SCHEDULE 14A
(Rule 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. _______)
Filed by the registrant X
Filed by a party other than the registrant __
Check the appropriate box:
X Preliminary proxy statement
__ Definitive proxy statement
__ Definitive additional materials
__ Soliciting material pursuant to Rule 14a-11(c) or Rule
14a-12
WOLVERINE WORLD WIDE, INC.
___________________________________________________________________________
(Name of Registrant as Specified in Its Charter)
BOARD OF DIRECTORS OF WOLVERINE WORLD WIDE, INC.
___________________________________________________________________________
(Name of Person(s) Filing Proxy Statement)
Payment of filing fee (Check the appropriate box):
X $125 per Exchange Act Rule 0-11(c)(1)(ii), 14a-6(i)(1), or 14a-
6(j)(2).
__ $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3).
__ Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-
11.
(1) Title of each class of securities to which transaction applies:
___________________________________________________________________________
(2) Aggregate number of securities to which transactions applies:
___________________________________________________________________________
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11.
___________________________________________________________________________
(4) Proposed maximum aggregate value of transaction:
___________________________________________________________________________
__ Check box if any part of the fee is offset as provided by Exchange
Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee
was paid previously. Identify the previous filing by registration
statement number, or the form or schedule and the date of its filing.
(1) Amount previously paid:
___________________________________________________________________________
(2) Form, schedule or registration statement no.:
___________________________________________________________________________
(3) Filing party:
___________________________________________________________________________
(4) Date filed:
___________________________________________________________________________
Preliminary Copies
WOLVERINE WORLD WIDE, INC.
9341 Courtland Drive, N.E.
Rockford, Michigan 49351
NOTICE OF ANNUAL MEETING
To the Stockholders:
The Annual Meeting of Stockholders of Wolverine World Wide, Inc. will
be held at the Amway Grand Plaza Hotel, 187 Monroe Avenue, N.W., Grand
Rapids, Michigan, on Thursday, April 21, 1994, at 10 a.m. local time, for
the following purposes:
(1) Election of two directors for three-year terms expiring in
1997.
(2) Consideration and approval of an amendment to the Certificate
of Incorporation to increase the amount of authorized
capital stock.
(3) Consideration and approval of the 1994 Directors' Stock Option
Plan.
(4) Consideration and ratification of the Board of Directors'
appointment of Ernst & Young as independent auditors for the
current fiscal year.
(5) Transaction of such other business as may properly come before
the meeting.
Stockholders of record at the close of business March 1, 1994, are
entitled to notice of and to vote at the meeting or any adjournment
thereof.
A copy of the Annual Report to Stockholders for the year ended January
1, 1994, is being mailed to you concurrently with this Notice.
March __, 1994 BY ORDER OF THE BOARD OF DIRECTORS
Blake W. Krueger, General Counsel and Secretary
Your vote is important. Even if you plan to attend the meeting,
PLEASE SIGN, DATE AND RETURN THE ENCLOSED PROXY PROMPTLY.
ANNUAL MEETING OF STOCKHOLDERS
WOLVERINE WORLD WIDE, INC.
9341 Courtland Drive, N.E.
Rockford, Michigan 49351
April 21, 1994
__________________
PROXY STATEMENT
__________________
This Proxy Statement and the enclosed Proxy are being furnished to
holders of Common Stock, $1.00 par value, of Wolverine World Wide, Inc.
("Wolverine" or the "Company") on and after March __, 1994, in connection
with the solicitation by the Wolverine Board of Directors of proxies for
use at the Annual Meeting of Stockholders to be held on April 21, 1994, and
at any adjournment of that meeting. The annual meeting will be held at
the Amway Grand Plaza Hotel, 187 Monroe Avenue, N.W., Grand Rapids,
Michigan, at 10 a.m. local time.
The purpose of the annual meeting is to consider and vote upon: (i)
the election of two directors for three-year terms expiring in 1997; (ii)
approval of an amendment to the Company's Certificate of Incorporation to
increase the amount of authorized capital stock; (iii) approval of the
1994 Directors' Stock Option Plan; and (iv) ratification of the appointment
of Ernst & Young as independent auditors for the Company for the current
fiscal year. If a proxy in the enclosed form is properly executed and
returned to Wolverine, the shares represented by the proxy will be voted at
the annual meeting and at any adjournment thereof. If a stockholder
specifies a choice, the proxy will be voted as specified. If no choice is
specified, the shares represented by the proxy will be voted for the
election of all nominees named in this Proxy Statement, for approval of the
amendment to the Certificate of Incorporation, for approval of the 1994
Directors' Stock Option Plan, for ratification of the appointment of Ernst
& Young as independent auditors for the Company for its current fiscal
year, and in accordance with the judgment of the persons named as proxies
with respect to any other matter that may properly come before the meeting or
any adjournment. For purposes of determining the presence or absence of a
quorum for the transaction of business at the meeting, all shares for which
a proxy or vote is received, including abstentions and shares represented
by a broker vote on any matter, will be counted as present and represented
at the meeting.
A proxy may be revoked at any time before it is exercised by written
notice delivered to the Secretary of the Company or by attending and voting
at the annual meeting.
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ELECTION OF DIRECTORS
In accordance with the recommendation of the Nominating Committee, the
Board of Directors has nominated the following two nominees for election as
directors for three-year terms expiring at the 1997 annual meeting:
Joseph A. Parini
Joan Parker
Mr. Elmer L. Ward, Jr., is not standing for reelection in accordance with
the Company's Directors' Retirement Policy. Mr. Ward has served as a
director of the Company since 1975 and his dedicated service to the
Company during the past 19 years is greatly appreciated. The Company
also recognizes and acknowledges the significant contribution Mr. Ward has
made during his service as a director to the Company's growth and
prosperity.
A vote of the stockholders holding a plurality of the shares present
in person or represented by proxy and entitled to vote on the election of
directors is required to elect directors. For purposes of counting votes
on the election of directors, abstentions, broker non-votes and other
shares not voted will not be counted as shares voted, and the number of
shares of which a plurality is required will be reduced by the number of
shares not voted.
Both nominees are presently directors of the Company whose terms will
expire at the meeting. The proposed nominees are willing to be elected and
to serve. In the event that any nominee is unable to serve or is otherwise
unavailable for election, which is not contemplated, the incumbent
Wolverine Board of Directors may or may not select a substitute nominee.
If a substitute nominee is selected, all proxies will be voted for the
substitute nominee designated by the Board of Directors. If a substitute
nominee is not selected, all proxies will be voted for the remaining
nominee. Proxies will not be voted for a greater number of persons than
the number of nominees named above.
YOUR BOARD OF DIRECTORS RECOMMENDS THAT YOU
VOTE FOR ELECTION OF ALL NOMINEES AS DIRECTORS
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AMENDMENT OF THE CERTIFICATE OF INCORPORATION
The Board of Directors proposes to amend the Fourth Article of the
Company's Certificate of Incorporation to increase the Company's authorized
capital stock from 15,000,000 shares of common stock, $1.00 par value per
share ("Common Stock"), to 25,000,000 shares of Common Stock. The purpose
of the amendment is to provide additional shares for possible future
issuance.
As of March 1, 1994, ______________ authorized shares of Common Stock
were issued and outstanding. The Board of Directors has approved a three-
for-two stock split payable on April 14, 1994, to stockholders of
record as of March 21, 1994, which will result in approximately ___ shares
of Common Stock being outstanding after the stock split.
The Board of Directors believes that it is advisable to have
additional authorized shares of Common Stock available for possible future
stock splits and dividends, public or private offerings of Common Stock or
securities convertible into Common Stock, employee benefit plans, equity-
based acquisitions, and other corporate purposes that might be proposed.
Authorized but unissued shares of Common Stock, or funds raised in a public
or private offering of shares, may be used for acquisition opportunities.
Other than the three-for-two stock split referenced above and shares to be
issued under the Company's stock plans, the Company does not have any present
plans to issue additional shares of Common Stock.
All of the additional shares resulting from the increase in the
Company's authorized Common Stock would be of the same class, with the same
dividend, voting and liquidation rights, as the shares of Common Stock
presently outstanding. The Company's authorized capital also includes, and
will continue to include, 2,000,000 shares of preferred stock, none of
which is currently outstanding.
If the proposed amendment is adopted, the newly authorized shares
would be unreserved and available for issuance. No further stockholder
authorization would be required prior to the issuance of such shares by the
Company. Stockholders have no preemptive rights to acquire shares issued
by the Company under its Certificate of Incorporation, and stockholders
would not acquire any such rights with respect to such additional shares
under the proposed amendment to the Company's Certificate of Incorporation.
Under some circumstances, the issuance of additional shares of Common Stock
could dilute the voting rights, equity and earnings per share of existing
stockholders.
The first paragraph of the Fourth Article of the Company's Certificate
of Incorporation, as amended, would read as follows:
FOURTH: The total number of shares that the corporation shall have
authority to issue and have outstanding is Twenty-seven Million
(27,000,000) shares, of which Two Million (2,000,000) shares shall be
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Preferred Stock, par value One Dollar ($1.00) per share, and Twenty-five
Million (25,000,000) shares shall be Common Stock, par value One Dollar
($1.00) per share.
The affirmative vote of holders of a majority of shares entitled to
vote at the annual meeting of stockholders is required to approve the
proposed amendment to the Company's Certificate of Incorporation. For the
purpose of counting votes on this proposal, abstentions, broker non-votes,
and other shares not voted have the same effect as a vote against the
proposal. The New York Stock Exchange has advised the Company that this
proposal is deemed to be a routine matter. Therefore, shares of Common
Stock held by New York Stock Exchange Member Organizations, or their
nominees, may be voted without specific instructions from the beneficial
owners of such shares.
YOUR BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE FOR
APPROVAL OF THE AMENDMENT TO THE COMPANY'S
CERTIFICATE OF INCORPORATION
APPROVAL OF 1994 DIRECTORS' STOCK OPTION PLAN
The Board of Directors believes that stock options, which return no
monetary value to a recipient unless the stockholders as a whole benefit
from an increase in the Company's stock price, are an especially effective
means of aligning the interests of the Company's directors with the
interests of its stockholders. Therefore, to attract and retain the
services of experienced and knowledgeable non-employee directors, who are
not eligible for awards under most of the Company's stock plans, and to
provide additional incentive for the Company's non-employee directors to
promote the best interests of the Company and its stockholders, on
March 10, 1994, the Board of Directors adopted, subject to
stockholder approval, the 1994 Directors' Stock Option Plan (the "1994
Directors' Plan"). The 1994 Directors' Plan is intended to supplement the
Company's current Directors Stock Option Plan, which was adopted and
approved by the stockholders in 1988 (the "1988 Directors' Plan"). Because
the 1988 Directors' Plan has limited authorized shares remaining for future
options (5,000 pre-split shares, of which 4,000 pre-split shares are scheduled
to be issued on May 20, 1994), the Board of Directors believes that the
adoption and implementation of the 1994 Directors' Plan, making additional
shares available for options to non-employee directors, is now advisable.
The following is a summary of the principal features of the 1994
Directors' Plan. The summary is qualified in its entirety by reference to
the terms of the 1994 Directors' Plan as set forth in the Appendix to this
Proxy Statement.
The 1994 Directors' Plan provides that a maximum of 80,000 shares
(120,000 post-split shares) of the Company's Common Stock (subject to
certain antidilution adjustments) would be available for stock option grants.
The stock options granted under the 1994 Directors' Plan would be
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non-qualified stock options. Only directors of the Company who are not
also employees of the Company or any of its subsidiaries ("Non-Employee
Directors") would be eligible to participate in the 1994 Directors' Plan.
Currently, there are eight Non-Employee Directors who would become participants
in the 1994 Directors' Plan upon approval of the plan by the stockholders.
Additional individuals may become Non-Employee Directors in the future and
may thereafter participate in the 1994 Directors' Plan. The 1994 Directors'
Plan would not be qualified under Section 401(a) of the Internal Revenue Code
of 1986, as amended (the "Code"), and would not be subject to the Employee
Retirement Income Security Act of 1974, as amended ("ERISA").
The 1994 Directors' Plan would be administered by the Compensation
Committee (the "Committee") of the Board of Directors. The Committee would
interpret the provisions of the 1994 Directors' Plan and supervise its
administration. However, because stock options would be granted
automatically each year and the term, exercise price, number of options to
be granted, and other material features of the stock options would be fixed
in accordance with the 1994 Directors' Plan, the Committee would exercise
limited discretion with respect to stock option grants under the 1994
Directors' Plan.
