirement Date, or if he is terminated by the Company for cause
prior to that date, all Company obligations to continue paying
his salary and furnishing benefits to him per this section shall
thereupon immediately cease.
Section 3. Duties. Panter's duties between the date of this
Agreement and his Retirement Date shall be those of a general managerial
nature as may be reasonably assigned to him by the Company's Chief
Executive Officer, or such other officer as the Chief Executive Officer may
designate.
Section 4. Future Communications. Third parties who inquire of the
Company as to Panter's employment/separation from employment will be
advised of: the dates of his employment; his title and duties at the time
of his retirement; and that, having reached the Company's normal retirement
age, Mr. Panter chose to retire effective December 31, 1993. Panter shall
not, from and after the date of this Agreement, voice criticisms of the
Company, its management or its operation in any conversation,
correspondence or other communications with any person or entity including,
without limitation, employees of the Company, its customers, or with the
general public. Panter understands and agrees that this commitment is an
express condition of the Company's commitments in this Retirement
Agreement, and that the Company shall be entitled to cease making any
payments herein required in the event that Panter should fail to adhere to
this provision. Failure by Panter to adhere to this provision shall also
entitle the Company to recover from Panter all payments made to him in
accordance with this Agreement, together with legal fees and other costs
reasonably incurred by the Company in effecting such recovery.
Section 5. Deferred Compensation Agreement. Panter's Deferred
Compensation Agreement of September 27, 1989, with the Company will
continue in effect in accordance with its terms. The Company waives any
right which it might have, based upon information disclosed by Panter to
the Company's Chief Executive Officer prior to July 1, 1993, to discharge
Panter for dishonesty or for any action inimical and injurious to the
interests of the Company. The foregoing waiver does not apply with respect
to any discharge decision motivated by any information brought to the
attention of the Company's Chief Executive Officer on or after the date of
this Retirement Agreement. If Panter is discharged prior to his Retirement
Date, the effect of such discharge on his eligibility for deferred
-2-
compensation per the September 27, 1989, Deferred Compensation Agreement
will be determined in accordance with that Agreement's terms. The 180
month period during which Panter will receive deferred compensation
payments pursuant to paragraph "2" of his September 27, 1989, Deferred
Compensation Agreement shall begin with the payment to be mailed to Panter
on or about January 1, 1994.
Section 6. Stock Option Plans Participation. The parties recognize
that prior to July 1, 1993, Panter has been a participant in the Company's
1988 Stock Option Plan ("1988 Plan") and the 1984 Executive Incentive Stock
Purchase Plan ("1984 Plan"). Panter has, prior to July 1, 1993, received
vested rights to purchase Company stock pursuant to said plan(s), which
rights are summarized on Schedule "A" attached to this Agreement. The
purchase rights summarized on Schedule "A" are not affected by this
Agreement. Panter hereby waives any and all rights which he may have or
assert with respect to stock options which have not vested in him prior to
July 1, 1993, or to restricted stock on which restrictions have not lapsed
as of July 1, 1993,including any such rights which would otherwise result
from Panter's employment between July 1, 1993, and his Retirement Date.
The Company's Compensation Committee shall, in its sole discretion and
after the Retirement Date but before January 31, 1994, determine whether or
not to accelerate vesting of any stock options issued pursuant to the 1988
Plan but not vested in Panter prior to July 1, 1993, and/or whether to
cancel the restrictions on any outstanding restricted shares issued
pursuant to the 1984 Plan.
Section 7. Bonus Plans Participation to be Discretionary With
Company. The parties recognize that as of July 1, 1993, Panter had
participated in the Company's "Wolverine World Wide, Inc., Executive Long-
Term Incentive (Three Year) Plan" for the 1991-1993, 1992-1994, and 1993-
1995 periods and the "Wolverine World Wide, Inc., Executive Short-Term
Incentive Plan" for 1993 (collectively, the "Bonus Plans").