The 1994 Directors' Plan provides that newly elected or appointed Non-
Employee Directors would receive on the date of their initial election or
appointment stock options to purchase 3,000 shares (4,500 post-split shares)
of the Company's Common Stock. Thereafter, options to purchase 500 shares
(750 post-split shares) of the Company's Common Stock would be automatically
granted on the date of each annual meeting of the Company's stockholders to
each person who is a Non-Employee Director at the close of the annual meeting.
The number of shares awarded pursuant to automatic grants, along with the
exercise prices, would be subject to adjustment in the event of a stock split,
stock dividend, merger or any other similar change in the corporate structure
or shares of the Company. No automatic grants would be made pursuant to the
1994 Directors' Plan until there were insufficient shares available for grants
to Non-Employee Directors under the 1988 Directors' Plan.
The Committee would set forth the terms of individual grants of stock
options in stock option agreements containing such terms and conditions,
consistent with the provisions of the 1994 Directors' Plan, as the
Committee deems appropriate. The Company would receive no consideration
upon the grant of stock options. The option price per share would be 100%
of the "market value" of the Common Stock on the date of grant. "Market
value" is defined as the mean of the highest and lowest sale prices of
shares on the New York Stock Exchange on the grant date or, if the New York
Stock Exchange is closed on the grant date, the last preceding date on
which the New York Stock Exchange was open for trading and on which shares
of Common Stock were traded. On March 1, 1994, the market value of the
Company's Common Stock was $___ per share.
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When exercising all or a portion of a stock option, a participant
could pay with cash, shares of Common Stock, or other consideration
substantially equal to cash. If shares are used to pay the exercise price,
a participant may use the value of shares received upon exercise for
further exercises in a single transaction, permitting a participant to
fully exercise an option with a relatively small initial cash or stock
payment. If appropriate arrangements are made by the Company with a broker
or other similar institution, payment for the shares may be made by a
properly executed exercise notice directing delivery of shares to the
broker, together with irrevocable instructions to the broker to deliver
promptly to the Company the amount of sale or loan proceeds to pay the
exercise price.
The term of each stock option would not exceed 10 years from the grant
date. Options generally would be exercisable for limited periods of time
in the event an option holder retired, died, became disabled or otherwise
ceased to be a director of the Company. Stock options granted to
participants under the 1994 Directors' Plan generally could not be
transferred except by will or by the laws of descent and distribution.
There would be no specified limit on the number of options that could be
granted to any individual participant under the 1994 Directors' Plan,
except that a new Non-Employee Director would be granted an initial option
for 3,000 shares (4,500 post-split shares) and would be limited to an annual
grant of 500 shares (750 post-split shares) thereafter.
Because the number of Non-Employee Directors and the market value of
the Common Stock on the date of each annual meeting cannot presently be
determined, the benefits or amounts that will be received by the Non-
Employee Directors under the plan also are not determinable. However, if
the 1994 Directors' Plan had been in effect for the fiscal year ended
January 1, 1994, and assuming that there were no shares available under the
1988 Directors' Plan, the benefits under the 1994 Directors' Plan would
have been as follows:
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NEW PLAN BENEFITS(1)
1994 DIRECTORS' STOCK OPTION PLAN
Dollar Value at Number of Securities
Group March 1, 1994(2) Underlying Options
Non-Executive Director Group
(8 persons) $____________ 4,000(3)
All Others 0 0
______________________________
(1) Stock options would not be granted under the 1994 Directors' Plan
until there were insufficient shares for similar awards under the 1988
Directors' Plan. The Company anticipates that there will be
insufficient shares under the 1988 Directors' Plan for future awards
in 1995.
(2) The dollar value of a stock option is determined by calculating the
spread between the exercise price of the option and the current value
of the Company's Common Stock. In this Table, dollar value is
calculated as the difference between the market value of the Common
Stock on April 27, 1993 (the date of the 1993 Annual Meeting of
Stockholders) and the market value as of March 1, 1994.
(3) Includes stock options to purchase 500 shares of Common Stock for each
of the eight current Non-Employee Directors.
Under current federal income tax laws, neither the Company nor the Non-
Employee Directors would recognize any income or deduction at the time a
stock option was granted. When a Non-Employee Director exercised stock
options granted under the 1994 Directors' Plan, he or she would recognize
self-employment income in the year of exercise equal to the difference
between the stock option price and the fair market value of the shares
acquired on the date of exercise. The Company would receive a corresponding
deduction of this amount for federal income tax purposes. The optionee's tax
basis in the shares acquired would be increased by the amount of self-employment
income recognized. Sale of the stock after exercise would result in recognition
of short or long-term capital gain or loss.
The Board of Directors could from time to time amend the 1994
Directors' Plan as it deemed proper and in the best interests of the
Company, except that the 1994 Directors' Plan could not be amended more
than once every six months other than to comply with changes in the Code,
ERISA, or the rules thereunder. In addition, without stockholder approval,
no amendment could become effective that would materially increase either
the benefits to Non-Employee Directors or the number of shares that could
be issued under the 1994 Directors' Plan, modify eligibility requirements,
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or require stockholder approval pursuant to Rule 16b-3 under the Securities
Exchange Act of 1934, as amended (the "Exchange Act") or the rules of the
New York Stock Exchange or any other exchange upon which the Company's
Common Stock is traded. No termination, amendment or modification could
become effective with respect to any outstanding stock option without the
prior written consent of the Non-Employee Director holding the stock option
unless such termination, amendment or modification operated solely to the
benefit of the Non-Employee Director.
When the three-for-two stock split becomes effective and is paid, the
number of shares that would be available for stock option grants under the
plan would increase to 120,000, initial option grants to a new Non-Employee
Director would increase to 4,500 shares, and annual option grants would
increase to 750 shares per director under the anti-dilution provisions of
the plan.
Subject to stockholder approval, the 1994 Directors' Plan would take
effect on April 21, 1994, and, unless terminated earlier by the Board of
Directors, the 1994 Directors' Plan would terminate on April 20, 2004. No
stock option could be granted under the 1994 Directors' Plan after that
date.
The Company intends to register shares covered by the 1994 Directors'
Plan under the Securities Act of 1933 before any stock options may be
exercised and to file a listing application to cover the shares with the
New York Stock Exchange.
A simple vote of the stockholders holding a majority of the shares
present in person or represented by proxy and entitled to vote on this
proposal is required to approve the adoption of the 1994 Directors' Plan.
For purposes of counting votes on this proposal, abstentions will be
counted as voted against the proposal. Broker non-votes will not be
counted as voted on the proposal, and the number of shares of which a
majority is required will be reduced by the number of shares not voted.
The New York Stock Exchange has advised the Company that this proposal is
deemed to be a routine matter. Therefore, shares of Common Stock held by
New York Stock Exchange Member Organizations, or their nominees, may be
voted without specific instructions from the beneficial owners of such
shares.
YOUR BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE FOR
APPROVAL OF THE 1994 DIRECTORS' STOCK OPTION PLAN
VOTING SECURITIES
Holders of record of Common Stock at the close of business on March 1,
1994, will be entitled to vote at the annual meeting and any adjournment of
the meeting. As of March 1, 1994, there were _____________ shares of
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Common Stock outstanding (excluding 781,778 shares of treasury stock), each
having one vote on each matter presented for stockholder action. Shares
cannot be voted unless the stockholder is present at the meeting or
represented by proxy.
OWNERSHIP OF COMMON STOCK
The following table sets forth information as to each entity known to
the Company to have been the beneficial owner of more than 5% of the
Company's outstanding shares of Common Stock as of March 1, 1994:
Amount and Nature of
Beneficial Ownership
Sole Voting Shared Voting
Name and Address and Dispositive or Dispositive Percent
of Beneficial Owner Power Power of Class
Dimensional Fund Advisors, Inc.
1299 Ocean Avenue, 11th Floor
Santa Monica, California 90401 (1) 369,100 -- 5.4%
The Kaufmann Fund, Inc.
17 Battery Place, Suite 2624
New York, New York 10004 (2) 400,000 -- 5.9%
___________________________
(1) Based on information set forth in Schedule 13G, originally filed with
the Securities and Exchange Commission on February 16, 1988, and
amended by filings dated February 10, 1989, January 9, 1990, February
10, 1993, and February 9, 1994. The Schedule 13G indicates that
Dimensional Fund Advisors, Inc. ("Dimensional"), a registered
investment advisor, is deemed to have beneficial ownership of all
369,100 shares. All such shares are held in portfolios of
Dimensional's advisory clients or by DFA Investment Dimensions Group
Inc. or The Investment Trust Company, both registered open-end
management investment companies.
(2) Based on information set forth on Schedule 13G filed with the
Securities and Exchange Commission. The Schedule 13G indicates that
The Kaufmann Fund, Inc. is a registered investment company.
SECURITIES OWNERSHIP OF MANAGEMENT
The following table sets forth the number of shares of Common
Stock beneficially owned as of March 1, 1994, by each of Wolverine's
directors and nominees for director, each of the named executive officers,
and all of Wolverine's directors and executive officers as a group:
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Amount and Nature of Beneficial Ownership(1)
Sole Voting Shared Voting Total
Name of and Disposi- or Disposi- Beneficial Percent
Beneficial Owner tive Power(2) tive Power(3) Ownership(2) of Class
George A. Andrews ________ ________ ________ _____%
Geoffrey B. Bloom ________ ________ ________ _____%
Daniel T. Carroll ________ ________ ________ _____%
Steven M. Duffy ________ ________ ________ _____%
Thomas D. Gleason ________ ________ ________ _____%
David T. Kollat ________ ________ ________ _____%
Phillip D. Matthews ________ ________ ________ _____%
David P. Mehney ________ ________ ________ _____%
Charles F. Morgo ________ ________ ________ _____%
Stuart J. Northrop ________ ________ ________ _____%
Timothy J. O'Donovan ________ ________ ________ _____%
Peter D. Panter ________ ________ ________ _____%
Joseph A. Parini ________ ________ ________ _____%
Joan Parker ________ ________ ________ _____%
Elmer L. Ward, Jr. ________ ________ ________ _____%
All directors and executive
officers as a group ________ ________ ________ _____%
___________________________
* Less than 1%.
(1) The numbers of shares stated are based on information provided by each
person listed and include shares personally owned of record by the
person and shares which, under applicable regulations, are deemed to
be otherwise beneficially owned by the person.
(2) These numbers include shares that may be acquired through the exercise
of stock options granted under the 1988 Directors' Plan, the Stock
Option Plan of 1979, the 1984 Executive Incentive Stock Purchase Plan,
the 1988 Stock Option Plan and the 1993 Stock Incentive Plan within 60
days after March 1, 1994. The number of shares subject to stock
options for each listed person is shown below:
Mr. Andrews ________
Mr. Bloom ________
Mr. Carroll ________
Mr. Duffy ________
Mr. Gleason ________
Mr. Kollat ________
Mr. Matthews ________
Mr. Mehney ________
Mr. Morgo ________
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Mr. Northrop ________
Mr. O'Donovan ________
Mr. Panter ________
Mr. Parini ________
Ms. Parker ________
Mr. Ward ________
All directors and executive
officers as a group ________
(3) These numbers include shares over which the listed person is legally
entitled to share voting or dispositive power by reason of joint
ownership, trust, or other contract or property right, and shares held
by spouses and children over whom the listed person may have
substantial influence by reason of relationship.
BOARD OF DIRECTORS
The Company's Board of Directors currently consists of eleven
directors, two of whom are standing for reelection. Mr. Ward is not
standing for reelection in accordance with the Company's Directors'
Retirement Policy. Wolverine's Amended and Restated By-Laws provide that
the Board of Directors shall be divided into three classes, with each class
to be as nearly equal in number as possible. Each class of directors
serves a term of office of three years, with the term of one class expiring
at the annual meeting of stockholders in each successive year.
Biographical information as of January 1, 1994, is presented
below for each person who either is nominated for election as a director at
the annual meeting of stockholders or is continuing as an incumbent
director. Except as indicated, all have had the same principal positions
and employment for over five years.
Nominees For Election To Terms Expiring in 1997
JOSEPH A. PARINI (age 62) has been a director since 1987. He is
President and Chief Executive Officer of Elbit Systems, Inc., which
designs, manufactures and markets infrared instrumentation, electronics
for telecommunications, and defense products. Formerly, Mr. Parini was
President and Chief Executive Officer of Rospatch Corporation (now
Ameriwood International, Inc.), a manufacturer of wood products.
Mr. Parini is also a director of Foremost Corporation of America.
JOAN PARKER (age 58) has been a director since 1981. Ms. Parker
is Senior Vice President and Managing Director of Ayer Public Relations, a
division of N. W. Ayer, Inc., an international advertising firm.
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Incumbent Directors - Terms Expiring In 1996
DANIEL T. CARROLL (age 67) has been a director since 1979.