Notwithstanding any provision of said Plans to the contrary, Panter shall
be entitled to participate in and receive any payments in respect of the
Bonus Plans with respect to fiscal 1993 and the three year periods
referenced above only to the extent that the Company's Chief Executive
Officer shall, in his sole discretion, determine such participation and/or
payments to be appropriate. Panter specifically waives any and all claims
which he might have pursuant to the Bonus Plans for any payments which
might otherwise be owed to him based upon Company earnings during these
Plan periods.
Section 8. Pension Plan. The parties recognize that Panter has prior
to July 1, 1993, participated in the "Wolverine World Wide Employee Pension
Plan" ("Pension Plan"). Panter's rights pursuant to said plan are
unaffected by this Agreement. The waiver and release set forth in Section
15 of this Agreement do not apply with respect to such vested interests
Panter may have pursuant to that Pension Plan. Panter's employment between
July 1, 1993, and his Retirement Date (or such earlier date of termination
-3-
as may occur) shall constitute "credited service" for purposes of computing
benefits to which Panter is entitled pursuant to the Pension Plan.
Section 9. Adjustment of Future Advances. The Company will deduct
from the final pay check(s) owed to Panter per section 2(b) above any
business expense reimbursement which has been advanced to Panter prior to
December 31, 1993, but with respect to which proper documentation has not
been furnished by him prior to that date.
Section 10. Cash Value of Life Insurance Policy. The Company
currently maintains a whole life insurance policy upon the life of Panter.
The Company shall maintain that policy in effect through Panter's
Retirement Date, or through the date of such earlier termination of Panter
as may occur per this Agreement. At that time, the cash surrender value of
this life insurance policy shall become the property of Panter. The
parties will cooperate in the completion of all forms necessary to
implement the foregoing.
Section 11. Covenants/Confidential Information.
(a) Covenants Not to Compete. Panter agrees that, prior to
January 1, 1999, he will not, without the prior written consent
of the Company: (i) solicit any customer and/or licensee of the
Company regarding products offered by the Company; (ii) compete,
directly or indirectly, with the Company in any line of business
engaged in by the Company if in the normal course of that
business Panter would directly or indirectly solicit or service
customers and/or licensees of the Company; (iii) consult with or
assist in any way any entity or person which competes with the
Company in the manner described in this paragraph; (iv) attempt
to divert or otherwise interfere with the relationship between
the Company and any of its customers, potential customers, and/or
licensees which were being actively pursued by the Company during
Panter's employment with the Company, or (v) engage, directly or
indirectly, for the benefit of Panter or any other person or
entity, in any activity of employment in the performance of which
it could be reasonably anticipated that Panter would be required
or expected to use or disclose Confidential Information obtained
during the course of Panter's employment by the Company. This
covenant shall apply world-wide.
(b) Employees. Panter agrees that he will not prior to
January 1, 1999, solicit or otherwise attempt to induce any
employee of the Company to terminate employment with the Company.
(c) Confidential Information. Panter shall not hereafter
use for personal benefit or other's benefit, or disclose to
anyone, any proprietary, secret, or confidential information of
the Company. "Confidential Information" includes technical data,
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methods, processes, software, compositions, equipment, research
data, marketing and sales information, personnel data, customer
lists, lists of or data respecting any Company distributors,
franchisees, or sales representatives, agents or employees, or
any books, records, reports, statements, financial and other
data, or plans and all the other know-how and trade secrets
pertaining in any respect to the Company or the Company's
customers.
(d) Remedies. Panter acknowledges that his foregoing
confidentiality, non-compete and non-solicitation covenants are
central to this Agreement. Panter accordingly recognizes and
agrees that, in the event of any breach by him of said covenants,
the Company shall be entitled to: reimbursement to it by Panter
of any payments made to or on behalf of Panter in accordance with
this Agreement; cease any payments which would thereafter be due
to Panter in accordance with this Agreement; Michigan or Federal
court injunctive relief restraining Panter from further such
violation of this Agreement; money damages equal to profits lost
by the Company as a result of such breach by Panter and
reimbursement of court costs and attorney fees and costs
reasonably incurred by the Company in securing Panter's
compliance with this Agreement.
Section 12. Interpretation by Court. If any provision of this
Agreement as applied to any party or to any circumstance shall be adjudged
by a court of competent jurisdiction to be invalid or unenforceable, the
same shall in no way affect any other provision of this Agreement, the
application of such provision in any other circumstances, or the validity
or enforceability of this Agreement. The parties agree that the provisions
hereof are reasonable and intend this Agreement to be enforced as written.
However, if any provision, or part thereof is held to be unenforceable
because of the duration thereof, the area covered thereby, or the types of
activities restricted thereby, all parties agree that a Court of competent
jurisdiction making such determination shall have and should exercise the
power to: reduce the duration and/or area of such provision or types of
activities restricted to the maximum duration and/or area permitted by
applicable law; to delete specific words or phrases; and to enforce such
provision in its reduced form.
Section 13. Return of Company Property. Panter shall on his
Retirement Date, or such earlier termination date as might occur per this
Agreement, return to the Company all of its property in his possession,
including, but not limited to, keys, office equipment, files,
correspondence, customer lists, business notes, documents and all other
materials relating to the Company's business. Panter agrees not to keep
photocopies or other facsimiles of such materials.
Section 14. Waiver and Release. Panter hereby waives and releases,
and discharges the Company, its subsidiaries and affiliates and their
-5-
officers, directors, agents, employees, and representatives from any and
all claims which Panter may have arising out of his employment or severance
of employment with the Company. Panter accepts said consideration in full
satisfaction of all such claims, including administrative claims, charges
or complaints. Said claims waived, released and discharged include, but
are not limited to, any administrative or civil claims arising under
Michigan's Elliott-Larsen Civil Rights Act, Michigan's Handicappers' Civil
Rights Act, the Federal Civil Rights Act of 1964, the Federal Age
Discrimination in Employment Act as amended in 1990, or any other state or
federal protective statutes or administrative rulings or any Michigan or
federal court rulings relating to the reasonableness, fairness, just cause
of or consistent application of the employer's policies relative to the
severance of Panter's employment.
Section 15. Opportunity For Review and Consultation. Panter
acknowledges having read this Agreement and understands all of its
provisions. Panter knowingly and voluntarily agrees to all of the terms
and provisions of this Agreement. Panter acknowledges that he has been
deliberating whether to sign this Agreement since July 28, 1993, that he
has until 12 Noon September 13, 1993, to consider whether to enter into
this Agreement and that the period of time between those dates has provided
him a reasonable period of time for his deliberations. Panter is hereby
encouraged by the Company to consult with an attorney regarding this
Agreement, and has done so.
Section 16. Revocation Period. For a period of seven (7) calendar
days after Panter's execution of this Agreement, Panter may revoke this
Agreement by giving written notice to the Company of his decision to do so.
Notwithstanding any other provisions of this Agreement to the contrary,
this Agreement shall not become effective or enforceable until this
revocation period has expired without Panter having revoked his Agreement
hereto.
Section 17. Notices. Any and all notices referred to herein shall be
sufficient if furnished in writing and shall be deemed to have been duly
given if mailed by certified or registered mail (postage prepaid) or
shipped and receipted by express courier service (charges prepaid) to the
respective parties at the following addresses:
If to Wolverine: Wolverine World Wide, Inc.