Mr. Carroll is Chairman of the Board and President of The Carroll Group,
Inc., a management consulting firm. Mr. Carroll is also a director of
American Woodmark Corp.; A.M. Castle & Co.; Aon Corporation; Comshare,
Inc.; Diebold, Incorporated; Michigan National Corporation; Woodhead
Industries, Inc.; UDC Homes, Inc.; DeSoto, Inc.; and Oshkosh Truck
Corporation.
THOMAS D. GLEASON (age 57) has been a director since 1970.
Mr. Gleason is Vice Chairman and an officer of the Board of Directors of
the Company. Formerly, Mr. Gleason was Chairman of the Board and Chief
Executive Officer of the Company. Mr. Gleason is also a director of
Foremost Corporation of America and Huffy Corporation.
PHILLIP D. MATTHEWS (age 55) has been a director since 1981.
Mr. Matthews is Chairman of the Board and Chairman of the Executive
Committee of the Company, Chairman of Reliable Company, a coin-operated
laundry equipment company servicing the multi-unit housing industry, and a
director and consultant of Bell Sports Corp., a manufacturer and marketer
of bicycle helmets and accessories. Formerly, Mr. Matthews was Chairman,
Chief Executive Officer and owner of Bell Helmets, Inc., a predecessor of
Bell Sports Corp.
STUART J. NORTHROP (age 68) has been a director since 1990.
Mr. Northrop is Vice Chairman of the Board and Chairman of the Executive
Committee of Huffy Corporation, a manufacturer and distributor of sports
equipment. Formerly, Mr. Northrop was Chairman of the Board of Huffy
Corporation. Mr. Northrop is also a director of Huffy Corporation; Lukens,
Inc.; Power Spectra; and Union Corp.
Incumbent Directors - Terms Expiring in 1995
GEOFFREY B. BLOOM (age 52) has been a director since 1987.
Mr. Bloom is President and Chief Executive Officer of the Company.
Formerly, Mr. Bloom was Chief Operating Officer of the Company.
DAVID T. KOLLAT (age 55) has been a director since 1992. Mr.
Kollat is President and Chairman of 22, Inc., a company specializing in
research and consulting for retailers and consumer goods manufacturers.
Mr. Kollat is also a director of The Limited, Inc.; The Limited Stores,
Inc.; Cooker Restaurant Corporation; and Consolidated Stores.
DAVID P. MEHNEY (age 54) has been a director since 1977.
Mr. Mehney is President of The KMW Group, Inc., a distributor of medical
and marine products.
TIMOTHY J. O'DONOVAN (age 48) has been a director since 1993.
Mr. O'Donovan is Executive Vice President of the Company.
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BOARD COMMITTEES AND MEETINGS
The Company's Board of Directors has four standing committees:
the Audit Committee, the Nominating Committee, the Compensation Committee
and the Executive Committee.
Audit Committee. The Audit Committee recommends to the Board of
Directors the selection of independent accountants; approves the
nature and scope of services to be performed by the independent
accountants and reviews the range of fees for such services; confers
with the independent accountants and reviews the results of the annual
audit; reviews with the independent accountants the Company's internal
auditing, accounting and financial controls; and reviews policies and
practices regarding compliance with laws and conflicts of interest.
Messrs. Kollat, Northrop and Parini and Ms. Parker currently serve on
the Audit Committee. Mr. Parini is Chairman of the Audit Committee.
During 1993, the Audit Committee held four meetings.
Nominating Committee. The Nominating Committee is responsible
for recommending to the Board of Directors suitable candidates for
nomination for positions on the Board of Directors and committees of
the Board of Directors. The Nominating Committee also recommends the
officers of the Company for appointment by the Board of Directors.
Messrs. Gleason, Kollat, Matthews and Mehney currently serve on the
Nominating Committee. Mr. Mehney is Chairman of the Nominating
Committee. During 1993, the Nominating Committee held three meetings.
The Nominating Committee will consider nominees for election to the
Board of Directors submitted by stockholders. The Amended and
Restated By-Laws of the Company provide that nominations for the
election of directors may be made by a stockholder entitled to vote
for the election of directors if, and only if, the stockholder submits
advance notice of the proposed nomination and such notice is received
by the Secretary of the Company not less than 50 nor more than 75 days
prior to the annual meeting. However, if fewer than 65 days notice of
such meeting or prior public disclosure is given to stockholders, the
notice of the proposed nomination must be received not later 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. Each such notice submitted by a
stockholder must set forth the name, age, business address, residence
address, principal occupation and employment of, the class and number
of shares of the Company's stock beneficially owned by, and any other
information concerning each nominee as would be required to be
included in a proxy statement soliciting proxies for the election of
the nominee under the Exchange Act and, as to the stockholder giving
the notice, the name, record address and the class and number of
shares of the Company's stock beneficially owned by such stockholder.
If the Chairman of the meeting determines that a nomination was not
made in accordance with these procedures, he or she shall so declare
to the meeting and the nomination shall be disregarded.
-14-
Compensation Committee. The Compensation Committee is
responsible for reviewing and recommending to the Board of Directors
the timing and amount of compensation for the Chief Executive Officer
and other key employees, including salaries, bonuses and other
benefits. The Compensation Committee also is responsible for
administering the Company's stock option and other equity-based
incentive plans, recommending retainer and attendance fees for Non-
Employee Directors, reviewing compensation plans and awards as they
relate to the Chief Executive Officer and other key employees, and
administering the Company's pension plans and 401(k) savings plan.
Messrs. Carroll, Mehney, Parini and Ward and Ms. Parker currently
serve on the Compensation Committee. Mr. Carroll is Chairman of the
Compensation Committee. During 1993, the Compensation Committee held
six meetings.
Executive Committee. The Executive Committee is responsible for
and may exercise all powers and authority of the Board of Directors in
the management of the business and affairs of the Company except to
the extent that delegation is prohibited by law. The Executive
Committee may consider or act upon matters requiring Board action
during periods between Board meetings. Messrs. Bloom, Carroll,
Gleason, Matthews, Northrop and Ward currently serve on the Executive
Committee. Mr. Matthews is Chairman of the Executive Committee.
During 1993, the Executive Committee held three meetings.
During the Company's last fiscal year, the Board of Directors
held six regular meetings. Each of the directors attended 75% or more of
the aggregate of (i) the total number of meetings of the Board of
Directors, and (ii) the total number of meetings held by all committees of
the Board of Directors on which he or she served.
COMPENSATION OF DIRECTORS
Directors who are not employees of the Company receive an $8,000
annual retainer fee plus compensation in accordance with the following
schedule: $1,000 for attendance at each regular meeting of the Board of
Directors; $900 for attendance at each Executive Committee meeting when
such committee functions in place of the Board; $500 for attendance at each
special meeting of the Board of Directors; and $250 for attendance at each
committee meeting. In addition, the chairman of each of the Audit,
Compensation and Nominating Committees receives annual fees of $2,000.
Under the 1988 Directors' Plan, each Non-Employee Director
serving on the Board of Directors on May 4, 1988, was granted an option to
purchase 3,000 shares of Common Stock. After that date and until there are
no longer shares available for issuace under the 1988 Directors' Plan, each
Non-Employee Director has been and will be granted an additional option to
purchase 500 shares on May 20 of each year. Under the 1988 Directors' Plan,
each new Non-Employee Director will be granted an option to purchase 3,000
-15-
shares on the May 20 following his or her initial appointment or election
as a director and an option to purchase 500 shares on May 20 of each following
year. The per share exercise price of options granted under the plan is 100%
of the market value of Common Stock on the date each option is granted. The
term of each option may not exceed 10 years. Options to purchase a maximum
of 50,000 shares may be granted under the 1988 Directors' Plan.
The Board of Directors has adopted, subject to stockholder
approval, the 1994 Directors' Plan. The 1994 Directors' Plan is intended
to supplement the 1988 Directors' Plan, which will have an insufficient
number of shares remaining for option grants after May 20, 1994. Options
would be granted under the 1994 Directors' Plan in amounts and on terms
substantially identical to those set forth in the 1988 Directors' Plan,
except that grants would occur on the date of each annual meeting under the
1994 Directors' Plan instead of the May 20 date provided in the 1988
Directors' Plan. If approved by the stockholders, options would be granted
under the 1994 Directors' Plan only after there are insufficient shares for
grants under the 1988 Directors' Plan. Options to purchase a maximum of
80,000 shares (120,000 post-split shares) of Common Stock may be granted
under the 1994 Directors' Plan.
In 1990, the Company adopted a Director Retirement Plan. Under
this plan, each Non-Employee Director who has served on the Board of
Directors a minimum of five years will receive an annual benefit after the
later of attaining age 65 or termination of service as a director. The
benefit received will depend upon the number of each director's years of
service, but may not exceed a maximum of 80% of the director's final annual
retainer. Directors are also entitled to receive an actuarially reduced
benefit if they would like payments of such benefits to begin after
retirement or termination of service as a director, but before attaining
age 65. The annual benefit is payable to each director for the shorter of
10 years or the number of years the director served on the Board.
In consideration of their efforts and additional service in
connection with the management transition process in 1993, including the
search to identify, interview and employ a new Chief Executive Officer for
the Company, the Board of Directors determined that Messrs. Carroll,
Matthews, Ward and other directors participating in the search process
would each receive additional compensation at the rate of $1,000 per day
plus expenses. Under these arrangements during 1993, Mr. Carroll received
$1,500 as compensation and no reimbursement for expenses, Mr. Matthews
received $1,000 as compensation and reimbursements totaling $_____ for his
expenses, Mr. Ward received $1,000 as compensation and reimbursements
totaling $______ for his expenses, and Mr. Northrop and Ms. Parker each also
received $500 and no reimbursement for expenses.
On April 27, 1993, Mr. Matthews was elected to serve as Chairman
of the Board of Directors of the Company. In connection with his election,
the Company entered into a supplemental director's fee agreement with
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Mr. Matthews (the "Fee Agreement"). Under the Fee Agreement, Mr. Matthews
agreed to serve as Chairman of the Board (as an officer of the Board and
not as an executive officer of the Company) for a term of one year. The
Fee Agreement automatically renews each year for an additional one
year term unless and until the Company delivers to Mr. Matthews a notice of
non-renewal. Under the Fee Agreement, the Company agreed to pay to Mr.
Matthews an annual supplemental director's fee of $100,000 in addition to
any standard retainer and Board meeting fees (but not committee meeting
fees) to which all Non-Employee Directors may be entitled. The Company
also agreed to reimburse Mr. Matthews for his actual expenses incurred in
connection with the performance of his duties, not to exceed $15,000 annually.
The Company also granted to Mr. Matthews an option to purchase 3,000 shares
of Common Stock with an exercise price equal to the market price of Common
Stock on the grant date. The Fee Agreement may be terminated by the Company
or Mr. Matthews. If the Fee Agreement is terminated by the Company other
than for Cause (as defined in the Fee Agreement), compensation under the
Fee Agreement would continue until the end of the term of the Fee Agreement.
If the Agreement is not renewed by the Company following a Change in
Control (as defined in the Fee Agreement), Mr. Matthews will receive a lump
sum payment of $50,000 in addition to the compensation discussed above
prorated through the date he receives such lump sum payment. Upon any
termination of the Fee Agreement, Mr. Matthews shall again be entitled to
receive the standard retainer and fees for Board and committee meeting
attendance paid to all other Non-Employee Directors.
Directors who are also employees of the Company receive no annual
retainer and are not compensated for attendance at Board or committee
meetings.
STOCK PRICE PERFORMANCE GRAPH
The following graph compares the cumulative total stockholder
return on Wolverine Common Stock to the Standard & Poor's 500 Stock Index
and an index of peer companies that produce non-athletic footwear, assuming
an investment of $100.00 at the beginning of the period indicated. The
Standard & Poor's 500 Stock Index is a broad equity market index published
by Standard & Poors. The index of peer companies was constructed by the
Company and includes J. Baker, Inc.; R.G. Barry; Brown Group, Inc.;
Candies, Inc.(1); Genesco, Inc.; Daniel Green; Interco, Inc.(2); Justin
____________________
(1)On February 23, 1993, Millfield Trading Co. changed its name to
Candies, Inc. Millfield Trading Co. was included in the peer group used to
compare cumulative total stockholder return in the Company's 1993 Proxy
Statement.