9341 Courtland Drive, N.E.
Rockford, Michigan 49351
Attention: Chief Executive Officer
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With a copy to:
Warner, Norcross & Judd
900 Old Kent Building
111 Lyon Street, N.W.
Grand Rapids, Michigan 49503-2489
Attention: Blake W. Krueger
If to Panter: Peter D. Panter
617 Plymouth Avenue, S.E.
Grand Rapids, Michigan 49506
With a copy to:
Borre, Peterson, Fowler & Reens
44 Lafayette, N.E.
P.O. Box 1767
Grand Rapids, Michigan 49501
Attention: Frank Johnson
AGREED: AGREED:
WOLVERINE WORLD WIDE, INC.
/s/ Peter D. Panter /s/ George A. Andrews
Peter D. Panter
Its Senior Vice President of Finance
and Treasurer
Date: September 3, 1993 Date: September 10, 1993
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SCHEDULE A
I. STOCK OPTIONS
Date of # of Option Vesting
Grant Shares Price 7/01/93
03/08/89 5,000 $11.5625 100%
12/18/90 7,000 8.75 75%
03/06/91 5,000 10.00 75%
03/06/92 6,000 11.625 50%
II. RESTRICTED STOCK
Date of # of Option Vesting
Grant Shares Price 7/01/93
05/23/85 1,000 $1.00 100%
02/24/86 500 1.00 100%
03/08/88 750 1.00 100%
03/08/89 1,330 1.00 50%
03/07/90 1,500 1.00 25%
03/06/91 1,500 1.00 0%
03/06/92 1,500 1.00 0%
Exhibit 11
Statement Regarding Computation of Per Share Earnings
Wolverine World Wide, Inc. and Subsidiaries
Fiscal year ended
January 1, 1994 January 2, 1993 December 28, 1991
Primary, as reported
Average shares outstanding 6,763,114 6,627,436 6,549,131
Net effect of dilutive stock options--based on the
treasury stock method using average market price 222,102 (A) (A)
6,985,216 6,627,436 6,549,131
Net earnings (loss) $11,492,000 $(10,941,000) $3,250,000
Per share amount $ 1.65 $ (1.65) $ 0.50
Primary, including dilutive stock options in all years
Average shares outstanding 6,763,114 6,627,436 6,549,131
Net effect of dilutive stock options--based
on the treasury stock method using
average market price 222,102 41,625 38,681
6,985,216 6,669,061 6,587,812
Net earnings (loss) $11,492,000 $(10,941,000) $3,250,000
Per share amount $1.65 $(1.64) $0.49
Fully diluted
Average shares outstanding 6,763,114 6,627,436 6,549,131
Net effect of dilutive stock options--based on the
treasury stock method using the year-end market
price, if higher than the average market price 263,072 156,542 63,773
Assumed conversion of 6.5% convertible
subordinated notes 200,000 200,000 __________
7,226,186 6,983,978 6,612,904
Net earnings (loss) $11,492,000 $(10,941,000) $3,250,000
Add 6.5% convertible subordinated
debentures interest, net of income tax effect 104,000 104,000 __________
$11,596,000 $(10,837,000) $3,250,000
Per share amount $1.60 $(1.55) $0.49
(A) The net effect of dilutive stock options in fiscal 1992 and fiscal 1991 are not included in the
computation of earnings per share since they were less than 3% dilutive.
-1-
EXHIBIT 21
SUBSIDIARIES OF THE REGISTRANT
WOLVERINE WORLD WIDE, INC.
Name State or Country of
Incorporation or Organization
Aguadilla Shoe Corporation Michigan
BSI Shoes, Inc. Michigan
Brooks France, S.A. France
Brooks Sportartikel, GmbH Germany
Dominican Wolverine Shoe Company Cayman Islands
Limited
Frolic de Mexico S.A. de C.V. Mexico
Spartan Shoe Company Limited Cayman Islands
WWW Europe Ltd. England
Hush Puppies Retail, Inc. Michigan
d/b/a Little Red Shoe House
Hush Puppies Factory Direct
Wolverine Design Center, Inc. Michigan
Wolverine Procurement, Inc. Michigan
Wolverine Sourcing, Inc. Michigan
Hush Puppies Canada Footwear, Ltd. Canada
(controlling interest)
Wan Hau Enterprise Co., Ltd. Republic of China
(minority interest) (Taiwan)
All of the subsidiaries of the Registrant are wholly owned, except as
otherwise indicated.