(2)Interco, Inc. filed a petition for relief under Chapter 11 of the
United States Bankruptcy Code on January 24, 1991. As part of the bankruptcy
reorganization, all outstanding capital stock of Interco, Inc. was canceled
-17-
Industries; Penobscot Shoe; Sam & Libby, Inc.; Stride Rite Corporation;
U.S. Shoe, Corp.; Wellco Enterprises; and Weyco Group, Inc. In
constructing the peer index, the return of each component company was
weighted according to its respective stock market capitalization at the
beginning of the period indicated. Cumulative total stockholder return is
measured by dividing (i) the sum of: (a) the cumulative amount of
dividends for the measurement period, assuming dividend reinvestment; and
(b) the difference between the share price at the end and the beginning of
the measurement period, by (ii) the share price at the beginning of the
measurement period.
____________________
(2)(...continued)
on June 26, 1992, and the company was completely recapitalized with new stock
issued to the creditors of Interco, Inc. Interco, Inc. is accounted for in the
stock performance graph as a new company effective in 1992.
-18-
COMPARISON OF FIVE YEAR CUMULATIVE
TOTAL STOCKHOLDER RETURN
[Graphics Chart]
The dollar values for total stockholder return plotted in the
graph above are shown in the table below:
Wolverine S & P 500 Peer Index
1988 $100.00 $100.00 $100.00
1989 104.78 131.69 116.31
1990 78.11 127.60 82.06
1991 109.26 166.47 128.49
1992 147.25 179.15 134.04
1993 297.82 197.21 133.28
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EXECUTIVE COMPENSATION
Compensation Summary
The following Summary Compensation Table shows certain information concerning the compensation during each of the three
fiscal years in the period ended January 1, 1994 of each individual who served as Chief Executive Officer of the Company during
the last completed fiscal year, and each of Wolverine's five most highly compensated executive officers who served in positions
other than Chief Executive Officer at the end of or during the last completed fiscal year:
SUMMARY COMPENSATION TABLE
Long-Term Compensation
Annual Compensation Awards
Securities
Restricted Underlying
Other Annual Stock Options All Other
Name and Principal Position Year Salary Bonus Compensation Awards(1) (No. of Shares) Compensation(2)
Geoffrey B. Bloom 1993 $ 320,769 $276,449 -- $ 90,000 15,000 $ 126,709(3)
President, Chief Executive 1992 287,901 0 -- 46,200 24,000 6,242
Officer and Director 1991 256,923 64,228 38,700 13,500
Thomas D. Gleason 1993 $ 338,707 $50,000 -- -- -- $ 11,143
Vice Chairman of the 1992 339,231 0 -- -- 30,000 193,820(4)
Board (former Chief 1991 319,077 90,656 $ 58,500 20,000
Executive Officer)
George A. Andrews 1993 $ 162,753 $ 98,739 -- $ 22,500 3,750 $ 6,760
Senior Vice President of 1992 161,808 46,211 -- 26,400 6,500 3,773
Finance and Administration 1991 154,039 36,194 22,500 7,500
Steven M. Duffy 1993 $ 129,737 $ 87,954 -- $ 22,500 3,750 $ 5,005
Vice President 1992 117,609 18,665 -- 16,500 2,400 1,570
1991 82,718 22,529 18,000 3,500
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Charles F. Morgo 1993 $ 183,333 $100,875 -- $ 22,813 3,750 $ 3,598
Senior Executive Vice 1992 182,742 41,528 -- 11,000 3,000 657
President 1991 177,019 30,491 13,500 4,000
Timothy J. O'Donovan 1993 $ 167,172 $114,132 -- $ 36,000 6,000 $ 6,487
Executive Vice President 1992 154,231 35,350 -- 16,500 5,000 3,040
and Director 1991 142,692 35,797 13,500 5,000
Peter D. Panter 1993 $ 196,704 $ 87,666 -- -- -- $ 7,751
Senior Vice 1992 168,839 9,057 -- 16,500 6,000 4,781
President (retired) 1991 158,600 34,715 13,500 5,000
___________________________
(1) The values of restricted stock awards reported in this column are calculated using the closing market price of Common Stock
on the date of grant. As of the end of Wolverine's 1993 fiscal year, each of the named executive officers held shares of
restricted stock. Dividends will be paid on shares of restricted stock at the same rate dividends are paid on Common Stock. The
number of shares of restricted stock held by each named individual and the aggregate value of those shares (as represented by the
closing price of Common Stock on December 30, 1993), without giving effect to the diminution of value attributable to the
restrictions on such stock, are set forth below:
Number Aggregate
of Shares Value
Mr. Bloom 17,723 $518,967
Mr. Gleason 13,039 378,131
Mr. Andrews 8,275 241,225
Mr. Duffy 5,125 149,875
Mr. Morgo 5,395 157,705
Mr. O'Donovan 6,792 198,968
Mr. Panter 4,790 138,910
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(2) Except for additional amounts separately noted for Mr. Bloom and Mr. Gleason, the compensation listed in this column for 1993
consisted of: (i) Company contributions to the accounts of the named executive officers under Wolverine's 401(k) Savings Plan as
follows: $3,598 for Mr. Bloom; $3,598 for Mr. Gleason; $3,598 for Mr. Andrews; $3,370 for Mr. Duffy; and $3,598 for Mr. Morgo;
$3,598 for Mr. O'Donovan; and $3,598 for Mr. Panter; and (ii) payments made by Wolverine for the premiums on certain life
insurance policies as follows: $5,203 for Mr. Bloom; $7,545 for Mr. Gleason; $3,162 for Mr. Andrews; $1,635 for Mr. Duffy; $2,889
for Mr. O'Donovan; and $4,153 for Mr. Panter. No payments of insurance premiums were made on behalf of Mr. Morgo.
(3) As required by Mr. Bloom's amended and restated employment agreement, the Company forgave one-half of the principal balance
($105,465) of a loan made to Mr. Bloom to permit him to purchase shares of Common Stock, plus all accrued but unpaid interest
($12,443) associated with the principal balance forgiven. See the discussion of Mr. Bloom's amended and restated employment
agreement on page ____ of this Proxy Statement.
(4) Other Compensation for Mr. Gleason during 1992 consisted primarily of the transfer of an insurance policy (valued at
$124,960) and the related reimbursement for the payment of taxes due to the transfer ($47,710). See the discussion of the
agreement with Mr. Gleason pursuant to which the policy was transferred on page ___ of this Proxy Statement.
Stock Options
The Company's stock option plans are administered by the
Compensation Committee of the Board of Directors which has authority to
determine the individuals to whom and the terms upon which options shall be
granted, the number of shares to be subject to each option and the form of
consideration that may be paid upon the exercise of an option.
The following tables set forth information regarding stock
options granted to and exercised by the named executive officers during the
fiscal year ended January 1, 1994:
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OPTION GRANTS IN LAST FISCAL YEAR
Individual Grants
Percent of
Total
Number of Options
Securities Granted to Potential Realizable Value at
Underlying Employees Exercise Assumed Annual Rates of Stock
Options in Fiscal Price Expiration Price Appreciation for Option Term
Name Granted(1) Year ($/Share) Date 0% 5% 10%
Geoffrey B. Bloom 15,000 15% $ 18.00 4/26/03 $ 0 $169,860 $430,493
Thomas D. Gleason -- -- -- -- -- -- --
George A. Andrews 3,750 4% $ 18.00 4/26/03 $ 0 $ 42,465 $107,623
Steven M. Duffy 3,750 4% $ 18.00 4/26/03 $ 0 $ 42,465 $107,623
Charles F. Morgo 3,750 4% $ 18.25 5/02/03 $ 0 $ 43,055 $109,118
Timothy J. O'Donovan 6,000 6% $ 18.00 4/26/03 $ 0 $ 67,944 $172,197
Peter D. Panter -- -- -- -- -- -- --
________________________
(1) All options granted during 1993 are exercisable with respect to 25% of the shares on the date of grant, and become
exercisable in cumulative 25% installments on anniversary date thereafter with full vesting occurring on the third anniversary
date. Vesting may be accelerated in certain events relating to a change in the control of the Company. All options were granted
for a term of ten years. Options terminate, with certain limited exercise provisions, in the event of death, retirement or other
termination of employment. The per share exercise price of each option is equal to the market value of Common Stock on the date of
grant. All options permit the option price to be paid by delivery of cash or, with the consent of the Compensation Committee,
shares of the Company's Common Stock.
-23-
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR
AND FISCAL YEAR-END OPTION VALUES
Number of Value of
Securities Underlying Unexercised
Number of Unexercised In-the-Money
Shares Options at Options at
Acquired on Fiscal Year-End Fiscal Year-End
Name Exercise Value Realized Exercisable Unexercisable Exercisable Unexercisable
Geoffrey B. Bloom 1,850 $ 44,053 51,325 26,625 $1,016,938 $431,125
Thomas D. Gleason -- -- 69,200 20,000 $1,433,000 $400,000
George A. Andrews 1,000 $ 20,000 20,113 7,937 $ 402,350 $130,963
Steven M. Duffy 2,075 $ 17,763 1,563 4,887 $ 24,537 $ 73,294
Charles F. Morgo 6,000 $ 54,563 7,438 5,312 $ 133,584 $ 80,604
Timothy J. O'Donovan 1,700 $ 30,706 17,450 8,250 $ 336,625 $124,938
Peter D. Panter 17,000 $ 331,438 6,000 -- $ 117,313 --
The Company's employee loan program provides that an employee may
borrow from the Company up to 95% of the option price to exercise options
acquired under the Company's stock option plans. Such loans bear interest
at a rate equal to the greater of 6 1/2% per annum or the interest rate
imputed by the United States Internal Revenue Service with interest payable
quarterly. Principal is payable quarterly at the rate of 15% per annum,
commencing five years after the date on which the option to which the loan
relates is exercised. All loans are secured by a pledge of the Common
Stock obtained upon exercise of the applicable option. Outstanding loan
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balances as of March 1, 1994 and, if higher, the maximum amount outstanding
since January 2, 1993 (indicated in parentheses) for each executive officer
of the Company were as follows: Mr. Bloom, $105,465 ($210,930); Mr. Gleason,
$106,813; Mr. Andrews, $41,013; and Mr. O'Donovan, $100,328 ($101,038). Mr.
Duffy, Mr. Morgo and Mr. Panter had no outstanding loan balances since
January 2, 1993.
Long-Term Incentive Awards
The Company has established the Executive Long-Term Incentive
Plan (1993-1995) pursuant to which the Company may award cash to plan
participants conditioned upon the attainment of certain corporate
performance goals over a three-year performance period.
The following table sets forth certain information concerning
awards of long-term incentive compensation to the named individuals during
the last fiscal year:
LONG-TERM INCENTIVE PLANS--AWARDS IN LAST FISCAL YEAR
Performance Estimated Future Payouts
or Other Under Non-Stock-
Number of Shares, Period until Price-Based Plans(2)
Units or Maturation
Name Other Rights(1) or Payout Threshold Target Maximum
Geoffrey B. Bloom 50% 3 years $84,268 $168,537 $252,806
Thomas D. Gleason 40% 3 years 50,000 50,000 50,000
George A. Andrews 30% 3 years 26,554 53,108 79,662
Steven M. Duffy 25% 3 years 17,707 35,415 53,123
Charles F. Morgo 20% 3 years 19,865 39,730 59,595
Timothy J. O'Donovan 30% 3 years 27,282 54,563 81,845
Peter D. Panter 25% 3 years 7,129 14,438 21,657
(1) Under the Company's Executive Long-Term Incentive Plan (1993-1995),
key management employees may earn incentive compensation based upon
achievement of specified earnings per share ("E.P.S.") over a three-
year performance period. The numbers reported in the column under the
heading "Number of Shares, Units or Other Rights" represent the
percentage of each officer's average base salary during the three-year
period the officer will receive as bonus compensation under the plan
if the specified E.P.S. are achieved. These amounts were determined
by the Compensation Committee. If higher or lower actual E.P.S. are
attained during the three-year performance period, the percentage of
base salary to be received as bonus compensation by each officer will
be correspondingly higher or lower. Bonuses are conditioned upon
achieving a minimum, or "threshold," E.P.S. Bonuses are also capped
at a maximum amount and, except for Mr. Gleason, may not exceed 150%
of the percentage of base salary reported under the heading "Number of
Shares, Units or Other Rights" with respect to each participant.
Mr. Gleason's bonus under the plan may not exceed $50,000. E.P.S.
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goals were established by the Compensation Committee at the beginning
of 1993 for the period ending on the last day of the Company's 1995
fiscal year. E.P.S. goals are expressed as net earnings per share
after taxes. For any bonuses to be paid, E.P.S. in the third year of
each performance period must equal at least 20% of the total E.P.S.
goal for the entire period.
(2) Under the plan, amounts earned as bonus compensation are calculated
based on each participant's average annual base salary during the
three-year performance period. For purposes of this table, the
"Threshold," "Target" and "Maximum" amounts have been calculated using
each named officer's base salary for 1993 as reported in the Summary
Compensation Table, adjusted for cost of living increases in each
successive year in the performance period which average 4.5% per year.
Pension Plan
The Company has established a qualified pension plan covering
most of the Company's salaried employees. The Code imposes certain
limitations on the maximum amount of pension benefits payable under
qualified plans. The Code also imposes a limitation on the amount of
earnings which may be taken into account in determining benefits payable
under qualified plans. The Company has agreed to pay to employees whose
earnings or benefits exceed such limitations the amount of pension benefits
they otherwise would have received under the pension plan without regard to
any such limitations.
The following table illustrates the estimated annual combined
benefits payable under the pension plan and the Company supplemental
pension plan described above for Wolverine's executive officers if they
retire at age 65 at the annual levels of average remuneration and years of
service indicated (computed on a straight life annuity basis without the
reduction required by the plan for the Social Security Allowance received
by participants in the plan):
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PENSION PLAN TABLE
Years of Benefit Service
Average
Remuneration 10 15 20 25 30 or more
$150,000 $ 24,000 $ 36,000 $ 48,000 $ 60,000 $ 72,000
200,000 32,000 48,000 64,000 80,000 96,000
250,000 40,000 60,000 80,000 100,000 120,000
300,000 48,000 72,000 96,000 120,000 144,000
350,000 56,000 84,000 112,000 140,000 168,000
400,000 64,000 96,000 128,000 160,000 192,000
450,000 72,000 108,000 144,000 180,000 216,000
500,000 80,000 120,000 160,000 200,000 240,000
550,000 88,000 132,000 176,000 220,000 264,000
600,000 96,000 144,000 192,000 240,000 288,000
650,000 104,000 156,000 208,000 260,000 312,000
700,000 112,000 168,000 224,000 280,000 336,000
750,000 120,000 180,000 240,000 300,000 360,000
The pension plan provides monthly benefits at normal retirement
in an amount equal to the greater of: (i) $12.00 times the participant's
number of years of service up to 30 years; or (ii) 1.6% of final average
monthly remuneration times the participant's number of years of service up
to 30 years. Benefits are reduced by the Social Security Allowance as
defined in the plan. Under the plan, benefits may be based upon an
employee's "final average pay," which is defined as the average of the 48
highest consecutive months of employee earnings within the latest 120
calendar months. The remuneration covered by the plan for an employee
would be essentially equivalent to the sum of the amounts reported under
the heading "Annual Compensation" in the Summary Compensation Table above.
The pension plan provides that if the pension plan is terminated
during any period beginning on a Restricted Date and ending two years
later, surplus plan assets will be used to purchase retiree medical and
life insurance in satisfaction of the Company's then outstanding
obligations, if any, and will be paid pro rata to increase the benefits of
plan participants, subject to legal limitations. If the pension plan is
merged with, or the assets of the plan are transferred to, another plan,
then (i) benefits will be fully vested; (ii) benefits will be increased as
if the plan had been terminated; and (iii) benefits will be satisfied
through the purchase of a guaranteed annuity contract. A Restricted Date
is defined as the date any person or group acquires more than 50% of the
voting stock of the Company in a transaction not approved by the Board of
Directors, or the date during any two-year period on which individuals who
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at the beginning of such period constituted the Board (including any new
director whose nomination or election was approved by two thirds of the
directors who were directors at the beginning of such period) cease for any
reason to constitute a majority of the Board.
As of January 1, 1994, the persons listed in the Summary
Compensation Table had the following years of credited service under the
plan: Mr. Bloom, 7 years; Mr. Gleason, 23 years; Mr. Andrews, 23 years;
Mr. Duffy, 5 years; Mr. Morgo, 24 years; Mr. O'Donovan, 24 years; and
Mr. Panter, 25 years.
EMPLOYMENT AGREEMENTS, TERMINATION OF EMPLOYMENT
AND CHANGE OF CONTROL ARRANGEMENTS
Mr. Bloom's Agreement. On April 27, 1993, the Company entered
into an amended and restated employment agreement (the "Employment
Agreement") with Mr. Bloom to employ him as President and Chief Executive
Officer until April 30, 1997, with a provision for automatic renewal until
April 30, 2000, unless a one-year prior notice of non-renewal is given by
the Company. Under the Employment Agreement, Mr. Bloom is to receive a
salary of not less than $330,000 per year, a leased vehicle, the benefits
of a term life insurance policy in the amount of $500,000 and other
benefits normally provided by the Company to top-level executives. Because
Mr. Bloom did not terminate his employment before January 1, 1994, the
Company forgave one-half of the principal balance ($105,465) of a loan,
plus accrued interest thereon ($12,443), made to Mr. Bloom to permit him to
exercise an option to purchase 22,500 shares of Common Stock. If Mr. Bloom
does not voluntarily terminate his employment prior to May 8, 1994, the
Company has agreed to forgive the remainder of the total indebtedness,
including accrued interest. Under the Employment Agreement, the Company
has agreed to provide to Mr. Bloom a three-year interest free loan in an
amount equal to the federal and state withholding taxes resulting from such
forgiveness and will be required to provide an additional loan for such
purposes if the remainder of the indebtedness is forgiven.
In the event that the Employment Agreement is not renewed or
Mr. Bloom is terminated other than for Cause (as defined in the Employment
Agreement), the Employment Agreement requires Wolverine to pay to
Mr. Bloom, in addition to normal salary and bonuses through the date of
termination or non-renewal, a lump sum equal to two times Mr. Bloom's then
current salary. In addition, Mr. Bloom will be credited with three
additional years of benefit service for purposes of computing his benefits
under the pension plan and supplemental pension plan. Mr. Bloom may elect
to commence payments of such pension benefits upon attaining age 58. If
Mr. Bloom is terminated other than for Cause, then Mr. Bloom will be
entitled to up to twelve months' benefits under all employee benefit
programs. Payments described in this paragraph are not subject to
mitigation under the Employment Agreement.
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In addition, if Mr. Bloom's employment is terminated by the
Company other than for Cause, Retirement or Disability, or by Mr. Bloom for
Good Reason (all as defined in the Employment Agreement), then Mr. Bloom
shall receive upon termination, in addition to normal salary and bonuses
earned through the date of termination: (i) cash equal to the present
value of his then current salary (plus bonus) which would have been payable
through April 30, 1997; (ii) a lump sum in cash equal to 150% of the value
of the difference between the market price of Common Stock (or, if higher,
the highest price paid in connection with any change of control of the
Company) and the exercise prices of options (other than incentive stock
options granted after May 8, 1992) then held by Mr. Bloom, whether or not
fully exercisable, and 100% of the difference between the market price and
exercise prices of any incentive stock options granted after May 8, 1992,
that are or would be exercisable by Mr. Bloom before April 30, 1997;
(iii) reimbursement for relocation expenses and legal fees, and indemnity
against loss in the sale of Mr. Bloom's principal residence; (iv) a cash
payment at Mr. Bloom's retirement age equal to the actuarial value of the
retirement pension to which Mr. Bloom would have been entitled (without
regard to vesting requirements) had he accrued three additional years of
service with the Company, plus the amount awarded to Mr. Bloom during the
year most recently ended reduced by the single sum actuarial equivalent of
any amounts to which he is entitled under the normal retirement plans and
programs; and (v) outplacement services paid for by the Company. Although
the Company believes that none of these payments would constitute
"parachute payments" under Section 280G of the Code, the payments will be
reduced and/or delayed to the extent they constitute "parachute payments."
The Employment Agreement requires Mr. Bloom to mitigate payments
under the agreement in accordance with law. However, Mr. Bloom need not
actively seek employment, accept employment outside the West Michigan
area, or accept employment which is not substantially equivalent in all
material respects to his position with the Company in connection with his
obligation to mitigate payments.
Mr. Gleason's Agreement. The Company has entered into an amended
and restated employment and transition agreement with Mr. Gleason which
extends through January 31, 1996 (the "Agreement"). Pursuant to the
Agreement, Mr. Gleason and the Company agreed to terminate Mr. Gleason's
prior employment agreement which extended through August 31, 1996. Under
the Agreement, Mr. Gleason will retire on January 31, 1996 from all
positions with the Company (except for any director position with the
Company, provided that nothing in the Agreement may infringe the unfettered
right of the Board or the stockholders to nominate, elect or appoint any
person to a particular office or directorship).
Mr. Gleason will receive an annual base salary of $346,000
(effective April 20, 1992) through December 31, 1994, and $250,000
(effective January 1, 1995) through January 31, 1996. In connection with
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the execution of the Agreement, the Company's interest in the cash value of
an insurance policy (on which the Company continues to pay premiums) was
transferred to Mr. Gleason and the amount of the cash surrender value was
grossed up once for federal and state tax purposes. The transfer and tax
gross up are reflected in the Summary Compensation Table under the "Other
Annual Compensation" column for the 1992 fiscal year. Mr. Gleason's annual
benefit under the Company's pension plan will be at least $122,500 (subject
to the social security offset provisions of the pension plan) unless his
employment is terminated (other than by the Company without cause) prior to
January 31, 1996. In the event of any such termination, Mr. Gleason's
pension benefit may be subject to reduction based upon the length of his
employment during the period August 1, 1992, through January 31, 1996.
Mr. Gleason is also entitled to participate in all other plans and to
receive other benefits normally provided by the Company to top-level
executives, except that Mr. Gleason's bonus under each of the Company's
annual bonus plan and long-term bonus plan may not exceed $50,000 annually.
The Company also agreed to pay to Mr. Gleason a contingent payment out of
the net proceeds, if any, that the Company or one of its subsidiaries
receives in connection with an action instituted by the Company and the
subsidiary alleging infringement of certain intellectual property rights.
The contingent payment to Mr. Gleason may not exceed the lesser of $750,000
or 10% of net proceeds received.
Under the Agreement, Mr. Gleason's employment may be terminated
by death, disability, or either the Company or Mr. Gleason. Salary and
benefits under the Agreement generally continue through the Agreement term
if Mr. Gleason is terminated by the Company without cause, and generally
terminate 12 months after disability. In the Agreement, Mr. Gleason
granted the Company a covenant not to compete (and certain related
restrictive covenants) that generally extend to January 31, 1996, or, if
longer, for a period of one year following termination of employment.
Mr. Panter's Agreement. During 1993, Mr. Panter reached the
Company's normal retirement age and decided to retire. Pursuant to a
retirement agreement with Mr. Panter (the "Retirement Agreement"), the
Company agreed to employ Mr. Panter through December 30, 1993, and to
continue his salary and benefits through that date. The Company also
permitted Mr. Panter to continue to participate in the Company's various
bonus plans in respect of corporate performance through December 30, 1993.
In connection with the Retirement Agreement, all outstanding but unvested
incentive stock options issued to Mr. Panter under the Company's stock
option plans became fully vested on December 30, 1993, and all unvested
shares of restricted stock held by him will be allowed to continue to vest
under the original vesting schedule. The Retirement Agreement does not
affect benefits payable to Mr. Panter under the Company's pension and
supplemental pension plans or under his deferred compensation agreement
with the Company. In the Retirement Agreement, Mr. Panter granted the
Company a covenant not to compete (and certain related restrictive
covenants) that generally extend to January 1, 1999.
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Severance Agreements. Pursuant to individual agreements with the
Company, Messrs. Andrews, Duffy, Morgo and O'Donovan, and certain other
executive officers, shall receive compensation in the event of termination
of their employment following a change in control of the Company, unless:
(i) the termination of the officer is due to death or retirement in
accordance with Company policy or as otherwise agreed; (ii) the termination
is by the Company for cause or disability; or (iii) the termination is by
resignation of the officer for other than Good Reason. Good Reason is
defined in the agreements to include, among other things, the assignment of
duties inconsistent with the officer's status as a senior executive officer
of the Company or the duties performed by the officer immediately preceding
a change in control, a reduction in the officer's annual base salary, or
relocation of the officer.
The compensation payable in the event of such a termination
following a change in control includes: (i) cash equal to two times the
officer's annual salary, including bonus; (ii) cash equal to 150% of the
difference between the market price of Common Stock (or, if higher, the
highest price paid in connection with any change of control of the Company)
and the exercise prices of unexercised stock options granted to the officer
(other than incentive stock options granted after the date of the officer's
agreement), and 100% of the difference between the market price and
exercise prices of incentive stock options granted to the officer after the
date of the agreement which are then exercisable; (iii) relocation
expenses, legal fees and indemnity against loss in the sale of the
officer's principal residence; (iv) up to two years' benefits under all
employee benefit programs; (v) a cash payment at the officer's retirement
age equal to the actuarial value of the retirement pension to which the
officer would have been entitled (without regard to vesting requirements)
had he or she accrued three additional years of service with the Company,
plus the amount awarded to the officer during the year most recently ended
reduced by the single sum actuarial equivalent of any amounts to which the
officer is entitled under the normal retirement plans and programs of the
Company; and (vi) outplacement services paid for by the Company. In all
such severance agreements, the officer has no requirement to mitigate the
payments by seeking employment, but the compensation to be paid during the
fourth and later months following termination will be reduced to the extent
of any compensation earned by the officer during the applicable period.