Exhibit 23
Consent of Independent Auditors
We consent to the incorporation by reference in Registration Statement
Number 33-64854 on Form S-8 dated June 22, 1993, Registration Statement
Numbers 33-23195 and 33-23196 on Form S-8 dated July 21, 1988,
Registration Statement Number 2-92600 on Form S-8 dated August 25, 1984,
and Post-Effective Amendment Number 2 to Registration Statement Number 2-
68548 on Form S-8 effective August 9, 1980, of our report dated
February 14, 1994, with respect to the consolidated financial statements
and schedules of Wolverine World Wide, Inc. and subsidiaries included in
the Annual Report on Form 10-K of Wolverine World Wide, Inc. for the fiscal
year ended January 1, 1994.
ERNST & YOUNG
Grand Rapids, Michigan
March 23, 1994
Exhibit 24--POWER OF ATTORNEY
The undersigned, in his or her capacity as a director or
officer, or both, as the case may be, of Wolverine World Wide, Inc.,
does hereby appoint GEOFFREY B. BLOOM; GEORGE A. ANDREWS; STEPHEN L.
GULIS, JR.; and BLAKE W. KRUEGER, or any of them, his or her attorneys
or attorney to execute in his or her name an Annual Report of Wolverine
World Wide, Inc., on Form 10-K for its fiscal year ended January 1, 1994,
and any amendments to that report, and to file it with the Securities
and Exchange Commission. Each attorney shall have power and authority
to do and perform in the name and on behalf of the undersigned, in any
and all capacities, every act to be done in the premises as fully and
to all intents and purposes as the undersigned could do in person, and
the undersigned hereby ratifies and approves the acts of such attorneys.
Date Signature
January 26, 1994 /s/ Phillip D. Matthews
Phillip D. Matthews
Exhibit 24--POWER OF ATTORNEY
The undersigned, in his or her capacity as a director or
officer, or both, as the case may be, of Wolverine World Wide, Inc.,
does hereby appoint GEOFFREY B. BLOOM; GEORGE A. ANDREWS; STEPHEN L.
GULIS, JR.; and BLAKE W. KRUEGER, or any of them, his or her attorneys
or attorney to execute in his or her name an Annual Report of Wolverine
World Wide, Inc., on Form 10-K for its fiscal year ended January 1, 1994,
and any amendments to that report, and to file it with the Securities
and Exchange Commission. Each attorney shall have power and authority
to do and perform in the name and on behalf of the undersigned, in any
and all capacities, every act to be done in the premises as fully and
to all intents and purposes as the undersigned could do in person, and
the undersigned hereby ratifies and approves the acts of such attorneys.
Date Signature
February 18, 1994 /s/ Thomas D. Gleason
Thomas D. Gleason
Exhibit 24--POWER OF ATTORNEY
The undersigned, in his or her capacity as a director or
officer, or both, as the case may be, of Wolverine World Wide, Inc.,
does hereby appoint GEOFFREY B. BLOOM; GEORGE A. ANDREWS; STEPHEN L.
GULIS, JR.; and BLAKE W. KRUEGER, or any of them, his or her attorneys
or attorney to execute in his or her name an Annual Report of Wolverine
World Wide, Inc., on Form 10-K for its fiscal year ended January 1, 1994,
and any amendments to that report, and to file it with the Securities
and Exchange Commission. Each attorney shall have power and authority
to do and perform in the name and on behalf of the undersigned, in any
and all capacities, every act to be done in the premises as fully and
to all intents and purposes as the undersigned could do in person, and
the undersigned hereby ratifies and approves the acts of such attorneys.
Date Signature
February 14, 1994 /s/ Timothy J. O'Donovan
Timothy J. O'Donovan
Exhibit 24--POWER OF ATTORNEY
The undersigned, in his or her capacity as a director or
officer, or both, as the case may be, of Wolverine World Wide, Inc.,
does hereby appoint GEOFFREY B. BLOOM; GEORGE A. ANDREWS; STEPHEN L.
GULIS, JR.; and BLAKE W. KRUEGER, or any of them, his or her attorneys
or attorney to execute in his or her name an Annual Report of Wolverine
World Wide, Inc., on Form 10-K for its fiscal year ended January 1, 1994,
and any amendments to that report, and to file it with the Securities
and Exchange Commission. Each attorney shall have power and authority
to do and perform in the name and on behalf of the undersigned, in any
and all capacities, every act to be done in the premises as fully and
to all intents and purposes as the undersigned could do in person, and
the undersigned hereby ratifies and approves the acts of such attorneys.
Date Signature
January 29, 1994 /s/ Stephen J. Gulis, Jr.
Stephen J. Gulis, Jr.
Exhibit 24--POWER OF ATTORNEY
The undersigned, in his or her capacity as a director or
officer, or both, as the case may be, of Wolverine World Wide, Inc.,
does hereby appoint GEOFFREY B. BLOOM; GEORGE A. ANDREWS; STEPHEN L.
GULIS, JR.; and BLAKE W. KRUEGER, or any of them, his or her attorneys
or attorney to execute in his or her name an Annual Report of Wolverine
World Wide, Inc., on Form 10-K for its fiscal year ended January 1, 1994,
and any amendments to that report, and to file it with the Securities
and Exchange Commission. Each attorney shall have power and authority
to do and perform in the name and on behalf of the undersigned, in any
and all capacities, every act to be done in the premises as fully and
to all intents and purposes as the undersigned could do in person, and
the undersigned hereby ratifies and approves the acts of such attorneys.
Date Signature
February 4, 1994 /s/ Daniel T. Carroll
Daniel T. Carroll
Exhibit 24--POWER OF ATTORNEY
The undersigned, in his or her capacity as a director or
officer, or both, as the case may be, of Wolverine World Wide, Inc.,
does hereby appoint GEOFFREY B. BLOOM; GEORGE A. ANDREWS; STEPHEN L.
GULIS, JR.; and BLAKE W. KRUEGER, or any of them, his or her attorneys
or attorney to execute in his or her name an Annual Report of Wolverine
World Wide, Inc., on Form 10-K for its fiscal year ended January 1, 1994,
and any amendments to that report, and to file it with the Securities
and Exchange Commission. Each attorney shall have power and authority
to do and perform in the name and on behalf of the undersigned, in any
and all capacities, every act to be done in the premises as fully and
to all intents and purposes as the undersigned could do in person, and
the undersigned hereby ratifies and approves the acts of such attorneys.
Date Signature
January 31, 1994 /s/ David P. Mehney
David P. Mehney
Exhibit 24--POWER OF ATTORNEY
The undersigned, in his or her capacity as a director or
officer, or both, as the case may be, of Wolverine World Wide, Inc.,
does hereby appoint GEOFFREY B. BLOOM; GEORGE A. ANDREWS; STEPHEN L.
GULIS, JR.; and BLAKE W. KRUEGER, or any of them, his or her attorneys
or attorney to execute in his or her name an Annual Report of Wolverine
World Wide, Inc., on Form 10-K for its fiscal year ended January 1, 1994,
and any amendments to that report, and to file it with the Securities
and Exchange Commission. Each attorney shall have power and authority
to do and perform in the name and on behalf of the undersigned, in any
and all capacities, every act to be done in the premises as fully and
to all intents and purposes as the undersigned could do in person, and
the undersigned hereby ratifies and approves the acts of such attorneys.