The agreements contain a clause limiting payments to those that are
deductible by the Company under the Code.
A change in control is defined in the agreements to include a
change in control as set forth in the proxy rules issued pursuant to the
Exchange Act, the acquisition of 25% or more of the Common Stock of the
Company by any person or group of persons acting together, or a change
during any two-year period in a majority of the Board of Directors of the
Company unless each new director was approved by a vote of at least two-
thirds of the directors then still in office who were directors at the
beginning of the period.
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Deferred Compensation Plan. The Company has established a
program to provide various senior executives, including Messrs. Bloom,
Gleason, Andrews, Duffy, Morgo, O'Donovan and Panter, with deferred
compensation commencing upon retirement from the Company at normal or early
retirement age. The program also provides benefits in the event of death
and, except for Mr. Morgo, reduced benefits upon disability. The Company
has purchased insurance on such executives' lives payable to the Company in
amounts which, if the assumptions made as to mortality experience, policy
dividends and other factors are realized, will cover all the Company's
payments for such insurance and all deferred compensation obligations, and
will provide an additional amount for use of the Company's money.
Anticipated annual benefits from the deferred compensation program upon
retirement for the individuals named in the Summary Compensation Table,
commencing at normal retirement age and continuing for 15 years (except for
benefits payable to Mr. Bloom and Mr. Gleason which continue for 18 years),
are as follows: Mr. Bloom, $120,000; Mr. Gleason, $180,000 for five years
and $154,000 for thirteen years; Mr. Andrews, $40,000; Mr. Duffy, $20,000;
Mr. Morgo, $18,000; Mr. O'Donovan, $55,000; and Mr. Panter, $42,000.
Except for the agreements with Messrs. Bloom, Gleason and Morgo,
the deferred compensation agreements provide for benefits to be payable
upon the attainment of age 58, if elected, or otherwise upon the attainment
of age 65, for a period of 15 years as long as the applicable officer has
completed five years of employment with the Company. An election to
receive benefits prior to age 65 triggers a reduction in the benefits.
Limited benefits vest incrementally over a period not to exceed 10 years
after the later of the attainment of age 48 or the completion of five years
of employment with the Company. The agreements provide that, upon certain
terminations of employment within the five years following a change in
control of the Company, deferred compensation benefits will immediately
vest and the employee will be paid 125% of the then present value of the
vested benefit.
Mr. Bloom's agreement is substantially similar to those described
above, except that benefits are payable for a period of 18 years and there
is no reduction in benefits if he elects to receive benefits prior to
attaining age 65. Mr. Gleason's agreement is substantially similar to
those described above, except that benefits are payable for 18 years after
attaining age 55, if he elects, or otherwise after attaining age 60.
Mr. Gleason is fully vested with respect to benefits under his agreement.
Mr. Morgo's agreement provides that, as long as he remains in the employ of
the Company until he is age 55, benefits are payable for a period of
15 years after attaining age 58, if he elects, or otherwise after attaining
age 62. Mr. Morgo's agreement does not provide for incremental vesting or
for vesting upon a change of control of the Company.
Stock Plan Provisions. The Company has granted certain stock
options and awarded shares of restricted stock that are subject to
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accelerated vesting upon a change in control of the Company. The options
include options issued under the Company's Stock Option Plan of 1979 (the
"1979 Plan"), 1988 Stock Option Plan (the "1988 Plan") and 1993 Stock
Incentive Plan (the "1993 Plan"), and the shares of restricted stock
include shares awarded under the 1984 Executive Incentive Stock Purchase
Plan (the "1984 Plan") and the 1993 Plan.
Under the stock option agreements entered into between the
Company and participants in the 1979 and 1988 Plans, 25% of each option
generally becomes exercisable on the date of grant, and the remainder
becomes exercisable at the rate of 25% of the option per year following the
date of grant. However, the stock option agreements also provide that all
options granted under the 1979 and 1988 Plans become immediately
exercisable in the event of a Change in Control of the Company.
The 1984 Plan provides for restricted stock awards. The
restrictions on 25% of the shares received pursuant to an award normally
lapse on the third anniversary of the date of the award, with an additional
25% of the restrictions lapsing on the fourth anniversary and the remaining
restrictions lapsing on the fifth anniversary. The restricted stock
agreements entered into with employees under the 1984 Plan provide that all
restrictions on restricted stock shall lapse upon certain terminations of
employment within a five-year period following a Change in Control.
A Change in Control is defined in the agreements under the 1979,
1984 and 1988 Plans to include a change in control as set forth in the
proxy rules issued pursuant to the Exchange Act, the acquisition of 25% or
more of the Common Stock of the Company by any person or group of persons
acting together, or a change during any two-year period in a majority of
the Board of Directors of the Company unless each new director was approved
by a vote of at least two-thirds of the directors then still in office who
were directors at the beginning of the period.
The stock option agreements under the 1993 Plan contain vesting
provisions for stock options similar to those under the 1979 and 1988
Plans. The 1993 Plan also contains vesting provisions for restricted stock
awards similar to those contained in the agreements under the 1984 Plan.
The definition of Change in Control under the 1993 Plan differs from the
definition of that term in the agreements under the Company's other plans
in that a Change in Control is deemed to have occurred upon the acquisition
of 20% or more (rather than 25%) of the Company's Common Stock, and the
definition includes the sale, lease, exchange or other transfer of
substantially all of the Company's assets to, or the merger or
consolidation of the Company with, a corporation that is not controlled by
the Company.
Severance agreements with various executive officers (described
above) provide for cash payments in lieu of outstanding options in the
event of a change of control of the Company.
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Benefit Trust Agreement. In May, 1987, the Company established a
Benefit Trust (the "Trust") to assure that payments to employees under the
employment agreements, the severance agreements and the deferred
compensation agreements (collectively, the "Agreements") described above
will not be improperly withheld in the event of a change in control of the
Company as defined in the agreement establishing the Trust. On May 5,
1989, the supplemental pension plan was added to the benefits subject to
the Trust. Under the Trust, upon the occurrence of a Potential Change in
Control (as defined in the Trust agreement), the Company shall deliver to
the trustee, to be held in trust, cash, marketable securities or insurance
equal to the amount that shall have been determined by the Company to have
a fair market value, together with any existing trust corpus, equal to the
value of the benefits due to employees under the Agreements given certain
assumptions set forth in the Trust. Additional terms of the Trust provide
for the return of such property to the Company upon written request prior
to a change in control or automatically if no change in control has
occurred within six months following funding upon a Potential Change in
Control. The Company has transferred to the Trust the insurance policies
on the lives of key employees described above.
Indemnity Agreements. The Company has entered into indemnity
agreements with Messrs. Bloom, Gleason, Andrews, Duffy, Morgo, O'Donovan
and Panter, and with each director and officer of the Company
(collectively, "Executives"). The indemnity agreements indemnify each
Executive against all expenses incurred in connection with any action or
investigation involving the Executive by reason of his or her position with
the Company (or with another entity at the Company's request). The
Executives will also be indemnified for costs, including judgments, fines
and penalties, indemnifiable under Delaware law or under the terms of any
current or future liability insurance policy maintained by the Company that
covers the Executives. An Executive involved in a derivative suit will be
indemnified for expenses and amounts paid in settlement. Indemnification
is dependent in every instance on the Executive meeting the standards of
conduct set forth in the indemnity agreements. In the event of a potential
change in control, the Company will fund a trust to satisfy its anticipated
indemnification obligations.
COMPENSATION COMMITTEE REPORT
ON EXECUTIVE COMPENSATION
The Compensation Committee of the Board of Directors (the
"Committee") develops and recommends to the Board of Directors the
executive compensation policies of the Company. The Committee also
administers the Company's compensation plans and recommends for approval by
the Board of Directors the compensation to be paid to the Chief Executive
Officer and, with the advice of the Chief Executive Officer, the other
executive officers of the Company. The Committee consists of five
directors, none of whom is a current or former employee of the Company or
its subsidiaries.
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The Company has engaged an independent compensation consulting
firm to assist the Committee in formulating Wolverine's compensation
policies and to provide advice to the Committee concerning specific
compensation packages and appropriate levels of executive compensation.
The firm was also retained to provide specific advice concerning the
employment and transition agreement with Mr. Gleason and the employment
agreement with Mr. Bloom, both of which are discussed in greater detail
below.
The basic compensation philosophy of the Committee and the
Company is to provide competitive salaries as well as incentives to achieve
superior financial performance. The Company's executive compensation
policies are designed to achieve four primary objectives:
- Attract and retain well-qualified executives who will lead the
Company and achieve and inspire superior performance;
- Provide incentives for achievement of specific short-term
individual, business unit and corporate goals;
- Provide incentives for achievement of longer-term financial
goals; and
- Align the interests of management with those of the stockholders
to encourage achievement of continuing increases in stockholder
value.
Executive compensation at Wolverine consists primarily of four
components: base salary and benefits; amounts paid (if any) under the
annual bonus plan; amounts paid (if any) under the long-term (three-year)
incentive bonus plan; and participation in the Company's stock option and
equity-based incentive plans. Each component of compensation is designed
to accomplish one or more of the four compensation objectives.
The participation of specific executive officers and other key
employees in the annual bonus plan, the long-term (three-year) incentive
bonus plan and the stock option and equity-based incentive plans of the
Company is recommended by management, and all recommendations (including
the level of participation) are reviewed, modified (to the extent
appropriate) and approved by the Committee. However, senior executive
officers are normally eligible to receive a greater percentage of their
compensation in the form of awards under these incentive plans to reflect
the Committee's belief that the percentage of an executive's total
compensation that is "at risk" should increase corresponding with the
executive's corporate responsibilities.
In 1993, Congress amended the Code to add Section 162(m). This
new section provides that publicly held companies may not deduct
compensation paid to certain executive officers in excess of $1 Million
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annually, with certain exemptions. The Company has examined its
compensation policies in view of Section 162(m) and the regulations
currently proposed by the Internal Revenue Service to implement that
section. If the proposed regulations under Section 162(m) are adopted
substantially as proposed, it is currently not expected that any part of
the Company's deduction for employee compensation will be disallowed for
the 1994 fiscal year or in future years by reason of awards granted in
1994. The Compensation Committee plans to review the Company's
compensation policies once final regulations implementing Section 162(m)
have been adopted to propose appropriate modifications, if any, to the
Company's compensation plans and policies to avoid or minimize any
disallowance of tax deductions under Section 162(m).
Base Salary.
To attract and retain well-qualified executives, it is the
Committee's policy to establish base salaries at levels and provide benefit
packages that are considered to be competitive. Base salaries of senior
executives are determined by the Committee by comparing each executive's
position with similar positions in companies of similar type and size. The
Committee uses surveys provided by the compensation consulting firm to make
this comparison. Although some of the companies included in the peer index
used in the graph of cumulative total stockholder return are among the
companies included in the surveys, the surveys are not limited to those
companies. Other factors considered by the Committee are the executive's
performance, the executive's current compensation, the competitive
marketplace, and the Company's or the applicable business unit's
performance. Although the Committee does not give specific weight to any
particular factor, the most weight is given to the executive's performance
and the second most weight is generally given to the comparative survey
data. The 1993 average base salary of senior executives increased 6.1%
over the previous year's level as a result of a combination of factors,
including improved individual performance, promotions, cost-of-living
increases and adjustments obligated by employment agreements.
Annual Bonus Plan.
To provide incentives and rewards for achievement of short-term
individual and business unit goals, the annual bonus plan is designed to
provide key employees with the opportunity for bonuses based on each
employee's performance and the performance of the business unit to which
the employee is assigned. In the case of senior executive officers, the
bonus is based on the achievement of individual performance goals (20%
weighting) and the performance of the Company as a whole (80% weighting).
Individual performance goals for senior executive officers are tailored to
the individual's position and duties, and vary in terms of number, scope
and substance among the eligible executives. Individual performance goals
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are recommended by management, are reviewed, modified (to the extent
appropriate) and approved by the Committee, and are then reviewed with each
employee at the beginning of each year. The performance goals for each
business unit and the Company as a whole relate to the attainment of
predetermined pre-tax levels of profit (70% to 100% weighting for a
business unit and 80% weighting for the Company), sales (0% to 20%
weighting for a business unit and 20% weighting for the Company) and, with
respect to a business unit, other specified goals (0% to 10% weighting).
Company and business unit goals are established prior to the start of each
year and are reviewed and approved by the Committee. Awards under the
annual bonus plan are based on a percentage of base salary. Bonuses are
conditioned on achieving minimum, or threshold, goals. Bonuses are also
capped at a maximum amount and may not exceed specified levels. During
fiscal year 1993, executive officers were eligible to receive from 12.5% to
80% of their annual salaries in bonus compensation. In determining these
percentages, the Committee considered each executive's position, incentive
amounts provided by other companies, and the executive's aggregate
incentive compensation potential under all of the Company's plans. The
percentages are generally higher for more senior executives to reflect
their greater influence on profits and to put a larger percentage of their
total potential cash compensation "at risk."
Long-term (Three-Year) Incentive Bonus Plan.
To provide incentives and rewards for achievement of longer-term
corporate performance goals, the long-term (three-year) incentive bonus
plan provides the opportunity for additional compensation based upon the
achievement of aggressive Company financial performance goals over a three-
year period. The primary purposes of this plan are to provide a
significant incentive to substantially improve the longer-term earnings
performance of the Company and to foster cooperation among all business
units. The target financial performance goals are ambitious in nature
since they are set above budget and generally provide a significant
challenge to management. Goals are recommended by management and reviewed,
modified (to the extent appropriate) and approved by the Committee prior to
the start of each performance period. Performance periods commence every
fiscal year and end three full fiscal years later. For the 1993-1995
performance period and prior periods, the Company utilized targeted
earnings per share ("E.P.S.") goals.
Awards under this plan are based on a percentage of average base
salary during the three-year period. If higher or lower actual E.P.S. are
attained during the three-year performance period, the percentage of base
salary to be received as bonus compensation by each officer will be
correspondingly higher or lower. Bonuses are conditioned upon achieving a
minimum threshold E.P.S. Bonuses are also capped at a maximum amount and
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may not exceed 150% of the targeted percentage of base salary with respect
to each executive. For the 1993-1995 performance period, executive
officers are eligible to receive from 10% to 75% of their base salaries in
bonus compensation. In determining the percentages, the Committee
considered the same factors discussed above in connection with the annual
bonus plan.
Stock Options and Equity-Based Incentive Plans.
Awards under the Company's stock option and equity-based
incentive plans are designed to encourage long-term investment in the
Company by participating executives, more closely align executive and
stockholder interests, and reward executives and other key employees for
building stockholder value. The Committee believes stock ownership by
management is beneficial; stock options have been granted by the Company to
executives and other key employees pursuant to various option plans for
several decades. The Committee administers all aspects of these plans and
reviews, modifies (to the extent appropriate) and approves management's
recommendations for awards.
Under the Company's plans that provide for awards of restricted
stock, all of which have been approved by the stockholders, the Committee
may grant to executives and other key employees shares of restricted stock
or rights to purchase stock at a minimum price equal to the par value of
the stock. These shares are subject to certain restrictions that generally
lapse over a period of five years from the date of grant.
Under the Company's stock option plans, all of which have been
approved by the stockholders, the Committee may grant to executives and
other key employees options to purchase shares of stock, as well as stock
appreciation rights and tax benefit rights. The Company has never granted
stock appreciation rights or tax benefit rights under its existing plans.
The Committee reviews, modifies (to the extent appropriate) and approves
the recommendations of management as to the key employees to be granted
options or rights and the amount, timing, price and other terms of the
options or rights. Most of the options granted have been "incentive stock
options" within the meaning of the Code, with an exercise price equal to
the market price of the stock on the date of the grant. The Committee may,
however, grant options with an exercise price greater or less than the
market price on the date of grant.
In determining the number of shares of restricted stock and/or
the number of options to be awarded to an executive, the Committee uses a
formula recommended by the compensation consulting firm which takes into
consideration the executive's salary and level of responsibility. The
Committee also considers the recommendations of management (except for
awards to the Chief Executive Officer), the individual performance of the
executive, and the number of shares or other compensation awarded to
executives at other companies. Generally, the result of application of the
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formula with respect to each officer is set forth in an amount of dollars.
The Committee may or may not adjust this amount after considering the other
factors discussed above. The dollar amount is then converted into a given
number of options and/or shares of restricted stock based upon the market
price of Common Stock at the time the award is made. Generally, both the
number of shares granted and their proportion relative to the total number
of shares granted increase corresponding to level of an executive's
corporate responsibility. Although the Committee may also consider the
number of shares of restricted stock and/or options already held by an
executive, this factor is not considered unusually important by the
Committee in determining the amounts of awards.
Chief Executive Officer.
The Chief Executive Officer's compensation is based upon the same
policies discussed above. The Chief Executive Officer, however, has a
higher percentage of total cash compensation "at risk" since a larger
percentage of potential cash compensation is based upon the annual bonus
and long-term (three-year) incentive bonus plans described above.
Mr. Gleason served as Chief Executive Officer of the Company until
April 27, 1993. At the meeting of the Board of Directors on April 27,
1993, Mr. Bloom was elected Chief Executive Officer to succeed Mr. Gleason.
Mr. Bloom. Effective April 27, 1993, the Company executed an
amended and restated employment agreement (the "Employment Agreement") with
Mr. Bloom which provides for his continued service to the Company through
April 30, 1997, as President and Chief Executive Officer. The Agreement is
also described on page __ of this Proxy Statement under the heading
"Employment Agreements, Termination of Employment and Change of Control
Arrangements."
Under the Employment Agreement, Mr. Bloom will receive an annual
base salary of at least $330,000 effective April 27, 1993, through
April 30, 1997, and if the Employment Agreement is renewed thereafter,
through April 30, 2000. Mr. Bloom will be entitled to participate in the
pension plan and the annual bonus and long-term (three-year) incentive
plans, and to receive fringe benefits similar to those provided to senior
executives of the Company through the term of the Agreement and any renewal
period.
Mr. Bloom's 1993 base salary was established pursuant to both an
employment agreement entered into on May 8, 1992, and the amended and
restated employment agreement. In setting Mr. Bloom's base salary and
total annual cash compensation, the Committee was advised by the
compensation consulting firm and compared Mr. Bloom's cash compensation
with that of chief operating officers and chief executive officers (during
the applicable periods) in companies of similar general type and size.
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Mr. Bloom's base salary for 1993 increased 11.4% above his 1992 level,
primarily due to an increase to recognize his additional responsibilities
as Chief Executive Officer.
Mr. Bloom's annual incentive bonus under the annual bonus plan is
based upon corporate performance goals (80% weighting) and individual
performance goals (20% weighting). The target annual bonus award for
Mr. Bloom was 40% of base salary. Mr. Bloom's bonus was subject to
achievement of minimum goals, and his threshold bonus at this level would
have been 20% of base salary. Mr. Bloom's bonus was also capped at 80% of
base salary. Corporate performance goals in 1993 were based on the
Company's attainment of predetermined pre-tax levels of profit
(approximately 64% weighting) and sales (16% weighting). Pre-tax earnings
from continuing operations for the 1993 fiscal year increased by 146% over
the 1992 fiscal year. Sales also increased for the 1993 fiscal year over
1992 levels. Because of these increases, the bonus paid to Mr. Bloom were
at the highest end of the possible range.
Mr. Bloom's long-term (three-year) incentive bonus award is based
upon ambitious financial performance goals for the Company expressed in
terms of targeted earnings per share. The target bonus for Mr. Bloom was
50% of average annual base salary for the 1993-1995 plan period. The bonus
payout for Mr. Bloom can range from 0% - 150% of the target bonus. No
bonus was paid to Mr. Bloom (or other plan participants) pursuant to the
1991-1993 long-term (three-year) incentive bonus plan since the Company did
not achieve its financial performance goals for the bonus period.
Mr. Bloom was also awarded 5,000 shares of restricted stock and
options to purchase an additional 15,000 shares of Common Stock. The
amounts of these awards were determined by the Committee using the formula
and considering the factors discussed above.
Mr. Gleason. The Company has entered an employment and
transition agreement (the "Agreement") with Mr. Gleason which provides for
his continued service to the Company through January 31, 1996, and the
transition of duties to a successor Chief Executive Officer. The Agreement
is also described on page __ of this Proxy Statement under the heading
"Employment Agreements, Termination of Employment and Change of Control
Arrangements." Mr. Gleason has been instrumental in the development and
expansion of the Company's business in the 24 years he has been employed by
the Company, and the Agreement assures his continued contribution to the
general welfare, growth and earnings of the Company during the transition
period.
Under the Agreement, Mr. Gleason will retire on January 31, 1996
from any and all positions with the Company (except for any director
position with the Company, provided that the Agreement shall in no way
infringe upon the unfettered right of the Board or the stockholders to
nominate, elect or appoint any person to a particular office or
directorship). Mr. Gleason will receive an annual base salary of $346,000
through December 31, 1994, and $250,000 effective January 1, 1995, through
January 31, 1996. The declining base salary reflects Mr. Gleason's reduced
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role in the Company which is anticipated over the term of the transition
period. Assuming Mr. Gleason's continued involvement and commitment to the
Company, he will be entitled to participate in the pension plan and the
annual bonus and long-term (three-year) incentive plans through 1995. Such
participation is intended to encourage his continued support to the short
and long-term growth and financial success of the Company. In general,
fringe benefits similar to those provided to senior executives of the
Company will continue to be provided to Mr. Gleason through January 31,
1996.
Mr. Gleason's 1993 base salary was established pursuant to the
employment and transition agreement. In setting Mr. Gleason's base salary
and total annual cash compensation, the Committee was advised by the
compensation consulting firm and compared Mr. Gleason's cash compensation
with that of chief executive officers in companies of similar general type
and size. Mr. Gleason's base salary for 1993 decreased slightly from his
1992 level.
Mr. Gleason's annual incentive bonus under the annual bonus plan
is based upon corporate performance goals (100% weighting). The target
annual bonus award for Mr. Gleason was 33% of base salary. Mr. Gleason's
bonus under this plan is capped at $50,000. Corporate performance goals in
1993 were based on the Company's attainment of predetermined pre-tax levels
of profit (approximately 80% weighting) and sales (20% weighting). Because
of the increases in pre-tax earnings and sales discussed above, Mr. Gleason
earned the maximum bonus under this Plan.
Mr. Gleason's long-term (three-year) incentive bonus award is
based upon ambitious financial performance goals for the Company expressed
in terms of targeted earnings-per-share. The target bonus for Mr. Gleason
for the 1993-1995 performance period is 40% of average annual base salary
as required by the employment and transition agreement. Mr. Gleason's
bonus under this plan is capped at $50,000. No bonus was paid to
Mr. Gleason (or other plan participants) pursuant to the 1991-1993 long-
term (three-year) incentive bonus plan since the Company did not achieve
its financial performance goals for the applicable bonus period.
Mr. Gleason was not awarded any stock options or shares of
restricted stock during 1993.
All recommendations of the Committee attributable to 1993
compensation were unanimous and were approved and adopted by the Board of
Directors without modification.
Respectfully submitted,
Daniel T. Carroll, Chairman
David P. Mehney
Joseph A. Parini
Joan Parker
Elmer L. Ward, Jr.
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COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The members of the Compensation Committee of the Board of
Directors during 1933 were Messrs. Carroll (Chairman), Mehney, Parini and
Ward and Ms. Parker. During 1993, the Company engaged N. W. Ayer, Inc. to
perform public relations services for which the Company paid $221,341 to
N. W. Ayer, Inc. Ms. Joan Parker, a Director of the Company, is Senior
Vice President and Managing Director of Ayer Public Relations, a division
of N. W. Ayer, Inc. The Company anticipates entering into a public
relations services contract with Ayer for the 1994 fiscal year pursuant to
which the Company anticipates it will make payments to Ayer of
approximately $375,000 during 1994.
COMPLIANCE WITH SECTION 16(a) OF THE EXCHANGE ACT
Section 16(a) of the Exchange Act requires Wolverine's directors
and officers to file reports of ownership and changes in ownership of
shares of Common Stock with the Securities and Exchange Commission.
Directors and officers are required by Securities and Exchange Commission
regulations to furnish the Company with copies of all Section 16(a) reports
they file. Based on its review of the copies of such reports received by
it, or written representations from certain reporting persons that no
reports on Form 5 were required for those persons for the 1993 fiscal year,
Wolverine believes that its directors and officers complied with all
applicable filing requirements during the Company's last fiscal year,
except that one report for Mr. Peter Panter that was filed on a timely
basis inadvertently omitted one of four transactions that occurred during
the applicable month. An amendment was filed to correct the report as soon
as the omission was discovered. One report for Mr. Stephen Gulis, Jr., that
was filed on a timely basis inadvertently omitted one stock option from the
list of holdings reported. A report on Form 5 was filed to report that
option as soon as the error was discovered. In addition, one report for
Mr. Elmer L. Ward, Jr., reporting the exercise of five stock options and
the sale of the underlying shares was filed late. The late filing of this
report was due to an oversight on the part of Wolverine personnel and not
Mr. Ward.