Date Signature
January 28, 1994 /s/ Stuart J. Northrop
Stuart J. Northrop
Exhibit 24--POWER OF ATTORNEY
The undersigned, in his or her capacity as a director or
officer, or both, as the case may be, of Wolverine World Wide, Inc.,
does hereby appoint GEOFFREY B. BLOOM; GEORGE A. ANDREWS; STEPHEN L.
GULIS, JR.; and BLAKE W. KRUEGER, or any of them, his or her attorneys
or attorney to execute in his or her name an Annual Report of Wolverine
World Wide, Inc., on Form 10-K for its fiscal year ended January 1, 1994,
and any amendments to that report, and to file it with the Securities
and Exchange Commission. Each attorney shall have power and authority
to do and perform in the name and on behalf of the undersigned, in any
and all capacities, every act to be done in the premises as fully and
to all intents and purposes as the undersigned could do in person, and
the undersigned hereby ratifies and approves the acts of such attorneys.
Date Signature
January 31, 1994 /s/ Joseph A. Parini
Joseph A. Parini
Exhibit 24--POWER OF ATTORNEY
The undersigned, in his or her capacity as a director or
officer, or both, as the case may be, of Wolverine World Wide, Inc.,
does hereby appoint GEOFFREY B. BLOOM; GEORGE A. ANDREWS; STEPHEN L.
GULIS, JR.; and BLAKE W. KRUEGER, or any of them, his or her attorneys
or attorney to execute in his or her name an Annual Report of Wolverine
World Wide, Inc., on Form 10-K for its fiscal year ended January 1, 1994,
and any amendments to that report, and to file it with the Securities
and Exchange Commission. Each attorney shall have power and authority
to do and perform in the name and on behalf of the undersigned, in any
and all capacities, every act to be done in the premises as fully and
to all intents and purposes as the undersigned could do in person, and
the undersigned hereby ratifies and approves the acts of such attorneys.
Date Signature
March 10, 1994 /s/ Joan Parker
Joan Parker
Exhibit 24--POWER OF ATTORNEY
The undersigned, in his or her capacity as a director or
officer, or both, as the case may be, of Wolverine World Wide, Inc.,
does hereby appoint GEOFFREY B. BLOOM; GEORGE A. ANDREWS; STEPHEN L.
GULIS, JR.; and BLAKE W. KRUEGER, or any of them, his or her attorneys
or attorney to execute in his or her name an Annual Report of Wolverine
World Wide, Inc., on Form 10-K for its fiscal year ended January 1, 1994,
and any amendments to that report, and to file it with the Securities
and Exchange Commission. Each attorney shall have power and authority
to do and perform in the name and on behalf of the undersigned, in any
and all capacities, every act to be done in the premises as fully and
to all intents and purposes as the undersigned could do in person, and
the undersigned hereby ratifies and approves the acts of such attorneys.
Date Signature
March 11, 1994 /s/ Elmer L. Ward, Jr.
Elmer L. Ward, Jr.
Exhibit 24--POWER OF ATTORNEY
The undersigned, in his or her capacity as a director or
officer, or both, as the case may be, of Wolverine World Wide, Inc.,
does hereby appoint GEOFFREY B. BLOOM; GEORGE A. ANDREWS; STEPHEN L.
GULIS, JR.; and BLAKE W. KRUEGER, or any of them, his or her attorneys
or attorney to execute in his or her name an Annual Report of Wolverine
World Wide, Inc., on Form 10-K for its fiscal year ended January 1, 1994,
and any amendments to that report, and to file it with the Securities
and Exchange Commission. Each attorney shall have power and authority
to do and perform in the name and on behalf of the undersigned, in any
and all capacities, every act to be done in the premises as fully and
to all intents and purposes as the undersigned could do in person, and
the undersigned hereby ratifies and approves the acts of such attorneys.
Date Signature
January 31, 1994 /s/ David T. Kollat
David T. Kollat