SELECTION OF AUDITORS
Subject to the approval of stockholders, the Board of Directors
has reappointed the firm of Ernst & Young as independent auditors of the
Company for the current fiscal year.
Ernst & Young, certified public accountants, has audited the
financial statements of the Company and its subsidiaries for the fiscal
year ended January 1, 1994. Representatives of Ernst & Young are expected
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to be present at the annual meeting, will have an opportunity to make a
statement and are expected to be able to respond to appropriate questions
from stockholders.
A simple vote of the stockholders holding a majority of the
shares present in person or represented by proxy and entitled to vote on
this proposal is required to ratify the reappointment of Ernst & Young.
For purposes of counting votes on this proposal, abstentions will be voted
as counted against the proposal. Broker non-votes and other shares not
voted will not be counted as voted on this proposal, and the number of
shares of which a majority is required shall be reduced by the number of
shares not voted.
YOUR BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE FOR
RATIFICATION OF THE REAPPOINTMENT OF ERNST & YOUNG.
STOCKHOLDER PROPOSALS
Stockholder proposals intended to be presented at the 1995 annual
meeting of stockholders must be received by the Company not later than
November 21, 1994, to be considered for inclusion in the proxy statement
and form of proxy relating to that meeting. Proposals of stockholders
should be made in accordance with Securities and Exchange Commission
Rule 14a-8 and should be addressed to the attention of the Secretary of the
Company, 9341 Courtland Drive, N.E., Rockford, Michigan 49351.
SOLICITATION OF PROXIES
Solicitation of proxies will be made initially by mail. In
addition, directors, officers and employees of the Company may solicit
proxies by telephone, telegraph or personally without additional
compensation. Proxies may be solicited by nominees and other fiduciaries
who may mail materials to or otherwise communicate with the beneficial
owners of shares held by them. The Company will bear all costs of the
preparation and solicitation of proxies, including the charges and expenses
of brokerage firms, banks, trustees or other nominees for forwarding proxy
material to beneficial owners. Wolverine has engaged Corporate Investor
Communications, Inc. at an estimated cost of $5,500.00 to assist in
solicitation of proxies from brokers and other nominee stockholders.
BY ORDER OF THE BOARD OF DIRECTORS
Blake W. Krueger, General Counsel and
Secretary
March __, 1994
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APPENDIX
WOLVERINE WORLD WIDE, INC.
1994 DIRECTORS' STOCK OPTION PLAN
SECTION 1
Establishment of Plan; Purpose of Plan
1.1 Establishment of Plan. The Company hereby establishes the 1994
DIRECTORS' STOCK OPTION PLAN (the "Plan") for its Non-Employee Directors.
The Plan permits the grant of Stock Options that are nonqualified stock
options.
1.2 Purpose of Plan. The purpose of the Plan is to advance the
interests of the Company 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 the Company and its stockholders
through continuing ownership of the Company's Common Stock.
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 "Code" means the Internal Revenue Code of 1986, as amended.
2.4 "Committee" means the Compensation Committee of the Board or such
other committee as the Board shall designate to administer the
Plan.
2.5 "Common Stock" means the Common Stock of the Company, par value
$1 per share.
2.6 "Company" means Wolverine World Wide, Inc., a Delaware
corporation, and its successors and assigns.
2.7 "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
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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.
2.8 "Non-Employee Directors" means directors of the Company who are
not also employees of the Company or any of its subsidiaries.
2.9 "Retirement" means the reaching of mandatory retirement age for a
director as established by the Board, which is currently 70 years
of age.
2.10 "Stock Option" means the right to purchase Common Stock at a
stated price for a specified period of time. For purposes of the
Plan, all Stock Options shall be nonqualified stock options.
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 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 Indemnification of Committee Members. Each person who is or has
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, a maximum of 80,000 shares of Common Stock shall be
available for Stock Options under the Plan. Such shares shall be
authorized and may be either unissued or treasury shares.
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4.2 Adjustments. If the number of shares of Common Stock outstanding
changes on or after April 21, 1994, by reason of a stock dividend, stock
split, reverse 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, including, without limitation, the
number of shares to be granted pursuant to subsection 5.1, 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 Stock
Options, with an appropriate cash adjustment for the value of any Stock
Options eliminated. If a Stock Option is cancelled, surrendered, modified,
exchanged for a substitute Stock Option, or expires or terminates during
the term of the Plan but prior to the exercise or vesting of the Stock
Option in full, the shares subject to but not delivered under such Stock
Option shall be available for other Stock Options.
SECTION 5
Stock Options
5.1 Grant. Subject to adjustment as provided in subsection 4.2, a
Stock Option to purchase 500 shares of Common Stock shall be granted
automatically on the date of each annual meeting of stockholders to each
director of the Company who is, at the close of each such annual meeting, a
Non-Employee Director; provided, however, that any Non-Employee Director
who is elected or appointed a director for the first time shall at the time
of his or her election or appointment be granted a Stock Option to purchase
3,000 shares of Common Stock and shall receive annual grants of 500 shares
of Common Stock in each succeeding year in the same manner as all other
Non-Employee Directors; and provided further, that automatic grants shall
only be made under the Plan if and to the extent that there are
insufficient shares of Common Stock available for similar grants under the
Company's Directors Stock Option Plan, which was approved by the
stockholders in 1988. 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.
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. Each Stock Option agreement 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 the Company for
the remainder of his or her term during which the Stock Option was granted.
5.3 Stock Option Price. The per share Stock Option price shall be
one hundred percent (100%) of the Market Value of the Common Stock on the
date of grant.
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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 in shares of Common Stock (including Common Stock to be
received upon a simultaneous exercise) or other consideration substantially
equivalent to cash. 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 deliver promptly to Wolverine the amount of
sale or loan proceeds to pay the exercise price.
5.5 Limits on Exercisability. Stock Options shall be exercisable for
a period 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.
5.6 Restrictions on Transferability.
(a) General. 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. All Stock Options granted to a Non-Employee
Director shall be exercisable during the Non-Employee Director's
lifetime only by such Non-Employee Director or the legal
representative acting in the name of the Non-Employee Director.
(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.
5.7 Termination of Directorship.
(a) General. If a Non-Employee Director ceases to be a
director of the Company for any reason other than the Non-
Employee Director's death, disability, or Retirement, the Non-
Employee Director may exercise his Stock Options only for a
period of three months after such termination of director status.
(b) Death. If a Non-Employee Director dies either while a
director of the Company or after the termination of his or her
directorship, the Stock 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 the Non-Employee
Director's death.
(c) Disability. If a Non-Employee Director ceases to be a
director of the Company due to the Non-Employee Director's
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disability, the Non-Employee Director may exercise a Stock Option
for a period of one year following such termination of
directorship.
(d) Non-Employee Director Retirement. If a Non-Employee
Director reaches mandatory Retirement age for a director, any
Stock Option granted under the Plan may be exercised during the
remaining term of the Stock Option.
SECTION 6
General Provisions
6.1 No Rights to Awards. Except as otherwise provided in subsection
5.1, no Non-Employee Director or other person shall have any claim to be
granted any Stock Option under the Plan, and there is no obligation of
uniformity of treatment of Non-Employee Directors or holders or
beneficiaries of Stock Options under the Plan. To the extent consistent
with the Plan, the terms and conditions of Stock Options and the
determination of the Committee to grant a waiver or modification of any
Stock Option and the terms and conditions thereof need not be the same with
respect to each Non-Employee Director.
6.2 Compliance With Laws; Listing and Registration of Shares.
All
Stock Options granted under the Plan (and all issuances of Common Stock or
other securities under the Plan) shall be subject to all applicable 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 Stock Option or
the issue or purchase of shares thereunder, such Stock Option may not be
exercised in whole or in part, or the restrictions on such Stock Option
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.
6.3 No Limit on Other Compensation Arrangements. Nothing contained
in the Plan shall prevent the Company 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.
6.4 No Right to Directorship. The grant of a Stock Option shall not
be construed as giving a Non-Employee Director the right to be retained as
a director of the Company. A Non-Employee Director may be removed from his
or her directorship in accordance with the Company's By-Laws, Certificate
of Incorporation, or applicable law, free from any liability or any claim
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under the Plan, unless otherwise expressly provided in the Plan or in any
written agreement with a Non-Employee Director.
6.5 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.
6.6 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 7
Amendment
The Board may from time to time amend the Plan as it deems proper
and in the best interests of the Company; provided, however, that the Plan
may not be amended more than once every six months, other than to comport
with changes in the Code, the Employee Retirement Income Security Act, or
the rules thereunder; and provided further, that without stockholder
approval no such amendment shall be effective that would: (a) materially
increase either the benefits to Non-Employee Directors under the Plan or
the number of shares that may be issued under the Plan; (b) modify the
eligibility requirements for participation in the Plan; or (c) require
stockholder approval pursuant to Rule 16b-3 under the Act or the rules of
the New York Stock Exchange or any other exchange upon which the Company's
Common Stock is traded. In addition, no termination, amendment, or
modification of the Plan shall become effective with respect to any Stock
Option previously granted under the Plan without the prior written consent
of the Non-Employee Director holding such Stock Option, unless such
termination, amendment, or modification operates solely to the benefit of
the Non-Employee Director, except according to the terms of the Plan or the
Stock Option agreement.
SECTION 8
Effective Date and Duration of the Plan
This Plan shall take effect April 21, 1994, subject to approval
by the stockholders at the 1994 Annual Meeting of Stockholders or any
adjournment thereof or at a Special Meeting of Stockholders. Stock Options
granted under the Plan shall not be exercisable prior to such stockholder
approval and shall expire if the stockholders do not approve the Plan at
the 1994 Annual Meeting of Stockholders or any adjournment thereof. The
Board may terminate the Plan at any time and, unless earlier terminated by
the Board, the Plan shall terminate on April 20, 2004. No Stock Option
shall be granted under the Plan after such date.
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FORM OF PROXY
WOLVERINE WORLD WIDE, INC.
9341 Courtland Drive, N.E.
Rockford, Michigan 49351
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned stockholder hereby appoints Daniel T. Carroll and
Phillip D. Matthews, and each of them, each with full power of substitution,
proxies to represent the stockholder and to vote all shares of Common Stock of
Wolverine World Wide, Inc. that the undersigned would be entitled to vote on all
matters which come before the Annual Meeting of Stockholders to be held at the
Amway Grand Plaza Hotel, 187 Monroe Avenue, N.W., Grand Rapids, Michigan, on
Thursday, April 21, 1994, at 10:00 a.m., and any adjournment thereof.
1. Election of Directors
[ ] FOR ALL NOMINEES listed [ ] WITHHOLD AUTHORITY
below (except as marked to vote for all nominees
to the contrary below) listed below
Joseph A. Parini Joan Parker
(INSTRUCTION: To withhold authority to vote for any individual nominee,
strike through that nominee's name in the list above.)
Your Board of Directors Recommends that you Vote FOR ALL NOMINEES
2. Proposal to approve an amendment to the Certificate of Incorporation
to increase the number of authorized shares of Common Stock.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
Your Board of Directors Recommends that you Vote FOR this Proposal
3. Proposal to approve the 1994 Directors' Stock Option Plan.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
Your Board of Directors Recommends that you Vote FOR this Proposal
4. Proposal to ratify the appointment of Ernst & Young as independent
auditors for the current fiscal year.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
Your Board of Directors Recommends that you Vote FOR this Proposal
If this Proxy is properly executed, the shares represented by
this Proxy will be voted as specified.
If no specification is made, the shares represented by this Proxy
will be voted for the election of all nominees named on this Proxy as
directors and for approval of each proposal identified on this Proxy. The
shares represented by this Proxy will be voted in the discretion of the
proxies on any other matters that may come before the meeting.
X____________________________________ ______________________________________
Date
X____________________________________ ______________________________________
Date
Signature of Stockholder(s)
IMPORTANT
Please sign exactly as your name(s) appears on this Proxy. When
signing on behalf of a corporation, partnership, estate or trust, indicate
title or capacity of person signing. If shares are held jointly, each
holder should sign.
PLEASE MARK, SIGN, DATE AND RETURN THE
PROXY CARD PROMPTLY USING THE ENCLOSED ENVELOPE.
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